Federal programs fostering consumption are mainly transfer programs to the elderly, the unemployed, the disabled and the poor. Since 1981 most changes in law and policy have curtailed spending on these transfers from what it otherwise would have been. While legislation increasing entitlements seems unlikely, budget surpluses could be devoted to moderating future cutbacks. They could provide relief only for a few years, however, because of the likelihood that surpluses will not persist beyond 2010. Longer-term increases in entitlements, unless offset by additional revenues or by spending cuts elsewhere, would mean larger deficits in future years.
Some social programs enhance productivity and thus have the nature of investment.
Federal Investment Spending. Many programs in the federal government's discretionary budget contribute to national investment and to economic and social progress. Examples are those adding to research, technology development, education, training, and physical infrastructure. To the extent that these investments yield social returns equal to or greater than those of marginal private investments, spending on them should be regarded as high-return investments and as additions to national saving. This added spending for roads and mass transit is to be offset, in part by reversing a recent ruling of the Veterans Administration allowing disability benefits for veterans with smoking-related illnesses who began smoking in the military.