20
www.concordcoalition.org THE CONCORD COALITION presented by Robert L. Bixby, Executive Director THE CONCORD COALITION www.concordcoalition.org Fiscal Future: The Challenges Ahead
| Date post: | 13-Dec-2015 |
| Category: |
Documents |
| Upload: | chad-berry |
| View: | 214 times |
| Download: | 1 times |
www.concordcoalition.org THE CONCORD COALITION
presented by
Robert L. Bixby, Executive Director
THE CONCORD COALITION www.concordcoalition.org
Fiscal Future: The Challenges Ahead
www.concordcoalition.org THE CONCORD COALITION
Estate & Gift Taxes($21 billion)
Composition of Projected FY 2010 Federal Government Revenues and Outlays(Deficit: $1.35 Trillion)
Interest
Domestic*
Social Security
Medicare & Medicaid
Other Entitlements
Defense
Other TaxesCorporate Taxes
Social Insurance Taxes
Individual Income Taxes
Outlays: $3.52 trillion Revenue: $2.18 trillion*Includes all appropriated domestic spending such as education, transportation, homeland security, housing assistance, and foreign aid.
Source: CBO January 2010.
www.concordcoalition.org THE CONCORD COALITION
62% 31%
7%
40%
15%
45% 39%
6%
55%
Mandatory DiscretionaryNet Interest
Source: Congressional Budget Office, January 2010.
Mandatory spending is consuming a growing share of the budget
1970 1990 2010
www.concordcoalition.org THE CONCORD COALITION
Current Policy Trends Lead to Large Sustained DeficitsFiscal Years 2011-2020
CBO March 2010 Baseline
The Concord Coalition Plausible Baseline adds in the effects of the new Health Care Reform law and assumes that discretionary spending grows at the rate of nominal GDP, that war costs slow gradually, that Medicare physician payment cuts are postponed, and that all expiring tax provisions (including those from the 2009 stimulus package) are extended with AMT relief.
Source: Congressional Budget Office, March 2010 and Concord Coalition analysis.
Bil
lion
s of
Dol
lars
-$14.6 Trillion Deficit
-$6.0 Trillion Deficit
www.concordcoalition.org THE CONCORD COALITION
CBO Jan. 2010 Baseline President’s Budget
Federal Spending vs. Revenues as a Percent of GDP (FY 1980-2020)
CBO January Baseline Compared to the President’s Budget
Source: Congressional Budget Office, January 2010 and Office of Management and Budget, Feb. 2010.
Average outlays: 21.0%
Average revenues: 18.3%
Per
cen
tage
of
GD
P
Actual Projected
www.concordcoalition.org THE CONCORD COALITION
Debt Held by the Public as a Percent of GDP 1940-2040
Source: GAO Analysis, September 2009 and OMB Historical Tables 2010.
As
a P
erce
ntag
e of
GD
P
Actual Projected
World War II108.6% 2010
63.6%
www.concordcoalition.org THE CONCORD COALITION
Percent of Debt Held by the Public Owned by Foreigners
(1987-2009)
Source: United States Treasury Department, Treasury Bulletin, December 2009.
www.concordcoalition.org THE CONCORD COALITION
Interest Costs Go Through The Roof
Source: Congressional Budget Office, Jan. 2010 and Office of Management and Budget, Feb. 2010.
Bil
lion
s of
Dol
lars
www.concordcoalition.org THE CONCORD COALITION
Social Security, Medicare, Medicaid and Interest Consume All Federal Revenues in Less Than 15 Years
Year
Per
cen
tage
of
Rev
enu
es
Social Security, Medicare and Medicaid Interest
Source: Government Accountability Office, February 2010.
www.concordcoalition.org THE CONCORD COALITION
America’s Population is AgingPopulation age 65 and Over
Source: Social Security and Medicare Trustees’ Report, May 2009.
Year
Per
cen
tage
of
Pop
ula
tion
Age
d 6
5 an
d O
ver
www.concordcoalition.org THE CONCORD COALITION
Health Care Costs are Rising Faster Than the Economy
Source: Congressional Budget Office, June 2009.
Per
cen
tage
of
GD
P
Historic Level of
Federal Revenues
Historic Level of
Federal Spending
Assumes that health care cost growth will not exceed GDP growth.
Assumes that health care cost growth continues at the average rate for the past 40 years (2.5 percentage points greater than GDP growth.)
Assumes that health care cost growth rate declines to 1.0 percentage point greater than GDP growth—consistent with the assumption used by the Medicare Trustees.
www.concordcoalition.org THE CONCORD COALITION
Defense Discretionary Spending as a Percentage of GDP
Source: Congressional Budget Office, January 2010.
As
a P
erce
nta
ge o
f G
DP
www.concordcoalition.org THE CONCORD COALITION
Projected Growth in Entitlement Spending far Greater than Defense Spending
Source: Government Accountability Office and Congressional Budget Office.
www.concordcoalition.org THE CONCORD COALITION
Medicare Costs Soar in the Coming Decades
Calendar Year
As
a P
erce
nta
ge o
f G
DP
General Revenues required to fund the program
Income from dedicated taxes, premiums, and state transfers
Source: Medicare Trustees’ Report, May 2009.
www.concordcoalition.org THE CONCORD COALITION
Social Security and Medicare Part A Cumulative Cash Surpluses and Deficits
In Constant 2009 Dollars — 2009 through 2085
In B
illion
s o
f C
on
sta
nt
20
09
D
ollars
2010 2020 2030 2040 2050 2060 2070 2080
Calendar Year
Source: Social Security Trustees’ Report—May 2009 (Intermediate Projections)
$147 Billion: Cumulative Social Security Cash Surplus
-$28 Trillion: Cumulative Social Security Cash Deficits
-$58 Trillion: Cumulative Medicare Part A Cash Deficits
-86 Trillion: Cumulative Social Security and Medicare Part A Cash Deficits
www.concordcoalition.org THE CONCORD COALITION
Current fiscal policy is on an unsustainable path
Federal Outlays as a Percentage of GDP
Social Security
Medicaid
Medicare
All Other
Interest
Source: Government Accountability Office, February 2010.
Average tax revenue
www.concordcoalition.org THE CONCORD COALITION
17
Why Deficits Matter
• Reduce national savings• Increase dependence on foreign lenders• Increase burden on future generations:
– Through rising debt service costs;– By reducing productivity-enhancing
investments• Weakened ability to meet contingencies or new
challenges
www.concordcoalition.org THE CONCORD COALITION
18
Other Costs of Deficits
• Deficits raise uncertainty about future policies
• Deficits reduce the government’s flexibility for dealing future contingencies and crises
• Deficits undermine budget discipline
www.concordcoalition.org THE CONCORD COALITION
Popular Myths that Impede Action
• Myth: We can grow our way out of difficult budget choices.
• Myth: Eliminating waste in government programs will solve the deficit problem.
• Myth: The deficit problem can be solved by delivering health care more efficiently.
• Myth: We just need to raise taxes starting with rolling back some or all of the Bush tax cuts.
• Myth: Cutting taxes will increase revenues.
www.concordcoalition.org THE CONCORD COALITION
Key Points of Agreement
Members of the Fiscal Wake-Up Tour do not necessarily agree on the ideal levels of spending, taxes and debt, but we do agree on the following key points:
• Current fiscal policy is unsustainable
• There are no easy solutions, such as cutting waste fraud and abuse or growing our way out of the problem.
• Finding solutions will require bipartisan cooperation and a willingness to discuss all options.
• Public engagement and understanding is vital in finding solutions.
• This is not about numbers. It is a moral issue.
