DALLAS-#501968-v1-MAMIAF SWIAF SEIAF-STACEY E … · 2000 2005 2010 2015 2020 2025 2030 2035 2040...
Transcript of DALLAS-#501968-v1-MAMIAF SWIAF SEIAF-STACEY E … · 2000 2005 2010 2015 2020 2025 2030 2035 2040...
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Intergovernmental Audit ForumDecember 4, 2014
Stacey E. PickeringStacey E. Pickering
Mississippi State AuditorMississippi State Auditor
Stacey E. PickeringStacey E. Pickering
Mississippi State AuditorMississippi State Auditor
December 4, 2014
12/8/2014
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Watch here: Watch here: http://http://youtu.be/d0nERTFoyoutu.be/d0nERTFo--SkSk
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Mississippi State AuditorMississippi State Auditor
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We’ve Lost Control of the U.S. BudgetWe’ve Lost Control of the U.S. BudgetControlled Yearly
1912Auto Pilot
2013
97% 66%3% 34%
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Mississippi State AuditorMississippi State AuditorSource: Historical Statistics of the United States, Millennial Edition On Line, Table Ea636–643 Federal government expenditure, by major function: 1789–1970. Congressional Budget Office, The Budget and Economic Outlook: fiscal Years 2013 to 2023, Feb. 2014. Compiled by TCAII.
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International Affairs5.3%
1962
Where the Federal Money GoesWhere the Federal Money GoesDiscretionary
71.3%
International Affairs
2013Transportation 2.6 %
Discretionary 36%
National Defense49.1%
5.3%Transportation
1.3%
Other Discretionary
11.5%
National Defense19.1%
Affairs1.3% Other
Discretionary 13.1%
Social Security21.8%
Social Security13.5%
Other Mandatory
12.7%
Net Interest
6.5%
Medicare13.3%
Medicaid7.1%
Other Mandatory
15.5%
Net Interest
6.2%
Mandatory64%
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Total Federal Spending 1962:
$812 Billionin 2012 Dollars
Mandatory28.7%
Total Federal Spending 2013:
$3.5 Trillion
64%
Source: OMB, Historical Tables, Table 8.5 & 8.7; BLS. Compiled by TCAII
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FY 2015General Fund Budget:
All Education funding is
g
$5,304,176,439
$2,876,152,227,or 54%.
(totals vary due to rounding)
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$3.5
Republican President Democrat President RevenuesFederal Spending & U.S. Revenue TrendsFederal Spending & U.S. Revenue Trends
$1 5
$2.0
$2.5
$3.0
$0.0
$0.5
$1.0
$1.5
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1912 1922 1932 1942 1952 1962 1972 1982 1992 2002 2012
7Sources: Office of Management & Budget, Historical Tables; Bureau of Labor Statistics; Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII
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Federal Public DebtFederal Public Debt250
CBO Alternative Projection
100
150
200
0
50
100
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Mississippi State AuditorMississippi State AuditorSource: CBO, Long Term Budget Outlook, 2009 and 2013
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Mississippi State AuditorMississippi State AuditorU.S. Census Bureau, 2000-2010
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Mississippi State AuditorMississippi State AuditorUnemployment rate by state, October 2014
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Spending Demands and Some Revenue Growth Spending Demands and Some Revenue Growth
Not Enough To Go Around Health Care Costs
Dealing with Long Term Liabilities
Federal Cuts/Changes
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Workforce
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12State and Local Government Non-Health Care Expenditures
6
8
10
of G
DP
0
2
4
Perc
ent (
%)
State and Local Government Health Care Expenditures
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2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Source:. GAO Simulations, updated March 2012
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$18Intragovernmental Held Debt Publicly Held Debt
$16.1 Trillion103 7% of GDP
$4.8 Trillion30.9% of GDP
$10
$12
$14
$16
of U
.S. D
olla
rs
$5.6 Trillion58% f GDP
103.7% of GDP
$3.4 Trillion35% of GDP
$11.3 Trillion72.7% of GDP$2.3 Trillion
23% of GDP
$2
$4
$6
$8
In T
rillio
ns o 58% of GDP
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35% of GDP$0
September 30, 2000 September 30, 2012
SOURCE: U.S. Department of Treasury, Bureau of the Public Debt, Debt to the Penny; CBO, Long-Term Budget Outlook (June 2012); OMB, Historical Tables, Table 1.2. Compiled by TCAII.
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Federal Programs and RevenuesFederal Programs and Revenues
35%
40%Net Interest Medicare & Medicaid Social Security All Other Revenue
6.1%10.2%
9.9%
20%
25%
30%
35%
ntag
e of
GDP
1 4% 3.3% 6.7% 10.8%4.8%
5.9%7.8%
9.3%
5.0%5.3%
6.0%11.7%
8.5%
0%
5%
10%
15%
Perc
en
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1.4%0%2012 2020 2030 2040
Source: Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII. Note: Alternative Fiscal Scenario used for all figures. Medicaid number are estimated and illustrative. They are derived from CBO LTBO June 2012 Data.
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1. Australia
2. Sweden
18. Mexico
19. Austria
Sovereign Fiscal Responsibility IndexSovereign Fiscal Responsibility Index(As of April 2012)(As of April 2012)
3. Estonia 4. New Zealand
5. China
6. Chile 7. Luxembourg
8. Denmark
9 B il
20. Norway 21. France
22. Finland
23. Slovenia24. Germany
25. Belgium
26 S i9. Brazil 10. India
11. United Kingdom
12. Israel 13. Canada
14. Poland
15 N th l d
26. Spain 27. Italy
28. United States29. Hungary
30. Iceland
31. Ireland32 P l
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15. Netherlands16. Korea
17. Slovakia
32. Portugal
33. Japan
34. Greece
Source: Comeback America and Stanford Graduate Students’ Sovereign Fiscal Responsibility Index. Compiled by TCAII. Note: Based upon IMF data that was reported in April 2012.
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12 member group coordinates how much oil is d d l i d f d bproduced to control prices and fund member
countries’ budgets
Increased non-OPEC production has lowered prices
OPEC nations are losing almost $1 billion/day
U.S. production has risen significantly, in spite of increasing federal regulations
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Potential Keystone Pipeline
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OPEC’s Risky Move Short term pain for long term gain? Short-term pain for long-term gain? Saudi Arabia and other Gulf states push prices down to
negatively impact new American energy independence Some American companies have hedged against lower
prices for next year or two
Poorer OPEC nations are already being hard hit They need prices over $100 barrel to maintain their
planned national budgets Particularly bad = Venezuela needs $120/barrel to avoid
ti l b k t (IMF)
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national bankruptcy (IMF) Angola, Nigeria, Ecuador, Iran, and others
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Chinese Economists say“W k i il i ld h h i i f“Weakening oil prices would hamper the competitiveness of new energy. The government has to subsidize the new energy industry to support its development.”
For China to continue to develop alternative (solar For China to continue to develop alternative (solar and wind) energy, the national government must spend more
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Bureau of Labor Statistics (BLS) changes h d lmethodology
Before 1999, the BLS formula tended to overstate changes in the cost of living, so BLS moved to a new model (geometric mean)/substitution
Result=Inflation rate does look different Old: Shift purchases to less expensive (less desirable) items New: Shift purchases to items whose price is rising less or
falling more
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Perception of the individual
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Unemployment is measured 6 different ways by the BLS
Greater percentage of underemployed and unemployed
Greater percentage of those dropping out of the workforce
Labor underutilization = negative to economy
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g y
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Elementary and Secondary Education: 5 states
Higher Education: 3 states
Public Assistance: 12 states
Medicaid: 7 states Medicaid: 7 states
Corrections: 7 states
Transportation: 10 states
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Other Cuts: 9 states
Source: NASBO Fall 2013 Fiscal Survey of States
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States must address their unsustainable fiscal
RecommendationsRecommendations
outlook, and adopt a comprehensive solutions to put their finances in order
States must focus on improving economic growth, reducing disparities and enhancing theirreducing disparities, and enhancing their competitiveness
States must create and institutionalize a culture of transparency, accountability and transformation at
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p y, yall levels of government
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Government has grown too big promised too
Role of Government & The IndividualRole of Government & The Individual
Government has grown too big, promised too much, and waited too long to restructure
The implications of which: The government will ask for more while doing less The government will ask for more while doing less State and local government will be adversely
impacted because bad news flows downhill Charitable organizations will be more important in
the future Individuals will be more responsible for their own
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Individuals will be more responsible for their own future
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Stacey E. PickeringMississippi State Auditor
P.O. Box 956J k MSJackson, MS 39205
Ph: 601-576-2800800-321-1275 (statewide)
Website: www.osa.ms.gov
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