The Federal Budget Now and In the Future...Source: Joint CommiMee on TaxaDon, x-141-15, December 7,...
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THE CONCORD COALITION www.concordcoalition.org The Federal Budget Now and In the Future presented by Joshua Gordon, Policy Director
Transcript of The Federal Budget Now and In the Future...Source: Joint CommiMee on TaxaDon, x-141-15, December 7,...
THE CONCORD COALITION
www.concordcoalition.org
TheFederalBudgetNowandIntheFuture
presentedby
JoshuaGordon,PolicyDirector
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179018001810182018301840185018601870188018901900191019201930194019501960197019801990200020102020203020402050
AmericaisonanUnsustainableFiscalPathDebtHeldbythePublic,asaPercentofGDP,1790-2050
Source:CongressionalBudgetOffice.
AsaPercentageofGDP
Historical Projected
WorldWarII106%
201677%
$936
$1,065$481
$344$582
$280$583
$223
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
ComposiMonofFiscalYear2015FederalBudgetDeficit:$438Billion
*IncludesMedicare,Medicaid,CHIP,andexchangessubsidiesspendingnetofoffseBngreceipts.
**IncludesallappropriateddomesDcspendingsuchaseducaDon,transportaDon,homelandsecurity,housingassistanceandforeignaid.
Source:CongressionalBudgetOffice,January2016.
Outlays:$3.69trillion Revenues:$3.25trillion
Interest
DomesHc**
SocialSecurity
MajorHealthCarePrograms*
OtherMandatory
Defense
Estate&GiQTaxes($19billion)
IndividualIncomeTaxes
SocialInsuranceTaxes
CorporateTaxes
OtherTaxes
$882
$1,541
Billion
sofD
ollars
Source:CongressionalBudgetOffice,August2016.
-$1,400
-$1,200
-$1,000
-$800
-$600
-$400
-$200
$0
2015(Actual) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
ThenextPresident’sfirstbudget.
DeficitsAreProjectedtoGrowAnnualDeficits,inBillionsofDollars,2016-2026
40%
15%
45%11%
MandatorySpending DiscreHonaryNetInterest
*ProjectedSource:CongressionalBudgetOffice,August2016.
AutomaMcExpendituresAreConsumingaGrowingShareoftheBudget
1966 1991 2016*
23%66%
2026*
“AutomaHc”
6%
31% 63%67% 26%
7%
OutlaysofSelectMandatorySpendingPrograms FiscalYear2016Projected
$910
$591
$381
$165$87 $110
$75$32 $31 $23 $15
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
SocialSecurity
Medicare Medicaid FederalCivilian&Military
ReMrement
EarnedIncome&ChildTaxCredits
VeteransSupport(Pensions
&EducaMonSubsidies)
FoodStamps
Unemploy-mentComp.
FamilySupport
ChildNutriMon
Agriculture
InBillionsofD
ollars
Source:CongressionalBudgetOffice,January2016.
OutlaysofSelectNon-DefenseDiscreMonarySpendingPrograms
FiscalYear2016Projected
$94$89
$72$67
$55 $55
$37$31
$18 $18
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
EducaMon TransportaMon Veterans(HealthCare)
IncomeSecurity(Housing)
ForgeignAid JusMce Environment Science-Space-Technology
CommunityandRegionalDevelopment
GeneralGovernment
InBillionsofD
ollars
Source:CongressionalBudgetOffice,January2016.
DiscreMonarySpendingWillDeclinetoRecordLowLevels
2
3
4
5
6
1976
1981
1986
1991
1996
2001
2006
2011
2016
2021
2026
Non-DefenseDiscreHonary(NDD)SpendingNDD40-yearaverage
NDD40-yearlow
Source:CongressionalBudgetOffice,January2016.
Percen
tageofG
DP
Percen
tageofG
DP
2
3
4
5
6
7
1976
1981
1986
1991
1996
2001
2006
2011
2016
2021
2026
DefenseDiscreHonarySpendingDefense40-yearaverage
Defense40-yearlow
TaxExpendituresAreLargerthanMajorSpending
Programs
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1
2
3
4
5
6
7
8
9
10
IndividualIncomeTaxRevenues
TaxExpenditures SocialSecurity Defense Medicare
Percen
tageofG
DP
Taxexpenditures,individualincometaxrevenueandselectedcomponentsofspending,Fiscal2015.
Source:JointCommiMeeonTaxaDon,x-141-15,December7,2015&CongressionalBudgetOfficeBudgetOffice,January2016.
InterestCostsAreFastestGrowingSpendingCategory
SmallIncreasesinRatesLeadtoSignificantlyLargerPayments.
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400
500
600
700
800
900
1000
1100
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
AddiHonalCostsWithJusta1%IncreaseinRates
ProjectedInterestCosts
Source:CongressionalBudgetOffice,January2016.
Billion
sofD
ollars
TheSourcesofGrowthinFederalSpending
-2
-1
0
1
2
3
4
5
Grow
thasa
PercentageofGDP
ChangeinOutlaysasaPercentageofGDP,2016-2046
Source:CBOLong-TermOutlookExtendedBaseline,July2016.
MedicareMedicaid,CHIP,
ExchangeSubsidies
SocialSecurity
AllOtherSpending
Interest
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Age20-64Age65&Over
IncreaseinWorkingAgePopulaHon
IncreaseinOver-65
10%
America’sPopulaMonisAgingPercentageChangeIncreaseinPopulaHon
Source:2015CBOLong-TermOutlook&ConcordCoaliDonAnalysis
2010-2030
82%
AmericansareLivingLongerandHavingFewerChildren
Consequently,fewerworkersareavailabletosupporteachSocialSecurityandMedicarerecipient
1960:5to1 2010:3to1 2030:2to1
Source:SocialSecurityTrustees,July2016.
SocialSecurityPromisedBenefitsExceedDedicatedTaxRevenues
Source:SocialSecurityTrustees,June2016(IntermediateProjecDons).
SocialSecurityOutlays
PayrollTax&TaxaHonofBenefits
Percen
tofG
DP
CalendarYear
CashDeficitsRiseto1.6%ofGDPandstabilize
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5
6
7
2014 2019 2024 2029 2034 2039 2044 2049 2054 2059 2064 2069 2074 2079 2084 2089
MoreBeneficiariesDriveGrowthinFederalHealthCareSpending
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1
2
3
4
5
6
7
8
9
2016 2020 2026 2030 2036 2040 2046
FederalHealthCareSpendingAiributabletoHealthCareInflaHon
FederalHealthCareSpendingonProjectedBeneficiaries
OutlaysforMedicare,Medicaid,CHIPandexchangesubsidies
Source:CBO2016Long-TermOutlook&ConcordCoaliDonAnalysis.
Percen
tageofG
DP
U.S.anOutlieronSpendingVs.LifeExpectancy
0
50
100
150
200
250
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
AmericaisonanUnsustainableFiscalPathDebtHeldbythePublic,asaPercentofGDP,1940-2050
Source:CongressionalBudgetOffice.
AsaPercentageofGDP
Historical Projected
WorldWarII106%
201677%
HigherDebtLeadstoLowerIncomes
Per-personsizeoftheeconomygrowswithdeficitreducHon.
82
78
74
60
65
70
75
80
852019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
CBOIllustraHveDeficitReducHonPlan
ExtendedBaselinewithEconomicFeedback
AlternaHveScenariowithEconomicFeedback
RealGNPPe
rPerson
(InTho
usandsofD
ollars)
Source:CongressionalBudgetOfficeLong-TermOutlook,June2015.
