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The Federal Budget Past – Present – Uncertain Future

The Federal Budget Past – Present – Uncertain Future. Stanford Institute for Economic Policy Research G. William Hoagland March 9, 2012. Trend. Recession as announced by National Bureau of Economic Research. “The Past, Present & Future” Total Budget Surplus/Deficit

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The Federal Budget Past – Present – Uncertain Future

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  1. The Federal Budget Past – Present – Uncertain Future Stanford Institute for Economic Policy Research G. William Hoagland March 9, 2012

  2. Trend Recession as announced by National Bureau of EconomicResearch “The Past, Present & Future” Total Budget Surplus/Deficit CBO Baseline. Alternative Baseline & The President’s Projections: January 2012 FY 1965 - 2022 Actual Alternative Projections Surplus Deficit 22 Source: Congressional Budget Office; The Budget and Economic Outlook: Fiscal Years 2012 to 2022. January 2012. Office of Management and Budget: FY 2013 Budget of the United States. February 2012.

  3. “The Past”Changes in Projections of Surplus Since January 2001($ in billions) Source: Congressional Budget Office; Joint Committee on Taxation

  4. “The Future” Budget OutlookFY 2011 – 2017(In Billions of Dollars – % of GDP)President’s FY 2013 Budget Nominal GDP estimated to increase 5.5 % annually 2012-2017: Real GDP estimated to increase 4.3% annually 2012-2017. Source: Office of Management and Budget, Fiscal Year 2013 Budget of the U.S. Government. February 2012.

  5. Federal Debt Held by the Public Baseline, Alternative Fiscal Scenario, President’s Budget% of GDP % President’s Budget 94.2% Avg. 2012-22: 77% Avg. 2012-22: 84.4% Avg. 2012-22: 68.6% 76.5% 72.5% 62.0% CBO’s Alternative Fiscal Scenario assumes expiring tax provisions (other than the payroll tax reduction) are extended, the AMT is indexed for inflation after 2011, Medicare’s payment rates for physicians’ services are held constant at their current level, and automatic spending reductions required by the Budget Control Act do not take effect. CBO January 2012. President’s Budget estimates from FY 2013 Federal Budget, OMB, February 2012.

  6. Spending Baseline & Alternative Fiscal Scenario% of GDP President’s Budget Avg. 22.7% CBO’s Alternative Fiscal Scenario assumes expiring tax provisions (other than the payroll tax reduction) are extended, the AMT is indexed for inflation after 2011, Medicare’s payment rates for physicians’ services are held constant at their current level, and automatic spending reductions required by the Budget Control Act do not take effect. CBO January 2012. President’s Budget: FY 2013 Federal Budget, OMB; February 2012.

  7. Revenues Baseline & Alternative Fiscal Scenario% of GDP President’s Budget Avg. 20.8% CBO’s Alternative Fiscal Scenario assumes expiring tax provisions (other than the payroll tax reduction) are extended, the AMT is indexed for inflation after 2011, Medicare’s payment rates for physicians’ services are held constant at their current level, and automatic spending reductions required by the Budget Control Act do not take effect. CBO January 2012. President’s Budget: FY 2013 Federal Budget, OMB; February 2012.

  8. Federal Spending Projected for 2021 Medicaid (11%) Social Security (24%) Medicare (15%) Other Health Programs (3%) NetInterest (11%) Other Mandatory Spending (9%) Domestic Discretionary (12%) Defense (14%) “Other Health Programs” includes: Health insurance subsidies, exchanges, and related spending; Department of Defense Medicare-Eligible Retiree Health Care Fund (including TRICARE for Life); Children’s Health Insurance Program, and other programs. Source: The Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2012 to 2022. January 2012.

  9. Major Components of Federal Expenditures% of GDP 2011-2051 % of GDP 14% Healthcare 12% 10% 8% Social Security 6% Discretionary Spending 4% Other Mandatory Spending 2% 0% 2011 2021 2031 2041 2051 Source: Congressional Budget Office.

  10. Alternative Medicare Spending PathsSpending Relative to GDP GDP+2% 14 The unstainable pathwe are on Goal of:Bowles/Simpson, Rivlin/Ryan, Domenici/Rivlin, Ryan/Wyden,and Obama/CBO GDP+1% 12 10 8 % GDP Medicare Trustees Report Estimate of PPACA GDP+0% 6 4 Ryan (House Republican) 2 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 Year

  11. Health Benefit Costs as a Share of Wages forFull-Time, Full-Year Workers ReceivingHealth Care Benefits through Their Own Employer 49.5% Source: Steven A. Nyce and Sylvester Schieber, “Treating Our Ills and Killing Our Prospects” paper prepared for the Coalition for Affordable Health Care, July 2011.

  12. Party Polarization 1879-2006 Distance Between the Parties First Dimension 1.0 0.9 0.8 0.7 0.6 0.5 0.4 Distance Between the Parties 1879 1887 1895 1903 1911 1919 1927 1935 1943 1951 1959 1967 1975 1983 1991 1999 2006 Source: Polarized America, The Dance of Ideology and Unequal Riches. McCarty, Poole, and Rosenthal. MIT Press, June 2006

  13. It could be worse.

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