Where We Stand: America’s Fiscal State and the Road To a Full Recovery
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Transcript of Where We Stand: America’s Fiscal State and the Road To a Full Recovery
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WHERE WE STAND:AMERICA’S FISCAL STATE AND THE
ROAD TO A FULL RECOVERY
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Medicare$502
Med-icaid$265
Social Secu-rity
$810
Interest$224
Other Manda
tory$538
Non De-
fense Discre-tionary$582
De-fense$631
Source: CBO
DISCRETIONARY SPENDING
AUTOPILOT SPENDING
TOTAL SPENDING FY 2013 = $3.55 TRILLION
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3
Individual Income$1,264
Corporate Income $251
Social Insur-ance$953
Other$241
Source: CBOTOTAL = $2.7
TRILLION
TOTAL RECEIPTS 2013 (in Billions)
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FEDERAL SPENDING VS. SEQUESTRATION
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SEQUESTRATION VS. PRESIDENT’S TAX HIKES
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10%
15%
20%
25%
30%
35%
40%
Historic & Projected Spending
President's Tax Increases
Historic & Projected Tax Revenue
Source: OMB/CBO/HBC
Historic/Projected Spending & Revenue as a Percentage of GDP
#SPENDINGISTHEPROB-LEM
SPENDING IS THE PROBLEM
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WHERE IS OUR MONEY GOING?(GOVERNMENT SPENDING AS A SHARE OF ECONOMY)
0%
5%
10%
15%
20%
25%
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Medicaid & Other HealthMedicare
Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare Medicare
REV-ENUE
SOURCE: CBO
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8201220132014201520162017201820192020202120222023$0
$200
$400
$600
$800
$1,000
$1,200
PRESIDENT’S BUDGET
HOUSE BUDGET
CBO CUR-RENT LAW
PROJECTED DEFICIT PATHS(IN BILLIONS OF DOLLARS)
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HEALTH CARE COSTS ARE THE PRIMARY DRIVER OF THE DEBT
(GOVERNMENT SPENDING AS A SHARE OF ECONOMY)
20112013
20152017
20192021
20232025
20272029
20312033
20352037
20392041
20432045
20472049
20510%
2%
4%
6%
8%
10%
12%
14%
SOURCE: CBO
HEALTH CARE SPEND-ING
SOCIAL SECU-RITY
DISCRETIONARY SPENDING
OTHER MANDATORY PROGRAMS
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Spain Portugal Ireland Italy Greece United States%
20%
40%
60%
80%
100%
120%
140%
160%
180%
64%
91%
114%120%
152%
100%
TROUBLE AHEAD - EUROPE(GOVERNMENT DEBT AS A SHARE OF ECONOMY )
SOURCE: IMF
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HOUSE PLAN FOR FULL RECOVERY
The Path To Prosperity
Efficient, Effective and Responsible Government
Strengthening the Social Safety Net
Fulfilling the Mission of Health and Retirement Security for All Americans
Pro-Growth Tax Reform
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TOTAL GOVERNMENT SPENDING (AS A SHARE OF ECONOMY)
19681971
19741977
19801983
19861989
19921995
19982001
20042007
20102013
20162019
20222025
20282031
20342037
20402043
20462049
%
10%
20%
30%
40%
50%
HISTORICAL
CURRENT PATH
PATH TO PROSPERITY
SOURCE: OMB/CBO
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A CHOICE OF TWO FUTURES(DEBT AS A SHARE OF ECONOMY)
1940 1948 1956 1964 1972 1980 1988 1996 2004 2012 2020 2028 2036 2044 2052 2060 2068 2076%
100%
200%
300%
400%
500%
600%
700%
800%
900%
CURRENT PATH
SOURCE: OMB/CBO
PATH TO PROSPER-
ITY
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WHAT IS NEXT?
President’s budget deadline: February 4
Sequester cuts hit: March 1
“Continuing resolution” expires: March 27
Budget deadline for House and Senate: April
15
Debt limit reached: May 19
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FOUR YEARS LATER
Source: House Ways and Means Committee
January 2009 January 2013
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OUR NATIONAL DEBT
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REFERENCE MATERIALS
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TAX REVENUES DO NOT CORRELATE WELL WITH TAX RATES
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TAX REVENUES ARE HIGHLY CORRELATED WITH GDP
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bottom 20% second middle fourth top 20% top 1%$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
SOURCE: IRS/TAX POLICY CENTER
WHO BENEFITS FROM TAX LOOPHOLESAVERAGE PER PERSON BENEFIT BY CATEGORY OF EARNERS
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WHO BEARS THE TAX BURDEN?(SHARE OF INCOME TAX BURDEN)
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WHO OWNS OUR DEBT?(DEBT HELD BY PUBLIC, 1970 -2011)
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Lowest Individual Rate Middle Individual Rate Top/Corporate Tax Rate0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10%
25%
35%
19%
47%
66%
25%
63%
88%
200820502081
SOURCE: CBO
CHASING HIGHER SPENDING WITH TAXES(INCREASE IN TAX RATES NECESSARY TO KEEP PACE SPENDING)
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BCA = SEQUESTER ATRA = FISCAL CLIFF BILL
HOW THE FISCAL CLIFF AND SEQUESTER AFFECTS OUR DEBT
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TOTAL SPENDING IN FY 2010 = $3.5 TRILLION(OUTLAYS IN BILLIONS OF DOLLARS)
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$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
SPENDING SPREE CONTINUES(IN BILLIONS OF DOLLARS)
SOURCE: OMB OBAMA FY2013 BUD-GET