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Transcript of Www.concordcoalition.org THE CONCORD COALITION presented by Jeffrey S. Thiebert, National Grassroots...
www.concordcoalition.orgTHE CONCORD
COALITION
presented by
Jeffrey S. Thiebert, National Grassroots Director
THE CONCORD COALITION www.concordcoalition.org
Federal Budget Briefing—ASMC PDI 2010
www.concordcoalition.orgTHE CONCORD
COALITION
About The Concord Coalition
The Concord Coalition is a nationwide, non-partisan, grassroots
organization advocating generationally responsible fiscal policy. The
Concord Coalition was founded in 1992 by the late former Senator Paul
Tsongas (D-Mass.), former Senator Warren B. Rudman (R-N.H.) and
former U.S. Secretary of Commerce Peter Peterson. Former Senator Bob
Kerrey (D-Ne.) became co-chair of the Concord Coalition in January
2002.
www.concordcoalition.orgTHE CONCORD
COALITION
Current Fiscal Policy
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0In b
illi
ons
of 1
996
cons
tant
(ch
ain)
dol
lars
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Fiscal Years
www.concordcoalition.orgTHE CONCORD
COALITION
Federal Revenue and SpendingFiscal Year 2009
Revenues Spending
Individual Income Taxes 26% Social Security 19%
Corporate Income Taxes 4% Health Care 22%
Payroll Taxes (SI, Medicare, & FICA) 25% International Affairs 1%
Other Taxes 5% Income Security 15%
Borrowed Funds 40% Education 2%
Total Revenue 100% Interest on the National Debt 6%
National Defense 19%
Environment 1%
Other Expenses 15%
TOTAL 100%
www.concordcoalition.orgTHE CONCORD
COALITION
Americans Want to Cut Spending – But Not on the Programs That Cost the Most
Source: The Economist/YouGov Poll, April 2010 and Congressional Budget Office, January 2010.
www.concordcoalition.orgTHE 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.orgTHE CONCORD
COALITION
Social Security, Medicare, & Medicaid as a Percentage of the Federal Budget
All other Federal Spending
$2.09 Trillion
59%
Social Security, Medicare and Medicaid
$1.43 Trillion
41%
Source: Congressional Budget Office, January 2010.
www.concordcoalition.orgTHE 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.orgTHE CONCORD
COALITION
Outlays of Select Mandatory Spending Programs (FY 2010 Projected)
Source: Congressional Budget Office, January 2010.
www.concordcoalition.orgTHE CONCORD
COALITION
Change in Composition of Discretionary Spending
68%32%
60%40%
50% 50%
Defense Non-defense
Source: Congressional Budget Office, January 2010.
www.concordcoalition.orgTHE CONCORD
COALITION
Outlays of Select Non-Defense Discretionary Programs (FY 2010 Projected)
Source: Congressional Budget Office, January 2010.
*includes ground, air, and water
Education Transportation Housing, Natural Veterans Foreign Aid General Science, Energy & Resources Government Space & Nutrition Asst. Technology
www.concordcoalition.orgTHE CONCORD
COALITION
Non-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.orgTHE 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.orgTHE CONCORD
COALITION
Projected Growth in Entitlement Spending far Greater than Defense Spending
Source: Government Accountability Office and Congressional Budget Office. 2010.
www.concordcoalition.orgTHE CONCORD
COALITION
CBO March 2010 Baseline CBO’s Estimate of the President’s Budget
Federal Spending vs. Revenues as a Percent of GDP (FY 1980-2020)
CBO March Baseline Compared to the President’s Budget
Source: Congressional Budget Office, March 2010..
Average outlays: 21.0%
Average revenues: 18.3%
Per
cen
tage
of
GD
P
Actual Projected
www.concordcoalition.orgTHE 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.orgTHE CONCORD
COALITION
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.orgTHE CONCORD
COALITION
Debt Held by the Public as a Percent of GDP 1940-2040
Source: OMB Historical Tables 2009.
As
a P
erce
ntag
e of
GD
P
www.concordcoalition.orgTHE CONCORD
COALITION
Debt Held by the Public as a Percent of GDP 1940-2040
Source: GAO Analysis, 2010 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.orgTHE 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.orgTHE CONCORD
COALITION
Interest Costs Go Through The Roof
Source: Congressional Budget Office, Analysis of the President’s Budget, March 2010.
Bil
lion
s of
Dol
lars
www.concordcoalition.orgTHE CONCORD
COALITION
Interest Costs Skyrocket Because of Recent Borrowing
The simulations assume that discretionary spending grows with the economy and that all expiring tax provisions are extended.
Source: Government Accountability Office, April 2008 and Feb. 2010.
www.concordcoalition.orgTHE CONCORD
COALITION
Americans are living longer and having fewer children
Consequently, fewer workers are available
to support each Social Security recipient
1960: 5.1 to 1 Today: 3.1 to 1 2029: 2.2 to 1
Source: Social Security Administration, May 2009.
www.concordcoalition.orgTHE 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.orgTHE 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.orgTHE CONCORD
COALITION
Social Security Cash Deficits
Source: Congressional Budget Office, March 2010.
Bil
lion
s of
Dol
lars
www.concordcoalition.orgTHE 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.orgTHE 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.orgTHE CONCORD
COALITION
Social Security, Medicare and Medicaid Cost Growth
Outlays as a Percentage of GDP
Social Security
Medicaid
Medicare
Source: Government Accountability Office, Feb. 2010.
www.concordcoalition.orgTHE 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.orgTHE CONCORD
COALITION
Current fiscal policy is on an unsustainable path
Federal Outlays as a Percentage of GDP
Social Security
Medicaid
Medicare
All OtherSpending
Interest
Source: Government Accountability Office, Feb. 2010.
Average tax revenue