Deficits and Projections Archive
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Off the Charts Blog: House Bills Would Make Budget Estimates More Confusing
June 18, 2013
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House “Budget Transparency” Bill Would Make Budget More Opaque
June 18, 2013
The House Budget Committee may soon consider the proposed “Budget and Accounting Transparency Act” (H.R. 1872), which is identical to a bill that the House passed last year (H.R. 3581). The bill would implement what proponents call “fair-value accounting” for federal credit programs. In fact, the proposal is … -
House Bill Would Artificially Inflate Cost of Federal Credit Programs
Revised June 18, 2013
The House Budget Committee may consider legislation in the near future that would change the federal accounting of direct loans and loan guarantees in ways that would overstate the federal costs of those programs. As a result, the legislation also would overstate total federal spending and deficits. The Federal Credit Reform Act of 1990 … -
Policy Basics: Non-Defense Discretionary Programs
June 14, 2013
Non-defense discretionary (NDD) programs comprise domestic and international programs outside of national defense that Congress funds on an annual basis. (They exclude “entitlement” programs such as Social Security, Medicare, and Medicaid.) NDD programs include a broad … -
Too Little to Go Around
June 5, 2013
The House Appropriations Committee’s plan to apportion discretionary funding for fiscal year 2014 among its 12 appropriations subcommittees — which it approved on a May 21 party-line vote — would override a key provision of the 2011 Budget Control Act (BCA) and shift tens of billions of dollars from domestic programs to … -
Media Briefing: Understanding the Annual Reports of the Social Security and Medicare Trustees
June 3, 2013
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Medicare Is Not “Bankrupt”
Updated June 3, 2013
Claims by some policymakers that the Medicare program is nearing “bankruptcy” are misleading. Although Medicare faces financing challenges, the program is not on the verge of bankruptcy or ceasing to operate. Such charges represent misunderstanding (or misrepresentation) of Medicare’s finances. … -
Statement of Paul Van de Water, Senior Fellow, on the 2013 Medicare Trustees' Report
May 31, 2013
Medicare has grown financially stronger in both the short and long term compared to last year, but it continues to face financing challenges in the long run, today’s new report from its trustees shows. The projected date of insolvency for Medicare’s Hospital Insurance (HI) … -
Statement of Robert Greenstein, President, on the 2013 Social Security Trustees' Report
May 31, 2013
Social Security does not face an immediate crisis, the trustees’ report shows, but it does face a funding shortfall two decades from now that the President and Congress should address in the near future so the program can fully meet its promises. Specifically, the trustees estimate that Social Security will be able to pay full … -
Proposed Balanced Budget Amendment is Extreme by International Standards
Revised May 3, 2013
Some proponents of a constitutional balanced budget amendment have argued that other developed countries’ constitutions require balanced budgets, suggesting that such a requirement for the federal government would therefore be appropriate.[2] In reality, however, no European country — not even Germany or Switzerland, which are … -
Chained CPI Proposal Would Cut Social Security Retirement Benefits by About 2 Percent, on Average
April 23, 2013
The President’s new budget proposes to use the chained Consumer Price Index (CPI) for computing cost-of-living adjustments in Social Security and certain other federal benefits, as well as for indexing key parameters of the tax code.[1] The effect of this proposal on Social Security retirement benefits would vary by a … -
Commentary: Think Obama’s Medicare Savings Aren’t Significant? Take a Closer Look.
April 23, 2013
Commentators, pundits, and some policymakers routinely say that while the President’s new budget takes useful steps to reduce the cost of health care programs, the steps are small and rather timid. This judgment seems rooted in the belief that the budget’s changes affecting Medicare beneficiaries, which save a modest $64 … -
Policy Basics: Deficits, Debt, and Interest
Updated April 18, 2013
Three important budget concepts — deficits (or surpluses), debt, and interest — are often misunderstood. Deficits (or Surpluses) For any given year, the federal budget deficit is the amount of money the federal government spends (also known as outlays) minus the amount of money it … -
President Obama’s Deficit-Reduction Package and Other Proposals in the 2014 Budget
April 11, 2013
The President’s 2014 budget is presented in two parts. One part includes the package of deficit- reduction policies that the President included in his last offer to Speaker Boehner during the “fiscal cliff” negotiations in December 2012. This package would reduce the deficit by $1.8 trillion over the next decade … -
Federal Income Taxes on Middle-Income Families Remain Near Historic Lows
Revised April 11, 2013
Federal taxes on middle-income Americans are near historic lows,[1] according to the latest available data. That’s true both for federal income taxes and total federal taxes.[2] Income taxes: A family of four in the exact middle of the income spectrum will pay only 5.3 percent of its 2013 income in federal income taxes next year, according to a new analysis by … -
Statement by Robert Greenstein, President, on President Obama’s FY 2014 Budget
April 10, 2013
President Obama’s budget includes a $1.8 trillion deficit reduction package that reflects his last offer to Speaker Boehner during their budget talks in December. The new budget — like the President’s offer — represents a substantial compromise on the President’s part; compared to the President’s original offer to the … -
Commentary: The Debate Over the Chained CPI
April 9, 2013
The news that President Obama’s new budget will propose adopting the “chained” Consumer Price Index (CPI) for cost-of-living adjustments in Social Security and other retirement programs, and annual inflation adjustments in the tax code, has intensified the debate on this issue. Some commentators portray this proposal as … -
Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens
April 2, 2013
The Tax Foundation released its annual “Tax Freedom Day” report today that, once again, can leave a strikingly misleading impression of tax burdens — showing an average federal tax rate across the United States that’s likely higher than the tax rate that 80 percent of U.S. households actually pay. To project the day … -
Sequestration by the Numbers
March 22, 2013
The automatic budget cuts known as “sequestration” took effect on March 1. Under the requirements of the 2011 Budget Control Act (BCA) as amended by January’s American Taxpayer Relief Act (ATRA), both defense and non-defense programs were automatically cut, or sequestered, reducing total funding by $85 billion. While the press and public have focused on the programmatic effects of … -
Ryan Roundup 2013: Everything You Need to Know About Chairman Ryan’s Latest Budget
March 22, 2013
Below is a compilation of the CBPP analyses and blog posts on House Budget Committee Chairman Paul Ryan’s budget, which the House has passed. Overview/General Statement: Robert Greenstein, President, on Chairman Ryan’s Budget Plan March 12, 2013 “When House Budget Committee Chairman Paul Ryan released his previous budget last … -
Ryan Budget Would Undermine Safety Net’s Work Supports
March 21, 2013
House Budget Committee Chairman Paul Ryan justifies the massive cuts he proposes in programs for low- and moderate-income Americans in part by claiming that the current safety net “can create a powerful disincentive to get ahead.”[1] He uses this argument to defend converting both Medicaid and the Supplemental Nutrition … -
Commentary: Why Balancing the Budget by the End of the Decade Is Not the Right Goal
March 20, 2013
As the House and Senate consider their respective budget resolutions this week, a key point of debate will be whether balancing the budget over the decade is an essential goal. We don’t think it is. We agree with Alice Rivlin, a former director of both the Congressional Budget … -
Ryan Budget Understates Defense Spending by $100 Billion
March 19, 2013
The Ryan budget understates defense spending by $100 billion over the next ten years. It claims $100 billion in defense savings that, in reality, would not materialize because they are flatly inconsistent with Congressional Budget Office (CBO) estimates of the amount of defense spending that would result from the amount of defense … -
An Apples-to-Apples Comparison of the Deficit-Reduction Figures in the House and Senate Budget Plans
March 19, 2013
The House and Senate are scheduled to consider the budget resolutions that their respective budget committees approved last week. These two budgets — one drafted by House Budget Committee Chair Paul Ryan, the other by Senate Budget Committee Chair Patty Murray — offer sharply contrasting visions.[1] Yet they are not … -
Paul Van de Water Testimony: Financing Medicare and Medicaid
March 19, 2013
Chairman Pitts, Ranking Member Pallone, and members of the subcommittee, I appreciate the invitation to appear before you today on the importance of preserving Medicare and Medicaid. Budgetary entitlements of many kinds are designed to guarantee Americans adequate protection in case of illness, disability, or economic misfortune. Efforts … -
The Ryan Budget’s Tax Cuts: Nearly $6 Trillion in Cost and No Plausible Way to Pay for It
March 17, 2013
The new budget from House Budget Committee Chairman Paul Ryan proposes a series of dramatic tax cuts that would cost nearly $6 trillion in lost federal revenue over the next decade (see Figure 1), and that would provide the lion’s share of their benefits to high-income households and corporations. But, despite its stated … -
Chairman Ryan Gets 66 Percent of His Budget Cuts from Programs for People With Low or Moderate Incomes
March 15, 2013
House Budget Committee Chairman Paul Ryan’s new budget plan would get at least 66 percent of its $5 trillion in non-defense budget cuts over ten years (relative to a continuation of current policies) from programs that serve people of limited means, standing a core principle of the Simpson-Bowles fiscal commission on its head. Not much … -
Commentary: Murray’s More Evenhanded Approach to Deficit Reduction Contrasts Sharply With Ryan’s
March 14, 2013
The budget that Senate Budget Committee Chair Patty Murray released yesterday stands in sharp contrast to the one that her House counterpart, Paul Ryan, released on Tuesday. As I wrote Tuesday, his budget is extreme.[1] Hers is more balanced and appropriate to meet the nation’s economic and fiscal challenges. The … -
Statement by Robert Greenstein, President, On Chairman Ryan’s Budget Plan
March 12, 2013
When House Budget Committee Chairman Paul Ryan released his previous budget last year, I wrote that for most of the past half century, its extreme nature would have put it outside the bounds of mainstream discussion. It was, I wrote, “Robin Hood in reverse — on … -
Deficit Reduction Should Not Increase Poverty and Hardship
March 11, 2013
Executive Summary With President Obama and lawmakers of both parties vowing to achieve further deficit reduction, the stakes are high for low- and moderate-income Americans. If policymakers heavily target programs that serve vulnerable Americans, they will run the risk of increasing poverty and hardship and reducing opportunity for … -
Jared Bernstein Testimony: Tax Expenditures: How Cutting Spending Through the Tax Code Can Lower the Deficit, Improve Efficiency, and Boost Fairness in the US Tax Code
March 5, 2013
Chairman Murray, ranking member Sessions, I thank you for the opportunity to testify today. These are uniquely challenging times for fiscal policy. Our national economy continues to face a series of self-imposed fiscal deadlines in the forms of cliffs, ceilings, and most recently, sequestration. Various independent analyses find … -
Commentary: Senate Republican Proposal Fails to Address Key Sequestration Problems
February 28, 2013
A measure from Senators James Inhofe (R-OK) and Patrick Toomey (R-PA), which the Senate is expected to consider today, is presented by supporters as giving the President the needed flexibility to address the impending $85 billion in across-the-board spending cuts (“sequestration”), enabling him to cut some programs more and some … -
Economic Downturn and Legacy of Bush Policies Continue to Drive Large Deficits
Updated February 28, 2013
Federal deficits and debt have been sharply higher under President Obama, but the evidence continues to show that the Great Recession, President Bush’s tax cuts, and the wars in Afghanistan and Iraq explain most of the deficits that have occurred on Obama’s watch — based on the latest Congressional Budget Office projections … -
Tax Expenditure Reform: An Essential Ingredient of Needed Deficit Reduction
February 27, 2013
The revenue raised as part of January’s American Tax Relief Act (ATRA) came primarily as a result of raising tax rates on high-income households. Yet throughout the negotiations around avoiding the fiscal cliff last year, both President Obama and Speaker Boehner called for raising revenue through limiting tax deductions, exclusions, and other tax breaks … -
The Pending Automatic Budget Cuts
February 26, 2013
This report has been updated to reflect new data. In budget circles and beyond, all eyes are focused on the automatic budget cuts, known as “sequestration,” that are slated to take effect on March 1. But, in fact, March will bring two separate sequestrations — the first and well-known one of March 1 and a second and much smaller one … -
Testimony of Robert Greenstein, President, Center on Budget and Policy Priorities, Before the Senate Committee on Finance
February 26, 2013
Mr. Chairman and distinguished members of the Finance Committee, I appreciate the invitation to testify here today. As we all know, the nation faces fiscal and economic challenges, and we will have to make some tough decisions to put the budget on a more sustainable fiscal course and to do so without hindering a still-too-weak economic … -
Commentary: A Look at the New Simpson-Bowles Plan
February 22, 2013
The new deficit-reduction plan that Alan Simpson and Erskine Bowles issued this week calls for $2.4 trillion of additional deficit reduction over the next ten years (through 2023), with roughly $2.1 trillion in policy changes and about $300 billion in resulting interest savings.[1] Of the policy savings, about $700 billion would come … -
Testimony of Chad Stone, Chief Economist, on Unintended Consequences: Is Government Effectively Addressing the Unemployment Crisis?
February 14, 2013
Mr. Chairman and members of the subcommittee, thank you for the opportunity to testify on this important topic. The first half of my testimony focuses on the macroeconomic roots of our current jobs crisis and the second part focuses specifically on unemployment insurance. There is no doubt that the United States continues to suffer a … -
Testimony of Robert Greenstein, President, Before Senate Budget Committee
February 13, 2013
I appreciate the invitation to testify today on the impact of federal budget decisions on families and communities. This is an important matter. As you know, the nation will have to make tough decisions to put the budget on a more sustainable fiscal course. The issue is not only whether policymakers act to secure adequate … -
$1.5 Trillion in Deficit Savings Would Stabilize the Debt Over the Coming Decade
February 11, 2013
Policymakers could stabilize the public debt over the coming decade with $1.5 trillion in additional deficit savings, according to the Center’s updated calculations, which are based on the new budget projections that the Congressional Budget Office (CBO) released this week. Policymakers could achieve these savings with $1.3 … -
“Boehner Rule” Linking Debt-Ceiling Increase to Spending Cuts Is Dangerous Policy
January 25, 2013
House Speaker John Boehner has argued that “any increase in the debt limit has to be accompanied by spending reductions that equal or exceed it.”[1] The Budget Control Act (BCA) of 2011, which ended the previous debt-limit showdown, paired a $2.1-trillion increase in the debt ceiling with spending cuts of similar size.[2] … -
Separating the Debt Limit From the Deficit Problem
January 23, 2013
Some lawmakers speak of refusing to raise the debt limit and thereby risking default on obligations of the U.S. Treasury unless Congress and the President agree to harsh spending cuts, or of raising the debt limit for only a few months at a time and thereby fostering ongoing uncertainty. To be sure, the nation’s long-term fiscal … -
Achieving Further Deficit Reduction Solely Through Spending Cuts Entails Cutting Entitlements That Benefit the Poor and Middle Class While Shielding the Biggest Entitlements for the Wealthy
January 9, 2013
Since President Obama and Congress enacted the “fiscal cliff” budget deal, congressional Republican leaders have vowed not to raise a dollar more in taxes for deficit reduction. All further deficit reduction, they say, must come from budget cuts, primarily from entitlement programs. That, however, would spare the broad … -
To Stabilize the Debt, Policymakers Should Seek Another $1.4 Trillion in Deficit Savings
January 9, 2013
With the “fiscal cliff” deal in place, President Obama and Congress are now expected to seek more deficit reduction to replace the automatic spending cuts (“sequestration”) that are scheduled to take effect on March 1. Policymakers can stabilize the public debt over the coming decade, ensuring that it … -
Commentary: Next Round on the Deficit
January 7, 2013
In recent days, policymakers, pundits, and the media have debated whether the “fiscal cliff” budget deal was a victory or defeat for the President or congressional Republicans, progressives or conservatives, rich or poor, the economy or the deficit — you name it. Most of the commentary is unpersuasive, however, for … -
Budget Deal Makes Permanent 82 Percent of President Bush’s Tax Cuts
January 3, 2013
The American Taxpayer Relief Act of 2012 (ATRA)[1] , which President Obama signed into law last night, makes permanent 82 percent of President Bush’s tax cuts. The Joint Committee on Taxation (JCT) and Congressional Budget Office estimate that making permanent all of the Bush tax cuts would have cost $3.4 trillion over 2013-2022.[2] …
