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Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts

Wednesday, August 30, 2023

Friday, July 28, 2023

Earmarks

Kevin McCarthy in Young Guns (2010):
KM: On the flight in this week, it just happened that sitting next to me was Gary Hart. We were having a kind of generational talk about Washington. And one of the things he pointed out that was wrong with Washington was earmarks. He said Republicans and Democrats had both been poisoned by earmarks.
Our Republican majority ended the practice of earmarks, which often diverted transportation spending to politically favored projects. 
House Republicans have so thoroughly stacked the earmarking deck in their favor in appropriations bills for the upcoming fiscal year that the top Democratic recipient doesn’t even appear in the top 60 among lawmakers in that chamber.

In their first year in the majority since Congress in 2021 brought back the practice Republicans banned a decade earlier, GOP lawmakers are spreading nearly $7.4 billion among 4,714 individual projects tucked inside the fiscal 2024 appropriations bills.

While Democrats requested 65 percent of those earmarks, they are receiving less than 38 percent of the dollars at nearly $2.8 billion, a CQ Roll Call analysis found.

Republicans argue that’s only fair; Democrats gave themselves roughly the same percentage when they were in charge. But Democrats allowed Republicans the largest individual hauls in that chamber last year, and eight out of the top 10 earmarkers in initial fiscal 2023 bills were GOP members.

Monday, July 3, 2023

Deficit and Debt 2023

Many posts have discussed federal deficits and the federal debt.

 From CBO:

Each year, the Congressional Budget Office publishes a report presenting its projections of what the federal budget and the economy would look like over the next 30 years if current laws generally remained unchanged. The long-term budget projections typically follow CBO’s 10-year baseline budget projections and then extend most of the concepts underlying them for an additional 20 years. This year, the long-term projections are based on CBO’s May 2023 baseline projections but also reflect the estimated budgetary effects of the Fiscal Responsibility Act of 2023 (Public Law 118-5), which was enacted on June 3, 2023.


In CBO’s projections, the deficit equals 5.8 percent of gross domestic product (GDP) in 2023, declines to 5.0 percent by 2027, and then grows in every year, reaching 10.0 percent of GDP in 2053. Over the past century, that level has been exceeded only during World War II and the coronavirus pandemic. The increase in the total deficit results from faster growth in spending than in revenues. The primary deficit, which excludes interest costs, equals 3.3 percent of GDP in both 2023 and 2053, but the total deficit is boosted by rising interest costs.


By the end of 2023, federal debt held by the public equals 98 percent of GDP. Debt then rises in relation to GDP: It surpasses its historical high in 2029, when it reaches 107 percent of GDP, and climbs to 181 percent of GDP by 2053. Such high and rising debt would slow economic growth, push up interest payments to foreign holders of U.S. debt, and pose significant risks to the fiscal and economic outlook; it could also cause lawmakers to feel more constrained in their policy choices. 


Federal debt as percentage of GDP 





Saturday, April 1, 2023

Social Security Trust Funds: The Lights are Blinking Red

From the Social Security Administration: 

The Social Security Board of Trustees today released its annual report on the financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to become depleted in 2034, one year earlier than projected last year, with 80 percent of benefits payable at that time.

The OASI Trust Fund is projected to become depleted in 2033, one year sooner than last year’s estimate, with 77 percent of benefits payable at that time. The DI Trust Fund asset reserves are not projected to become depleted during the 75-year projection period.

In the 2023 Annual Report to Congress, the Trustees announced:
  • The asset reserves of the combined OASI and DI Trust Funds declined by $22 billion in 2022 to a total of $2.830 trillion.
  • The total annual cost of the program is projected to exceed total annual income in 2023 and remain higher throughout the 75-year projection period. Total cost began to be higher than total income in 2021. Social Security’s cost has exceeded its non-interest income since 2010.
  • The year when the combined trust fund reserves are projected to become depleted, if Congress does not act before then, is 2034. At that time, there would be sufficient income coming in to pay 80 percent of scheduled benefits.

...

View the 2023 Trustees Report at www.socialsecurity.gov/OACT/TR/2023/.

Friday, February 24, 2023

The Budget Process

In the forward to a committee report on the congressional budget process, Senator Bernie Sanders offers some observations:

This volume explains, in excruciating detail, how the congressional budget process works. That process gives new meaning to the word Byzantine.
Let’s be clear: no one would intentionally design something like this. This process is needlessly complicated. Americans deserve a simpler, more transparent budget process.
This process is bound by precedent, but many of these precedents are known to only a few. Secret law is not fair law. This volume makes public precedents that Democrats have collected. We welcome others to join us and make other precedents public.
This process vests a great deal of power in the hands of the SenateParliamentarian, who does not answer to voters, to often make arbitrary decisions to block changes in law that would substantially improve the lives of working families supported by the overwhelming majority of the American people without a supermajority of 60 votes. As this volume makes clear, in the budget process, those decisions have empowered a minority of Senators to block a raise in the minimum wage, sensible immigration reform, a cap on the price of insulin, and many other common-sense initiatives.
A fair system would respond to the demands of the American people. The congressional budget process fails that test.
I hope that by laying out this story, this volume will highlight the weaknesses in the current system and spur reform. We need a more democratic system that allows the will of the American people to prevail.

From the report:

The Congressional Budget Act layered new institutions—Budget Committees and the Congressional Budget Office—on top of the existing structures. And the Budget Act layered new procedures on top of existing procedures. In Riddick‘s Senate Procedure, the premier authority on Senate procedure, the Senate Parliamentarian noted: “The provisions of the Congressional Budget Act of 1974 supplement rather than supplant Senate procedure, and therefore they are not the exclusive means to achieve the purposes for which they were enacted.”13 This volume details those Budget Act procedures.

 

Wednesday, January 25, 2023

Draconian Cuts

Many posts have discussed federal deficits and the federal debt.

From the centrist Committee for a Responsible Federal Budget:

The exact amount of savings needed for full budget balance is uncertain and will depend both on budget projections in the Congressional Budget Office's forthcoming ten-year baseline as well as the path of any proposed policies. In the recent CRFB Fiscal Blueprint for Reducing Debt and Inflation, we estimated achieving balance would require roughly $14.6 trillion of deficit reduction through 2032, including over $2 trillion of policy savings (and nearly $400 billion of interest savings) in 2032 alone.1

To achieve these savings without more revenue, we estimate all spending in 2032 would need to be cut by 26 percent; this figure rises to 33 percent if defense and veterans spending is exempted from the cuts. For a sense of magnitude, applying this cut across the board would mean reducing annual Social Security benefits for a typical new retiree by $10,000 to $13,000 in 2032. It would also mean laying off 1.1 to 1.4 million federal employees (more than two-thirds of the civilian workforce if the military were exempted) and removing 20 to 25 million people from Medicaid eligibility.

Excluding Social Security and Medicare from cuts would make the task of balance even more unrealistic. Without touching spending on defense, veterans, or Social Security, all other spending would need to be cut by 51 percent. Also excluding Medicare would mean that remaining spending would need to ultimately be cut by 85 percent.

Saturday, May 7, 2022

Debt: Pay Now or Pay More Later

CBO analyzes the effects of waiting to stabilize the federal debt.
  • Regardless of when the process was begun, stabilizing federal debt as a percentage of GDP would require that income tax receipts or benefit payments change substantially from their currently projected path.
  • The longer policymakers waited to implement a policy change, the more debt would grow in relation to GDP, and the greater the policy changes needed to stabilize it would be.
  • If the option of increasing income tax rates was chosen, the effects of delaying implementation would be greater than they would be under the option of cutting benefits: Increases in interest costs would be larger, GDP and household consumption would be lower, and debt as a percentage of GDP would be higher in the long run.
  • Under either option, the negative effects of delaying the implementation of policy changes on people’s consumption and labor supply would be disproportionately borne by younger people and lower-income people.
 

Monday, March 28, 2022

Fund the Police

The White House is responding to public concern about crime:
In his State of the Union address earlier this month, President Biden highlighted his comprehensive strategy to reduce gun violence. He emphasized the $350 billion in American Rescue Plan funds that we’ve made available for cities, counties, and states that enable them to hire more police and invest in proven strategies like community violence intervention. He talked about our efforts to crack down on difficult-to-trace “ghost guns,” part of an aggressive array of executive actions to reduce gun violence, taking more steps than any other Administration in its first year. And he repeated his call for Congress to take further action tackle the gun violence epidemic that continues to take more than 100 lives each day.

We have made strong progress by rolling out and executing on the President’s comprehensive gun crime reduction strategy. This strategy contains five key components:
  • Stemming the flow of firearms used to commit violence,
  • Supporting local law enforcement with federal tools and resources to put more cops on the beat and address violent crime
  • Investing in evidence-based community violence interventions
  • Expanding summer programming, employment opportunities, and other services and supports for teenagers and young adults to give them pathways away from crime
  • Helping formerly incarcerated individuals successfully reenter their communities instead of re-offending.
You can read a full summary of the progress we’ve made here. We are pulling all of the levers of the federal government to address this crisis. For example:
  • The President secured a bipartisan investment in fighting gun crime, including a new $50 million initiative to expand community violence interventions, additional funding for community policing, and the resources the Bureau of Alcohol Tobacco and Firearms (ATF) needs to continue to enforce our existing gun laws.
  • The Administration made American Rescue Plan funds available for fighting gun crime, and cities and states across the country have taken up this opportunity.
  • The Justice Department is taking regulatory action to rein in the proliferation of “ghost guns”—unserialized, homemade firearms that are difficult for law enforcement to trace.
  • The Justice Department launched five new law enforcement strike forces focused on addressing firearms trafficking, including on the “Iron Pipeline” – the illegal flow of guns sold in the south, transported up the East Coast, and found at crime scenes from Baltimore to New York City.
  • In part due to action by the U.S. Department of Health and Human Services, Connecticut and Illinois enacted legislation that allows Medicaid to reimburse providers for hospital-based gun violence prevention services.
That progress is made possible by the dedicated gun violence prevention team we have at the White House, working to combat gun violence—every day, from every angle. Under the leadership of Domestic Policy Advisor Susan Rice, I coordinate the White House’s gun violence work. The solutions to gun violence are interdisciplinary, which is why we have built a multi-faceted, 12-person team of experts here in the heart of the Domestic Policy Council who have teamed up to drive forward our gun violence reduction agenda.

Tuesday, November 23, 2021

Pelosi at Work

Carl Hulse at NYT:
On a Wednesday night in September, while President Biden backslapped in the Republican dugout during the annual congressional baseball game, Speaker Nancy Pelosi sat nearby, sober-faced and wagging her finger while speaking into her cellphone, toiling to salvage her party’s top legislative priority as it teetered on the brink of collapse.

On the other end of the line was Senator Joe Manchin III, Democrat of West Virginia, a crucial swing vote on Mr. Biden’s sweeping social policy bill, and Ms. Pelosi, seated in the V.I.P. section behind the dugout at Nationals Park, was trying to persuade him to embrace $2.1 trillion in spending and climate change provisions she considered essential for the legislation.

In a moment captured by C-SPAN cameras that went viral, Ms. Pelosi appeared to grow agitated as Mr. Manchin, according to sources apprised of the call, told her that he could not accept more than $1.5 trillion — and was prepared to provide a document clearly laying out his parameters for the package, benchmarks that House Democrats had been clamoring to see.

The call reflected how Ms. Pelosi’s pivotal role in shepherding Mr. Biden’s agenda on Capitol Hill has reached far beyond the House that is her primary responsibility and into the Senate, where she has engaged in quiet and little-noticed talks with key lawmakers who have the power to kill the package or propel it into law. 
Her efforts — fraught with challenges and littered with near-death experiences for the bill — finally paid off on Friday with House passage of the $2.2 trillion social policy and climate change package.

...

While her main responsibility was wrangling the House, Ms. Pelosi devoted considerable time to Mr. Manchin and Ms. Sinema, both of whom hold the power to scuttle the deal in the evenly divided Senate if they balk.

Ms. Pelosi has ties to both. She has bonded with Mr. Manchin, who like Ms. Pelosi grew up in a political family, over their shared Italian heritage and Catholicism and her work on health and pension benefits for coal miners, represented in her office by a statue of a miner gifted to her by Mr. Manchin.

 

Friday, July 2, 2021

Budget Update

From the Congressional Budget Office:

In CBO’s budget projections (called the baseline), the federal budget deficit for fiscal year 2021 is $3.0 trillion, nearly $130 billion less than the deficit recorded in 2020 but triple the shortfall recorded in 2019. Relative to the size of the economy, this year’s deficit is projected to total 13.4 percent of gross domestic product (GDP), making it the second largest since 1945, exceeded only by the 14.9 percent shortfall recorded last year. The economic disruption caused by the 2020–2021 coronavirus pandemic and the legislation enacted in response continue to weigh on the deficit (which was already large by historical standards before the pandemic).

Baseline deficits under current law are significantly smaller after 2021 and average $1.2 trillion from 2022 to 2031. They average 4.2 percent of GDP through 2031, well above their 50-year average of 3.3 percent. In CBO’s projections, the deficit declines to about 3 percent of GDP in 2023 and 2024 before increasing again, reaching 5.5 percent in 2031 (see Table 1). By the end of the period, both primary deficits (which exclude net outlays for interest) and interest outlays are increasing in nominal terms and as a share of GDP.
With such deficits, federal debt held by the public—which stood at $21.0 trillion, or 100 percent of GDP, at the end of 2020—would total $23.0 trillion, or 103 percent of GDP, at the end of 2021. As recently as 2007, at the start of the previous recession, federal debt equaled 35 percent of GDP. Projected federal debt dips just below 100 percent of GDP between 2023 and 2025 before rising again, reaching 106 percent in 2031, about the same as the amount recorded in 1946, which stands as the highest in the nation’s history.

Revenues in CBO’s baseline increase to 17 percent of GDP in 2021 and are relatively stable thereafter, averaging 18 percent from 2022 through 2031. Outlays are projected to decline from 31 percent of GDP this year to about 21 percent from 2023 through 2025 as pandemic-related spending wanes and low interest rates persist. Outlays then increase relative to GDP, owing to rising interest costs and greater spending for major entitlement programs.

Compared with its estimates from February 2021, CBO’s estimate of the deficit for 2021 is now $745 billion (or 33 percent) larger, and its projection of the cumulative deficit between 2022 and 2031, $12.1 trillion, is now $173 billion (or 1 percent) smaller. In 2021, recently enacted legislation—primarily the American Rescue Plan Act of 2021 (Public Law 117-2)—increases the projected deficit by $1.1 trillion, mostly as a result of higher spending. The largest budgetary effects stem from additional funding for recovery rebates for individuals, for state and local governments, for educational institutions, and for an extension of expanded unemployment compensation. The effects of a stronger economy as well as technical changes (that is, changes that are neither legislative nor economic) partially offset the deficit effects of recently enacted legislation. For subsequent years, CBO has increased its projections of both revenues and outlays—the former by more than the latter.
Projected revenues over the next decade are now higher because of the stronger economy and consequent higher taxable incomes. In addition, tax collections in 2020 and 2021—particularly amounts collected from individual income taxes—were stronger than the amounts implied by currently available data on economic activity and the past relationship with revenues. In CBO’s projections, that unexpected strength dissipates over the next few years. Besides resulting from the direct effects of recent legislation, the changes to outlays since February over the projection period are largely attributable to higher interest rates (which boost net interest costs) and higher projected inflation and wages (which increase the costs of major benefit programs).

CBO’s projections are constructed in accordance with the Balanced Budget and Emergency Deficit Control Act of 1985 (P.L. 99-177) and the Congressional Budget Act of 1974 (P.L. 93-344). Those laws require CBO to construct its baseline projections under the assumption that current laws governing revenues and spending will generally stay the same and that discretionary appropriations in future years will match current funding, with adjustments for inflation.2

CBO’s baseline is not intended to provide a forecast of future budgetary and economic outcomes; rather, it provides a benchmark that policymakers can use to assess the potential effects of future policy decisions. Future legislative action could lead to markedly different outcomes. Even if federal laws remained unaltered for the next decade, actual budgetary outcomes would probably differ from CBO’s baseline—not only because of unanticipated economic developments, but also as a result of many other factors that affect federal revenues and outlays.

Thursday, June 17, 2021

Tax Gap

From the Committee for a Responsible Federal Budget:
One of the most fair and efficient ways for policymakers to raise revenue would be to close some portion of the “tax gap.” The tax gap is the difference between taxes paid and taxes owed by law. In this primer, we answer the following questions:
Reducing the tax gap could raise additional revenue without increasing taxes and should be a key legislative priority for both parties. In future pieces, we will discuss ideas and options for how to close it.
How Big is the Tax Gap?

The Department of the Treasury recently estimated a "gross tax gap" of $630 billion in tax year 2019, with over $3.6 trillion of taxes owed but only about $3 trillion paid voluntarily. After accounting for $76 billion of additional revenue from Internal Revenue Service (IRS) enforcement activities and late payments, Treasury estimates the “net tax gap” totaled $554 billion in 2019, which is 2.6 percent of Gross Domestic Product (GDP), or 15.2 percent of total tax revenue owed.

Sunday, March 14, 2021

Deficits and Debt Will Increase

From the Committee for a Responsible Federal Budget: 
Now that the American Rescue Plan Act has been signed into law, the federal deficit is on course to exceed $3 trillion this year, with debt reaching a new record as a share of the economy.

In February, under what was current law at the time, the Congressional Budget Office (CBO) projected the budget deficit would total $2.3 trillion in 2021, $1.1 trillion in 2022, and $1.9 trillion in 2031. Incorporating the direct effects of the American Rescue Plan Act, we project the deficit will now total $3.4 trillion this year – higher than last year’s record $3.1 trillion – and $1.6 trillion in 2022.

With the passage of the American Rescue Plan Act, we now project deficits will total $16.6 trillion over the 2021 to 2031 budget window, a $2.1 trillion increase over CBO’s prior estimate of $14.5 trillion. Virtually all of this increase will take place between 2021 and 2026.

Measured as a share of the economy, the deficit will total 15.6 percent of GDP this year and average 4.7 percent over the coming decade. Previously, the deficit was expected to total 10.3 percent of GDP in 2021 and average 4.4 percent over the 2022-2031 period. As a share of GDP, the 2021 deficit will be the fourth highest in history, eclipsed only by three years of borrowing to fight World War II.

Saturday, February 13, 2021

Raising the Minimum Wage

 From the Congressional Budget Office:

If enacted at the end of March 2021, the Raise the Wage Act of 2021 (S. 53, as introduced on January 26, 2021) would raise the federal minimum wage, in annual increments, to $15 per hour by June 2025 and then adjust it to increase at the same rate as median hourly wages. In this report, the Congressional Budget Office estimates the bill’s effects on the federal budget. 
  • Higher prices for goods and services—stemming from the higher wages of workers paid at or near the minimum wage, such as those providing long-term health care—would contribute to increases in federal spending.
  • Changes in employment and in the distribution of income would increase spending for some programs (such as unemployment compensation), reduce spending for others (such as nutrition programs), and boost federal revenues (on net). 

...

Increasing the minimum wage would affect employment in several ways.
  • Higher wages would increase the cost to employers of producing goods and services. Employers would pass some of those increased costs on to consumers in the form of higher prices, and those higher prices, in turn, would lead consumers to purchase fewer goods and services. Employers would consequently produce fewer goods and services, and as a result, they would tend to reduce their employment of workers at all wage levels. 
  • When the cost of employing low-wage workers goes up, the relative cost of employing higher-wage workers or investing in machines and technology goes down. Some employers would therefore respond to a higher minimum wage by shifting toward those substitutes and reducing their employment of low-wage workers.
  • In some limited circumstances, increasing the minimum wage could boost employment if employers had what is known as monopsony power—that is, bargaining power that allows them to set wages below the rates that would prevail in a more competitive market.
  • Because increasing the minimum wage would shift income toward families with lower income, it would boost overall demand in the short term. Lower-income families spend a larger proportion of any additional income on goods and services than do families with higher income. That increased demand for goods and services would reduce the drop in employment for several years after the implementation of a higher minimum wage, CBO projects. 
Taking those factors into account, CBO projects that, on net, the Raise the Wage Act of 2021 would reduce employment by increasing amounts over the 2021–2025 period. In 2025, when the minimum wage reached $15 per hour, employment would be reduced by 1.4 million workers (or 0.9 percent), according to CBO’s average estimate. In 2021, most workers who would not have a job because of the higher minimum wage would still be looking for work and hence be categorized as unemployed; by 2025, however, half of the 1.4 million people who would be jobless because of the bill would have dropped out of the labor force, CBO estimates. Young, lesseducated people would account for a disproportionate share of those reductions in employment.

Friday, April 17, 2020

Elections and Earmarks

Kevin Kosar at LegBranch.org:
This decision to continue to forswear earmarks looks myopic, according to a recent analysis by Professor Andrew Sidman of John Jay College. His Pork Barrel Politics: How Government Spending Determines Elections in a Polarized Era (Columbia) shows how both political parties can benefit from giving individual legislators more power to direct spending.
...
Sidman crunched data from various sources (e.g., the Federal Assistance Awards Data System, the American National Election Studies, DW-Nominate, etc.) over a period of rising polarization (1983 to 2012). He also analyzed public works spending and elections results from 1876 through 2012. The aim is to see, as the book’s title indicates, how pork barrel spending affects reelection.
The top-line results are intriguing. “When polarization is high, incumbents benefit from securing pork consistent with the ideological preferences of their party’s base voters and pay electoral costs for securing pork inconsistent with these preferences.” Democrats benefit from dishing out formula grants, project grants, and direct payments. Republicans fend off challengers with loan and insurance programs. Woe to the elected official who sends home the wrong sort of bacon, as he or she may well find themselves with a competent, well-financed challenger. The results, it is worth mentioning, are consistent with previously published survey research.
But when it comes to “defense pork,” Sidman finds a different trend. Democrats and Republicans alike pursue it whether they are polarized or not. In fact, highly polarized legislators distribute military-related benefits for the home districts all the more.
It is no accident that the National Defense Authorization Act, which benefits just about every district in the nation, has sailed through enactment annually for six consecutive decades. Rare is the legislator who stands up and declares, “My district really does not need this military base,” or “My home state refuses to partake of this wasteful weapons-building contract.” On the contrary, they tend to boast about the defense dollars they bring home. That Congress had to establish BRAC commissions and special fast-track voting procedures to enable its members to find ways to trim unneeded military facilities only goes to underscore the electoral potency of congressionally directed defense expenditures.

Wednesday, March 4, 2020

Underfunding the Legislative Branch

Kevin Kosar at LegBranch.org:
From 1995 to 2020, spending on the legislative branch has lagged, according to a recent analysis by Demand Progress. Funding for Congress is a rounding error:
“The legislative branch receives only 0.7% of non-defense discretionary funding. Total non-defense discretionary funding for FY 2020 was $621.5 billion; the legislative branch received just under $5 billion.”
The analysis also notes that Congress itself only sees a small portion of the total legislative branch dollars.
“Within the legislative branch, 20% of its total funding goes towards the personal offices in the House and the Senate, at $520m each, which covers all member representational costs. Major costs for Congress come from its support agencies: the Library of Congress gets 15% of the budget ($728m); the Architect and GAO each gets about 12% (~$610m); and the Capitol Police get 9.5% (~$460m). (The USCP has requested a $56m increase for FY 2021.)”
Read more of the analysis at https://s3.amazonaws.com/demandprogress/reports/2020-02_The_Undermining_of_Congress.pdf.

Sunday, February 2, 2020

Spending on the Legislative Branch

First Branch Forecast:
Every year Congress determines exactly how much money will be made available to the Legislative Branch and the purpose for which it can be spent. The Legislative Branch Appropriations bills directs congressional spending, line-item by line-item — but, alas, the instructions are published as prose, can run for dozens of pages, and it is difficult to see how appropriations spending has changed over the decades.
We’ve gone through all of the spending bills for the last quarter-century and lined up the spending items in a downloadable spreadsheet. Now you can see how spending on each line-item has changed from 1994 forward.
Peruse the Legislative Branch budget line items from fiscal years 1994-2020 below, or download the data set here.

Tuesday, January 28, 2020

Deficit and Debt

Phillip L. Swagel, CBO’s Director:
In our projections, which incorporate the assumption that current laws governing taxes and spending generally remain unchanged, the federal budget deficit is $1.0 trillion this year and averages $1.3 trillion per year between 2021 and 2030. Measured as a percentage of economic output, the deficit widens from 4.6 percent of GDP in 2020 to 5.4 percent in 2030. Over the past 50 years, the average annual deficit equaled 3.0 percent of GDP, and it was generally much smaller when the economy was strong.
Revenues will grow in our expanding economy. If current laws did not change, federal revenues would rise from 16.4 percent of GDP in 2020 to 18.0 percent of GDP in 2030. Those projections reflect a scheduled increase in individual income taxes at the end of 2025, among other things.
Spending is projected to grow more than revenues, widening the gap between the two. In our projections, federal outlays climb from 21.0 percent of GDP to 23.4 percent over the next decade. That growth has two sources: increased spending for mandatory programs and interest on federal debt.
The increase in mandatory outlays over the decade—from 12.9 percent of GDP to 15.2 percent—is attributable partly to the aging of the population. Another major factor is the growth of health care costs, which has slowed in recent years but is still projected to be faster than economic growth. Those two long-term trends affect Social Security and Medicare in particular, and they are expected to persist beyond 2030.
As for the increase in interest spending, one of its causes is the large deficits, which lead the federal government to borrow more each year in our projections. Another cause is rising interest rates over the next decade. All in all, the federal government’s net interest outlays are projected to increase from 1.7 percent of GDP in 2020 to 2.6 percent in 2030.
As a result of the persistently large deficits, federal debt held by the public is projected to rise to $31.4 trillion at the end of 2030—an amount equal to 98 percent of GDP. At that point, debt would be higher as a percentage of GDP than at any point since just after World War II and more than double what it has averaged over the past 50 years. We project that the gap between spending and revenues would continue to widen over the following two decades and that debt would reach 180 percent of GDP by 2050, well above the highest percentage ever recorded in the United States. And it would be headed still higher.

Federal Debt Held by Public as Percent GDP:

 

Tuesday, January 14, 2020

Immigration, the Economy, and the Federal Budget

From CBO:
About 47 million people living in the United States in 2018 were born in other countries. Roughly three-quarters of those people were here legally. They included naturalized citizens, lawful permanent residents (who are also known as green-card holders), refugees, people who were granted asylum, and people who were temporarily admitted for a specific purpose, such as extended work or study. (The people accounted for in this document do not include visitors for business or pleasure.) The remaining one-quarter, or about 11 million people, were here illegally, having either remained here when their temporary legal status expired or crossed the border illegally. For more than a decade, the number of people remaining when their temporary status expired has exceeded the number crossing the border illegally, mostly because the number of illegal border crossings has declined.

Effects of the Foreign-Born Population on the Economy
Immigration, whether legal or illegal, expands the labor force and changes its composition, leading to increases in total economic output—though not necessarily to increases in output per capita.
The effects of immigration on wages depend on the characteristics of the immigrants. To the extent that newly arrived workers have abilities similar to those of workers already in the country, immigration would have a negative effect on wages. To the extent that newly arrived workers have abilities that complement those of workers already in the country, immigration would foster productivity increases, having a positive effect on wages. But it is difficult to disentangle the influence of immigration on wages from the influence of other forces, such as changes in technology and the global economy.
A change in the legal immigration status of people who are already in the United States would affect their wages and productivity. People with legal immigration status are usually authorized to work; so are recipients of Deferred Action for Childhood Arrivals (DACA). People without legal immigration status are usually not authorized to work (although many work regardless). And if people were to acquire legal status, they would be better positioned to ask for more compensation and become likelier to be employed in jobs that best matched their skills, increasing their wages and productivity.

Effects of the Foreign-Born Population on the Federal Budget
People’s direct effects on the federal budget depend largely on the taxes that they pay and the government programs in which they participate. Foreign-born and native-born citizens are liable for the same taxes and eligible for the same programs. Foreign-born people who are not citizens are generally liable for federal taxes, but their eligibility for various federal programs depends on their immigration status. (Similarly, people’s effects on state and local budgets depend on their liability for state and local taxes and their use of state and local public services. For example, increases in population exert budgetary pressure on community resources, such as schools.

Sunday, September 1, 2019

Useful Websites

In 2018, the government spent $4.11 trillion. USA Spending tracks federal spending to ensure taxpayers can see how their money is being used in communities across America. Learn more on how this money was spent with tools to help you navigate spending from top to bottom.

The Niskanen Center’s Science of Politics Podcast features up-and-coming researchers delivering fresh insights on the big trends driving American politics and policy today. In 30 minutes, you’ll get beyond punditry to data-driven understanding.  Each episode goes in-depth on one hot topic in the news with two researchers who have just published relevant empirical studies. Hear about their new discoveries and get the broader context that’s lost in the daily news shuffle.


FCC Public Inspection Files
This site provides summary information about, and access to, the “public inspection file” (or “public file”) for the following types of entities: licensed full-service radio and television broadcast stations, Class A television stations, cable television systems, direct broadcast satellite (“DBS”) providers, and satellite radio (also referred to as “Satellite Digital Audio Radio Services” or “SDARS”) licensees.

The Commission first adopted rules requiring broadcast stations to keep a public file more than 40 years ago and certain political programming files have been public for nearly 75 years. The public file for broadcast stations contains a variety of information about each station’s operations and service to its community of license, including information about political time sold or given away by each station, quarterly lists of the most significant programs each station aired concerning issues of importance to its community, data on ownership of each station and active applications each station has filed with the Commission. The Commission adopted the public inspection file requirement to "make information to which the public already has a right more readily available, so that the public will be encouraged to play a more active part in dialogue with broadcast licensees."

Cable, DBS, and SDARS entities also have public and political file requirements. These entities’ political file requirements are substantially similar to those of television and radio broadcasters. Apart from the political file, however, cable, DBS, and SDARS entities’ other public file requirements differ somewhat from the public file

Thursday, August 22, 2019

Debt Will Grow, Economy Will Slow

From CBO:
In CBO’s projections, the federal budget deficit is $960 billion in 2019 and averages $1.2 trillion between 2020 and 2029. Over the coming decade, deficits (after adjustments to exclude the effects of shifts in the timing of certain payments) fluctuate between 4.4 percent and 4.8 percent of gross domestic product (GDP), well above the average over the past 50 years. Although both revenues and outlays grow faster than GDP over the next 10 years in CBO’s baseline projections, the gap between the two persists.
As a result of those deficits, federal debt held by the public is projected to grow steadily, from 79 percent of GDP in 2019 to 95 percent in 2029—its highest level since just after World War II.
Real (inflation-adjusted) GDP is projected to grow by 2.3 percent in 2019, supporting strong labor market conditions that feature low unemployment and rising wages. This year, real output is projected to exceed CBO’s estimate of its potential (maximum sustainable) level. After 2019, consumer spending and purchases of goods and services by federal, state, and local governments are projected to grow at a slower pace, and annual output growth is projected to slow—averaging 1.8 percent over the 2020–2023 period—as real output returns to its historical relationship with potential output. From 2024 to 2029, both output and potential output are projected to grow at an average pace of 1.8 percent per year, which is less than the long-term historical average. That slowdown occurs primarily because the labor force is expected to grow more slowly than it has in the past.