Select Committee on Deficit Reduction -Setting the Stage & Fiscal Challenges Ahead Dr. Jason J. Fichtner Senior Research F...
Joint Select Committee on Deficit Reduction <ul><li>Budget Control Act of 2011 </li></ul><ul><li>Charges Joint Select Comm...
Joint Select Committee on Deficit Reduction <ul><li>Using CBO current policy baseline: </li></ul><ul><ul><li>Assumes full ...
Jason Fichtner Presentation on Entitlement Reform
Jason Fichtner Presentation on Entitlement Reform
Jason Fichtner Presentation on Entitlement Reform
Jason Fichtner Presentation on Entitlement Reform
Jason Fichtner Presentation on Entitlement Reform
Jason Fichtner Presentation on Entitlement Reform
Jason Fichtner Presentation on Entitlement Reform
Jason Fichtner Presentation on Entitlement Reform
Jason Fichtner Presentation on Entitlement Reform
Jason Fichtner Presentation on Entitlement Reform
Jason Fichtner Presentation on Entitlement Reform
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Jason Fichtner Presentation on Entitlement Reform

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Jason Fichtner Presentation on Entitlement Reform

  1. 1. Select Committee on Deficit Reduction -Setting the Stage & Fiscal Challenges Ahead Dr. Jason J. Fichtner Senior Research Fellow Mercatus Center October 19, 2011 Mercatus Center at George Mason University Spending and Budget Initiative Event: A Sustainable Approach to Entitlement Reform
  2. 2. Joint Select Committee on Deficit Reduction <ul><li>Budget Control Act of 2011 </li></ul><ul><li>Charges Joint Select Committee with finding $1.5 trillion in deficit reduction, including interest savings, through 2021 </li></ul><ul><li>Using CBO current law baseline: </li></ul><ul><ul><li>$1.5 trillion in deficit reduction -> 60% publicly-held federal debt to GDP </li></ul></ul><ul><ul><li>Assumes December 2010 tax law expires in 2012 </li></ul></ul><ul><ul><li>To get 60% debt-GDP goal would require beginning 2013: </li></ul></ul><ul><ul><li>10% cut discretionary spending only </li></ul></ul><ul><ul><li>5% cut mandatory spending only </li></ul></ul><ul><ul><li>4% cut – equal percentages discretionary & mandatory </li></ul></ul><ul><ul><li>7% increase in tax in income taxes only </li></ul></ul><ul><ul><li>3% increase in all federal revenues only </li></ul></ul><ul><ul><li>2% equal spending /revenue </li></ul></ul>Source: Pew Charitable Trusts – Analysis of CBO Data http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Fiscal_Analysis/Essential_Federal_Fiscal_Charts.pdf
  3. 3. Joint Select Committee on Deficit Reduction <ul><li>Using CBO current policy baseline: </li></ul><ul><ul><li>Assumes full extension of December 2010 tax law, index AMT for inflation, override planned cuts to Medicare Part B “doc fix,” etc. </li></ul></ul><ul><ul><li>$1.5 trillion in deficit reduction -> 79% publicly-held federal debt to GDP </li></ul></ul><ul><ul><li>To get 60% debt-GDP goal would require $6.1 trillion: </li></ul></ul><ul><ul><li>46% cut discretionary spending only (10%) </li></ul></ul><ul><ul><li>21% cut mandatory spending only (5%) </li></ul></ul><ul><ul><li>15% cut – equal percentages discretionary & mandatory (4%) </li></ul></ul><ul><ul><li>36% increase in tax in income taxes only (7%) </li></ul></ul><ul><ul><li>16% increase in all federal revenues (3%) </li></ul></ul><ul><ul><li>8% equal spending/revenue (2%) </li></ul></ul>Source: Pew Charitable Trusts – Analysis of CBO Data http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Fiscal_Analysis/Essential_Federal_Fiscal_Charts.pdf
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