The FY 2014 Budget Proposals and Where Do We Go From Here

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The FY 2014 Budget Proposals and Where Do We Go From Here

  1. 1. The FY 2014 Budget Proposals and Where DoWe Go from HereDr. Jason J. FichtnerSenior Research FellowMercatus CenterApril 30, 2013
  2. 2. What  we’re  going  to  discuss  today:  •  Where  we  are:  CBO  baseline  –  past,  present  and  future  •  What’s  driving  our  fiscal  condi?on  •  Comparison  of  FY14  budgets    •  The  real  boFom  line  Overview2
  3. 3. CBO’s Baseline Projection - 20123
  4. 4. CBO’s Baseline Projection - 20134
  5. 5. CBO’s 2013 Outlook: Budget Surplus and Deficit5
  6. 6. U.S. Government Debt6
  7. 7. The Real Source of the Problem7
  8. 8. Medicare/Medicaid and Social Security8
  9. 9. Defense and Non-Defense Spending Squeezed asAutopilot Programs Explode9
  10. 10. 10Medicare Costs Over Time
  11. 11. State and Federal Medicaid Spending11
  12. 12. Social Security Trust Funds Annual Cash Flows12
  13. 13. Social Security Trust Fund Exhaustion13
  14. 14. 14
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  25. 25. Interest Costs Crowd Out Other Government SpendingSource: Peter G. Peterson Foundationhttp://www.pgpf.org/Special-Topics/Spending-primer.aspxConstant 2009 Dollars based on OMB , GAO and OMB dataAuthor’s Calculations for FY201125
  26. 26. A Huge Deficit Would Remain, Even If Any One ofThese Steps Were Taken:26Source: Office of Management and Budget, The New York TimesBased on fiscal year 2010 appropriations and disclosure reports from membersof Congress who received spending earmarks for special projects.
  27. 27. 272,000  2,500  3,000  3,500  4,000  4,500  5,000  5,500  2010   2011   2012   2013   2014   2015   2016   2017   2018   2019   2020   2021   2022   2023  $  Billions  Balancing  the  Budget  with  Spending  Restraint  CBO  Baseline  Revenues  Revenues  19%  GDP  Revenues  18%  GDP  Revenues  17%  GDP  Spending  Freeze  1%  Reduc?on  1%  Spending  2%  Spending  Authors  Calcula?ons  based  on  CBO  February  2013  Budget  and  Economic  Outlook.  Revenues  for  2010  -­‐  2012  are  Actual;  Revenues  for  2013  on  based  on  CBO  GDP  figures  are  Authors  Calcula?ons  
  28. 28.  Any  Ques?ons???  28

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