The Congressional Budget Office director Douglas Elmendorf presented on the budget outlook and consequences of high federal debt. He showed projections of growing deficits, spending, and debt as a percentage of GDP through 2023 if current laws remain. High and rising debt reduces flexibility, increases risk of crisis, and means future debt would be larger. It also crowds out investment and imposes long term healthcare and retirement spending pressures. Evaluating policy changes requires considering how much debt is reduced, the speed of reduction, resource allocation, long term growth effects, and distributional burdens across incomes and generations.
Presentation by James Baumgardner, Ph.D., Deputy Assistant Director Health, Retirement, and Long-Term Analysis Division, CBO, to the 30th International Congress of Actuaries on April 4, 2014
This presentation provides information published in Raising the Excise Tax on Cigarettes: Effects on Health and the Federal Budget (June 2012), www.cbo.gov/publication/43319
Presentation by Elizabeth Cove Delisle, an analyst in CBO's Budget Analysis Division, with Natalie Tawil, an analyst in CBO's Microeconomic Studies Division, to the Council of Large Public Housing Authorities.
In 2014, the federal government provided about $50 billion in housing assistance specifically designated for low-income households. This presentation describes the ways in which the federal government provides housing assistance to low-income households, provides information about the households that receive assistance, and lists some policy options for altering that assistance.
Presentation by Derek Trunkey, an analyst in CBO’s National Security Division, at the 91st Annual Conference of the Western Economic Association International.
The Department of Defense’s (DoD’s) operation and maintenance (O&M) account funds the department’s day-to-day operations ranging from equipment maintenance to health care. Over the past few decades, funding for O&M has been increased significantly, accounting for a growing share of DoD’s budget.
Presentation at the Fifth Biennial Conference of the American Society of Health Economists, by Allison Percy, Health, Retirement, and Long-Term Analysis Division
In 2012, the federal government spent $531 billion on investment—for physical capital; research and development; and education and training—which represented 15 percent of federal spending and 3 percent of GDP.
Presentation by James Baumgardner, Ph.D., Deputy Assistant Director Health, Retirement, and Long-Term Analysis Division, CBO, to the 30th International Congress of Actuaries on April 4, 2014
This presentation provides information published in Raising the Excise Tax on Cigarettes: Effects on Health and the Federal Budget (June 2012), www.cbo.gov/publication/43319
Presentation by Elizabeth Cove Delisle, an analyst in CBO's Budget Analysis Division, with Natalie Tawil, an analyst in CBO's Microeconomic Studies Division, to the Council of Large Public Housing Authorities.
In 2014, the federal government provided about $50 billion in housing assistance specifically designated for low-income households. This presentation describes the ways in which the federal government provides housing assistance to low-income households, provides information about the households that receive assistance, and lists some policy options for altering that assistance.
Presentation by Derek Trunkey, an analyst in CBO’s National Security Division, at the 91st Annual Conference of the Western Economic Association International.
The Department of Defense’s (DoD’s) operation and maintenance (O&M) account funds the department’s day-to-day operations ranging from equipment maintenance to health care. Over the past few decades, funding for O&M has been increased significantly, accounting for a growing share of DoD’s budget.
Presentation at the Fifth Biennial Conference of the American Society of Health Economists, by Allison Percy, Health, Retirement, and Long-Term Analysis Division
In 2012, the federal government spent $531 billion on investment—for physical capital; research and development; and education and training—which represented 15 percent of federal spending and 3 percent of GDP.
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In CBO’s projections, economic output is expected to grow by 2.3 percent in 2019, supporting strong labor market conditions that feature low unemployment and rising wages. After 2019, economic growth averages 1.8 percent per year, which is less than the historical average.
CBO estimates that the federal budget deficit for 2019 will be $960 billion. Under current law, budget deficits are projected to average $1.2 trillion a year between 2020 and 2029, boosting debt held by the public to 95 percent of GDP in that year—its highest level since just after World War II.
Presentation by Wendy Edelberg, an Associate Director for Economic Analysis at CBO, at the Brookings Institution’s Hutchins Center on Fiscal and Monetary Policy.
Revenues and spending as a share of economic output have varied over business cycles as a result of both changes in legislation and automatic stabilizers. Automatic stabilizers are the automatic increases in revenues and decreases in outlays in the federal budget that occur when the economy strengthens, and the opposite changes that occur when the economy weakens.
The Finance Minister presented the Union Budget on 1st February 2017. This is our analysis of the implications of the budget on the Indian Economy and the Markets. We have also shared the stocks that will be the Budget Winners & Losers. We hope you enjoy going through our analysis.
This presentation provides an overview of the agency’s most recent budget and economic projections, which incorporate the assumption that current laws governing taxes and spending generally remain unchanged. In those projections, federal debt held by the public grows sharply over the next 30 years, reaching unprecedented levels. The presentation also includes a discussion of the effects of the 2017 tax act and recent changes to federal spending policy on the projections. In addition, the presentation touches on budgetary outcomes under scenarios that include future changes to current law.
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Presentation by Jared Jageler, David Adler, Noelia Duchovny, and Evan Herrnstadt, analysts in CBO’s Microeconomic Studies and Health Analysis Divisions, at the Association of Environmental and Resource Economists Summer Conference.
Presentation by Mark Hadley, CBO's Chief Operating Officer and General Counsel, at the 2nd NABO-OECD Annual Conference of Asian Parliamentary Budget Officials.
Presentation by Daria Pelech, an analyst in CBO’s Health Analysis Division, at the Center for Health Insurance Reform McCourt School of Public Policy, Georgetown University.
This slide deck highlights CBO’s key findings about the outlook for the economy as described in its new report, The Budget and Economic Outlook: 2024 to 2034.
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Presentation by Eric J. Labs, an analyst in CBO’s National Security Division, at the Bank of America 2024 Defense Outlook and Commercial Aerospace Forum.
Presentation by Elizabeth Ash, William Carrington, Rebecca Heller, and Grace Hwang of CBO’s Labor, Income Security, and Long-Term Analysis and Health Analysis divisions to the Children’s Health Group, American Academy of Pediatrics.
Presentation by Molly Dahl, Chief of CBO’s Long-Term Analysis Unit, at a meeting of the National Conference of State Legislatures’ Budget Working Group.
In the President’s 2024 budget request, total military compensation is $551 billion, including veterans' benefits. That amount represents an increase of 134 percent since 1999 after removing the effects of inflation.
Approaches to Estimating the Noncyclical Rate of Unemployment
The Budget Outlook
1. Congressional Budget Office
The Budget Outlook
Presentation to the National Association for Business Economics
Douglas W. Elmendorf
Director
March 4, 2013
2. Topics to Cover
The Budget Outlook
Consequences of High and Rising Federal Debt
Criteria for Evaluating Possible Courses of Action
CONGRESSIONAL BUDGET OFFICE
3. How Big Are Projected Federal Deficits
and Debt?
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4. Total Federal Deficits or Surpluses
(Percentage of GDP)
Estimates from The Budget and Economic Outlook: Fiscal Years 2013 to 2023 (February 2013).
CONGRESSIONAL BUDGET OFFICE
5. Total Federal Revenues and Outlays
(Percentage of GDP)
Estimates from The Budget and Economic Outlook: Fiscal Years 2013 to 2023 (February 2013).
CONGRESSIONAL BUDGET OFFICE
6. Projected Growth in Major Federal Spending Categories
(Percentage of GDP)
Estimates from The Budget and Economic Outlook: Fiscal Years 2013 to 2023 (February 2013).
CONGRESSIONAL BUDGET OFFICE
7. Federal Debt Held by the Public
(Percentage of GDP)
Actual Projected
Estimates from The Budget and Economic Outlook: Fiscal Years 2013 to 2023 (February 2013).
CONGRESSIONAL BUDGET OFFICE
8. What Are the Consequences of High
and Rising Federal Debt?
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9. High and Rising Debt Relative to the Size of the Economy
Is A Significant Concern for Several Reasons
First: Crowding out of capital investment will be
greater.
Second: Lawmakers will have less flexibility to
respond to unexpected challenges.
Third: There will be a heightened risk of a fiscal
crisis.
CONGRESSIONAL BUDGET OFFICE
10. Fourth: Debt Would Be Even Larger If…
…Current laws were modified to delay or undo certain
scheduled changes in policy.
For example, if lawmakers:
Eliminated the automatic spending cuts that have just taken
effect;
Extended all of the tax provisions that are scheduled to expire;
Prevented the reduction in Medicare’s payment rates for
physicians scheduled for next January; and
Made no other policy changes with offsetting budget effects...
Then, debt would rise to 87 percent of GDP by 2023.
CONGRESSIONAL BUDGET OFFICE
11. Fifth: Original Caps on Discretionary Funding Are Very
Low Relative to GDP
(Percentage of GDP)
7 Actual Projected
6 Defense
Spending
5
4
3 Nondefense
Spending
2
1
0
1973 1978 1983 1988 1993 1998 2003 2008 2013 2018 2023
Estimates from The Budget and Economic Outlook: Fiscal Years 2013 to 2023 (February 2013). Estimates incorporate the
assumption that the automatic spending reductions required by the Budget Control Act do not take effect, although the
original caps on discretionary appropriations remain in place and are met through proportional reductions in defense and
nondefense budget authority.
CONGRESSIONAL BUDGET OFFICE
12. Sixth: 10-Year Projections Do Not Fully Reflect Long-Term
Budget Pressures
Health
(Percentage of GDP)
15 Actual Projected
10
Medicaid and Other
5
Medicare
0
2000 2005 2010 2015 2020 2025 2030 2035
Social Security
15
10
5
0
2000 2005 2010 2015 2020 2025 2030 2035
Estimates from The 2012 Long-Term Budget Outlook (June 2012).
CONGRESSIONAL BUDGET OFFICE
13. What Are Some Criteria for Evaluating
Proposed Policy Changes?
CONGRESSIONAL BUDGET OFFICE
14. Criterion #1: How Much Would Debt Be Reduced?
The more that debt is reduced, the more that the
harms caused by high debt would be avoided—but
also the greater the loss of government benefits
and services or the burdens on individuals and
businesses of higher taxes.
CONGRESSIONAL BUDGET OFFICE
15. Debt Held by the Public Under Current Law and
Alternative Budgetary Paths
(Percentage of GDP)
90
$2 Trillion Increase in
Primary Deficits
80 CBO's Baseline
(Current law)
$2 Trillion Reduction in
70 Primary Deficits
60
$4 Trillion Reduction in
Primary Deficits
50
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Estimates from Macroeconomic Effects of Alternative Budgetary Paths (February 2013).
CONGRESSIONAL BUDGET OFFICE
16. Criterion #2: How Quickly Would Debt Be Reduced?
The sooner deficits are cut, the less debt that will
be accumulated—but also the greater the drag on
economic activity over the next few years. Indeed,
several provisions of current law that are bringing
down the deficit will weaken output and
employment this year.
CONGRESSIONAL BUDGET OFFICE
17. Unemployment Rate
(Percent)
Estimates from The Budget and Economic Outlook: Fiscal Years 2013 to 2023 (February 2013).
CONGRESSIONAL BUDGET OFFICE
18. Criterion 3: How Would the Government’s Resources Be
Allocated?
(Percentage of GDP)
Estimates from The Budget and Economic Outlook: Fiscal Years 2013 to 2023 (February 2013).
CONGRESSIONAL BUDGET OFFICE
19. Criterion #4: How Would Policy Changes Affect Longer-
Term Economic Performance?
Possible effects of:
Raising marginal tax rates on labor;
Raising marginal tax rates on capital;
Cutting government benefits; and
Reducing government investment.
CONGRESSIONAL BUDGET OFFICE
20. Criterion #5: Who Would Bear the Burden of Policy
Changes?
Possible effects on:
Distribution of burden among people at
different income levels;
Distribution of burden among people with
similar income but other differences; and
Distribution of burden among people in
different generations.
CONGRESSIONAL BUDGET OFFICE
21. Key Implication of CBO’s Budget Projections
Putting the debt on a sustainable path will
ultimately require increases in taxes or cuts in
government benefits or services for people who
consider themselves to be in the middle class.
CONGRESSIONAL BUDGET OFFICE