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Bad Things Come in Threes Legislative Briefing Session Montpelier, - - PowerPoint PPT Presentation
Bad Things Come in Threes Legislative Briefing Session Montpelier, - - PowerPoint PPT Presentation
Bad Things Come in Threes Legislative Briefing Session Montpelier, VT November 20, 2013 Federal Funds Information for States www.ffis.org Three months, three (new) crises in the making December 13: a grand bargain? The
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How did we get here? And where are we going?
0.0 5.0 10.0 15.0 20.0 25.0 30.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Percent of GDP
CBO's Long-Term Budget Projections
Spending Revenues Social Security Major Health Care Programsa Other Noninterest Spending Net Interest
Source: CBO Long-Term Budget Outlook, 9/13
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Grants in the FFIS database tell the story
Source: FFIS Grants Database
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A grand bargain? Divergent FY 2014 budget proposals
President House Senate Health
- $152
- $2,722
- $137
Other Mandatory
- 22
- 962
- 76
Discretionary
- 174
- 249
- 382
Chained CPI
- 230
Revenue
- 746
- 811
Sequester 1,018 995 War and Sandy Drawdowns
- 1,036
- 931
- 1,268
Jobs Measures 216 100 Subtotal
- $1,126
- $4,864
- $1,579
Interest
- 180
- 869
- 195
Total
- $1,306
- $5,733
- $1,774
Source: Committee for a Responsible Federal Budget Relative to CBO Baseline/Current Law Savings in President's, House, and Senate Budgets (FY 2014 - FY 2023, $ in billions)
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Health
President House Senate Health
- $152
- $2,722
- $137
Relative to CBO Baseline/Current Law
President: Medicare Part D rebates; Medicare provider cuts; means- testing Medicare premiums; Medicare cost sharing; federal employee health programs House: Repeal coverage provisions of ACA; convert Medicaid and CHIP to block grants; Medicare Part D tort and means-testing; Medicare premium support proposal would kick in later Senate: Nonspecific cuts focused on providers rather than beneficiaries, and focused on Medicare
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Other Mandatory
President: Reduce tax fraud; reduce farm subsidies; increase federal employee retirement contributions; reduce fraud and abuse; reform PBGC House: Increase retirement contributions; reduce farm subsidies; block grant SNAP; reform PBGC; wind down Fannie Mae and Freddie Mac; reform energy subsidies and reduce land purchases Senate: Reform agriculture programs and PBGC
President House Senate Other Mandatory
- 22
- 962
- 76
Relative to CBO Baseline/Current Law
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Revenues
President: Limit value of certain exclusions and deductions (including tax-exempt bonds) to 28% tax bracket; “Buffett Rule”; cigarette tax House: Deficit-neutral tax reform (limiting tax expenditures to allow lower rates) Senate: No specifics beyond limiting tax expenditures and targeting “the wealthiest Americans and big corporations”
President House Senate Revenue
- 746
- 811
Relative to CBO Baseline/Current Law
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The BCA is the law of the land
1.
Discretionary spending caps (saves $917 billion/10 yrs.)
2.
Joint Select Committee on Deficit Reduction (failed)
3.
Sequestration ($1.2 trillion in savings/9 yrs.)
$984 billion in cuts through FY 2021 ($109 billion per year) Split equally between defense/nondefense Many mandatory and a few discretionary programs exempt
(special rules for some programs)
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Sequestration in FY 2013 vs. FY 2014
FY 2013 FY 2014 Mandatory ATB (-5.1%) ATB (-7.2% est.) Program Exemptions Yes Yes Effective Date March 1, 2013 October 1, 2013 Flexibility PPA PPA Discretionary ATB (-5.0%) Lower Caps Program Exemptions Yes No Effective Date March 1, 2013 October 1, 2013 Flexibility PPA Appropriation Account Enforcement N/A Same as FY 2013
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No paths conform to BCA in FY 2014
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Under BCA, increases after FY 2014
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Is there a way forward?
- BCA is amended to provide additional defense spending
in FY 2014, possibly achieved by extending BCA caps beyond 2021
- Will Democrats entertain the notion of revenue-neutral
tax reform? Will Republicans entertain the notion of raising revenues?
- If either is true, tax expenditures may be on the table, including
tax-exempt bond interest and the deduction for state-local taxes
- Some kind of “deal” should ease the way for a debt-limit
increase, assuming history did not.
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