October 22, 2014

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Friday, October 17, 2014 - 9:02 AM

The administration trecently confirmed a bit of good news about the last fiscal year: the government borrowed substantially less than it did the year before.

But this drop, in line with a previous projection by the Congressional Budget Office (CBO), is no reason for complacency. The additional borrowing has still pushed the federal debt to well over $17.8 trillion, and the government remains on track to boost that by $7.2 trillion or more in the coming decade.

The final budget figures for Fiscal 2014, which ended Sept. 30, show the deficit at $483 billion, according to a joint statement by Treasury Secretary Jacob Lew and Office of Management and Budget Director Shaun Donovan. That figure compares to a $680 billion deficit in Fiscal 2013.

Lew and Donovan attribute the difference to higher government receipts and stable outlays. Receipts rose to 17.5 percent of GDP, up from 16.7 percent in 2013. Spending, while higher in absolute dollar terms, fell to 20.3 percent of GDP in Fiscal 2014. That is down from 20.8 percent the previous year.

The joint statement says spending “was lower than the previous year for many agencies and programs,” including the...

Tuesday, October 7, 2014 - 10:11 AM

On a recent day in Florida, hundreds of people gathered to examine federal budget issues, question former members of Congress and push for sustainable fiscal policy. For me, that sparked hope for our nation’s future, even in the face of mounting federal debt and changing demographics.  

The Concord Coalition and Fix the Debt partnered with two universities and eight former congressmen on Sept. 23 to present the programs and to help give members of the Millennial generation a larger voice on fiscal issues.

About 200 people -- mostly high school students -- attended a  program during the day that was part of the Lou Frey Institute’s fall symposium at the University of Central Florida in Orlando. That evening about 50 people attended a fiscal forum on the University of South Florida’s Tampa campus.

The Orlando program featured a panel that included Reverend John Allen Newman and former U.S. House members Bill Zeliff, Jason Altmire, Allen Boyd, Cliff Stearns and Tom Tauke.

“No political issue is more critical than the federal debt and deficit,” Altmire said. Boyd echoed that sentiment, saying today’s fiscal issues will determine what kind of America we and the next generation will live in.

Added Tauke: “The longer we wait to...

Tuesday, September 23, 2014 - 9:18 AM

In 2011, Medicare spent $170 billion, or 28 percent of its total expenditures, on services for beneficiaries in their last six months of life. But a new report says many of these patients are not receiving the care they want and are undergoing costly and unnecessary tests, procedures, and hospital visits.

Revamping the end-of-life care system in the U.S. could better satisfy the wishes of patients and families and make health care more affordable.

The report, “Dying in America,” was put together by a 21-member commission of doctors, nurses, religious leaders and aging experts. The panel was appointed by the Institute of Medicine, an independent research arm of the National Academy of Sciences that provides information to the public and policymakers.

The commission’s co-chairs are David Walker, former Comptroller General of the United States and former CEO of the Comeback America Initiative, and Dr. Philip A. Pizzo, a former dean of the Stanford University School of Medicine.

The report points...

Tuesday, August 26, 2014 - 11:05 AM

Our nation’s reliance on a 24-hour news cycle has bred an environment focused on quick stories with tag lines to keep us engaged. Listening to a recent panel discussion, I realized that the emphasis on sound bites needs to change if we are to have any hope of improving the nation’s fiscal footing. Enacting sustainable fiscal policy will take far more than a superficial exchange of partisan one-liners.

The panel discussion, which took place earlier this month at Dartmouth College in Hanover, New Hampshire, focused on the federal budget, the national debt and the political roadblocks to fiscal reform. The panelists were Robert Bixby, executive director of The Concord Coalition; Richard Swett, a former ambassador to Denmark who also served in Congress, and Charles Arlinghaus, president of The Josiah Bartlett Center for Public Policy.

The event was co-sponsored by Concord, the Bartlett Center, the Campaign to Fix the Debt, the Millennial Action Coalition and the Nelson A. Rockefeller Center for Public Policy.

Arlinghaus said that fiscal issues are “difficult to deal with, and do not easily fit in a 10-second sound bite.” He noted that human nature itself is an obstacle to fiscal reform because people will need to give up something they currently have. Politicians are reluctant to press difficult changes on the...

Tuesday, August 5, 2014 - 10:31 AM

For several years we’ve heard a familiar tune from the Social Security trustees: Its programs are unsustainable in their current form but insolvency is still years away. This time is different because the next Congress will face a deadline to act.

Social Security pays the benefits of retirees and disabled workers through a combined 12.4 percent payroll tax it collects from wage earners and their employers. Of that, 10.6 percent is obligated to pay Old Age and Survivors Insurance (OASI) benefits and 1.8 percent is obligated for Disability Insurance (DI). Additionally, income taxes collected on these benefits are funneled back into the program.

In years when more money was collected through these taxes than was paid out in benefits, the respective Social Security trust funds were credited with surpluses. When promised benefits exceed tax revenue, Social Security is authorized to continue paying full benefits until those trust fund credits run out. For Disability Insurance, that time will be upon us in 2016 when its trust fund becomes “insolvent.”

According to the trustees, Congressional failure to act by then will lead to an automatic, across-the-board benefit cut of 19 percent for disability insurance beneficiaries. Such a steep cut would impose...

Monday, July 14, 2014 - 11:18 AM

With the economy continuing its slow recovery, the administration’s Mid-Session Review budget projections released on Friday show little change in the overall outlook. Under the President’s policies, the Office of Management and Budget (OMB) anticipates a deficit for the current fiscal year of $583 billion, down $66 billion from the administration’s March projection and far below the trillion-dollar-plus deficits that came with the Great Recession.

It is important to remember, however, that the federal debt -- high by historical standards, at nearly $17.6 trillion -- remains a deep concern, even with quite favorable economic and political assumptions.

Under its proposed budget, the administration says, the 10 annual deficits over the next decade would add another $5.5 trillion to that total. That is up by nearly $600 billion over the March budget.

While the deficit is lower than the earlier projection for 2014-16, it is higher in all subsequent years. The biggest change is that revenues are now projected to be $760 billion lower over the coming decade.

As a result of higher deficits in the out years, debt held by the public is now projected to be slightly higher (72 percent of GDP) in 2024 than projected in the March...

Monday, July 7, 2014 - 11:31 AM

In a move that many saw as inevitable unless lawmakers acted, the Department of Transportation announced recently that the dwindling Highway Trust Fund would have to begin delaying payments to state governments in August.

In a press release, Transportation Secretary Anthony Foxx said “there is still time for Congress to act on a long-term solution,” adding that he hoped “Congress will avert this crisis before it is too late.”

Delayed payments would mean financial difficulties for the states, postponement of planned highway projects, and delays on the projects that are already underway. Yet Washington lawmakers continue to struggle over how to replenish the trust fund.

Foxx also said Tuesday there is “no good option when we're...

Saturday, June 28, 2014 - 9:58 AM

Short-term improvements in the federal government’s finances have led to widespread complacency in Washington about fiscal reform.

But a panel discussion this week highlighted the continuing need for such reform, with former members of Congress lamenting the sharp political divisions within the two major parties as well as between them that hinder constructive change.

“We have a fiscal challenge which is really a political challenge which really is a societal challenge. . . .the two parties are more polarized than ever before,” said Evan Bayh, a former senator (D-Ind.). “The Democratic Party has moved further left, the Republican Party has moved even further right.”

Mike Castle, a former congressman (R-Del.), sounded a similar theme, noting the pressures faced by moderates in both parties. “The Congress of the United States today,” he said, “is a difficult place.”

The panel discussion took place in Washington on Wednesday night, when The Concord Coalition honored Senators Dick Durbin and Tom Coburn with the 2014 Paul E. Tsongas Economic Patriot Award.

Joining Bayh and Castle for the panel discussion were former senator Judd Gregg (R-N.H.), former House member John Tanner (D-Tenn.) and Concord Coalition Executive Director Robert L. Bixby.

Castle and Tanner are Concord’s co-...

Tuesday, June 24, 2014 - 10:00 AM

Following last year’s bipartisan budget agreement, this was supposed to be the year of a harmless fiscal ceasefire on Capitol Hill. Unfortunately, the ceasefire is becoming a retreat for fiscal responsibility.

On issues ranging from tax and entitlement reform to highways and veterans health, Congress has backtracked, ducked and gimmicked its way around hard choices. This pattern does not bode well for any attempt to put the budget on a sustainable track after the fall elections.

Backing away from military retirement reforms. The first sound of retreat came in February with overwhelming votes in the House and Senate to repeal a provision included as part of their budget agreement just a month earlier that limited cost-of-living adjustments for working-age military retirees.

The minor change supported by the Pentagon would not have saved a huge amount of money (roughly $7 billion over 10 years) but represented the type of difficult choice necessary to reduce defense spending. However, in the face of complaints from veterans groups, Congress quickly backed down. To save face, lawmakers replaced the savings on paper with unspecified automatic cuts 10 years from now, but it was still a clear case of kicking the can down the road.

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Friday, June 20, 2014 - 1:44 PM

More than 7,000 students, retirees, political leaders and other citizens have played The Concord Coalition’s updated Federal Budget Challenge since we put the updated version online a month ago.

The exercise lets players decide for themselves how they would reduce the nation’s projected budget deficits over the next 10 years by choosing among 40 different policy options, each with its own price tag or savings.

The updated version, built with our partners from the California-based non-profit Next Ten, takes into account what policymakers have done to reduce the deficit over the last two years and showcases several additional options that are available for further deficit reduction.

The Federal Budget Challenge, based on our interactive group exercise Principles and Priorities, also provides participants the opportunity to learn about some of the policy options available to create a more sustainable fiscal future.

In the updated Federal Budget Challenge, the most unpopular choice by players thus far is an increase in discretionary spending -- the part of the budget Congress...