April 24, 2017

The (Tab)ulation

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Tuesday, March 7, 2017 - 10:31 AM

In considering budget plans for the coming fiscal year, President Trump and lawmakers should keep in mind that under current law the federal government is already on track to run up deficits of nearly nine and a half trillion dollars, according to Robert L. Bixby, executive director of The Concord Coalition.

“I think that one of the problems . . . with what we’ve seen so far from the White House is that if you are just going to try to pay for new initiatives -- if you are going to pay for the new defense spending by cutting other spending -- that’s fine, but it still leaves the budget on an unsustainable track,” Bixby said Sunday on C-SPAN’s Washington Journal.

Stan Collender, a Forbes columnist, also appeared on the program and expressed a variety of concerns about Washington’s ability to meet the difficult fiscal challenges facing the country.

Bixby emphasized that most of the projected growth in federal deficits over the next 10 years is driven by mandatory spending programs such as Social Security, Medicare and Medicaid. These programs are growing rapidly because of the aging population and rising health care costs. They are projected to outpace federal revenue in the years...

Tuesday, February 28, 2017 - 1:00 AM

With large numbers of baby boomers moving into their retirement years, the federal government corporation that insures pension benefits for nearly 40 million workers and retirees faces growing difficulties that require Washington’s urgent attention.

These difficulties were recently summarized by the Government Accountability Office, which has included Pension Benefit Guaranty Corporation (PBGC) programs on the GAO’s “High Risk List.” That list includes government programs that GAO says need “broad-based transformation” or may be vulnerable to mismanagement.

“PBGC’s financial future remains uncertain, due in part to a long-term decline in the number of traditional defined benefit plans and the collective financial risk of the many underfunded pension plans that PBGC insures,” the GAO says.

This means the financial futures of millions of American workers and retirees are uncertain as well. Many of them could eventually face sharp reductions in their retirement incomes unless Congress and the Trump administration take steps to put the PBGC on a more sustainable track.

The government corporation backs up both single-employer...

Monday, February 27, 2017 - 10:47 AM

President Trump’s Saturday morning tweet on the national debt left many budget watchers scratching their heads about its dubious factoid and irrelevant comparison.

Here’s what Trump said:

“The media has not reported that the National Debt in my first month went down by $12 billion vs a $200 billion increase in Obama first mo.”

The facts are accurate but meaningless.

Trump correctly claims that the debt went down in his first month as president. There are, however, two problems with this claim. First, the time frame is totally arbitrary. The debt number can fluctuate widely on a day-to-day basis. For example, from January 10 to January 12 this year the debt fell by $22 billion. On the other hand, from January 13 to January 18 it rose by $21 billion.

As Keith Hennessey, former director of the National Economic Council under President George W. Bush, noted, if Trump had “ended his timeframe one day earlier this tweet would have been invalid and debt would have increased (by just $1 B) in ‘the first month.’ ”

Beyond that is the fact that Trump has not done anything yet that would have an effect on the debt. The numbers he cites are not indicative of any...

Tuesday, February 21, 2017 - 12:52 PM

A new report from the Congressional Budget Office (CBO) found that non-health means-tested government programs, such as the Supplemental Nutrition Assistance Program (also known as food stamps) and Supplemental Security Income (SSI), are growing at a much slower rate than other federal benefit programs. The report analyzed both spending trends over the past decade and projections for the upcoming decade.

According to CBO, means-tested programs that provide benefits other than health care grew by 49 percent between 2007 and 2011, after adjusting for inflation. But since then, their costs have actually been falling and are projected to continue doing so over the next decade. That is despite the fact that gross domestic product is projected to grow by 37 percent between 2007 and 2027.

Non-means-tested programs, such as Social Security and Medicare, however, are projected to grow much faster than GDP. Between 2007 and 2027, the cost of these programs will double – even after adjusting for inflation.

There are two key reasons why these programs are growing faster than others in the federal budget. The first is demographic changes; while means-tested programs tend...

Tuesday, February 21, 2017 - 12:20 PM

In the release of their annual projections for National Health Expenditures (NHE), the federal government's chief health care actuaries see the sector growing to represent one-fifth of the entire economy by 2025 (up from 18 percent in 2016). Understanding this growth and how to moderate it should be front-and-center for newly confirmed Secretary of Health and Human Services Tom Price.

Over the period of 2016-2025, the actuaries expect NHE to grow by an average of 5.6 percent a year, about 1.2 percent faster than the expected growth of the economy over the same time period.

The year 2016 itself actually saw a slight decline in the growth rate. Its 4.8 percent growth was the result of a slowdown relative to the prior two years, when new coverage under the Affordable Care Act (ACA) was phased in and there was a related increase in the usage and intensity of health care services.

However, the actuaries expect the growth rate to pick up over the projection period as the population ages, making more people eligible for Medicare and Medicaid, and as health care prices rise faster than prices in the overall economy. The two pieces of health care spending that will grow the fastest...

Friday, February 17, 2017 - 12:45 PM

President Trump and many lawmakers in both parties have promised to attack waste and substantially improve government efficiency. The Government Accountability Office (GAO) has just handed them a long list of opportunities to do so in its latest “High Risk List.”

With a large and growing federal debt, elected officials should vigorously pursue these opportunities to reduce unnecessary spending and collect hundreds of billions of dollars in unpaid taxes. In addition, Congress and the president should heed the GAO’s renewed warnings about the long-term fiscal challenges facing important but costly entitlement programs.

The High Risk List, which GAO updates at the start of each new Congress, spotlights 34 government activities or areas that the agency considers “vulnerable to waste, fraud, abuse and mismanagement or needing broad-based transformation.”

GAO, a nonpartisan investigative arm of Congress, reports that the government made “considerable progress” on problems highlighted in the 2015 list. The agency removed one area from the High Risk List: the sharing and managing of information related to terrorism, which U.S. Comptroller General Gene Dodaro called “a particularly...

Tuesday, February 7, 2017 - 11:43 AM

With interest rates in recent years far below traditional levels, it has been easy for American taxpayers and their political leaders to overlook one of the chief drawbacks of the federal debt: the borrowing costs.

But as Congressional Budget Office (CBO) officials have made clear recently, there is good reason for elected officials and the public to start paying more attention to what the government pays in interest -- and how rapidly these payments will rise in the coming years unless big changes are made in the federal budget.

In testimony last week on Capitol Hill, CBO Director Keith Hall said that net interest payments this year would be the fastest-growing component of the projected increase in federal spending.

If interest payments rise as projected over the next decade, they will make it even more difficult to put the federal budget on a responsible and sustainable path.

Two factors are driving the current and projected growth in federal interest costs:

  • Interest rates are on their way up. As explained in a CBO blog post last week, the budget office expects rates to rise...

Monday, January 30, 2017 - 12:24 PM

In an interview on Fox News last week, President Trump said that he would like to have a balanced budget “eventually,” but not at the expense of higher spending for the military.

“So a balanced budget is fine,” Trump said. “But sometimes you have to fuel the well in order to really get the economy going. And we have to take care of our military. Our military is more important to me than a balanced budget because we’ll get there with a balanced budget.”

This brief window into the president’s thinking on budget policy is troubling because it indicates that he does not feel constrained by the need to make trade-offs in pursuit of his policy goals. It is an invitation to pit any worthy initiative against the goal of a balanced budget regardless of the cost.

That is a false choice and one that has potentially harmful consequences for budget discipline.

As new projections by the nonpartisan Congressional Budget office (CBO) show, current policy is already on track to add another $9.4 trillion of borrowing to the nation’s growing debt over the next 10 years.

With that sobering outlook in mind, Trump’s...

Monday, January 23, 2017 - 11:15 AM

Last week marked a sad anniversary at The Concord Coalition. On Jan. 18, 1997, former U.S. senator and Concord Coalition co-founder Paul E. Tsongas passed away.

Twenty years later, his example and vision continue to guide us.

Upon his death, The Concord Coalition issued a statement about him and his legacy that we republish below.

"The death of Paul Tsongas will be deeply felt by every member of The Concord Coalition family. His leadership inspired many of us first in his 1992 presidential campaign, and later as co-founder of The Concord Coalition. He represented the best qualities in leadership - integrity, courage, commitment, compassion, and the good grace to take himself less seriously than the policies he advocated.

"With his death, some will inevitably wonder whether the work of The Concord Coalition will go on. But no one who had the privilege of knowing Paul Tsongas could have any doubt as to the answer. Of course it will.

"Paul Tsongas often spoke of legacies. To him, the work of The Concord Coalition went well beyond the tactical goal of balancing the federal budget. He was much more...

Thursday, January 19, 2017 - 12:12 PM

With a new administration coming into office, a report on the nation’s fiscal health provides a timely and emphatic reminder of the need for the new president and Congress to pursue sweeping long-term changes in the federal budget.

Released this week by the Government Accountability Office (GAO), the report provides a good look at the nation’s unsustainable fiscal path and deserves close scrutiny by elected officials in both parties.

Although our nation’s leaders face an array of serious short-term challenges and difficult policy choices, the new report reminds them -- and the American public -- that the federal government is already “highly leveraged in debt by historical norms.”

So in addition to the near-term financing decisions that must be made, the GAO says, “a broader plan is needed to put the government on a more sustainable long-term path.”

The report draws on the work of the GAO itself as well as Congressional Budget Office (CBO) projections and the recently issued Fiscal Year 2016 Financial Report of the United States Government.

Their projections, the GAO says, “all show that, absent policy changes...