November 21, 2014

The (Tab)ulation

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Monday, August 6, 2012 - 1:00 PM

Updated 8/17 with "History of Debt" infographic below

The Concord Coalition is proud to be partnering with a new effort called "Face the Facts USA." This nonpartisan initiative is a project of the George Washington University School of Media and Public Affairs and will be providing a new fact every day until the election (for 100 total).

The exciting part of the project is that along with their facts, they are producing great infographics and video content that make it easier to understand significant issues and trends that are (or should be) part of the national discussion as we approach election day.

They have also solicited involvement from some important organizations in the policy community to shed further light on the information in their facts -- and that is where The Concord Concord fits in. Many of the facts the project will be presenting falls into categories that Concord writes about and discusses, which allows us to add supplemental material to go along with the fact of the day.

Already, there have been two debt related facts. On...

Wednesday, August 1, 2012 - 5:04 PM

Rep. Steven LaTourette’s announcement this week that he will not seek re-election underscores the difficulties that face elected officials who try to take a constructive, bipartisan approach to dealing with the nation’s most important challenges – notably the need for fundamental fiscal reforms.

“For a long time now, words like compromise have been considered to be dirty words,” the Republican said in a press conference in his Ohio district Tuesday. “And there are people on the right and the left who think that if you compromise you’re a coward . . . . you’re an appeaser.”

LaTourette, who has served in the House since 1995, has built a reputation as a moderate who seeks bipartisan compromise and is willing to challenge members of his own party when he feels they are taking less constructive positions. His frustration, echoed by many other moderates in Washington, should serve as a warning to American voters that partisanship and political intransigence are clouding the country’s future.

That’s particularly true in fiscal policy, as LaTourette indicated in his press conference. He understands the need for sweeping changes to put the federal budget on a more responsible and sustainable course, as recommended by an array of bipartisan groups, including...

Friday, July 27, 2012 - 9:19 AM

The severe fiscal, financial and economic difficulties in Europe underscore the need for Washington to develop credible plans for comprehensive, long-term fiscal reforms -- in part because spillover problems from Europe could well aggravate U.S. budget challenges.

But Europe’s experience also cautions against excessive austerity measures that can turn a weak recovery into another recession. “These are critical times,” says Senate Budget Committee Chairman Kent Conrad, “and we’ve got to be smart about how we get back on track.”

These were among the key themes that emerged Thursday at a forum in Washington that focused on Europe’s perilous situation and its possible implications for the American economy and U.S. fiscal policy. The program was sponsored by the Committee for Economic Development (CED) and The Concord Coalition.

In addition to Conrad’s keynote speech, the forum featured Stephanie Riso, the head of the European Union's fiscal policy unit, and a panel of four American economists: Douglas Elliott, a fellow with the Brookings Institution; Simon Johnson, an MIT professor; Joseph Minarik, senior vice president and director of research with CED, and Diane Lim Rogers, Concord’s chief economist. Ed Andrews, a former New York Times economics correspondent, served as...

Tuesday, July 24, 2012 - 3:14 PM

The Congressional Budget Office (CBO) today estimated that repealing the 2010 Affordable Care Act (ACA) would increase federal budget deficits between next year and 2022 by around $109 billion, only a small change from previous estimates. The CBO suggests that this can also be considered a rough estimate for how much the ACA reduces the deficit over the same time period.

The CBO cautions, however, that its estimates are uncertain because the projected effects of the law are themselves “highly uncertain.” The law contains some provisions that are projected to cost the government money, but others that would save money or provide additional revenue.

Also updated were CBO’s estimates of the budgetary effects of just the ACA’s health insurance coverage provisions in light of last month’s Supreme Court decision, which allows states to choose whether or not to expand eligibility for coverage under their Medicaid programs.

The budget office now estimates that these coverage provisions would have a net cost of $1,168 billion from 2012 to 2022, a net reduction of about $84 billion from estimates last March. This slightly reduced spending would come about because even with some states opting out of the relatively cheap Medicaid expansion and pushing some...

Tuesday, July 17, 2012 - 11:52 AM

Today Concord Coalition Co-Chair Sam Nunn, a former U.S. senator from Georgia, helped launch the Campaign to Fix the Debt.  This project is a non-partisan initiative to put America on a better fiscal and economic path.  Nunn is a member of the campaign's steering committee.  

In advance of the campaign's launch, Nunn said:

"On fiscal matters, neither political party can impose its will on the other, and that it is not likely to change after the election.  Successfully tackling our fiscal challenges requires Members of Congress to come together across party lines with a balanced plan that will strengthen the economy, reassure markets, and save future generations from an unbearable debt burden.  There are good people across the political spectrum who recognize this in putting together the Simpson  – Bowles and the Domenici  – Rivlin plans.  There are many Members of Congress who are willing to work together, but they get hit hard from both sides and need a foundation of citizen support.  The Campaign to Fix the Debt hopes to give these folks in Washington, DC and across the country the support they need to work together to put our nation's interest above political parties and to strengthen America to protect our children's...

Monday, July 2, 2012 - 9:59 AM

This post was co-authored with Louise Mackey, intern from the Washington Ireland Program 

Interest rates are at historically low levels, making borrowing very affordable for consumers -- and the United States government. When it issues debt, the federal government, like any other borrower, pays interest. This is how the government finances its annual budget deficits.

Why are interest rates so low now?

There are two primary reasons. First, during the recession there was less demand for credit. And to combat this, the Federal Reserve brought interest rates down to spur borrowing. Second, in response to the global economic slowdown, investors around the world have been desperate to place their money in a safe haven -- and U.S. Treasuries are still considered the safest investment in the world.

Interest rates are projected to stay at or near historic lows over the next two years as the economy continues to recover. Eventually, though, interest rates will begin to return to normal levels as economic growth puts inflationary pressure on the economy. This normalization of rates will increase the government’s borrowing costs. Those costs will also be going up simply because the government is borrowing...

Monday, June 25, 2012 - 10:45 AM

Lately it seems impossible to talk about the U.S. economy’s ailments and challenges without mentioning the rest of the world. Recent research by International Monetary Fund economists (reported in a Reuters story here and detailed in this IMF white paper) shows that advanced and emerging economies have become increasingly interlinked over the past decade, particularly through financial markets, with good and bad implications for individual countries. On one hand, cross-border financial linkages diversify risk, reducing an individual country’s exposure to localized shocks. On the other hand, the IMF warns that such interconnectedness can mean that financial risks can be transmitted quickly when they affect a major economic player (they use the term “core node”), possibly leading to a breakdown of the entire, global system.

 Moreover, it’s clear that the world’s economies are in many cases fighting off our own individual but similar economic ailments. The U.S. is watching Europe with keen interest, not just because we are afraid of the negative...

Wednesday, June 13, 2012 - 2:36 PM

The Medicare actuaries have just updated their projections for National Health Expenditures (NHE) and the overall picture they illustrate is a welcome one, but likely reflects temporary factors and cannot serve as an excuse for politicans to rest on their laurels.

On the plus side, health care cost inflation has slowed pretty dramatically over the last three years (2009-2011) and is also projected to be slower than normal for 2012 and 2013 -- with those costs staying nearly constant as a percent of GDP throughout the entire time period (around 17.9 percent). Furthermore, while spending is projected to jump in 2014, as the major health insurance provisions of the Affordable Care Act (ACA) extend coverage to approximately 22 million people, over the period 2011-2021 spending is projected to grow at an annual average of 0.9 percent above GDP growth. This is good news because most budget experts consider health care cost growth of 1 percent over GDP the "gold standard" for a tough, but theoretically obtainable, spending target. (Historically, health care costs have risen 2 percentage points faster than GDP.)

The actuaries suggest most of the recent slowdown in health care spending can be attributed to the recession and...

Sunday, June 3, 2012 - 11:00 PM

Federal budgeting isn’t for the faint of heart. The tax code alone consists of tens of thousands of pages. Then there's the defense budget, the other eleven annual appropriations bills, Medicare, Medicaid, the need to modernize Social Security . . . the list goes on and on. Mix in some presidential and congressional politics, and it’s easy to see why even people with the best of intentions just cannot seem to get the country on a sustainable track for the long term.

In late May, U.S. Rep. Rich Nugent (R-Fla.) wanted to find out if his constituents, given sufficient info, could handle the challenge. In three different sessions across his central Florida district, the congressman invited The Concord Coalition to host our flagship budget exercise “Principles and Priorities.” He asked constituents to “role-play” as policy makers with the goal of working toward substantial deficit reduction. Concord has done similar programs from coast to coast. However, one of the unique characteristics of Congressman Nugent’s district is that he represents more senior citizens than any of his House colleagues.

Nugent was pleased with what his constituents were able to do in looking for deficit reduction over the next decade.

...
Friday, May 25, 2012 - 9:06 AM

The Congressional Budget Office (CBO) has released an excellent analysis on the "Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013."  The CBO term “fiscal restraint” has been more popularly referred to as “the fiscal cliff.” That is because there are so many large, sudden fiscal policy changes awaiting us at the turn of the year that if we think of the U.S. economy as a train, it is heading straight for a dramatic fall-off in consumer demand (and hence in overall activity in an economy still constrained by inadequate demand) as these policy changes all happen at once.

Some of the main changes we will face are the expiration of the 2001 and 2003 tax cuts, the expiration of the payroll tax cut, and the beginning of automatic spending cuts required by the debt limit law passed last August. The concern is that taking so much money out of the economy at one time, through either tax increases or a reduction in government spending on goods and services, would slow consumer spending. That would reduce businesses’ desire to increase hiring, which would lead to continued high unemployment. 

And yes, the worry is that the rapid deficit reduction will be harmful. As I explained...