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TBD TITLE SLIDE
The Economy, Jobs, and Fiscal Responsibility From Main Street to Wall Street to Washington
September 7th – October 9th
1
24%
Federal Spending as a Percentage of GDP
Federal Spending $3.8 Trillion in 2012 Dollars
2012
2
The Federal Government has Grown Dramatically
2%
Federal Spending $16 Billion in 2012 Dollars
1912
Source: Historical Statistics of the United States, Millennial Edition On Line, Cambridge 2006; Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII
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3
We’ve Lost Control of the Budget
3% 97%
Controlled Yearly
1912
67% 33%
Auto Pilot
2012 Source: Historical Statistics of the United States, Millennial Edition On Line, Table Ea636–643 Federal government expenditure, by major function: 1789–1970. Congressional Budget Office, Historical Tables. Compiled by TCAII.
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4
Where the Money Goes
National Defense
18.7% International
Affairs & Foreign Aid
1.5%
Other Discretionary
14.6%
Social Security
20.4%
Medicare
12.6%
Medicaid
6.7%
Other Mandatory
19.7%
Net Interest
5.9%
Source: OMB, Historical Tables, 8.5, 8.8. Compiled by TCAII.
Social Security & Medicare Combined 33%
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5
Federal Spending and Revenue Trends
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
1912 1922 1932 1942 1952 1962 1972 1982 1992 2002 2012
Fede
ral G
over
nmen
t Spe
ndin
g
In T
rilli
ons o
f Con
stan
t 201
2 D
olla
rs
Republican President Democrat President Revenues
Sources: Office of Management & Budget, Historical Tables; Bureau of Labor Statistics; Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII
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6
Federal Debt Levels
0%
50%
100%
150%
200%
250%
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040
Publ
icly
Hel
d Fe
dera
l Deb
t as a
Per
cent
ageo
of G
DP
Actual Debt Projected Debt
Source: CBO, Long-Term Budget Outlook, 2009, 2012. Compiled by TCAII.
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7
Federal Financial Sink Hole
$6.9
$17.4 $0.5
$1.9
$3.8
$9.2
$9.2
$37.0
$0
$10
$20
$30
$40
$50
$60
$70
2000 2011
Trill
ions
of P
rese
nt V
alue
Dol
lars
Explicit Liabilities Commitments & Contingencies Social Security Medicare
SOURCE: Data from the Department of Treasury, 2011 Financial Report of the United States Government. Compiled by TCAII. Note: Actuary’s alternative estimates are used for 2011 Medicare projected benefits cost.
$20.4 Trillion (Your Share $72,500)
$65.5 Trillion (Your Share $210,200)
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8
Comparative Government Debt Burdens
78.9% 79.0% 88.4% 89.0%
106.6% 112.4%
123.4%
153.2%
31.2%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Germany Spain United Kingdom France United States Portugal Italy Greece
Tota
l Gov
ernm
ent D
ebt A
s a
Per
cent
age
of th
e E
cono
my
Source: IMF, World Economic Outlook, April 2012; U.S. Treasury, Debt to the Penny; OMB, Historical Tables. Compiled by TCAII Note: Additional data with dotted line represents intra-governmental holdings for the United States. All figures are estimates for 2012.
Total U.S. Debt 137.8%
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9
The Federal Public Debt
$0
$2
$4
$6
$8
$10
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Fede
ral P
ublic
Deb
t In
Trill
ions
of D
olla
rs
U.S. Debt Held by The FED Other Domestically Held U.S. DebtAll Other U.S. Debt Held by Foreigners U.S. Debt Held by China
Source: U.S. Department of the Treasury. Compiled by TCAII. Note: All data from September the end of the fiscal year.
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10
Our Fiscal Future
1.4% 3.3% 6.7%
10.8% 5.0%
5.3%
6.0%
6.1%
4.8% 5.9%
7.8%
9.3%
11.7% 8.5%
10.2%
9.9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2012 2020 2030 2040
Perc
enta
ge o
f GD
P
Net Interest Social Security Medicare & Medicaid All Other Revenue
Source: Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII. Note: Alternative Fiscal Scenario used for all figures. Medicaid number are estimated and illustrative, they are derived from CBO’s LTBO June 2012 Data.
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11
Social Insurance Cash Flows
($2.5)
($2.0)
($1.5)
($1.0)
($0.5)
$0.0
2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054 2057 2060 2063 2066 2069 2072 2075 2078 2081 2084
Tri
llion
s of 2
012
Dol
lars
HI OASDI
Source: Social Security, OASDI and HI Annual Non-interest Income, Cost, and Balance in Current Dollars, Calendar Years 2012-90, Table VI.F9. Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII. Note: Intermediate projections used.
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12
Social Insurance Payments vs. Benefits
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
Paid In Benefits Received
U.S
. Dol
lars
Source: Urban Institute. Compiled by TCAII. Note: Two-earner couple with one spouse earning an average wage ($43,500 in 2011) and one earning a low wage ($19,500 in 2011). Turning 65 in 2011.
315% Difference
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13
Comparative Health Care Costs
$3,361
$4,363 $3,978 $4,218
$3,137 $3,722 $3,487
$7,960
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
OECD Average Canada France Germany Italy Sweden United Kingdom United States
Per
Cap
ita H
ealth
Car
e C
osts
Source: OECD, Health Data, 2011. Compiled by TCAII. Note: Based on 2009 expenditures.
72.2% 70.6% 77.9% 76.9% 77.9% 81.5% 84.1% 47.7% Public Health Expenditures as a Percentage of Total Health Expenditures
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14
Relative Defense Spending
$690 Bil.
$0
$100
$200
$300
$400
$500
$600
$700
$800
Bill
ions
of C
onst
ant 2
010
US
Dol
lars
Israel
Turkey
Australia
Canada
Korea, South
Brazil
Italy
Germany
India
Saudi Arabia
Japan
UK
France
Russia
China, P. R.
$670 Bil.
Source: SIPRI Military Expenditure Database, Military Expenditure by Country, In Constant (2010) US$ millions. Compiled by TCAII.
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15
Comparative Tax Burden 2012
0%
10%
20%
30%
40%
50%
Mexico Japan United States Australia UnitedKingdom
Canada Germany Netherlands France
Tota
l Tax
Bur
den
as a
Per
cent
age
of G
DP
Source: International Monetary Fund, World Economic Outlook Database, April 2012. Compiled by TCAII.
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16
Select Individual Tax Expenditures (2010-2014)
$0
$100
$200
$300
$400
$500
$600
$700
Exclusion of EmployerContributions for
Healthcare*
Deduction for MortgageInterest on Owner-Occupied
Residences
Reduced Rates of Tax onDividends and Long-Term
Capital Gains
Earned Income Credit Deductions for CharitableContributions, Other than
Education and Health
Bill
ions
of D
olla
rs
Source: The Joint Committee on Taxation, Background Information on Tax Expenditure Analysis and Historical Survey of Tax Expenditure Estimates, JCX-15-11, February 28, 2011. Note: *This only includes income taxes, There are estimates that suggest that if an analysis included payroll taxes the total cost would be over $1 trillion for the same time period.
Total individual tax expenditures for the period 2010-2014 will be greater than $3 trillion dollars.
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17
Effective Federal Income Tax Rates
-6.7% -5.4%
-2.9%
0.8%
3.2%
5.7% 7.2%
9.9%
14.7%
17.5% 18.9%
-10%
-5%
0%
5%
10%
15%
20%
25%
Less Than$10,000
$10,000 -$20,000
$20,000 -$30,000
$30,000 -$40,000
$40,000 -$50,000
$50,000 -$75,000
$75,000 -$100,000
$100,000 -$200,000
$200,000 -$500,000
$500,000 -$1,000,000
More Than$1,000,000
Eff
ectiv
e In
divi
dual
Fed
eral
Inco
me
Tax
Rat
e
Source: Urban Institute and Brookings Institution, Tax Policy Center, Distribution tables by Dollar Income Class, T11-0315 - Effective Federal Tax Rates by Filing Status and Demographics, Under Current Law, by Cash Income Level, 2011. Compiled by TCAII. Note: About half of individuals who file federal tax returns pay no income tax.
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2013 2013-2022 2001/2003/2010 Tax Cuts $110 Billion $2.8 Trillion
Alternative Minimum Tax Patches $125 Billion $1.7 Trillion
Jobs Measures $115 Billion $150 Billion
Medicare Physician Payments $10 Billion $150 Billion
Budget Control Act Sequester $65 Billion $980 Billion
"Tax Extenders" $30 Billion $455 Billion
Health Care Reform Taxes $25 Billion $420 Billion
Net Interest N/A $1.2 Trillion
Total (Without Jobs Measures) ~$400 Billion $7.9 Trillion
Total (With Jobs Measures) ~$500 Billion $8.1 Trillion
18
The Year End Fiscal Cliff
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19
Source: 2010, Institute for Truth in Accounting. All information from State CAFRs Numbers in red denote burden per taxpayer, Numbers in black denote a surplus per taxpayer
Taxpayer’s Burden by State 2010 (Thousands of Dollars)
1. Alaska 2. Wyoming 3. North Dakota 4. Utah 5. Nebraska 6. South Dakota 7. Montana 8. Iowa 9. Oregon 10. Tennessee 11. Arkansas 12. Idaho 13. Minnesota 14. Colorado 15. Florida 16. Arizona 17. Virginia
$21.2 $20.2
$9.5 $2.6 $2.4 $1.4 $0.3 $0.5 $0.9 $1.1 $1.7 $2.6 $2.6 $2.9 $2.9 $3.3 $3.6
18. Nevada 19. Missouri 20. Georgia 21. Indiana 22. Kansas 23. Texas 24. Wisconsin 25. Ohio 26. New Hampshire 27. Vermont 28. Washington 29. Pennsylvania 30. South Carolina 31. New Mexico 32. Oklahoma 33. Alabama 34. Louisiana
$3.7 $3.8 $3.9 $3.9 $4.6 $5.5 $5.7 $6.0 $8.2 $9.1 $9.8
$10.3 $10.5 $11.8 $12.6 $14.3 $14.7
35. North Carolina 36. Maine 37. Mississippi 38. Delaware 39. New York 40. Maryland 41. Rhode Island 42. West Virginia 43. Michigan 44. California 45. Massachusetts 46. Kentucky 47. Illinois 48. Hawaii 49. New Jersey
50. Connecticut
$14.8 $15.0 $15.7 $16.3 $17.2 $17.3 $18.8 $20.5 $20.8 $21.4 $23.2 $23.5 $31.6 $32.7 $35.8
$49.0
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20
Protecting Their Future
1912
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1. Pro Growth
2. Socially Equitable
3. Culturally Acceptable
4. Mathematically Accurate
5. Politically Feasible
6. Bipartisan Support 21
6 Key Principles for Reform
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• Budgeting
• Social Security
• Health Care
• Medicare & Medicaid
• Defense
• Taxes
• Other
• Political
22
Areas of Reforms
#10Million
No Budget, No Pay
Recapture Control over the Budget
Reform Federal Budget Controls (Pay-Go Rules, Debt to GDP Targets)
23
Budgeting
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Raise The Taxable Wage Base Cap
Gradually Raise the Retirement Eligibility Ages
Revise Benefit Structure Based on Income
Supplemental Retirement Savings Account
24
Social Security
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25
Health Care
Basic Level of Health Coverage for all Citizens
Revise Payment Practices to be Evidence Based
Phase Out the Tax Exclusion for Employer Provided Health
Insurance
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Impose an Annual Budget for Medicare & Medicaid Spending
Make Medicare Premiums Subsidies More
Needs Based
Rationalize Medicaid Minimum Standard
26
Medicare & Medicaid
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Require Cost Consideration in Defense Planning
Right-Size our Bases and Force Structure
Modernize Purchasing and Compensation Practices
27
Defense
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Reform Individual Federal Income Tax
Reform Corporate Federal Income Tax
Determine Income Level Where No Income Tax is Paid
28
Taxes
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Develop a Strategic Framework for the Federal Government
Create Government Transformation
Task Force
29
Other
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Redistricting Reform
Integrated & Open Primaries
Campaign Finance Reform
Term Limits
30
Political
#10Million
• Committee for a Responsible Federal Budget-www.crfb.org (www.FixtheDebt.org)
• Committee for Economic Development - www.ced.org
• Common Sense Coalition - www.thecommonsensecoalition.com
• Concord Coalition - www.concordcoalition.org
• No Labels - www.nolabels.org
• Rebellious Truths - www.rebellioustruths.org
• The Can Kicks Back - www.thecankicksback.org
31
Partner Organizations
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• Educate yourself and others on the facts, tough choices and solutions (Participate in Live Online Town Hall on September 15 at www.KeepingAmericaGreat.org)
• Use the “Serious 7: Serious Questions for Serious Candidates”
• Make these issues the top priority on election day
• Hold our elected officials accountable
32
What You Can Do
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