dallas-#501968-v1-mamiaf swiaf seiaf-stacey e … · 2000 2005 2010 2015 2020 2025 2030 2035 2040...

12/8/2014

1

Intergovernmental Audit ForumDecember 4, 2014

Stacey E. PickeringStacey E. Pickering

Mississippi State AuditorMississippi State Auditor



December 4, 2014

12/8/2014

2

Watch here: Watch here: http://http://youtu.be/d0nERTFoyoutu.be/d0nERTFo--SkSk





12/8/2014

3





12/8/2014

4

We’ve Lost Control of the U.S. BudgetWe’ve Lost Control of the U.S. BudgetControlled Yearly

1912Auto Pilot

2013

97% 66%3% 34%




Mississippi State AuditorMississippi State AuditorSource: Historical Statistics of the United States, Millennial Edition On Line, Table Ea636–643 Federal government expenditure, by major function: 1789–1970. Congressional Budget Office, The Budget and Economic Outlook: fiscal Years 2013 to 2023, Feb. 2014. Compiled by TCAII.

12/8/2014

5

International Affairs5.3%

1962

Where the Federal Money GoesWhere the Federal Money GoesDiscretionary

71.3%

International Affairs

2013Transportation 2.6 %

Discretionary 36%

National Defense49.1%

5.3%Transportation

1.3%

Other Discretionary

11.5%

National Defense19.1%

Affairs1.3% Other

Discretionary 13.1%

Social Security21.8%

Social Security13.5%

Other Mandatory

12.7%

Net Interest

6.5%

Medicare13.3%

Medicaid7.1%

Other Mandatory

15.5%

Net Interest

6.2%

Mandatory64%





Total Federal Spending 1962:

$812 Billionin 2012 Dollars

Mandatory28.7%

Total Federal Spending 2013:

$3.5 Trillion

64%

Source: OMB, Historical Tables, Table 8.5 & 8.7; BLS. Compiled by TCAII

12/8/2014

6

FY 2015General Fund Budget:

All Education funding is

g

$5,304,176,439

$2,876,152,227,or 54%.

(totals vary due to rounding)





12/8/2014

7

$3.5

Republican President Democrat President RevenuesFederal Spending & U.S. Revenue TrendsFederal Spending & U.S. Revenue Trends

$1 5

$2.0

$2.5

$3.0

$0.0

$0.5

$1.0

$1.5





1912 1922 1932 1942 1952 1962 1972 1982 1992 2002 2012

7Sources: Office of Management & Budget, Historical Tables; Bureau of Labor Statistics; Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII

12/8/2014

8

Federal Public DebtFederal Public Debt250

CBO Alternative Projection

100

150

200

0

50

100




Mississippi State AuditorMississippi State AuditorSource: CBO, Long Term Budget Outlook, 2009 and 2013

12/8/2014

9




Mississippi State AuditorMississippi State AuditorU.S. Census Bureau, 2000-2010

12/8/2014

10




Mississippi State AuditorMississippi State AuditorUnemployment rate by state, October 2014

12/8/2014

11





12/8/2014

12

Spending Demands and Some Revenue Growth Spending Demands and Some Revenue Growth

Not Enough To Go Around Health Care Costs

Dealing with Long Term Liabilities

Federal Cuts/Changes





Workforce

12/8/2014

13

12State and Local Government Non-Health Care Expenditures

6

8

10

of G

DP

0

2

4

Perc

ent (

%)

State and Local Government Health Care Expenditures





2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Source:. GAO Simulations, updated March 2012

12/8/2014

14

$18Intragovernmental Held Debt Publicly Held Debt

$16.1 Trillion103 7% of GDP

$4.8 Trillion30.9% of GDP

$10

$12

$14

$16

of U

.S. D

olla

rs

$5.6 Trillion58% f GDP

103.7% of GDP

$3.4 Trillion35% of GDP

$11.3 Trillion72.7% of GDP$2.3 Trillion

23% of GDP

$2

$4

$6

$8

In T

rillio

ns o 58% of GDP





35% of GDP$0

September 30, 2000 September 30, 2012

SOURCE: U.S. Department of Treasury, Bureau of the Public Debt, Debt to the Penny; CBO, Long-Term Budget Outlook (June 2012); OMB, Historical Tables, Table 1.2. Compiled by TCAII.

12/8/2014

15

Federal Programs and RevenuesFederal Programs and Revenues

35%

40%Net Interest Medicare & Medicaid Social Security All Other Revenue

6.1%10.2%

9.9%

20%

25%

30%

35%

ntag

e of

GDP

1 4% 3.3% 6.7% 10.8%4.8%

5.9%7.8%

9.3%

5.0%5.3%

6.0%11.7%

8.5%

0%

5%

10%

15%

Perc

en




Mississippi State AuditorMississippi State Auditor 15

1.4%0%2012 2020 2030 2040

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 LTBO June 2012 Data.

12/8/2014

16

1. Australia

2. Sweden

18. Mexico

19. Austria

Sovereign Fiscal Responsibility IndexSovereign Fiscal Responsibility Index(As of April 2012)(As of April 2012)

3. Estonia 4. New Zealand

5. China

6. Chile 7. Luxembourg

8. Denmark

9 B il

20. Norway 21. France

22. Finland

23. Slovenia24. Germany

25. Belgium

26 S i9. Brazil 10. India

11. United Kingdom

12. Israel 13. Canada

14. Poland

15 N th l d

26. Spain 27. Italy

28. United States29. Hungary

30. Iceland

31. Ireland32 P l





15. Netherlands16. Korea

17. Slovakia

32. Portugal

33. Japan

34. Greece

Source: Comeback America and Stanford Graduate Students’ Sovereign Fiscal Responsibility Index. Compiled by TCAII. Note: Based upon IMF data that was reported in April 2012.

12/8/2014

17

12 member group coordinates how much oil is d d l i d f d bproduced to control prices and fund member

countries’ budgets

Increased non-OPEC production has lowered prices

OPEC nations are losing almost $1 billion/day

U.S. production has risen significantly, in spite of increasing federal regulations





Potential Keystone Pipeline

12/8/2014

18

OPEC’s Risky Move Short term pain for long term gain? Short-term pain for long-term gain? Saudi Arabia and other Gulf states push prices down to

negatively impact new American energy independence Some American companies have hedged against lower

prices for next year or two

Poorer OPEC nations are already being hard hit They need prices over $100 barrel to maintain their

planned national budgets Particularly bad = Venezuela needs $120/barrel to avoid

ti l b k t (IMF)





national bankruptcy (IMF) Angola, Nigeria, Ecuador, Iran, and others

12/8/2014

19

Chinese Economists say“W k i il i ld h h i i f“Weakening oil prices would hamper the competitiveness of new energy. The government has to subsidize the new energy industry to support its development.”

For China to continue to develop alternative (solar For China to continue to develop alternative (solar and wind) energy, the national government must spend more





12/8/2014

20

Bureau of Labor Statistics (BLS) changes h d lmethodology

Before 1999, the BLS formula tended to overstate changes in the cost of living, so BLS moved to a new model (geometric mean)/substitution

Result=Inflation rate does look different Old: Shift purchases to less expensive (less desirable) items New: Shift purchases to items whose price is rising less or

falling more





Perception of the individual

12/8/2014

21





12/8/2014

22

Unemployment is measured 6 different ways by the BLS

Greater percentage of underemployed and unemployed

Greater percentage of those dropping out of the workforce

Labor underutilization = negative to economy





g y

12/8/2014

23

Elementary and Secondary Education: 5 states

Higher Education: 3 states

Public Assistance: 12 states

Medicaid: 7 states Medicaid: 7 states

Corrections: 7 states

Transportation: 10 states





Other Cuts: 9 states

Source: NASBO Fall 2013 Fiscal Survey of States

12/8/2014

24

States must address their unsustainable fiscal

RecommendationsRecommendations

outlook, and adopt a comprehensive solutions to put their finances in order

States must focus on improving economic growth, reducing disparities and enhancing theirreducing disparities, and enhancing their competitiveness

States must create and institutionalize a culture of transparency, accountability and transformation at





p y, yall levels of government

12/8/2014

25

Government has grown too big promised too

Role of Government & The IndividualRole of Government & The Individual

Government has grown too big, promised too much, and waited too long to restructure

The implications of which: The government will ask for more while doing less The government will ask for more while doing less State and local government will be adversely

impacted because bad news flows downhill Charitable organizations will be more important in

the future Individuals will be more responsible for their own





Individuals will be more responsible for their own future

12/8/2014

26

Stacey E. PickeringMississippi State Auditor

P.O. Box 956J k MSJackson, MS 39205

Ph: 601-576-2800800-321-1275 (statewide)

Website: www.osa.ms.gov





dallas-#501968-v1-mamiaf swiaf seiaf-stacey e … · 2000 2005 2010 2015 2020 2025 2030 2035 2040...

Documents