presented by jeffrey s. thiebert, national grassroots director

www.concordcoalition.orgTHE CONCORD

COALITION

presented by

Jeffrey S. Thiebert, National Grassroots Director

THE CONCORD COALITION www.concordcoalition.org

Fiscal Future: The Challenges Ahead


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About The Concord Coalition

The Concord Coalition is a nationwide, non-partisan, grassroots

organization advocating generationally responsible fiscal policy. The

Concord Coalition was founded in 1992 by the late former Senator Paul

Tsongas (D-Mass.), former Senator Warren B. Rudman (R-N.H.) and

former U.S. Secretary of Commerce Peter Peterson. Former Senator Bob

Kerrey (D-Ne.) became co-chair of the Concord Coalition in January

2002.


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Federal Revenue and SpendingFiscal Year 2010

Revenues Spending

Individual Income Taxes % Social Security %

Corporate Income Taxes % Health Care %

Payroll Taxes (SI, Medicare, & FICA) % International Affairs %

Other Taxes % Income Security %

Borrowed Funds % Education %

Total Revenue 100% Interest on the National Debt %

National Defense %

Environment %

Other Expenses %

TOTAL 100%


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Federal Revenue and SpendingFiscal Year 2010

Revenues Spending

Individual Income Taxes 26% Social Security 22%

Corporate Income Taxes 6% Health Care 24%

Payroll Taxes (SI, Medicare, & FICA) 25% International Affairs 1%

Other Taxes 6% Income Security 18%

Borrowed Funds 37% Education 3%

Total Revenue 100% Interest on the National Debt 6%

National Defense 20%

Environment 1%

Other Expenses 5%

TOTAL 100%


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Americans Want to Cut Spending – But Not on the Programs That Cost the Most

Source: The Economist/YouGov Poll, April 2010 and Congressional Budget Office, January 2010.


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THE SHORT-TERM OUTLOOK


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Estate & Gift Taxes($18 billion)

Composition of FY 2010 Federal Government Revenues and Outlays(Deficit: $1.29 Trillion)

Interest

Domestic*

Social Security

Medicare & Medicaid

Other Entitlements

Defense

Other TaxesCorporate Taxes

Social Insurance Taxes

Individual Income Taxes

Outlays: $3.45 trillion** Revenue: $2.1 trillion*Includes all appropriated domestic spending such as education, transportation, homeland security, housing assistance and foreign aid.

**Numbers may not add due to the preliminary nature of the fiscal year numbers.

Source: CBO October 2010 and Department of Treasury 2010.


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CBO August 2010 Baseline CBO’s Estimate of the President’s Budget

Federal Spending vs. Revenues as a Percent of GDP (FY 1980-2020)

CBO August Baseline Compared to the President’s Budget

Source: Congressional Budget Office, August 2010..

Average outlays: 21.0%

Average revenues: 18.3%

Perc

enta

ge o

f GD

P

Actual Projected


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Current Policy Trends Lead to Large Sustained DeficitsFiscal Years 2011-2020

CBO August 2010 Baseline

The Concord Coalition Plausible Baseline assumes that discretionary spending grows at the rate of nominal GDP, that war costs slow gradually, that Medicare physician payment cuts are postponed, and that all expiring tax provisions (including those from the 2009 stimulus package) are extended with AMT relief.

Source: Congressional Budget Office, August 2010 and Concord Coalition analysis.

Bill

ions

of D

olla

rs

-$15.2 Trillion Deficit

-$6.2 Trillion Deficit


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Debt Held by the Public as a Percent of GDP 1940-2040

Source: GAO Analysis, 2010 and OMB Historical Tables 2010.

As a

Per

cent

age

of G

DP

1940

1943

1946

1949

1952

1955

1958

1961

1964

1967

1970

1973

1976

1979

1982

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

2014

2017

2020

2023

2026

2029

2032

2035

2038

0

50

100

150

200

250

300

Actual Projected

World War II108.6% 2010

63.6%


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Percent of Debt Held by the Public Owned by Foreigners

(1987-2010)

Source: United States Treasury Department, Treasury Bulletin, September 2010.

Perc

enta

ge o

f Ow

ners

hip

of P

ublic

ly-H

eld

Deb

t


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Interest Costs Go Through The Roof

Source: Congressional Budget Office August 2010 and CBO’s Analysis of the President’s Budget, March 2010.

Bill

ions

of D

olla

rs


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REFORM: WILL A HAIRCUT DO?


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Sources of Growth in the Federal Budget Over the Next 30 Years

Source: Government Accountability Office and Congressional Budget Office. 2010.

Individual Income Taxes = 6.5%

Current Defense Spending = 4.7%


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Factors Explaining Future Federal Spending on Medicare, Medicaid, and Social Security

Source: Congressional Budget Office, June 2010.

Percent of Growth Attributed to: 2035 2080

Health Care Cost Growth 37% 56%

Aging 63% 44%


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Defense Discretionary Spending as a Percentage of GDP

Source: Congressional Budget Office, August 2010.

As a

Per

cent

age

of G

DP


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Outlays of Select Non-Defense Discretionary Programs (FY 2010 Projected)

Source: Congressional Budget Office, January 2010.

*includes ground, air, and water

Education Transportation Housing, Natural Veterans Foreign Aid General Science, Energy & Resources Government Space & Nutrition Asst. Technology


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Non-Defense Discretionary Spending as a Percentage of GDP

Source: Congressional Budget Office, January 2010.

As a

Per

cent

age

of G

DP


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RETIREMENT: ARE WE READY?


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Current fiscal policy is on an unsustainable pathFederal Outlays as a Percentage of GDP

Social Security

Medicaid

Medicare

All Other

Interest

Source: Government Accountability Office, 2010.

Average tax revenue


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Share of Workforce with Employee Sponsored Pension Coverage has been Around 50 Percent Since 1970s

*Includes public-sector employees.Source: EBRI Databook of Employee Benefits, Chapter 10 (Employee Benefit Research Institute, December 2009; and Employee Benefits in Private Industry in the United States (Bureau of Labor Statistics, March 2008).


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Lower-Earning Workers are Much Less Likely to Have Pension Coverage

*Includes public-sector employees.Source: EBRI Databook of Employee Benefits, Chapter 10 (Employee Benefit Research Institute, December 2009.


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Typical Workers Can Only Finance One or Two Years of Retirement

Source: 2007 Survey of Consumer Finances Chartbook (Federal Reserve Board, February 2010); Current Population Survey, 2008 Annual Social and Economic Supplement (August 2008, U.S. Census Bureau).


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Typical US Family Don’t Have Enough Savings for Retirement

Source: 2007 Survey of Consumer Finances Chartbook (Federal Reserve Board, February 2010).


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Key Points of Agreement

Members of the Fiscal Wake-Up Tour do not necessarily agree on the ideal levels of spending, taxes and debt, but we do agree on the following key points:

• Current fiscal policy is unsustainable• There are no easy solutions, such as cutting waste fraud

and abuse or growing our way out of the problem. • Finding solutions will require bipartisan cooperation and

a willingness to discuss all options. • Public engagement and understanding is vital in finding

solutions.• This is not about numbers. It is a moral issue.

presented by jeffrey s. thiebert, national grassroots director

Documents

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