CRFB

CRFB Projects a One Trillion Dollar Deficit

Fiscal Policy — Mon, 10 Nov 2008 17:59:00 -0500

The fiscal year 2009 deficit could reach over one trillion dollars, according to an analysis by the Committee for a Responsible Federal Budget (CRFB). This deficit would be more than twice as large as the 2008 deficit of $455 billion and would represent a post-war record both in nominal terms and as a share of GDP.

"These numbers are simply astonishing," said Maya MacGuineas, president of CRFB. "Of course we can't try to balance the budget right now when the economy is in such turmoil, but when the deficit has that many zeros, you have to ask yourself how we let things get so bad. If a trillion… more

Fiscally Responsible Stimulus

Fiscal Policy — Mon, 10 Nov 2008 17:50:00 -0500

In light of the current state of the economy, it appears likely that Congress will pass another stimulus package...

The Committee for a Responsible Federal Budget recognizes that there is a strong enough risk of a prolonged recession that a fiscal stimulus package may well make sense. Given the many risks associated with a significant downturn, it makes sense to err on the side of caution in determining whether more stimulus is appropriate. Assuming Congress proceeds with plans to offer some type of stimulus package, CRFB offers three recommendations.

1) The package should be designed to accomplish economic, not political, objectives. There is already a good deal of momentum behind… more

Guide to Health Care Policy: The 2008 Presidential Election

Fiscal Policy — Fri, 31 Oct 2008 07:56:00 -0400

One of the most pressing issues facing policymakers in the United State is rising health care costs. Cost growth is putting ongoing stress on the budgets of families, employers, and governments. The U.S. already spends $2.2 trillion a year - 16 percent of GDP - for health care. Nearly a third of this comes from the federal government.

Health expenditures are projected to nearly double to $4.3 trillion in a decade, at which point they will represent nearly one-fifth of the economy. According to the Congressional Budget Office, by 2030 they could consume a third, and by 2080 nearly half of GDP.

As health care costs grow,… more

Guide to Tax Policy: The 2008 Election

Fiscal Policy — Wed, 29 Oct 2008 10:58:00 -0400

The next president will have to address fiscal imbalances within the government and a dramatically rising federal debt. National debt has been on a more or less steady rise since 1974 when, after a steady decline from the massive debt accumulated during WWII, it hit a low of 33.6 percent of GDP. Total national debt was more than $10 trillion at the start of fiscal year 2009.

This rising debt is driven by entitlement growth, resulting from demographic changes and rapidly rising healthcare costs. An aging population, especially in light of the retirement of the Boomers, is projected to… more

Guide to Social Security: The 2008 Presidential Election

Fiscal Policy — Tue, 28 Oct 2008 09:17:00 -0400

Social Security is the single largest government program. In 2007, the program cost $585 billion and provided benefits for roughly 50 million retirees, dependents, survivors, and disabled workers. It is financed primarily through the payroll tax -- a 12.4 percent tax on wages up to $102,000. The tax is split equally between employees and employers. The remaining revenues come mainly from the taxation of Social Security benefits for wealthier recipients.

Next year, the program’s surpluses will begin to decline precipitously. The Social Security Trustees have repeatedly warned that the program is on an unsustainable path and that the system will begin… more

Guide to Stimulus Proposals: The 2008 Presidential Election

Fiscal Policy — Sun, 26 Oct 2008 12:36:00 -0400

Background

The United States is in the midst of an economic crisis. Financial institutions are failing, the credit markets are frozen, and global stock markets have experienced large-scale losses. This crisis has also had significant effects on the "real" economy. Home values have tumbled, consumption has dropped, and jobs are disappearing.

During economic downturns, the government regularly takes actions to try to combat the effects of the decline. Most of its actions fall into one of four categories: monetary stimulus, fiscal stimulus, targeted stabilization, and economic relief.

Monetary stimulus involves the Federal Reserve Board ("the Fed") reducing interest rates, making it cheaper to borrow.… more

Promises, Promises: A Fiscal Voter Guide to the 2008 Election

Fiscal Policy — Wed, 20 Aug 2008 23:37:00 -0400

The United States faces serious fiscal challenges. Large budget deficits have returned, and shifting demographics along with growing health care costs are putting intense pressure on the long-term federal budget outlook. Over time, sustained deficits will weaken the economy and adversely affect the American standard of living.

The two major political parties' presidential candidates are campaigning on a lengthy list of policy initiatives, most of which would have significant impact on the federal budget. While not all of these proposals will become law, they do reflect the candidates' values and priorities, and the policies each candidate is likely to pursue once… more

Twelve Principles for Fiscal Responsibility

Fiscal Policy — Tue, 20 May 2008 10:45:00 -0400

The United States faces a number of serious fiscal challenges. Budget deficits are back, the economy has weakened, Social Security is unsound, growing health care spending is putting immense pressure on the budget, tax policy is at a major crossroads, and borrowing is projected to reach unsustainable levels. Politicians will have to take concrete steps to confront these challenges, and some level of sacrifice will be required. The sooner decisions are made, the better-both because it will give the public more time to adjust and because it will allow us to spread the sacrifices more broadly.

The presidential campaign can either… more

Fiscal Year 2009 Budget Resolutions

Fiscal Policy — Tue, 08 Apr 2008 06:06:00 -0400

This Budget Update looks at the budget resolutions passed by both the House (H. Con. Res. 312) and Senate (S. Con. Res. 70), compared to each other as well as to the CBO March baseline and the President’s budget as reestimated by CBO.

Major Points The House-passed budget should be commended for complying with pay-as-you-go (PAYGO) rules without exception. The budget plan assumes that all changes to revenues and mandatory spending would be offset so that deficits would not be increased over the six- and eleven-year time periods. Neither the House nor the Senate budget makes any attempt to control the unsustainable growth… more

Letter On the Budget Resolution And Taxes

Fiscal Policy — Tue, 18 Mar 2008 06:59:00 -0400

Thank you for your inquiry concerning whether the budget plan reported by the House Budget Committee increases taxes. The budget resolution does not raise taxes. Both tax rates and tax revenues as a share of GDP will increase under the budget resolution because tax increases are part of current law, not because of policies introduced as part of the budget resolutions currently under consideration.

Barring changes, taxes will increase beginning in 2011 due to the way in which the original 2001 and 2003 tax cuts were passed. In order to decrease the number of votes necessary for passage and to help… more