CBO – Options for Reducing the Deficit: Mandatory Spending

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Options for Reducing the Deficit: Mandatory Spending

posted by Sheila Dacey on December 6, 2013

CBO recently published a report on Options for Reducing the Deficit: 2014 to 2023. That report is now available in a fully digital version, so users can search the options according to major budget category, budget function, and major program category. The report included 23 options for changing mandatory spending programs (apart from options primarily involving health); they are listed at the bottom of this post with estimates of their budgetary savings.

Trends in Mandatory Spending

Mandatory spending—which totaled about $2.0 trillion in 2013, or about 60 percent of federal outlays, CBO estimates—consists of all spending (other than interest on federal debt) that is not subject to annual appropriations. Lawmakers generally determine spending for mandatory programs by setting the programs’ parameters, such as eligibility rules and benefit formulas, rather than by appropriating specific amounts each year. Mandatory spending is net of offsetting receipts—certain fees and other charges that are recorded as negative budget authority and outlays. Continue reading “CBO – Options for Reducing the Deficit: Mandatory Spending”

Jobs Deficit: Austerity Politics Threatens Economy

Jobs Deficit: Austerity Politics Threatens Economy

Posted: 01/30/2013 1:25 pm EST  |  Updated: 01/30/2013 1:46 pm EST

Obama AusterityWASHINGTON — Lawmakers were stunned Wednesday to learn that the U.S. economy officially dove toward a double-dip recession at the end of 2012, contracting for the first time in three and a half years amid steep declines in government spending and sluggish exports.

Policymakers were similarly stunned in Europe when reductions in government spending led to continued economic malaise, leading top economists there to question the logic behind austerity recommendations. European austerity programs are a major driver of the slowdown in U.S. exports, and several economists have argued that reductions in government spending, here and abroad, are almost solely responsible for the suddenly tanking economy. Continue reading “Jobs Deficit: Austerity Politics Threatens Economy”

The U.S. Economy Is Shrinking: Now Is the Time to Worry

AFL-CIO Now

01/31/2013 William Spriggs

Photo courtesy of Wikimedia commons.

MAD magazine’s Alfred E. Neuman was always shown with a grin on his face, captioned, “What, me worry?” Well, now it is time to worry.

The release of the advanced GDP numbers—measuring all goods and services produced in the United States—for the past three-month period of 2012, shows the economy shrinking. Why? Well, personal consumption—all those Christmas gifts—grew by 2.2%, a growth rate faster than in the preceding quarter. Non-residential fixed investment, what businesses are buying to increase their economic activity going forward, jumped by 8.8%, almost six times faster than in the preceding quarter, and imports dropped significantly (a drain on the system, since that is money going abroad), so that the net effect of exports and imports was a boost of 5.7% to the economy. So, if people are buying more, business is investing more and imports aren’t sucking the wind out of the economy’s sails, where did we go wrong? Federal expenditures plummeted by 15%. The big chunk of the drop from federal expenditures came in defense expenditures. Continue reading “The U.S. Economy Is Shrinking: Now Is the Time to Worry”

Analysis: Next fiscal fight shifts focus to spending cuts

Analysis: Next fiscal fight shifts focus to spending cuts

Shebeko//Shutterstock.com

Nearly everyone views the year-end fiscal-cliff fight as a debacle, but once that is accepted as a given, opinions tend to diverge. While one can say that the vast majority of Bush-era tax cuts were not just extended but made permanent—something that Republicans and conservatives should like—there were effectively no spending cuts, and in no meaningful way were entitlements trimmed or reformed.

People on either side could view the cup as either half-full or half-empty. But as a practical matter, the only area where the Left caved was to pick whom not to raise taxes on, giving in by allowing the definition of “middle class” to rise to $400,000 in annual income ($450,000 for a family), with the higher rates kicking in for income above that level. If only a family earning almost half-a-million dollars a year really were middle class. Other key provisions set the estate-tax rate at 40 percent (it was scheduled to rise from 35 to 55 percent), with an exemption on the first $5 million; created solutions for the alternative minimum tax and the “doc fix”; and increased the capital-gains rate from 15 to 20 percent. Continue reading “Analysis: Next fiscal fight shifts focus to spending cuts”