Tag: Congressional Budget Office

U.S. Debt Load Seen Worse Than Italy’s by 2023, IMF Predicts
Social Security Disability

U.S. Debt Load Seen Worse Than Italy’s by 2023, IMF Predicts

Greenspan says tax cuts problematic because they’re unfunded Trump’s budget chief urges Congress to approve spending cuts Mamma Mia!
In five years, the U.S. government is forecast to have a bleaker debt profile than Italy, the perennial poor man of the Group of Seven industrial nations.
The U.S. will also place ahead of both Mozambique and Burundi in terms of the weight of its fiscal burden.
U.S. debt-to-GDP ratio projected to surpass Italy’s Expected debt-to-GDP ratios in G7 countries in 2023 Source: International Monetary Fund The numbers put renewed focus on the U.S. deteriorating budget after the enactment in December of $1.5 trillion in tax cuts, and the passage more recently of $300 billion in new spending.
The central bank’s most recent forecasts show a median estimate of 2.7 percent for this year’s expansion slowing to 2 percent in 2020, while the CBO sees GDP growth slowing from 3.3 percent this year to 1.8 percent in 2020.
Former Fed Chairman Alan Greenspan, speaking in an interview Wednesday with Tom Keene on Bloomberg Television, said lowering corporate tax rates was a good move.
“The trouble, unfortunately, is it’s unfunded,” he said, adding that Republicans should have done “spending cuts first before you try to do tax cuts.” Higher Spending Spending, meanwhile, is rising.
“This president, obviously, is not a president that’s interested in fiscal issues,” Senator Bob Corker, a Republican from Tennessee, said in Washington earlier on Wednesday.
“This issue is not going to be dealt with without a strong charismatic president who really wants to take it on.
Mulvaney said the CBO’s projection of the effects of December’s tax cuts, which sees them adding $1.9 trillion to deficits over about a decade, is way off base.

Both parties have a plan for the debt crisis: Do nothing
Unemployment

Both parties have a plan for the debt crisis: Do nothing

Here are the CBO projections.
Since 1950, deficits have equaled or exceeded 5 percent of GDP in only six years (1983, 1985 and 2009-2012), and most of these occurred after deep recessions.
Adding these amounts to government borrowing would increase the federal debt — the total of all past deficits — to more than 100 percent of GDP, about as large as right after World War II.
They warned of an approaching “debt crisis” if ballooning budget deficits weren’t reversed.
On April 9, five Democratic economists issued a rejoinder in The Post, rejecting the Hoover economists’ suggestion that spending cuts for “entitlements” — mainly programs for the elderly and the poor — bear all the burden of cuts.
In today’s dollars, balancing the budget would require annual spending cuts and tax increases of about $1 trillion.
That’s equal to about a fifth of federal spending, which is now being borrowed.
Social Security and other “safety net” programs would have to be reduced, possibly through higher eligibility ages and more means-testing.
These entitlements constitute about 70 percent of federal spending; if they’re ignored, the entire adjustment would fall on other spending (other domestic programs and defense) and taxes.
But a debt crisis does not come slowly and visibly like a rising tide.

Opinion: Paul Ryan leaves behind an unfixable mess
Unemployment

Opinion: Paul Ryan leaves behind an unfixable mess

Here’s his legacy: He spent his career, first as chair of the House Budget and Ways and Means committees, and later as speaker, devoted to cutting taxes so much it would force deep cuts in popular entitlement programs, mostly Social Security and health insurance, that actually dominate the non-defense part of the federal budget.
That’s bad enough, not least since the economy has been doing reasonably well before Congress and President Donald Trump administered the twin stimuli of a very large tax cut for corporations and the rich, followed weeks later by a $1.3 trillion spending bill that boosted federal spending, mostly to expand a defense budget that was already bigger than those of the next half-dozen nations with big military establishments put together.
But the real news was further down in the report — where CBO projected that the tax cuts and spending increases will only boost economic growth for about a year, after which things will stagnate.
Let’s put that $1 trillion deficit in perspective, especially since — unlike the trillion-dollar deficits in fiscal 2009 through 2013 — it’s happening when the economy is at full employment, rather than fighting off the worst recession since the 1930s.
And then, you have to take your pick of eliminating essentially all of Social Security, or all of Medicare and most of Medicaid (or vice versa).
Or you can whack all of the disability and SSI program, all of Medicaid, and all of domestic discretionary.
According to CBO, even with just the cake-and-candy policies Ryan and Trump have passed already will produce relative stagnation by 2020, with monthly job gains slowing to just 62,000 on average, though unemployment will still be low.
And it would get much worse if you really whacked the whole non-defense, non-entitlement parts of the federal government, plus most of Social Security, and then headed into a recession.
That’s the massive fraud Paul Ryan always was, even before Trump.
Fixing the budget damage he’s done is impossible if Republicans stay in control of Congress and cling to last year’s tax cut.

Why America’s return to $1 trillion deficits is a big problem for you
Unemployment

Why America’s return to $1 trillion deficits is a big problem for you

The United States has been running a deficit every year since 2002, but the situation is about to get really ugly.
The country has never run this high of a deficit during good economic times.
Didn’t Obama run a $1 trillion deficit?
“It shows Congress has lost any will to make hard choices to fix near-record debt levels we’re already facing.” What it means for you.
That means more spending on programs for the elderly, such as Social Security, Medicare and Medicaid.
That’s a major driver of the deficits, but on the campaign trail, Trump said he would not touch Social Security or Medicare.
Raise taxes a bit (this could be anything from raising the Social Security or Medicare tax to imposing a tax on carbon or a special millionaires tax), and look for ways to trim Medicare and Medicaid spending by striking harder deals with providers and/or limiting some types of treatments.
After that, the Social Security program will still have some money coming in, but not enough to pay full benefits for everyone.
Congress and the Obama administration agreed in 2013 to what was known as “budget sequestration.” The idea was to impose mandatory caps on both social and defense spending that would go in place unless both parties came together on a long-term budget deal.
“Every person who supports the balanced budget amendment should be required to actually put forward a budget that balances,” said MacGuineas.

Analysis: Tax cuts, spending to raise deficit to $1T by 2020
Unemployment

Analysis: Tax cuts, spending to raise deficit to $1T by 2020

The combined effect of President Donald Trump’s tax cuts and last month’s budget-busting spending bill is sending the federal deficit toward the $1 trillion mark next year, according to a new analysis by the Congressional Budget Office.
Republicans once laced into President Barack Obama for trillion-dollar-plus deficits but mostly fell quiet on Monday’s news.
The administration had promised the cuts would pay for themselves.
Instead, Monday’s report estimates that the GOP tax bill, which is Republican-controlled Washington’s signature accomplishment under Trump, will add $1.8 trillion to the deficit over the coming decade, even after its positive effects on the economy are factored in.
The economic growth promises to drop the nationwide unemployment rate below 4 percent starting this year, CBO predicts, though interest rates would rise more rapidly than the agency had earlier predicted, countering some of the positive economic impact of the tax cuts.
The report paints an unrelentingly bleak picture of the federal deficit, predicting it will hit $804 billion this year, rise to just under $1 trillion for the upcoming budget year and permanently breach the $1 trillion mark in 2020 unless Congress stems the burst of red ink.
With conservatives complaining about the $1.3 trillion catchall spending bill — which blew through previous budget limits by $300 billion over this year and next — House GOP leaders have scheduled a vote this week on a proposed amendment to the Constitution to require a balanced federal budget.
Many economists believe that if deficits continue to rise and the national debt grows, government borrowing will “crowd out” private lending and force up interest rates.
And if interest rates go up, the government will have to pay much more to finance the more than $14 trillion in Treasury debt held by investors.
It warns that interest rates on government borrowing will spike, with the benchmark 10-year Treasury note, currently yielding 2.8 percent, will average a 3.0 percent interest rate this year and 3.7 percent next year.

The US government’s budget deficit is about to explode — and the Trump tax law and spending surge is to blame
Unemployment

The US government’s budget deficit is about to explode — and the Trump tax law and spending surge is to blame

The CBO also reports that economic growth will lower the unemployment rate below 4 percent.
WASHINGTON (AP) — The combined effects of President Trump’s tax cuts and last month’s budget-busting spending bill is sending the government’s budget deficit toward the $1 trillion mark next year, according to a new analysis by the Congressional Budget Office.
The CBO report says that that the twin tax and spending bills will push the budget deficit to $804 billion this year and just under $1 trillion for the upcoming budget year.
The administration had promised the cuts would pay for themselves.
The economic growth promises to drop the nationwide unemployment rate below 4 percent, CBO predicts.
The report paints an unrelentingly bleak picture of federal deficits, which would permanently breach the $1 trillion mark in 2020 unless Congress stems the burst of red ink.
Deficits would grow to $1.5 trillion by 2028 — and could exceed $2 trillion if the tax cuts are fully extended and if Washington doesn’t cut spending.
Republicans controlling Washington have largely lost interest in taking on the deficit, and the issue has fallen in prominence in recent years.
Now that conservatives complained about the $1.3 trillion catchall spending bill — which blew through previous budget limits by $300 billion over this year and next, House GOP leaders have scheduled a vote this week on a proposed amendment to the Constitution to require a balanced federal budget.
Many economists believe that if deficits continue to rise and the national debt grows, government borrowing will “crowd out” private lending and force up interest rates.

Fed report reflects mysteries over its core mandate: the jobs market and prices
Unemployment

Fed report reflects mysteries over its core mandate: the jobs market and prices

Steve The cautious outlook the Federal Reserve delivered on Friday in its monetary policy report reflects uncertainty the central bank has over its core mandates: stable prices and full employment.
The Fed devoted two of its four sidebars in the report to exploring how tight the labor market is and why global inflation is so low.
That the Fed raised as many questions as delivered answers shows the predicament it’s in.
After years of decline, the labor market participation rate has stabilized, in further good news.
Surveys of job openings at small businesses as well as household perceptions about job availability also fit the notion of a tight labor market.
Onto the mysteries — why then are companies still steadily hiring workers?
And there still are disparities across racial, ethnic and regional lines, the Fed notes.
Onto inflation – why has it been so low across the industrialized world?
Sure, but if that’s the case, why are profit margins so high?
But so far, there hasn’t been much evidence that global slack can help explain inflation in a given country, the Fed report says.

I’m a Multi-Millionaire So Trump’s Tax Plan Is Great for Me. It’s a Disaster for Everyone Else
Welfare

I’m a Multi-Millionaire So Trump’s Tax Plan Is Great for Me. It’s a Disaster for Everyone Else

Pearl, a former BlackRock executive, Chair of the Patriotic Millionaires On Sunday, the nonpartisan Congressional Budget Office released its report on the effects of the Senate GOP tax plan, and the results aren’t pretty.
The plan would also add an astounding $1.4 trillion to the national debt.
Senate Republicans claim their bill is intended to help the middle class, and that tax cuts for millionaires and wealthy corporations are necessary to boost economic growth and raise wages.
The idea that this tax plan is going to help anyone beside the ultra-rich is ludicrous.
Yes, some middle-class Americans are going to get a tax cut, but it will be temporary and will leave millions worse off in the long run.
If you make less than $75,000 a year, your taxes are going up so mine can go down.
What about those huge tax cuts for millionaires and wealthy corporations?
After years of talk about the danger of deficits and the importance of helping small businesses, this bill puts Senate Republicans’ priorities in the spotlight, and the American people (rightly) don’t like what they’re seeing.
Any tax bill will naturally have winners and losers as rates are changed and loopholes are closed, but it’s striking how clearly the lines in this bill have been drawn.
The effects of this tax bill are clear — I’ll get a tax cut, and the middle class gets screwed.

CBO: The Senate’s Latest Health Bill Would Leave 22 Million Uninsured
Welfare

CBO: The Senate’s Latest Health Bill Would Leave 22 Million Uninsured

CBO: The Senate’s Latest Health Bill Would Leave 22 Million Uninsured.
The latest version of the Senate Republicans’ health care bill would result in an additional 22 million people becoming uninsured by 2026, according to a Thursday report from the nonpartisan Congressional Budget Office, or CBO.
The report analyzed an updated version of the bill which includes additional funding for opioid recovery programs and out-of-pocket expenses.
Those opposing that amendment argued it would increase health care costs for the sick.
The bill would end federal funding allowing states to expand Medicaid programs by 2024.
Neither bill has enough support among Republicans to pass in the Senate.
With 52 Republican Senators in the chamber and universal opposition from the Democrats, Senate Majority Leader Mitch McConnell can only afford two defections.
More than two Republicans are opposed to each version of the bill.
McConnell acknowledged as much earlier in the week, stating that the Senate would vote to simply repeal the Affordable Care Act, also known as Obamacare.
According to a separate CBO analysis, repealing Obamacare without passing a replacement would result in an additional 32 million Americans without health insurance.

Senate Health Care Bill Would Result in 22 Million Uninsured By 2026
Welfare

Senate Health Care Bill Would Result in 22 Million Uninsured By 2026

Senate Health Care Bill Would Result in 22 Million Uninsured By 2026.
But much of those savings come from reducing the funding for Medicaid, cuts the CBO estimates will amount to $772 billion.
By 2026, 49 million Americans would be uninsured should this bill become law, in comparison with the 28 million people who would remain uninsured by that year if the Affordable Care Act remained in place.
Savings would also come by changing the Affordable Care Act’s subsidies to nongroup health insurance.
Cutting federal funding for Planned Parenthood for one year, another provision included in the bill, would ultimately reduce spending by $146 million for the net decade, but would increase Medicaid spending and have the biggest impact on coverage for low-income populations in areas with few other health care options.
Overall, the estimates regarding the number of uninsured, which are just 1 million fewer than the number estimated in the House’s version of the bill, coupled with the steep cuts to Medicaid, will likely pose a further impediment to Senate Majority Leader Mitch McConnell’s ability to garner enough votes in the Senate for the bill to pass.
inRead invented by Teads The CBO had previously determined that the version of the Obamacare repeal bill that passed the House in May would increase the number of uninsured by 23 million, to 51 million, in comparison with the 28 million that would have been uninsured if the Affordable Care Act remained in place.
The CBO also estimates that, even though premiums in 2020 would be 30% lower than the Affordable Care Act, fewer people with low-incomes would choose to purchase a plan because it would be such a high percentage of their income.
The bill would repeal the parts of the Affordable Care Act that increased certain taxes on the wealthiest Americans, as well as a tax credit for some small businesses to provide healthcare. ”
The Senate budget committee released a statement touting the statistics from the report about lowering premiums and reducing the deficit, as did McConnell.