Category Archives: Budget – United States

The Nation’s Fiscal Health: Action is Needed to Address the Federal Government’s Fiscal Future

Source: Statement of Gene L. Dodaro – Comptroller General of the United States, United States Government Accountability Office, Testimony Before the Committee on the Budget, U.S. House of Representatives, GAO-17-579T, May 3, 2017

From the Fast Facts:
The Comptroller General testified before Congress about the federal government’s unsustainable long-term fiscal outlook—the growing imbalance between revenues (money collected) and spending (driven by health care, Social Security, and net interest on the debt).

A plan is needed to put the nation on a sustainable long-term fiscal path. But in the near-term, Congress and executive branch agencies have opportunities to improve the government’s fiscal condition, including trying to address improper payments and the tax gap, as well as making changes where federal programs or activities are at high risk or fragmented, overlapping, or duplicative….
Related:
Highlights

Federal Funding Insulated State Budgets From Increased Spending Related To Medicaid Expansion

Source: Benjamin D. Sommers, and Jonathan Gruber, Health Affairs, Vol. 36 no. 5, May 2017
(subscription required)

From the abstract:
As states weigh whether to expand Medicaid under the Affordable Care Act (ACA) and Medicaid reform remains a priority for some federal lawmakers, fiscal considerations loom large. As part of the ACA’s expansion of eligibility for Medicaid, the federal government paid for 100 percent of the costs for newly eligible Medicaid enrollees for the period 2014–16. In 2017 states will pay some of the costs for new enrollees, with each participating state’s share rising to 10 percent by 2020. States continue to pay their traditional Medicaid share (roughly 25–50 percent, depending on the state) for previously eligible enrollees. We used data for fiscal years 2010–15 from the National Association of State Budget Officers and a difference-in-differences framework to assess the effects of the expansion’s first two fiscal years. We found that the expansion led to an 11.7 percent increase in overall spending on Medicaid, which was accompanied by a 12.2 percent increase in spending from federal funds. There were no significant increases in spending from state funds as a result of the expansion, nor any significant reductions in spending on education or other programs. States’ advance budget projections were also reasonably accurate in the aggregate, with no significant differences between the projected levels of federal, state, and Medicaid spending and the actual expenses as measured at the end of the fiscal year.

Trump Tax Plan Would Make States’ Job Still Harder

Source: Iris J. Lav, Center on Budget and Policy Priorities, May 1, 2017

The new Trump tax plan would rob states of revenues they need to serve their residents at a time when states already face significant fiscal distress, with over half of them projecting budget shortfalls for fiscal year 2018. And it would add to the problems caused by the President’s proposed cuts next year in funding for important state and local services, as well as congressional proposals to shift large health care costs to the states by repealing the Affordable Care Act and sharply cutting federal Medicaid spending.

Several parts of the Trump tax plan would affect state revenues ….

The “Better Way” House Tax Plan: An Economic Analysis

Source: Jane G. Gravelle, Congressional Research Service, CRS Report, R44823, April 25, 2017

On June 24, 2016, House Speaker Paul Ryan released the Better Way Tax Reform Task Force Blueprint, which provides a revision of federal income taxes. For the individual income tax, the plan would broaden the base, lower the rates (with a top rate of 33%), and alter some of the elements related to family size and structure by eliminating personal exemptions, allowing a larger standard deduction, and adding a dependent credit. For business income, the current income tax would be replaced by a cash-flow tax rebated on exports and imposed on imports, with a top rate of 20% for corporations and 25% for individuals. The cash-flow tax would be border-adjusted (imports taxed and exports excluded), making domestic consumption the tax base. The system would also move to a territorial tax in which foreign source income (except for easily abused income) would not be taxed. In addition, the proposal would repeal estate and gift taxes. Although the Affordable Care Act (ACA) taxes are not repealed in the Better Way tax reform proposal, ACA taxes are repealed in the Healthcare Task Force proposals. One objective of tax reform is to increase output and efficiency. However, the plan’s estimated output effects appear to be limited in size and possibly negative. ….

Another Round of Fend-for-Yourself Federalism

Source: FFIS, State Policy Reports, Volume 35, Issue 8, April 2017
(subscription required)

From the abstract:
It began with the president’s “skinny” budget for fiscal year (FY) 2018, and it is continuing with chatter around tax reform. “It” is the notion that state and local governments are about to see an escalation of fend-for-yourself federalism.

USAFacts

Source: USAFacts, 2017

USAFacts is a new data-driven portrait of the American population, our government’s finances, and government’s impact on society. We are a non-partisan, not-for-profit civic initiative and have no political agenda or commercial motive. We provide this information as a free public service and are committed to maintaining and expanding it in the future.

We rely exclusively on publicly available government data sources. We don’t make judgments or prescribe specific policies. Whether government money is spent wisely or not, whether our quality of life is improving or getting worse – that’s for you to decide. We hope to spur serious, reasoned, and informed debate on the purpose and functions of government. Such debate is vital to our democracy. We hope that USAFacts will make a modest contribution toward building consensus and finding solutions.

There’s more to USAFacts than this website. We also offer an annual report, a summary report, and a “10-K” modeled on the document public companies submit annually to the SEC for transparency and accountability to their investors.

Block Grants: Past, Present, and Future

Source: Federal Funds Information for States, Issue Brief 17-12, April 11, 2017
(subscription required)

From the summary:
During the House debate around repealing and replacing the Affordable Care Act (ACA), a provision was added allowing states to participate in an optional block grant for certain Medicaid participants. While the bill was pulled from the House floor, converting all or part of Medicaid into a block grant is not a new idea. Medicaid and other major open-ended mandatory programs, including the Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), and child nutrition programs, have all been recommended for conversion into block grants in recent years.

This Issue Brief provides context for these and other proposals by examining block grants as a subdivision of federal grant funding. It also highlights recent proposals affecting block grants.
A separate spreadsheet providing data on federal block grants is available here.

FY 2018 Budget Blueprint Cuts Many Grants, Provides Increase to Defense

Source: Federal Funds Information for States (FFIS), Budget Brief 17-05, March 17, 2017
(subscription required)

From the summary:
The president’s budget blueprint for fiscal year (FY) 2018, America First: A Budget Blueprint to Make America Great Again, provides top-line discretionary spending levels for federal agencies with some specific details. It does not propose funding levels for most discretionary programs, or information on mandatory spending and revenues.
Related:
Spreadsheet

The Fiscal Ship

Source: Brookings Institution – Hutchins Center, Woodrow Wilson Center – Serious Games Initiative, 2017

The Fiscal Ship challenges you to put the federal budget on a sustainable course. Measured as a share of gross domestic product, the federal debt is higher than at any time since the end of World War II and projected to climb to unprecedented levels. America is looking at a permanent, growing mismatch between revenues and spending, and policymakers are faced with difficult decisions about how to reconcile important government priorities—including retirement and health benefits promised to the growing number of old folks—with the tax revenues that the current tax code will yield. Today’s tax code won’t yield enough revenue to pay for basic services of government plus the retirement and health benefits promised to the growing number of old folks. So your mission is to pick from a menu of tax and spending options to reduce the debt from projected levels over the next 25 years. Small changes to spending and taxes won’t suffice. The choices are difficult, but the goal is achievable.

But budget decisions aren’t only about fiscal sustainability. They also shape the kind of country we live in. To win the game, you need to find a combination of policies that match your values and priorities AND set the budget on a sustainable course….