Analysis of CBO’s January 2016 Budget and Economic Outlook

After falling to a post-recession low of $439 billion in 2015, CBO projects deficits will rise every year in the future, with trillion-dollar deficits returning by 2022. As a result, debt will rise further above today’s record-high levels, remaining on an unsustainable long-term course.

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The Fiscal Irresponsibility of the Tax Deal in 6 Charts

It's no surprise that a deficit-financed tax cut deal costing $830 billion after interest is bad for the budget. We've been describing the deal in various blogs over the last month, so here are the most important charts, updated for the actual numbers.

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Interest Rates and the Debt

Even under current projections, interest spending threatens to crowd out other important  priorities, and our high level of debt puts the country’s finances at substantial risk if interest rates rise further than expected. In light of the U.S. Federal Reserve's interest rate hike, learn about the relationship between interest rates and national debt in our most recent paper.

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Fiscal FactCheck Releases Infographic on Candidates' Tax Plans

CRFB’s new Fiscal FactCheck project released an infographic comparing the costs of several GOP presidential candidates’ tax plans. So far, the Tax Foundation has scored plans many candidates, including from Bush, Carson, Cruz, Rubio, and Trump. Although these plans offer a number of thoughtful improvements to the tax code, they would also add trillions to the deficit.

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CRFB's Blog: The Bottom Line

Democratic presidential candidate and former Secretary of State Hillary Clinton has proposed several new taxes that would raise taxes on the wealthy by between $400 billion and $500 billion to pay for new investments helping the middle-class. We've posted an policy explainer on our Fiscal FactCheck site.

Our Fiscal FactCheck project examines fiscal claims made by the candidates. We have posted a full analysis of the offsets for Sanders' "Medicare For All" Plan on our Fiscal FactCheck website.

CBO's summary of its budget outlook included a short summary of the long-term debt outlook, which showed debt rising continuously and eventually exceeding the size of the economy. With the full budget report being released earlier this week, CBO has put out a little more detail on what the budget will look like over the next 30 years. Not surprisingly, it shows debt rising significantly in the coming decades with Social Security and particularly health care spending being the main drivers. The fuller detail in the report also allows us to estimate what happens if policymakers don't adhere to fiscal responsibility. The answer: debt goes even higher, reaching 185 percent of GDP in 2050 instead of 150 percent.

February 2, 2016
Estimates Vary Between Experts and the Campaign

Democratic presidential candidate Sen. Bernie Sanders (I-VT) recently released arguably his most ambitious policy proposal yet, to move to a single-payer health care system in the U.S., but debate quickly arose over just how much such a far-reaching proposal would actually cost.

The Sanders campaign relies on an estimate from UMass-Amherst economist Gerald Friedman suggesting the plan would cost $13.8 trillion over ten years. But Emory University health economist Kenneth Thorpe contends that it could actually cost closer to $24.7 trillion, particularly without simultaneously enacting very large provider payment cuts – which are not mentioned anywhere in Sen. Sanders's plan.

 
June 4, 2013
CRFB's latest interactive tool "The Reformer" is a handy game that allows users to design their own Social Security plan. Users can select from a wide variety of benefit and revenue changes to make the system sustainably solvent. The tool then shows the effect on the program's finances and benefit and tax levels.
September 27, 2011
If you've ever wanted to design your own corporate tax reform, now you can with our new Interactive Tax Reform Calculator. There is no question that the U.S. corporate tax system is badly in need of reform, and leaders in both parties have been pursuing this goal.

Join Our Team!

Current job opportunities at the Committee for a Responsible Federal Budget include:

  • Director of the Fiscal Institute
  • Legislative Director

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CRFB Projects

The McCrery-Pomeroy SSDI Solutions Initiative is dedicated to identifying practical improvements to the Social Security Disability Insurance (SSDI) program. The SSDI Solutions Initiative is calling for academic papers on innovative ways to make the SSDI program better serve workers with disabilities, those who pay into the program, and the economy as a whole.

The Campaign to Fix the Debt is an unprecedented and bipartisan coalition that seeks to mobilize members of business, government, and policy communities to urge Congress and the President to enact a comprehensive debt deal.

There is a growing consensus that the budget process is broken. The Better Budget Process Initiative will put forward specific options to reform and improve the budget process in a wide range of areas, including increasing focus on the long-term fiscal outlook, improving the process for dealing with the debt limit, strengthening statutory budget enforcement, revising the content and structure of the budget resolution, moving to biennial budgeting, and addressing treatment of tax expenditures in the budget process.