Report: The 2014 CBO Long-Term Budget Outlook

    CRFB's MacGuineas on Bloomberg TV

    CRFB Examines Budget Process At Age 40

    Fixing the Highway Fund

Report: The 2014 CBO Long-Term Budget Outlook

  

The Congressional Budget Office (CBO) released its 2014 Long-Term Budget Outlook, detailing the budget picture for the next 75 years. The report shows debt rising as a share of the economy continuously after 2017, a trend which CBO describes as unsustainable over the long run. Read our six-page analysis of the report here.

 

CRFB's MacGuineas on Bloomberg TV

 

CRFB President Maya MacGuineas appeared on Bloomberg Television to discuss CBO's Long-Term Budget Outlook and how imperative it is for lawmakers to address our nation's fiscal challenges. Watch the full interview on Bloomberg TV here.

CRFB Examines Budget Process At Age 40

 

Our new paper, The Budget Act at 40: Time for a Tune Up? details many problems facing the current budget process including lack of transparency, lack of accountability, and lack of a long-term focus. These issues have resulted in poor planning and policy around the debt, with the process increasingly becoming ad hoc, ineffective, and short-sighted in practice. Read the blog here.

Fixing the Highway Fund

 

In light of the nearing insolvency of the Highway Trust Fund, CRFB recently released a new paper -- Trust or Bust: Fixing the Highway Trust Fund -- along with blogs detailing options to increase revenue, reduce spending, identify new revenue sources, finance a general revenue transfer, and fix the budgetary treatment of the HTF.

 

 

CRFB's Blog: The Bottom Line

In our series on the long-term budget outlook, we covered how debt projections would change if some of CBO's economic and technical assumptions turned out differently. Uncertainty is clearly a factor in any budget projection and especially so for 75-year estimates. But CBO also points out that there are ways for policymakers to remove or lessen this uncertainty by changing federal policies, including by reducing federal debt to lessen the risk of negative revisions to projections.

Recall that the four parameters for which CBO evaluated alternate assumptions were mortality, productivity, interest rates, and health care cost growth. While it is difficult to insulate the budget from productivity shocks, government policy can mitigate the effect of shocks for the three other variables on the budget.

With the anticipated release of the Social Security Trustees Report, CRFB will be holding an event decoding the Trustees Report on Tuesday July 29 at the Hyatt Regency in Washington, DC. It will start at 8:30 AM Eastern time with opening remarks.

The event will include a heavy-hitting lineup, with remarks by Social Security Chief Actuary Stephen Goss and Reps. Tom Cole (R-OK) and John Delaney (D-MD). In addition, there will be a diverse panel with experts from a wide variety of perspectives, including Goss, the American Enterprise Institute's Andrew Biggs, the Mercatus Center's Jason Fichtner, Third Way's Jim Kessler, and the Center on Budget and Policy Priorities's Paul Van de Water. The panel will be moderated by Damien Paletta of The Wall Street Journal.

July 22, 2014
How Long-Term Debt Looks With Different Assumptions

Any budget projection is inherently uncertain, and that uncertainty is magnified when the projection period is extended to 25 or 75 years, as the Congressional Budget Office (CBO) does in its long-term outlook. That's why CBO publishes an Alternative Fiscal Scenario (AFS), to illustrate what would happen to debt if lawmakers cut taxes and increase spending differently than projected by current law (the Appendix of our analysis explains the differences). However, policy is not the only source of uncertainty in long-term projections; the economic and technical assumptions used also greatly affect CBO's estimates. Fortunately, CBO provides a band of assumptions for mortality, productivity, interest rates, and health care cost growth, showing how they would each affect debt in 2039 (at 111 percent of GDP in the Extended Baseline, including economic feedback effects). We delve into these details below.

The Bipartisan Policy Center held an event Tuesday commemorating the 40th anniversary of the Congressional Budget Act, which became law on July 12. The event featured two panel discussions: The first panel included six former directors of the Congressional Budget Office (including CRFB Board members Alice Rivlin, Rudy Penner, and Dan Crippen), and the second panel consisted of former chairmen and members of the House and Senate Budget Committees (including CRFB Co-Chair Bill Frenzel and Board member Jim Jones). Bill Hoagland, another CRFB Board member, presided over the event. Both panels touched on the merits of the Congressional Budget Office, which the Budget Act created, and the failure of Congress to pass concurrent budget resolutions in recent years. The speakers also touched on many of the issues raised in our recent paper on the problems with the budget process. On the whole, the panelists stated that the political polarization of Congress, not inadequacies in the Budget Act, was a main reason for the gridlock in the process.

 
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.

CRFB Projects

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.

The Moment of Truth (MOT) project is a non-profit, non-partisan effort that seeks to foster honest discussion about the nation’s fiscal challenges, the difficult choices that must be made to solve them, and the potential for bipartisan compromise that can move the debate forward and set our country on a sustainable path.