SGR Bill Would Add $500 Billion to Long-Term Debt

The next major Fiscal Speed Bump coming up is scheduled cuts to doctor’s payment in late March under the Sustainable Growth Rate (SGR). We estimate that debt would increase $500 billion by 2035 under the current plan being discussed. Read our PREP Plan, which includes a permanent fix for SGR. While Congress always averts this cut, it has almost always been paid for with other health savings. Learn more in our chartbook.

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House and Senate Release FY 2016 Budgets

Both the House and Senate have released budgets that cut spending to balance the budget within ten years. Read our summaries of the House and Senate budgets and read more on the House budget’s spending and revenue.

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Improving the Debt Limit

CRFB released "The Better Budget Process Initiative: Improving the Debt Limit" in conjunction with the debt ceiling being reinstated on March 16. The debt ceiling is a major fiscal speed bump. The paper outlines reform options including applying the debt limit to more economically meaningful measures.

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Update: Impending Fiscal Speed Bumps

Lawmakers will soon face a number of important budget related deadlines, or Fiscal Speed Bumps, that require legislative action.  Addressed irresponsibly, they could cause serious disruptions and/or add as much as $3 trillion to the debt over the next decade. But if dealt with thoughtfully, they offer an opportunity to pursue reforms. Click here to read the paper.

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CRFB's Blog: The Bottom Line

Today marks not just April Fool's Day but also the end of Doug Elmendorf's six-plus year tenure as director of the Congressional Budget Office (CBO) and the beginning of Keith Hall's tenure. Hall was appointed at the end of February to be the ninth director in CBO's history after a long career in government and academia. Elmendorf's time as director saw CBO be a key player in several pieces of legislation - including the 2009 stimulus, the Affordable Care Act, and the Budget Control Act - and economic debates involving things like the health care slowdown, the post-recession labor market, and the minimum wage.

With the Murray-Ryan deal expiring at the end of September, the sequester will once again be a hot topic as lawmakers will be prompted to deal with the discretionary spending reductions it prescribes. Despite the House and Senate being controlled by the same party, their budgets take very different approaches to the sequester. The two budgets have large differences in the amount of defense and non-defense discretionary spending and slight differences in their approach to war spending. Although both only get a small portion of their deficit reduction from on discretionary spending, the two budgets get there in different ways. In addition, the Senate budget provides a more realistic method for a future sequester relief deal, by establishing a deficit-neutral reserve fund for that purpose.

Now that the Senate and House have passed their respective budget resolutions, a budget conference committee is right around the corner. One aspect of the competing resolutions that will have to be dealt with are provisions related to the budget process. While we have previously written on both budgets' treatments of reconciliation instructions, below we’ll go further and highlight some of the other budget process provisions.

March 27, 2015
A Compilation of Doc Fix Offsets

We have spent much space on this blog highlighting the fact that temporary delays of the cuts dictated by Medicare's Sustainable Growth Rate (SGR) formula have almost always been offset (98% of the time since 2004), producing $165 billion in deficit reduction all told, almost entirely from health care programs.

And despite assertions to the contrary, these health savings shouldn’t be dismissed lightly.

 
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 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.

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.