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

This week the Senate agreed by unanimous consent to consider the House passed highway bill, H.R. 5021. The agreement allows for the consideration of several amendments, including an amendment by Senators Tom Carper (D-DE), Bob Corker (R-TN), and Barbara Boxer (D-CA), that would remove the pension smoothing offset, a gimmick that we have written about previously.

In a recent New York Times column, economist Paul Krugman argued that the focus on the national debt represented “an imaginary budget and debt crisis.” He stated that current debt increases are manageable, there is little danger of a debt crisis, and it would be “no big deal” economically to stabilize the debt-to-GDP ratio. He contends that those who focus on impending deficits are fear mongering and diverting the national attention "from its real problems — crippling unemployment, deteriorating infrastructure and more."

We find several flaws in Krugman’s budgetary logic, detailed below.

In its release this week of the economic effects of the President's budget, CBO found the budget would increase the size of the economy, mainly due to immigration reform. As a result, under the President's budget Gross National Product (GNP) would be about 2.1 percent higher in 2024 than before the enactment of the budget, though GNP per capita would be about 1 percent lower. Importantly, higher economic growth would lead to additional revenue collection and lower deficits. Because CBO accounted for certain economic effects of immigration in its analysis of the President's budget, the additional economic effects would actually increase the deficit by less than $100 billion over ten years.

July 23, 2014
Think Tanks on Left, Right, and Center Agree

In the coming days, the Senate will vote on the House-passed measure to replenish the Highway Trust Fund. The bill is a last-ditch effort to prevent the fund from going bankrupt and stalling construction projects across the country. However, the transfer of general revenue to the HTF is funded primarily by a budget gimmick known as “pension smoothing,” which appears to raise revenue in the short term but ends up costing money in the long term. Opposition to the policy has been building steadily and now includes organizations from all points on the political spectrum.

 
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.