Report: CBO's January 2015 Budget and Economic Outlook

After falling to post-recession lows below $470 billion this year and next, CBO projects that deficits will again start to rise, exceeding $1 trillion by 2025. As a result, debt will rise over the next decade, from $13 trillion today to $21.6 trillion by the end of 2025. Watch CRFB President Maya MacGuineas discuss the long-term problem on Bloomberg TV here.

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The Better Budget Process Initiative: Improving Focus on the Long-Term

The short-term emphasis in the budget process is the result of both an overreliance on ten-year budget windows for scoring and analysis, and insufficient enforcement of long-term fiscal goals. Modifying the rules governing the budget process could be a powerful tool to help correct this myopic thinking. We suggest several possible remedies in our latest paper.

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Fiscal Speed Bumps: Challenges, Risks, and Opportunities

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.

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Energy and Commerce Holds Hearings on SGR

The House Energy and Commerce (E&C) Health Subcommittee held hearings on the Sustainable Growth Rate (SGR) formula for Medicare physician payments. Set to cut those payments by 21 percent in April 2015 when the latest "doc fix" runs out, the SGR will be one of the first "Fiscal Speed Bumps" the new Congress will confront this year. Fixing it permanently could cost at least $140 billion through 2025. Click here to read our plan for addressing SGR.

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CRFB's Blog: The Bottom Line

January 30, 2015
Compensation Commission Releases Long-Awaited Report

After a more than year-long process, the Military Compensation and Retirement Modernization Commission released its final report yesterday, recommending changes to military pay, pensions, health benefits, and other benefits.The report is highly anticipated because of the Pentagon's repeated insistence that personnel costs need to be addressed to avoid other areas from getting squeezed by the defense caps. Lawmakers so far have often ignored or only partially implemented their policies.

On Monday, the President is scheduled to release his FY 2016 Budget. Based on press reports, we know some rough outlines of what he will be proposing. Here are some other things to look for.

January 30, 2015

After we sent out our weekly Bottom Line weekly email with the subject line, "All About that CBO Baseline," we started getting requests for the full lyrics. For a lighter look at CBO's report, here's a song that borrows the tune of Meghan Trainor's "All About that Bass."

CBO's official budget estimates rely on general adherence to current law, meaning that no new laws are passed other than to keep the government functioning basically as is. This means that temporary tax cuts or spending increases are expected to expire as scheduled, and legislated spending cuts and tax increases go into effect as scheduled. Of course, that assumption has had mixed success in recent years, and we've pointed out that if lawmakers don't stick adhere to current law, debt would go from bad to worse.

 
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.