2012 Federal Budget Outlook NIHB January 24, 2012 Joan Huffer Center on Budget and Policy Priorities 1
Federal Debt Under Current Policies is Unsustainable cbpp. org 3/18/2018 NOT FOR DISTRIBUTION 2
Tax Cuts, Wars Account for Half of Public Debt by 2019 3/18/2018 3
Ryan plan would get two-thirds of cuts from programs for low- and moderate-income people Source: “The Path to Prosperity” FY 2012 Budget Resolution 4
Deficit Reduction Under the Budget Control Act 1. Cuts discretionary spending by $1 trillion over 10 years through caps on discretionary spending. 2. Set up bipartisan, bicameral Joint Select Committee to identify additional $1. 5 trillion in savings. Failed to reach agreement. 3. $1. 2 trillion in across-the-board cuts (sequestration) begins January 2013 unless Congress acts. cbpp. org 3/18/2018 5
Supercommittee Failure Triggers Sequestration 3/18/2018 6
Sequestration Means Deep Cuts Throughout Budget 3/18/2018 7
Sequestration will be on TOP of Discretionary Caps 3/18/2018 8
Core Low-Income Entitlement Programs Exempt from Sequestration $1. 2 trillion across-the-board spending cuts will not affect: • Medicaid and Children’s Health Insurance Program • Supplemental Nutrition Assistance Program (Food Stamps) • Child Care Entitlements (mandatory) • Child Nutrition • Earned Income Tax Credits (EITC), Child Tax Credit (CTC), ACA Premium Credits [but NOT cost-sharing subsidies] • Supplemental Security Income (SSI) • Temporary Assistance to Needy Families (TANF) 3/18/2018 9
Short-term threats • UI benefits, weeks could be cut back • Cuts to health care programs to pay for SGR • Shielding defense from sequestration without revenue savings could lead to: - Loss of exemption for some low-income programs - Increased cuts to NDD 10
Fiscal Policies Collide at End of 2012 • 2001 -2010 tax cuts expire at end of 2012 • $1. 2 trillion sequestration scheduled to begin in January 2013 • Debt ceiling may need to be raised by early 2013 • FY 2013 Appropriations bills may or may not be completed 11
Principles for Deficit Reduction • Balance primary budget, stabilize debt to GDP. • Need a balanced approach: everything must be on the table • Should not increase poverty or inequality • Boost economy in short-run cbpp. org 3/18/2018
Past Deficit-Reduction Packages Included Large Revenue Increases 13
Taxes Do Not Necessarily Harm the Economy or Cost Jobs 14
Helpful Resources • Office of Management & Budget (OMB) – www. whitehouse. gov/omb • U. S. Senate Budget Committee – http: //budget. senate. gov • U. S. House Budget Committee – http: //budget. house. gov • Congressional Budget Office (CBO) – www. cbo. gov • THOMAS – Library of Congress – http: //thomas. loc. gov • Center on Budget and Policy Priorities – www. cbpp. org
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