LUNCHEON PANEL: A NEW ADMINISTRATION AND CONGRESS Moderator: Bob Rapoza Panelists: William Hoagland, Bipartisan Policy Center David Reich, Center for Budget and Policy Priorities Nick Wyatt, Senate Finance Committee (Majority Staff)
2 The Federal Budget Outlook Appropriations & Taxes CDIF Panel Discussion G. William Hoagland Sr. Vice President Bipartisan Policy Center February 28, 2017
Total Budget Surplus/Deficit FY 1965-2025 3 Total Budget Surplus/Deficit 400 200 Surplus Actual Projections 0-200 Deficit Dollars in Billions -400-600 -800-1000 -1200 Trend -1400-1600 -1800-2000 Recession as announced by National Bureau of Economic Research 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25 Year Source: The Budget and Economic Outlook: Fiscal Years 2017 to 2027. Congressional Budget Office; January 2017. WWW.BIPARTISANPOLICY.ORG
Ac Budget Outlook FY 2012 2027 (In Billions of Dollars % of GDP) 4 2012 Actual 2013 Actual 2014 Actual 2015 Actual 2016 Proj. 2017 2018 2027 % annual 2017-2027 Receipts 2,450 2,774 3,021 3,250 3,267 3,404 3,604 5,140 + 4.2% Spending 3,537 3,455 3,506 3,688 3,854 3,963 4,091 6,548 + 5.2% Deficits 1,087 680 485 438 587 559 487 1,408 +9.7% % of GDP 6.8% 4.1% 2.8% 2.5% 3.2% 2.9% 2.4% 5.0% NA Public Debt 11,281 11,983 12,780 13,117 14,168 14,838 15,416 24,893 + 5.3% % GDP Debt Subject Limit % GDP 73% 16,027 100% 72% 16,699 101% 74% 17,781 103% 74% 18,113 102% 77% 19,538 106% 78% 20,356 106% 77% 21,075 106% 89% 30,032 10% +4.0% CBO estimate of nominal GDP growth increase 3.9% annually 2016-2026. Source: Congressional Budget Office, The Budget and Economic Outlook 2016-2026. January 2017. Debt subject to limit currently set at $18.4 but suspended thru March 15, 2017 on March 16 limit will be raised to its previous level plus amount of borrowing that has occurred while limit was suspended.
Federal Spending Projected for 2027 5 Medicare (18%) Defense (11%) Medicaid (10%) Other Health Programs (2%) Net Interest (12%) Social Security (26%) Other Mandatory Spending (11%) Domestic Discretionary (11%) Agriculture (0.2%) Other Health Programs includes: Health insurance subsidies, exchanges, and related spending; Department of Defense Medicare- Eligible Retiree Health Care Fund (including TRICARE for Life); Children s Health Insurance Program, and other programs. Source: The Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2017 to 2027, January 2017.
Growth in Net Interest Average Annual Growth, 5-year periods (1975 2025) 6 % Growth 20 17.7 19.8 Nominal Growth Real Growth in 2005 $ 17.4 16 13.5 15.1 12 8 4 0-4 9.4 7.3 4.1 4.7 2.1-0.8-2.4-3.8-3.8 2.6 0.9 9.1 6.6-8 -6.0-6.2 1975-80 1980-85 1985-90 1990-95 1995-00 2000-05 2005-10 2010-15 2015-20 2020-2025 Source: The Budget and Economic Outlook Fiscal Years 2016 to 2026: Congressional Budget Office, January 2016, plus historical data.
Immediate & Longer-Term Challenge Post Election 7
Federal Spending as a Share of the Economy 1980 2050 88
Limits on Discretionary Budget Authority* FY 2014 to 2021 (Billions of dollars) 9 Caps 2014 2015 2016 2017 2018 2021 Annual Rate of Increase 2014-2021 Defense $ 520.5 521.3 548.0 551.1 549.0 590.0 1.8% Nondefense $ 491.8 492.4 519.0 518.5 515.4 554.6 1.8% Total $ 1,012.3 1,013.7 1,067.0 1,070.0 1,068.1 1,146.0 1.8% * The Budget Control Act of 2011 specified that if lawmakers did not enact legislation from the Joint Committee on Deficit Reduction that would reduce projected deficits by at least $1.2 trillion, automatic procedures would go into effect to reduce spending during the period 2013-2021. Those procedures are now in effect and are reflected in these numbers. Spending not constrained by these caps (e.g. overseas contingency operations, emergencies, disaster relief and certain program integrity initiatives are not included in these numbers. Source: OMB Sequestration Update Report to the President and Congress for Fiscal Year 2017, August 19, 2016. Congressional Budget Office, An Update to the Budget and Economic Outlook: 2016 to 2026, August 2016. WWW.BIPARTISANPOLICY.ORG
Trust Funds Cannot Fully Fund Scheduled Benefits CBO Estimates -- DI 2022 / OASI 2030 Exhaust 10 450% Trust Fund Ratio (%) Historical Projected 400% 350% 300% 250% 200% 150% 100% 50% 0% Source: Social Security Trustees Report, 2016 OASI DI
Fiscal Impact of Tax Reform Proposals President Trump vs House GOP 11 Current Policy Revenues 2016-2025 In Billions of Dollars (CBO August 2016) President Trump In Billions of Dollars House GOP In Billions of Dollars $39,931 $34,505 to $34,703 (-$5,426 to -$5,228) Tax Policy Center $37,073 to 37,607 (-2,858 to -$2,323) Tax Policy Center Debt Held by Public Debt/GDP in 2025 84.0% $ (-$5,906 to -$2,640) Tax Foundation 106.8% to 107.6% Tax Policy Center $37,513 to $39,740 (-$2,418 to -$191) Tax Foundation 94.9% to 96.7% Tax Policy Center Sources: Congressional Budget Office, August 2016. Tax Policy Center An Analysis of Donald Trump s Revised Tax Plan, October 2016; An Analysis of the House GOP Plan, September 2016. Tax Foundation Details and Analysis of the Donald Trump Tax Reform Plan, September 2016; Details and Analysis of the 2016 House Republican Tax Reform Plan, July 2016.
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February 28, 2017 Bob Rapoza
Chairman of the Full Committee: Rep. Rodney Frelinghuysen (R-NJ) Ranking Member of the Full Committee: Rep. Nita Lowey (D-NY) House Financial Services /General Government Appropriations Subcommittee Chairman: Tom Graves (R-GA) Ranking Member: Mike Quigley (D-IL)
Chairman of the Full Committee: Sen. Thad Cochran (R-MS) Ranking Member of the Full Committee: Sen. Patrick Leahy (D- VT) Senate Financial Services /General Government Appropriations Subcommittee Chairman: Shelly Moore Capito (R-WV) Ranking Member: Chris Coons (D-DE)
Current Continuing Resolution (CR) expires on April 28 Congress is expected to pass a CR for the remainder of FY 2017 and will then turn to address FY 2018 President Trump is expected to release a full budget request in May, and might release a skinny budget on March 14.
FY 2017 -- Congress will have available domestic discretionary appropriation at FY 17 rate or $504 billion (annualized); FY 2018 $1.064 trillion with the sequester in place. No firewalls between defense and non-defense; and Trump targets: Defense - $603 billion; Non-defense- $461 billion.
From the Heritage Foundation: Eliminate the Community Development Financial Institutions Fund save $238 million in FY 2017 http://thfreports.s3.amazonaws.com/2016/blueprintforbalance.pdf
House Appropriations Deadline for FY 2018 Member requests April 5 Week of April 3 Congress completes action on FY 2017 Appropriations
$250 million for CDFI Fund as passed by the House in July 2016 ( H.R. 5485) $750 million for Bond Guarantee
Explain your CDFI and its activity in communities in state/district; Explain how the Financial Assistance from the CDFI Fund leverages other capital for your organization how that capital is to put to use to create jobs, businesses and improve the community; Note that for FY 17, you are requesting $250 million the same amount as approved by the House of Representatives in the FY 17 Financial Services appropriations bill; For FY 18, your CDFI is requesting a freeze at the levels in the FY 17 House Financial Services appropriations bill