THE CONCORD COALITION www.concordcoalition.org

1. The Federal Budget Now and In the Future presented by Joshua Gordon, Policy Director THE CONCORD COALITIONwww.concordcoalition.org

2. Interest Estate & Gift Taxes ($19 billion) Domestic** Other Taxes Defense Corporate Taxes Other Mandatory Social Insurance Taxes Medicare & Medicaid* Individual Income Taxes Social Security Composition of Fiscal Year 2013 Federal BudgetRevenues and Outlays, in Billions of Dollars (Deficit: $642 Billion) $1,133 $809 Revenues: $2.81 trillion Outlays: $3.46 trillion • Includes CHIP, spending related to exchanges and subsidies • **Includes all appropriated domestic spending such as education, transportation, homeland security, housing assistance and foreign aid. • Source: Congressional Budget Office, May 2013.

3. Net Interest Discretionary Mandatory Automatic Expenditures Are Consuming a Growing Share of the Budget 1973 1993 2013 2023* 40% 24% 38% 35% 53% 49% 59% 62% 14% 7% 14% 6% *Projected Source: Congressional Budget Office, September 2013.

4. Outlays of Select Mandatory Spending ProgramsFiscal Year 2013 projected Source: Congressional Budget Office, February 2013.

5. Defense Discretionary Spending as a Percentage of GDP Projected As a Percentage of GDP Source: Congressional Budget Office, February 2013.

6. Outlays of Select Non-Defense Discretionary Programs (FY 2012 Projected) Education Transp. Housing Veterans Foreign Aid Natural Science, General Agriculture Energy & Resources Space & Government Nutrition Asst. Technology *includes ground, air, and water Source: Congressional Budget Office, January 2012.

7. Domestic Discretionary Projected to be Cut DramaticallyFiscal Years 2013-2022 Percent of GDP Source: Congressional Budget Office, January 2011, August 2012 and Concord Coalition analysis.

8. Tax Expenditures: The Hidden EntitlementFiscal Year 2012 Revenues collected from Individual Income and Corporate Taxes Amount of Forgone Revenue in the Individual and Corporate Tax from “Tax Expenditures” Source:Congressional Budget Office and Tax Policy Center, Tax Notes, April 9, 2012.

9. Largest Tax ExpendituresFiscal Years 2013-2017 Billions of Dollars Tax expenditures are any reduction in income tax liabilities that result from special tax provisions or regulations that provide tax benefits to particular taxpayers. These special income tax provisions are referred to as tax expenditures because economically they are considered analogous to direct outlay programs. Source: Joint Committee on Taxation, JCS-1-13, February 1, 2013.

10. How Marginal Tax Rates Work:First Calculate “Taxable Income” Taxable Income

11. How Marginal Tax Rates Work:Only your taxable income in the last “bucket” get taxed at the highest rate. This highest rate also determines the value of your deductions. Taxable Income = $100,000 15% $8,925 taxed @10% $27,325 @15% $51,600 @25% 33% 39.6% $12,150 @28% Note: 2013 Income Tax Rates/Brackets 35% rate applies to $1,650 of income below $400K

12. Federal Spending vs. Revenues as a Percent of GDP CBO Baseline 2013-2023 Projected Percentage of GDP Average outlays: 20.4% Average revenues: 17.4% CBO Projected Baseline Source: Congressional Budget Office, 2013.

13. Interest costs rise sharply under current law Net Interest, in Billions of Dollars, 2014-2023 Source: Congressional Budget Office, May 2013.

14. Percentage of Debt Held by the Public Owned by ForeignersCalendar Years 1987-2012 Percentage of Ownership of Publicly-Held Debt Source: United States Treasury Department, Treasury Bulletin, Table OFS-2, December 2012.

15. The Sources of Growth in Federal Spending Interest Social Security Medicaid, CHIP, Exchange Subsidies Medicare All Other Spending Medicaid Source: CBO Alternative Fiscal Scenario, 2013

16. Effects of aging and health care spending on the federal budget. Source: Congressional Budget Office, June 2010 & 2011.

17. America’s population is aging. Percentage Change in the Increase in Working-Age and Elderly Population, 2010-2030 Increase in Population Aged 65 and Over Increase in Working Age Population

18. Americans are Living Longer and Having Fewer Children Consequently, fewer workers are available to support each Social Security recipient 2029: 2.1 to 1 Today: 2.9 to 1 1960: 5.1 to 1 Source: Social Security and Medicare Trustees’ Report, 2012.

19. Social Security Promised Benefits Exceed Dedicated Tax Revenues Social Security Outlays Percent of GDP Cash Deficits Rise to 1.5% of GDP and Stabilize Payroll Tax & Taxation of Benefits Calendar Year Source: Social Security Trustees’ Report—May 2012 (Intermediate Projections).

20. Medicare Costs Under Alternative Scenarios As a Percentage of GDP Calendar Year Current Law Alternative Physician projection Full Alternative projection Source: Medicare Trustees’ Report, May, 2012.

21. America is on an Unsustainable Fiscal Path Debt Held by the Public, as a Percent of GDP, 1940-2050 Actual Projected As a Percentage of GDP World War II 106% 2013 73% Source: CBO’s Long Term Outlook Extended Alternative Scenario, 2013..

22. Looking at the Simpson-Bowles Commission Report