O slideshow foi denunciado.
Utilizamos seu perfil e dados de atividades no LinkedIn para personalizar e exibir anúncios mais relevantes. Altere suas preferências de anúncios quando desejar.

The 2016 Budget Outlook in 19 Slides

10.509 visualizações

Publicada em

This presentation of the budget outlook for the coming decade highlights the key findings from CBO’s report The Budget and Economic Outlook: 2016 to 2026, which was released in January.

The 2016 Budget Outlook in 19 Slides

  1. 1. @ CONGRESSIONAL BUDGET OFFICE The Budget Outlook for 2016 to 2026 in 19 Slides February 2016 For more details, see wvvw. cbo. gov/ publication/51129.
  2. 2. The federal budget deficit in 2016 will total billion, CBO estimates. /-‘. t 2.3 percent of GDP, the expected shortfall will mark the first time that the deficit has risen in relation to the size of the economy since peaking at 9.8 percent in 200°. CBO
  3. 3. CBO Total Deficits or Surpluses Percentage of GDP 4 . Surpluses Actual PlOj€Cl€d Average Deficit, .5 — 1966 to 2015 Deficits (-2.8%) -8 -10 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 CBO’s projections indicate the budget outlook if current laws governing taxes and spending generally remained unchanged. In those projections, the deficit remains slightly below 3 percent of GDP through 2018, but then starts to rise, reaching 4.9 percent in 2026.
  4. 4. CBO Deficits are projected to rise because, under current law, spending would grow faster than revenues in the coming 10 years.
  5. 5. CBO Total Revenues and Outlays Percentage of GDP 30 ' Actual Projected Average Outlays, I 25 - Outlays 1966to 2015 I 18.2 1 _ 5 Revenues Average Revenues, 1966 to 2015 10 - (17.4%) 5 0 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 After 2018, in CBO’s projections, the deficit generally increases each year as a share of the economy, as outlays rise and revenues remain relatively flat as a share of GDP.
  6. 6. CBO In 2016, federal outlays will total $3.9 trillion, or 21.2 percent of GDP. Over the next 10 years, spending is projected to rise because of the growth in the nation’s retirement and health care programs and escalating interest costs.
  7. 7. CBO Total Outlays Percentage of GDP 30 ' Actual Projected Average Outlays, 1966 to 2015 25 ' Outlays (20.2%) 15' 10' o ' - I I ~ - - - - - I I 1966 1971 1975 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 In CBO’s projections, federal outlays remain near 21 percent of GDP forthe next few years. Later in the coming decade, growth in outlays outstrips growth in the economy; outlays rise to 23 percent of GDP by 2026.
  8. 8. Components of the Total Increase in Outlays in CBO’s Baseline Between 2016 and 2026 Net Interest (23%) Total Increase in Outlays: Social Security S25 Trillion (28%) Other (12%) Major Health Care , Programs Medicaie (32%) (20 A. ) Three components of the budget—Social Security, the major health care programs, and net interest—account for 83 percent of the total increase in outlays (in nominal terms) over the coming decade and would be the largest categories of spending in the budget by the end of that period. Social Security and Medicare alone account for nearly half ofthe total increase—mainly attributable to the aging of the population and rising health care costs per person. Major health care programs include Medicare (net of premiums and other offsetting receipts), Medicaid, the Children's Health Insurance Program, and subsidies for health insurance purchased through exchanges and related spending. CBO
  9. 9. Population, by Age Group Millions of People 300 Actual 3 Projected 100 ‘ Actual Projected 250 80 ’ Age 65 or Older 200 60 ' Ages 20 to 64 150 40 ' 100 50 2° I 0 0 1966 1976 1986 1996 2006 2016 2026 1966 1976 1986 1996 2006 2016 2026 The number of people age 65 or older in the United States—now more than twice what it was 50 years ago—is expected to grow by more than a third over the next 10 years. Thus, enrollment in Social Security's O| d—Age and Survivors Insurance program and Medicare will continue to rise in the future.
  10. 10. CBO Projected Net Interest Outlays Billions of Dollars 900 - 800 ' 700 ’ 600 ‘ 500 ' 400 z 300 ‘ 200 - 100 ' I 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Because of rising interest rates and growing federal debt held by the public, the governments interest payments on that debt are projected to rise sharply over the next 10 years—more than tripling in dollar terms and doubling as a percentage of GDP. The average interest rate paid on the debt will jump from 1.8 percent in 2016 to 3.5 percent in 2026, CBO estimates.
  11. 11. CBO Projected Outlays for Major Budget Categories Percentage of GDP DI5"'°tI°“a'V Major Health Care Programs 5-6 5.9 5.2 5 Social Security 4 _ 3 — Other Mandatory -1 0 I I I I I I l I I i I 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Aside from spending for Social Security, the major health care programs, and net interest payments, other mandatory spending and discretionary spending are projected to decline relative to GDP overthe next 10 years. In particular, by 2026, discretionary spending is projected to drop to its lowest share of GDP in the past 50 years. That occurs because most discretionary funding is capped through 2021 at amounts that increase more slowly than the projected growth in the economy. ,0
  12. 12. CBO Federal revenues will increase by $127 billion in 2016, reaching $33.4 trillion, or 18.3 percent of GDP, CBO estimates. Over the coming decade, revenues are projected to remain relatively stable in relation to the size of the economy, averaging 18.1 percent of GDP.
  13. 13. CBO Total Revenues Percentage of GDP 30 ' Actual Projected 25 - 20 Revenues #/ §u= r *‘:9>---T--- 15 Average Revenues, 1966 to 2015 10 - (17.4%) 5 - O 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 If current laws generally remained unchanged, revenues would range between 17.9 percent and 18.2 percent of GDP from 2017 to 2026—above their 50-year average of 17.4 percent.
  14. 14. Major Changes in Projected Revenues From 2016 to 2026 Revenues as a Percentage of GDP 2016 2026 Individual Income Taxes 8.8 9.6 Payroll Taxes 6.0 5.8 Corporate Income Taxes 1.8 1.6 Federal Reserve Remittances 0.6 0.2 -1 0 ml IT .03 F .02 . ,,_4 F Percentage-Point Change 1 0.8 CBO Major Reasons for Change - Real bracket creep - Increased distributions from retirement accounts, relative to GDP - Rising income inequality Rising income inequality Smaller domestic profits, relative to GDP Return to historical averages The projected stability of revenues over the next decade, relative to the size ofthe economy, stems mostly from offsetting changes in estimated revenues from various sources. Relative to GDP, receipts from individual income taxes are projected to grow, mostly because of real bracket creep, but receipts from other sources are projected to decline.
  15. 15. CBO Tax Expenditures and Other Budget Categories in 2016 Percentage of GDP 10 - 8 _ Corporate Income Tax Expenditures 6 » Payroll Tax Expenditures 4 _ Individual Income Tax Expenditures 2 L 0 Individual Payroll All Other All Tax Defense Medicare Spending Social Security Income Tax Revenues Revenues Expenditures Spending Net of Spending Tax Revenues Offsetting Receipts Tax expenditures cause revenues to be lower than they would be otherwise and, like spending programs, contribute to the federal deficit. CBO projects that the more than 200 tax expenditures in the individual and corporate income tax systems will total almost $1.5 trillion in 2016—an amount equal to 7.9 percent ofGDP, or equivalent to nearly half of all federal revenues projected for the year. This figure is based on estimates by the staff of the Joint Committee on Taxation that were prepared before the enactment of the Consolidated Appropriations Act, 2016, and do not include the effects of that law. 14
  16. 16. CBO The composition of the budget has fundamentally changed over the past 50 years, and that trend would continue under current law.
  17. 17. CBO Spending and Revenues Projected in CBO’s Baseline, Compared With Actual Values in 1966 and 1991 Percentage of GDP Mandatory Spending Discretionary Spending Net Interest Social Major Health Care Security Programs Other Defense Nondefense 1966 I 2.6 | 0.1 -1.8 2 7.5 — 4.0 | 1.2 1991 - 4.4 I 2.5 - 2.9 - 5.2 2 3.5 j 3.2 2016 - 4.9 - 5.6 I 2.8 2 3.2 - 3.3 I 1.4 2026 X 5.9 2 6.6 - 2.5 I 2.6 - 2.5 — 3.0 Total Outlays Total Revenues Deficit 1966 _ 17.2 ‘ 16.7 -0.5I 1991 — 21.7 — 17.3 -4.4 2 2016 — 21.2 —13.3 -2.9 I 2026 T 23.1 m 13.2 -4.9 1 Spending for the government's benefit programs—including Social Security and the major health care programs—is now a much larger proportion of spending, and appropriations for defense and other programs are much smaller.
  18. 18. CBO If current laws generally remain the same, growing deficits are projected to raise federal debt held by the public to 86 percent of GDP by 2026—up from percent at the end of 2015 and a little more than twice the average of the past five decades.
  19. 19. Federal Debt Held by the Public Percentage of GDP 120 ' Actual 5 Projected 100 a 80* 60 ' A / 40 F A 20' 0 J J A A A 1 J 1 J A A J A J. J. _ AAA 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 High and rising federal debt would have serious negative consequences forthe nation, including increasing federal spending for interest payments, restraining economic growth in the long term, giving policymakers less flexibility to respond to unexpected challenges, and eventually increasing the risk of a fiscal crisis.
  20. 20. CBO To put the federal budget on a sustainable path for the long term, lawmakers would have to make major changes to tax policies, spending policies, or both—by reducing spending for large benefit programs below the projected amounts, letting revenues rise more than they would under current law, or adopting some combination of those approaches.
  21. 21. About This Document Leigh Angres, Christi Hawley Anthony, Barry Blom, Christine Bogusz, Maureen Costantino, Meredith Decker, Amber Marcellino, and Joshua Shakin prepared these slides. For more details about the economic outlook as well as the agency’s most recent budget projections, see The Budget and Economic Outlook: 2016 to 2026 (January 2016), www. cbo. gov/ publication/51129. That report is the result of work by many analysts at CBO.

×