Storm'n Norm'n: 11/27/16

Above Interpretation by Storm'n Norm'n

The following from: Just Facts
National Debt

What You’ll Find

Comprehensive and meticulously documented facts about the national debt. Learn about various measures of the national debt, contributing factors, consequences, and more. For example:

APA

Agresti, J. D. (2016, November 22). National Debt Facts. Just Facts. Retrieved November 29, 2016 from www.justfacts.com/nationaldebt.asp

MLA

Agresti, James D. “National Debt Facts.” Just Facts. 22 November 2016. Web. 29 November 2016. <www.justfacts.com/nationaldebt.asp>.

Chicago (for footnotes)

James D. Agresti, “National Debt Facts,” Just Facts, last modified November 22, 2016, www.justfacts.com/nationaldebt.asp.

Chicago (for bibliographies)

Agresti, James. D. “National Debt Facts.” Just Facts. Last modified November 22, 2016. www.justfacts.com/nationaldebt.asp.

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Introductory Notes

In keeping with the practice of the Congressional Budget Office and other federal agencies that deal with budget policy, many of the federal debt, spending, and revenue figures in this research are expressed as a portion of gross domestic product (GDP). This is because debates about the size of government and the effects of its debt are frequently centered upon how much of a nation’s economy is consumed by government. This measure also accounts for population growth, some of the effects of inflation, and the relative capacity of government to service its debt.

However, the federal government does not have the entire U.S. economy at its disposal to service federal debt. The private sector, which produces the goods and services that comprise most of the economy, utilizes some of these resources, and local and state governments also consume some of the nation’s GDP. Hence, this research sometimes expresses federal debt as a portion of annual federal revenues. This is a more direct measure of the federal government’s capacity to service its debt.

In keeping with Just Facts’ Standards of Credibility, all graphs in this research show the full range of available data, and all facts are cited based upon availability and relevance, not to slant results by singling out specific years that are different from others.

Click here for a video that summarizes some of the key facts in this research.

Quantifying the National Debt

* As of November 18, 2016, the official debt of the United States government is $19.9 trillion ($19,895,970,356,079).[1] This amounts to:

$61,250 for every person living in the U.S.[2]
$158,132 for every household in the U.S.[3]
107% of the U.S. gross domestic product.[4]
569% of annual federal revenues.[5]

[6]

* Publicly traded companies are legally required to account for “explicit” and “implicit” future obligations such as employee pensions and retirement benefits.[7] [8] [9] The federal budget, which is the “government’s primary financial planning and control tool,” is not bound by this rule.[10] [11]

* At the close of the federal government’s 2015 fiscal year (September 30, 2015), the federal government had roughly:

$8.3 trillion ($8,279,000,000,000) in liabilities that are not accounted for in the publicly held national debt, such as federal employee retirement benefits, accounts payable, and environmental/disposal liabilities.[12]
$26.7 trillion ($26,661,000,000,000) in obligations for current Social Security participants above and beyond projected revenues from their payroll and benefit taxes, certain transfers from the general fund of the U.S. Treasury, and assets of the Social Security trust fund.[13] [14]
$28.5 trillion ($28,500,000,000,000) in obligations for current Medicare participants above and beyond projected revenues from their payroll taxes, benefit taxes, premium payments, and assets of the Medicare trust fund.[15] [16]

* The figures above are determined in a manner that approximates how publicly traded companies are required to calculate their liabilities and obligations.[17] [18] [19] The obligations for Social Security and Medicare represent how much money must be immediately placed in interest-bearing investments to cover the projected shortfalls between dedicated revenues and expenditures for all current participants in these programs (both taxpayers and beneficiaries).[20] [21] [22]

* Combining the figures above with the national debt and subtracting the value of federal assets, the federal government had about $76.4 trillion ($76,438,000,000,000) in debts, liabilities, and unfunded obligations at the close of its 2015 fiscal year.[23]

* This $76.4 trillion shortfall is 90% of the combined net worth of all U.S. households and nonprofit organizations, including all assets in savings, real estate, corporate stocks, private businesses, and consumer durable goods such as automobiles and furniture.[24] [25]

* This shortfall equates to:

$237,284 for every person living in the U.S.[26]
$613,531 for every household in the U.S.[27]
423% of the U.S. gross domestic product.[28]
2,192% of annual federal revenues.[29]

* These figures do not account for the future costs implied by any current policies except those of the Social Security and Medicare programs.[30]

* These figures are based upon current federal law and “a wide range of complex assumptions” made by federal agencies.[31] Regarding this:

The Board of Social Security Trustees has stated that “significant uncertainty” surrounds the “best estimates” of future circumstances.”[32]
The Board of Medicare Trustees has stated that the program’s financial projections “are highly uncertain, especially when looking out more than several decades.”
The Board of Medicare Trustees has stated that the program’s long-term costs may be “substantially higher” than projected under current law. This is because current law includes the effects of the Affordable Care Act, which will cut Medicare prices for “many” healthcare services to “less than half of their level” under prior law. Per the Trustees:

Absent an unprecedented change in health care delivery systems and payment mechanisms, the prices paid by Medicare for health services will fall increasingly short of the costs of providing these services. … Before such an outcome would occur, lawmakers would likely intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result.[33]

Causes of the National Debt

Spending and Taxes

† To measure the entirety of government expenditures and receipts, “total” instead of “current” figures are preferable, but such data (shown in the next graph) only extends back to 1960.[34]
‡ In 2015, receipts consisted of: 97% taxes; 2% premiums, settlements, donations, fines, fees, & penalties; 1% interest & dividends.[35]

[36]

* Data from the graph above:

Year	Receipts (Portion of GDP)	Expenditures (Portion of GDP)
1930	3%	3%
1940	8%	9%
1950	16%	16%
1960	17%	17%
1970	17%	20%
1980	19%	22%
1990	18%	22%
2000	20%	19%
2010	16%	25%
2015	19%	22%

[37]

* Data from the graph above:

Year	Receipts (Portion of GDP)	Expenditures (Portion of GDP)
1960	18%	19%
1970	18%	21%
1980	19%	23%
1990	18%	22%
2000	20%	19%
2010	16%	27%
2015	19%	22%

Spending Distribution

† Social programs include income security, healthcare, education, housing, and recreation.
‡ National defense includes military spending and veterans’ benefits.
§ General government and debt service includes the executive & legislative branches, tax collection, financial management, and interest payments.
# Economic affairs includes transportation, general economic & labor affairs, agriculture, natural resources, energy, and space. (This excludes spending for infrastructure projects such as new highways, which is not accounted for in this graph.[38])
£ Public order and safety includes police, fire, law courts, prisons, and immigration enforcement.

[39]

* Data from the graph above:

Category	Portion of Total Federal Spending
Category	1960	1970	1980	1990	2000	2010	2015
Social Programs	21%	32%	45%	44%	54%	61%	63%
National Defense	53%	42%	26%	25%	19%	20%	19%
General Government & Debt Service	19%	18%	21%	25%	21%	13%	13%
Economic Affairs & Infrastructure	6%	7%	7%	5%	5%	4%	4%
Public Order & Safety	0%	0%	1%	1%	1%	1%	1%

Tax Distribution

NOTE: This data does not account for 7% of federal revenues that could not be allocated to households by income group.

[40]

* Data from the graph above:

Average Effective Federal Tax Burdens (2013)
Income Group	Household Income	Tax Rate	Taxes Paid
Lowest 20%	$25,400	3.3%	$838
Second 20%	$47,400	8.4%	$3,982
Middle 20%	$69,700	12.8%	$8,922
Fourth 20%	$103,700	17.0%	$17,629
Highest 20%	$265,000	26.3%	$69,695

* Breakdown of the highest 20%:

Income Group	Household Income	Tax Rate	Taxes Paid
81st - 90th	$147,100	20.7%	$30,450
91st - 95th	$201,400	23.0%	$46,322
96th - 99th	$326,800	26.3%	$85,948
Top 1 %	$1,571,600	34.0%	$534,344

Consequences

* As detailed in publications of the Congressional Budget Office, the Brookings Institution, and Princeton University Press, the following are some potential consequences of unchecked government debt:

reduced “future national income and living standards.”[41] [42] [43]
“reductions in spending” on “government programs.”[44]
“higher marginal tax rates.”[45]
“higher inflation” that increases “the size of future budget deficits” and decreases the “the purchasing power” of citizens’ savings and income.”[46] [47]
restricted “ability of policymakers to use fiscal policy to respond to unexpected challenges, such as economic downturns or international crises.”[48]
“losses for mutual funds, pension funds, insurance companies, banks, and other holders of federal debt.”[49]
increased “probability of a fiscal crisis in which investors would lose confidence in the government’s ability to manage its budget, and the government would be forced to pay much more to borrow money.”[50] [51]

* In 2012, the Journal of Economic Perspectives published a paper about the economic consequences of government debt. Using 2,000+ data points on national debt and economic growth in 20 advanced economies (such as the United States, France, and Japan) from 1800–2009, the authors found that countries with national debts above 90% of GDP averaged 34% less real annual economic growth than when their debts were below 90% of GDP.[52]

* The United States exceeded a debt/GDP level of 90% in the second quarter of 2010.[53]

* Per the textbook Microeconomics for Today:

GDP per capita provides a general index of a country’s standard of living. Countries with low GDP per capita and slow growth in GDP per capita are less able to satisfy basic needs for food, shelter, clothing, education, and health.[54]

* In 2013, the Political Economy Research Institute at the University of Massachusetts, Amherst, published a working paper about the economic consequences of government debt. Using data on national debt and economic growth in 20 advanced economies from 1946-2009, the authors found that countries with national debts over 90% of GDP averaged:

31% less real annual economic growth than countries with debts from 60% to 90% of GDP,
29% less real annual economic growth than countries with debts from 30% to 60% of GDP,
and 48% less real annual economic growth than countries with debts from 0% to 30% of GDP.[55]

* The authors of the above-cited papers have engaged in a heated dispute about the results of their respective papers and the effects of government debt on economic growth. Facts about these issues can be found in the Just Facts Daily article, “Do large national debts harm economies?”

Politics

Responsibility

* The U.S. Constitution vests Congress with the powers to tax, spend, and pay the debts of the federal government. Legislation to carry out these functions must either be:

passed by majorities in both houses of Congress and approved by the President; or
passed by majorities in both houses of Congress, vetoed by the President, and then passed by two-thirds of both houses of Congress; or
passed by majorities in both houses of Congress and left unaddressed by the President for ten days.[56]

* Other factors impacting the national debt include but are not limited to legislation passed by previous congresses and presidents,[57] economic cycles, terrorist attacks, natural disasters, demographics, and the actions of U.S. citizens and foreign governments.[58]

Current Policies

* In 2014, the Congressional Budget Office (CBO) projected the debt that the U.S. government would accumulate under current federal policies.[59] The projection used the following assumptions:

Unemployment will incrementally decline from 6.8% in 2014 to 5.8% in 2018 and 5.3% in 2027, where it will remain thereafter.[60] (For reference, the average of the previous 40 years is 6.5%.[61])
GDP growth will incrementally decline from an average rate of 3.4% above the rate of inflation in 2015 to 1.9% in 2021 and remain constant thereafter.[62] (The average of the previous 40 years is 2.9%.[63])
Federal revenues (i.e., taxes) will incrementally increase from 17.4% of GDP in 2014 to 18.0% in 2024 and remain constant thereafter.[64] (The average of the previous 40 years is 17.4%.[65])
Federal spending will incrementally increase from 20.4% of GDP in 2014 to 23.6% in 2025 and 31.8% in 2040.[66] (The average of the previous 40 years is 20.5%.[67])
Payments for Medicare services will undergo scheduled reductions that would likely cause “severe problems with beneficiary access to care.”[68] [69]

* Combining these projections with historical data yields the following results:

Revenues and Spending Under Current Policies

[70]

† To measure the entirety of the national debt, it would be preferable to show “gross” debt instead of “publicly held” debt, but this data is not presented in this report. Nonetheless, it would make little difference because the excluded debt primarily resides in federal government trust funds that dwindle and become insolvent during the projection period.[71] Facts regarding why and how the federal government keeps its books in this manner are covered in the section of this research entitled “Government Accounting.”

[72]

* Per CBO, postponing action to stabilize the debt will:

punish younger generations of Americans, because most of the burden would fall on them.
reward older generations of Americans, because “they would partly or entirely avoid the policy changes needed to stabilize the debt.”
“substantially increase the size of the policy adjustments needed to put the budget on a sustainable course.”[73] [74]

* The following Ph.D. economists and political scientists have claimed that the level of national debt during World War II is a good reason to not be overly concerned about the modern national debt:

Paul Davidson, editor of the Journal of Post Keynesian Economics and author of The Keynes Solution: The Path to Global Economic Prosperity:[75]

Rather than bankrupting the nation, this large growth in the national debt [during World War II] promoted a prosperous economy. By 1946, the average American household was living much better economically than in the prewar days. Moreover, the children of that Depression–World War II generation were not burdened by having to pay off what then was considered a huge national debt. Instead, for the next quarter century, the economy continued on a path of unprecedented economic growth and prosperity….[76]

Douglas J. Amy, professor of politics at Mount Holyoke College:[77]

Conservatives are also wrong when they argue that deficit spending and a large national debt will inevitably undermine economic growth. To see why, we need to simply look back at times when we have run up large deficits and increased the national debt. The best example is World War II when the national debt soared to 120% of GDP—nearly twice the size of today’s debt. This spending not only got us out of the Great Depression but set the stage for a prolonged period of sustained economic growth in the 50s and 60s.[78]

Paul Krugman, Nobel Prize-winning economist and Princeton University professor:[79]

Right now, federal debt is about 50% of GDP. So even if we do run these deficits, federal debt as a share of GDP will be substantially less than it was at the end of World War II.

Again, the debt outlook is bad. But we’re not looking at something inconceivable, impossible to deal with; we’re looking at debt levels that a number of advanced countries, the U.S. included, have had in the past, and dealt with.[80]

* In the 40 years that followed the end of World War II (1946–1985):

federal spending as a percent of GDP averaged 42% lower than the last year of the war.[81]
publicly held debt as a percent of GDP decreased by 72 percentage points.[82]

* In 2010, around the time when the statements above were written, the Congressional Budget Office projected that under current policy and a sustained economic recovery over the next 40 years:

federal spending as a percent of GDP will average over 78% higher than in the four decades that followed World War II.[83]
publicly held debt as a percent of GDP will rise by 277 percentage points.[84]

Alternative Policies

* As alternatives to the CBO’s current policy projections detailed above, the CBO also ran projections for scenarios such as these:

1) Current law:[85]

Federal revenues will incrementally increase from 17.6% of GDP in 2014 to 18.0% in 2020, 19.9% in 2044, and 23.5% in 2084.[86] [87] At this point, federal revenues (i.e., taxes) will be 35% higher than the average of the previous 40 years.[88]
Federal spending on all government functions will incrementally increase from 20.4% of GDP in 2014 to 21.5% in 2020, and 26.0% in 2040.[89] At this point, spending will be 27% higher than the average of the previous 40 years.[90]
Payments for Medicare services will undergo reductions that will likely cause “severe problems with beneficiary access to care.”[91] [92]

2) Republican Congressman Paul Ryan’s 2014 budget resolution, called the “The Path to Prosperity”:[93]

Starting in 2024, Medicare beneficiaries will have a choice to enroll in private plans paid for by Medicare or remain in the traditional Medicare program.[94] Also starting in 2024, the eligibility age for Medicare benefits will incrementally rise to correspond with Social Security’s retirement age.[95] Compared to the projections under the current policy scenario, Medicare spending will be 0.5% lower in 2016, 2% lower in 2020, and 4% lower in 2024.[96]
Federal Medicaid spending will be converted to an “allotment that each state could tailor to meet its needs, indexed for inflation and population growth.”[97] The expansion of Medicaid manadated by the Affordable Care Act (a.k.a. Obamacare) will be repealed.[98] Compared to the projections under the current policy scenario, Medicaid spending will be 9% lower in 2016, 19% lower in 2020, and 24% lower in 2024.[99]
All federal spending related to Obamacare’s exchange subsidies will be repealed.[100]
Spending on all government functions except for interest payments on the national debt will incrementally decline from 18.9% of GDP in 2015 to 16% in 2025 before increasing to 16.4% in 2035.[101] (The average of the previous 40 years is 18.3%).[102]
Revenues will increase from 18.2% of GDP in 2015 to 18.4% in 2025, 19% in 2032 and stay constant thereafter.[103] (The average of the previous 40 years is 17.4%.[104])

* Combining historical data on the national debt with CBO’s projections for current policy, current law, and the Ryan plan yields the following results:

[105] [106]

Public Opinion

* A poll conducted by NBC News and the Wall Street Journal in February 2011 found that:

80% of Americans are concerned “a great deal” or “quite a bit” about federal budget deficits and the national debt.
if the deficit cannot be eliminated by cutting wasteful spending, 35% of Americans prefer to cut important programs while 33% prefer to raise taxes.
22% think cuts in Social Security spending will be needed to “significantly reduce the federal budget deficit,” 49% do not, and 29% have no opinion or are not sure.
18% think cuts in Medicare spending will be needed to “significantly reduce the federal budget deficit,” 54% do not, and 28% have no opinion or are not sure.[107]

* Other than interest on the national debt, most of the long-term growth in federal spending (as a percent of GDP) under the CBO’s current policy and current law scenarios stems from Social Security, Medicare, Medicaid, the Children’s Health Insurance Program, and Affordable Care Act (a.k.a. Obamacare) subsidies.[108]

* A poll conducted in November 2010 by the Associated Press and CNBC found that:

85% of Americans are worried that the national debt “will harm future generations.”
56% think “the shortfalls will spark a major economic crisis in the coming decade.”
when asked to choose between two options to balance the budget, 59% prefer to cut unspecified government services, while 30% prefer to raise unspecified taxes.[109]

* A poll conducted in July 2005 by the Associated Press and Ipsos found that:

70% of Americans were worried about the size of the federal deficit.
35% were willing to cut government spending.
18% were willing to raise taxes.
1% were willing to cut government spending and raise taxes.[110]

Congresses

* During the first session of the 113th Congress (January–December 2013), U.S. Representatives and Senators introduced 168 bills that would have reduced spending and 828 bills that would have raised spending.[111]

* The table below quantifies the costs and savings of these bills by political party. This data is provided by the National Taxpayers Union Foundation:

	Costs/Savings of Bills Sponsored or Cosponsored in 2013 by Typical Congressman (in Billions)
	Increases	Decreases	Net Agenda
House Democrats	$407	$10	$397
Senate Democrats	$22	$3	$18
House Republicans	$9	$91	-$83
Senate Republicans	$6	$165	-$159

[112] [113]

* Click here to look up any member of Congress and see the annual costs or savings from the legislation he or she has sponsored or cosponsored.

* The table below quantifies the net agendas of the political parties in previous Congresses:

	Costs/Savings of Bills Sponsored or Cosponsored in the First Sessions of Congress by Typical Congressman (in Billions)
	2011	2009	2007	2005	2003	2001	1999
House Democrats	$497	$500	$547	$547	$402	$262	$34
Senate Democrats	$24	$134	$59	$52	$174	$88	$15
House Republicans	-$130	-$45	$7	$12	$31	$20	-$5
Senate Republicans	-$239	$51	$7	$11	$26	$19	-$324
NOTE: Data not adjusted for inflation.

[114]

Presidents

* In February 2001, Republican President George W. Bush stated:

Many of you have talked about the need to pay down our national debt. I listened, and I agree. We owe it to our children and grandchildren to act now, and I hope you will join me to pay down $2 trillion in debt during the next 10 years. At the end of those 10 years, we will have paid down all the debt that is available to retire. That is more debt, repaid more quickly than has ever been repaid by any nation at any time in history.[115]

* From the time that Congress enacted Bush’s first major economic proposal (June 7, 2001[116]) until the time that he left office (January 20, 2009), the national debt rose from 53% of GDP to 74%, or an average of 2.7 percentage points per year.[117]

* During eight years in office, President Bush vetoed 12 bills, four of which were overridden by Congress and thus enacted without his approval.[118] These bills were projected by the Congressional Budget Office to increase the deficit by $26 billion during 2008–2022.[119]

* In February 2009, Democratic President Barack Obama stated:

I refuse to leave our children with a debt that they cannot repay—and that means taking responsibility right now, in this administration, for getting our spending under control.[120]

* From the time that Congress enacted Obama’s first major economic proposal (February 17, 2009[121]) until September 30, 2016, the national debt rose from 74% of GDP to 105%, or an average of 4.0 percentage points per year.[122]

* As of November 4, 2016, President Obama has vetoed twelve bills, one of which has been overridden by Congress and thus enacted without his approval.[123] This bill is projected by the Congressional Budget Office to “have no significant effect on the federal budget."[124]

Government Accounting

Trust Funds and the Two Main Categories of Debt

* Some federal programs (such as Social Security) have “trust funds” that are legally separated from the rest of the federal government.[125]

* When these programs spend less than the federal government allocates to them, their surpluses are loaned to the federal government. This creates a legal obligation for the federal government to pay money and interest to these programs, thus adding to the national debt.[126] [127] [128] [129] [130]

* The federal government divides the national debt into two main categories:[131] [132]

Money that it owes to federal entities such as the Social Security program.
Money that it owes to non-federal entities such as individuals, corporations, local governments, and foreign governments.[133] Also, money owed to the Federal Reserve is classified under this category, even though the Federal Reserve is a federal entity.[134] [135]

NOTE: Just Facts has identified numerous instances in which politicians and journalists have used terms that technically refer to the overall national debt, when in fact, they are only referring to a portion of it. In order to clear up some of the confusion this has created, below are common terms for the national debt categorized by their proper meanings:

Overall national debt: gross debt, federal debt, public debt[136]
Portion of the national debt owed to federal entities: debt held by government accounts, government-held debt, intragovernmental holdings[137] [138] [139]
Portion of the national debt owed to non-federal entities: debt held by the public, publicly held debt[140] [141]

* On September 30, 2016, the national debt consisted of:

$5.4 trillion owed to federal entities
$14.2 trillion owed to non-federal entities
$19.6 trillion owed in total[142]

* The federal law that governs the repayment of the national debt draws no distinction between the debt owed to federal and non-federal entities. Both must be repaid with interest.[143]

* The White House Office,[144] [145] Congressional Budget Office,[146] and other federal agencies[147] sometimes exclude the debt owed to federal entities in their reckonings of the national debt because this portion of the debt “represents internal transactions of the government and thus has no effect on credit markets.”

* Federal programs to which this money is owed, such as Social Security and Medicare, include this money and the interest it generates in their assets and financial projections.[148] [149] [150]

* In the 2000 presidential race, the Gore-Liebermann campaign released a 192-page economic plan that contains over 150 uses of the word “debt.” In none of these instances does the plan mention or account for any of the debt owed to federal entities.[151] The same plan includes the debt owed to federal entities in the assets of the Social Security and Medicare programs.[152]

“Deficits” and “Surpluses”

* During the federal government’s 2010 fiscal year (October 1, 2009 to September 30, 2010[153]), the national debt rose from $12.0 trillion to $13.6 trillion, thus increasing by $1.6 trillion.[154]

* The White House,[155] USA Today,[156] Reuters,[157] and other government and media entities reported that the 2010 federal “deficit” was $1.3 trillion.

* The difference between the national debt increase of $1.6 trillion and the reported deficit of $1.3 trillion is attributable to the following accounting practices:

When calculating the reported deficit, the federal government merges the finances of all federal programs into what is called the “unified budget.” Hence, the deficit does not account for the intergovernmental debt that arises when programs such as Social Security loan their surpluses to the federal government.[158]
When the federal government lays out money for programs such as TARP and student loans, the outgo is not fully counted in the deficit. The deficit reflects only what the government expects to lose or gain on these loans.[159] [160]

* PolitiFact, a Pulitzer Prize-winning project of the Tampa Bay Times to “help you find the truth in politics,”[161] has stated that there were “several years of budget surpluses” during Bill Clinton’s presidency. This same article cites the rise in “national debt” during the tenure of George W. Bush.[162]

* Using the same criterion PolitiFact applied to Bush’s presidency (change in gross national debt), the national debt rose every year of Clinton’s presidency:

Year	National Debt on Inauguration Date† (billions)
1993	$4,188
1994	$4,501
1995	$4,797
1996	$4,988
1997	$5,310
1998	$5,496
1999	$5,624
2000	$5,706
2001	$5,728
† NOTE: PolitiFact used the inauguration date for its debt baseline. The national debt also rose every fiscal year of Clinton’s presidency.

[163] [164]

Ownership

* As of September 30, 2016, the national debt consists of:

Amount	Owed To:	Portion of Total
$14.2 trillion	owed to non-federal entities (i.e., publicly held debt)	72%
$5.4 trillion	owed to federal entities (i.e., intragovernmental debt)	28%

[165]

Debt Owed to Non-Federal Entities

* Ownership of publicly held debt as of September 30, 2016:

* Data from the chart above:

Entities	Amount (billions)	Portion of Total
Foreign & International	$6,148	45%
Federal Reserve[166]	$2,462	18%
Other Investors	$1,343	10%
Mutual Funds	$1,315	10%
State & Local Governments	$687	5%
Banks & Savings Institutions	$547	4%
Private Pension Funds	$540	4%
Insurance Companies	$297	2%
U.S. Savings Bonds	$172	1%
State and Local Government Pension Funds	$164	1%

[167]

Debt Owed to Foreign Entities

* Per the White House Office of Management and Budget (2016):

During most of American history, the Federal debt was held almost entirely by individuals and institutions within the United States. In the late 1960s, foreign holdings were just over $10 billion, less than 5 percent of the total Federal debt held by the public. Foreign holdings began to grow significantly starting in the 1970s and now represent almost half of outstanding [publicly held] debt.[168]

* Ownership of U.S. government debt by foreign creditors as of August 31, 2016:

* Data from the chart above:

Country	Amount (billions)	Portion of Total
China, Mainland	$1,185	19%
Japan	$1,144	18%
Ireland	$266	4%
Cayman Islands	$264	4%
Brazil	$256	4%
Switzerland	$238	4%
Luxembourg	$220	4%
United Kingdom	$205	3%
Hong Kong	$192	3%
Taiwan	$190	3%
Others	$2,037	33%
Total	$6,196	100%

[169]

* Foreign purchases of U.S. government debt increase the demand for this debt, thus putting downward pressure on U.S. interest rates. Conversely, foreign sales of U.S. government debt place upward pressure on U.S. interest rates.[170] [171]

* Per a 2008 Congressional Research Service report, a “potentially serious short-term problem would emerge if China decided to suddenly” sell its holding of U.S. government debt. Possible effects could include:

“a more general financial reaction (or panic), in which all foreigners responded by reducing their holdings of U.S. assets”;
“a sudden and large depreciation in the value of the dollar”;
“a sudden and large increase in U.S. interest rates”;
a stock market fall; and/or
“a recession.”[172]

* The same report states:

The likelihood that China would suddenly reduce its holdings of U.S. securities is questionable because it is unlikely that doing so would be in China’s economic interests. First, a large sell-off of China’s U.S. holdings could diminish the value of these securities in international markets…. Second, such a move would diminish U.S. demand for Chinese imports…. A sharp reduction of U.S. imports from China could have a significant impact on China’s economy….[173]

* During a visit to China in February 2009, Secretary of State Hillary Clinton said:

By continuing to support American Treasury instruments [i.e., buy U.S. government debt] the Chinese are recognizing our interconnection. … We have to incur more debt. It would not be in China’s interest if we were unable to get our economy moving again. … The U.S. needs the investment in Treasury bonds to shore up its economy to continue to buy Chinese products.[174]

* In August 2007 during a currency dispute between the U.S. and China, two leading officials of Chinese Communist Party bodies suggested that China use the threat of selling U.S. debt as a “bargaining chip.”[175]

* In February 2009 during a dispute over U.S. arms sales to Taiwan, a Chinese general made the following statements in the state-run magazine Outlook Weekly:

Our retaliation should not be restricted to merely military matters, and we should adopt a strategic package of counterpunches covering politics, military affairs, diplomacy and economics to treat both the symptoms and root cause of this disease. … [W]e could sanction them using economic means, such as dumping some U.S. government bonds.[176]

* One month later while appearing before China’s parliament, the head of China’s State Administration of Foreign Exchange said:

the U.S. Treasury market is important to us. … This is purely market-driven investment behavior. I would hope not to see this matter politicized.[177]

Debt Owed to Federal Entities

* Ownership of intergovernmental debt as of September 30, 2016:

* Data from the chart above:

Funds	Amount (billions)	Portion of Total
Social Security	$2,843	53%
Civil Service Retirement and Disability	$874	16%
Military Retirement	$591	11%
Medicare	$256	5%
Department of Defense Retiree Healthcare	$213	4%
Postal Service Retiree Health Benefits	$51	1%
Other	$572	11%

[178]

Media

Budget Cuts

* In April 2011, journalists reported on a $38 billion federal budget cut agreement with the following headlines and phraseology:

“New Cuts Detailed in Agreement for $38 Billion in Reductions”; “deep budget cuts in programs for the poor, law enforcement, the environment and civic projects” - Los Angeles Times[179]
“Congress Sends Budget Cut Bill to Obama”; “cutting a record $38 billion from domestic spending” - Associated Press[180]
“Budget Deal to Cut $38 Billion Averts Shutdown”; “Republicans were able to force significant spending concessions from Democrats….” – New York Times[181]

* None of these articles reported that this figure of $38 billion in cuts was primarily relative to a portion of the budget called “discretionary non-emergency appropriations.”[182] Relative to the entire federal budget, this cut left a projected spending increase of $135 billion from 2010 to 2011. This equates to an inflation-adjusted increase of $49 billion or 0.1 percentage points of GDP:[183]

[184]

* None of the articles quoted above contains a budget-wide frame of reference for the cuts. A spending reduction of $38 billion equates to 1.0% of the estimated 2011 budget or 2.7% of the projected deficit:

[185]

Tax Cuts

* In February 2010, Fareed Zakaria of CNN stated:

Now, please understand that the Bush tax cuts are the single largest part of the black hole that is the federal budget deficit.[186]

* In 2010, the Bush tax cuts lowered federal revenues by about $283 billion.[187] [188] This was 22% of the budget deficit, or 8% of the budget.[189]

* Per the Congressional Budget Office (CBO), “Most parameters of the tax code are not indexed for real income growth, and some are not indexed for inflation.” Thus, if tax cuts are not periodically implemented, “average federal tax rates would increase in the long run.”[190]

* In 2000, the year before the first Bush tax cuts were passed,[191] the federal government collected revenues equal to 20% of the nation’s gross domestic product (GDP), the highest level in the history of the United States [192]

* With the Bush tax cuts in place and annual economic growth averaging 3.2% above the rate of inflation from 2003 through 2006,[193] [194] federal revenues rose to 16.7% of GDP in 2005, 17.6% in 2006, and 17.9% in 2007. This was 3.1% above the historical average of the past 40 years.[195]

The “Do Nothing” Plan

* In April 2011, Ezra Klein of the Washington Post posted a graph of spending and revenue projections based upon CBO’s “current law” scenario and wrote that it:

shows what happens if we do … nothing. The answer, as you can see, is that the budget comes roughly into balance.[196]

* Klein’s graph and commentary omitted the interest and outcome of the national debt under this plan.[197] In the “do nothing” scenario, outlays were projected to exceed revenues every year through 2084, and the publicly held debt was projected to increase from 62% of GDP in 2010, to 74% in 2030, 90% in 2050, and 113% in 2084.[198]

* In the same commentary, Klein wrote that the “current law” scenario is “a pretty good plan” that contains:

a balanced mix of revenues, through returning tax rates to Clinton-era levels and implementing the taxes in the Affordable Care Act, and program cuts … in Medicare….[199]

* Under this scenario:

Certain elements of the tax code are not indexed for inflation or wage growth. Consequently, taxpayers are shifted over time into higher tax brackets.
According to the Congressional Budget Office, by 2020 revenues “reach higher levels relative to the size of the economy than ever recorded in the nation’s history.”
Revenues as a portion of GDP continue climbing through 2084, rising 69% higher than the average of the past 40 years and 47% higher than ever recorded in the history of the United States.[200] [201]
As a portion of GDP, federal spending without interest on the national debt rises by 2084 to 68% higher than the average of the past 40 years.[202]

Context

* Without mentioning the role of Congress in taxes, spending, or the national debt,[203] [204] PolitiFact (in the same article cited above) wrote that the national debt increased by $5.73 trillion “under” George W. Bush whereas there were budget surpluses “at the end of the Clinton administration.”[205]

* Below are the fluctuations in national debt organized by the tenures of recent presidents and congressional majorities:

Political Power	Dates	Average Annual Change in National Debt (Percentage Points of GDP)
Bill Clinton with Democratic House and Senate	1/20/93 – 1/4/95	0.9
Bill Clinton with Republican House and Senate	1/4/95 – 1/19/01	-1.6
George W. Bush with Republican House and Senate	1/19/01 – 6/6/01, 11/12/02 – 1/4/07	0.8
George W. Bush with Republican House and Democratic Senate	6/6/01 – 11/12/02	2.3
George W. Bush with Democratic House and Senate	1/4/07 – 1/20/09	6.5
Barack Obama with Democratic House and Senate	1/20/09 – 1/4/11	9.3
Barack Obama with Republican House and Democratic Senate	1/5/11 – 1/6/15	1.9

[206]

* Other factors impacting the national debt include but are not limited to: legislation passed by previous congresses and presidents,[207] economic cycles, terrorist attacks, natural disasters, demographics, and the actions of U.S. citizens and foreign governments.[208]

Footnotes

[1] Webpage: “The Debt to the Penny and Who Holds It.” Bureau of the Public Debt, United States Department of the Treasury. Accessed November 22, 2016 at <www.treasurydirect.gov>

As of 11/18/2016, the “Total Public Debt Outstanding” is $19,895,970,356,079.

[2] Dataset: “Monthly Population Estimates for the United States: April 1, 2010 to December 1, 2016.” U.S. Census Bureau, Population Division, December 2015. <www.census.gov>

“Resident Population … November 1, 2016 [=] 324,831,561”

CALCULATION: $19,895,970,356,079 debt / 324,831,561 people = $61,250 debt/person

[3] Dataset: “Average Number of People per Household, by Race and Hispanic Origin, Marital Status, Age, and Education of Householder: 2015.” U.S. Census Bureau, November 2016. <www.census.gov>

“Total households [=] 125,819,000”

CALCULATION: $19,895,970,356,079 debt / 125,819,000 households = $158,132 debt/household

[4] Dataset: “Table 1.1.5. Gross Domestic Product.” U.S. Department of Commerce, Bureau of Economic Analysis, October 28, 2016. <www.bea.gov>

“[Billions of dollars] Seasonally adjusted at annual rates … Gross Domestic Product … 2016Q3 [=] 18,651.2”

CALCULATION: $19,895,970,356,079 debt / $18,651,200,000,000 GDP = 107%

[5] Dataset: “Table 3.2. Federal Government Current Receipts and Expenditures.” U.S. Department of Commerce, Bureau of Economic Analysis, October 28, 2016. <www.bea.gov>

“[Billions of dollars] Seasonally adjusted at annual rates … Total receipts … 2016Q2 [=] 3,494.3”

CALCULATION: $19,895,970,356,079 debt / $3,494,300,000,000 receipts = 569%

[6] Calculated with data from:

a) Dataset: “Historical Debt Outstanding – Annual, 1790-1849.” United States Department of the Treasury, Bureau of the Public Debt. Updated May 5, 2013. <www.treasurydirect.gov>

b) Dataset: “Historical Debt Outstanding – Annual, 1850-1899.” United States Department of the Treasury, Bureau of the Public Debt. Updated May 5, 2013. <www.treasurydirect.gov>

c) Dataset: “Historical Debt Outstanding – Annual, 1900-1949.” United States Department of the Treasury, Bureau of the Public Debt. Updated May 5, 2013. <www.treasurydirect.gov>

d) Dataset: “Historical Debt Outstanding – Annual, 1950-1999.” United States Department of the Treasury, Bureau of the Public Debt. Updated May 5, 2013. <www.treasurydirect.gov>

e) Webpage: “The Debt to the Penny and Who Holds It.” Bureau of the Public Debt, United States Department of the Treasury. Accessed January 29, 2016 at <www.treasurydirect.gov>

f) Dataset: “Historical Data on the Federal Debt.” Congressional Budget Office, August 5, 2010. <www.cbo.gov>

g) Dataset: “Table 1.1.5. Gross Domestic Product [Billions of dollars].” U.S. Bureau of Economic Analysis, January 29, 2016. <www.bea.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[7] Report: “Enron: Selected Securities, Accounting, and Pension Laws Possibly Implicated in its Collapse.” By Michael V. Seitzinger, Marie B. Morris, and Mark Jickling. Congressional Research Service, Library of Congress, January 16, 2002. <fpc.state.gov>

Page 2:

Among the disclosures of publicly traded companies are accounting statements. Since financial information is of little use to investors unless all firms use comparable accounting methods, the securities laws give the Securities and Exchange Commission broad authority to establish standards for financial reporting. The SEC has delegated the task of writing accounting standards to private sector bodies, and since 1973 the Financial Accounting Standards Board has been charged with formulating accounting and financial reporting standards.

[8] Summary of Statement No. 106: “Employers’ Accounting for Postretirement Benefits Other Than Pensions.” Financial Accounting Standards Board, December 1990. <www.fasb.org>

This Statement establishes accounting standards for employers’ accounting for postretirement benefits other than pensions…. It will significantly change the prevalent current practice of accounting for postretirement benefits on a pay-as-you-go (cash) basis by requiring accrual, during the years that the employee renders the necessary service, of the expected cost of providing those benefits to an employee and the employee’s beneficiaries and covered dependents. …

… The Board believes that measurement of the obligation and accrual of the cost based on best estimates are superior to implying, by a failure to accrue, that no obligation exists prior to the payment of benefits. The Board believes that failure to recognize an obligation prior to its payment impairs the usefulness and integrity of the employer’s financial statements. …

The provisions of this Statement are similar, in many respects, to those in FASB Statements No. 87, Employers’ Accounting for Pensions, and No. 88, Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits. …

This Statement relies on a basic premise of generally accepted accounting principles that accrual accounting provides more relevant and useful information than does cash basis accounting. …

[L]ike accounting for other deferred compensation agreements, accounting for postretirement benefits should reflect the explicit or implicit contract between the employer and its employees.

[9] Book: Finance for Managers. By Richard Luecke and Samuel L. Hayes. Harvard Business School Press, 2002. Page 39:

In contrast to cash-basis accounting, accrual accounting records transactions as they are made, whether or not the cash has actually changed hands. Most companies of any size use accrual accounting. This system provides a better matching between revenues and their associated cost, which helps companies understand the true causes and effect of business activities. Accordingly, revenues are recognized during the period in which the sales activities occur, whereas expenses are recognized in the same period as their associated revenues.

[10] See the three footnotes above for details regarding the manner in which publicly traded companies are required to calculate their debt and obligations using accrual-based accounting. The following note explains that the federal budget, in contrast, is calculated on a cash basis. More details are spelled out here.

[11] “2008 Financial Report of the United States Government.” U.S. Department of the Treasury, 2008. <www.fiscal.treasury.gov>

Page 21 (in pdf): “The President’s Budget (Budget), the Government’s primary financial planning and control tool, describes how the Government spent and plans to spend the money it collects.”

Page 30 (in pdf): “President’s Budget … Prepared primarily on a ‘cash basis’ ”

[12] “Fiscal Year 2015 Financial Report of the United States Government.” U.S. Department of the Treasury, February 25, 2016. <www.fiscal.treasury.gov>

Page 60:

United States Government Balance Sheets as of September 30, 2015, and 2014

Liabilities	2015 (billions $)
Accounts payable	68.3
Federal employee and veteran benefits payable	6,719.3
Environmental and disposal liabilities	411.6
Benefits due and payable	213.9
Insurance and guarantee program liabilities	177.5
Loan guarantee liabilities	36.2
Other liabilities	652.3
Total of above (excludes publicly held federal debt)	8,279

[13] The following points provide important context for understanding the data and calculation in the next footnote:

The past participants wash out of the calculation below, because their benefits have already been paid.
The general fund of the U.S. Treasury is “used to carry out the general purposes of Government rather than being restricted by law to a specific program….” [“Internal Revenue Manual.” Internal Revenue Service. Accessed January 11, 2011 at <www.irs.gov>. Part 1, Chapter 34, Section 1 (<www.irs.gov>)]
Social Security’s “closed group unfunded obligation” represents “the financial burden or liability being passed on to future generations.” [Textbook: Fiscal Challenges: An Interdisciplinary Approach to Budget Policy. Edited by Elizabeth Garrett, Elizabeth A. Graddy, and Howell E. Jackson. Cambridge University Press, 2009. Chapter 6: “Counting the Ways: The Structure of Federal Spending.” By Howell E. Jackson. Page 207: “The measure featured here is the ‘closed-group liability’ for each program. This measure reflects the financial burden or liability being passed on to future generations.”]
Prior to 2012, the Social Security Trustees Report provided an explicit “closed group unfunded obligation” for the Social Security program. Since this figure is not provided in later reports, Just Facts has calculated it using the methodology provided in the 2011 Report [“2011 Annual Report of the Board of Trustees of The Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds.” United States Social Security Administration, May 13, 2011. <www.ssa.gov>. Page 66: “The present value of future cost reduced by future non-interest income over the next 100 years for all current participants¹ equals $21.4 trillion. Subtracting the current value of the trust fund gives a closed group unfunded obligation of $18.8 trillion, which represents the shortfall of lifetime contributions for all past and current participants relative to the cost of benefits for them. … ¹ Individuals who attain age 15 or older in 2011.”]

[14] Calculated with data from the “2015 Annual Report of the Board of Trustees of The Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds.” United States Social Security Administration, July 22, 2015. <www.ssa.gov>

Page 7: “Table II.B1.—Summary of 2014 Trust Fund Financial Operations (In billions). … OASDI … Assets at the end of 2014 … $2,789.5”

Page 199:

Table VI.F2.—Present Values of OASDI [Social Security] Cost Less Non-interest Income and Unfunded Obligations for Program Participants, Based on Intermediate Assumptions [Present values as of January 1, 2015; dollar amounts in trillions] …

[P]resent value of future cost for current participants [=] 58.5 …

[P]resent value of future dedicated tax income for current participants [=] 29.0 …

[P]resent value of future general fund reimbursements over the infinite horizon ^a [=] ^c…

^a Distribution of general fund reimbursements among past, current, and future participants cannot be determined.

^c Less than $50 billion

CALCULATION: $58.5 present value of future cost for current participants – $29.0 present value of future dedicated tax income for current participants – > $0.05 present value of future general fund reimbursements over the infinite horizon – $2.790 current value of the trust fund = $26.661 closed group unfunded obligation

[15] The following points provide important context for understanding the data and calculation in the next footnote:

Federal general revenues are “used to carry out the general purposes of Government rather than being restricted by law to a specific program….” [“Internal Revenue Manual.” Internal Revenue Service. Accessed January 11, 2011 at <www.irs.gov>. Part 1, Chapter 34, Section 1 (<www.irs.gov>)]
Medicare Part A (a.k.a. HI or Hospital Insurance) covers hospital inpatient services, skilled nursing facility care (not custodial care), and hospice care. This part of Medicare is funded by dedicated revenues (not general revenues), and the law does allow for the transfer of general revenues to cover projected shortfalls. [“2013 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” Centers for Medicare and Medicaid Services, May 31, 2013. <www.cms.gov>. Page 202: “There is no provision under current law to cover the shortfall [of Medicare Part A]. In particular, transfers from the general fund of the Treasury could not be made for the purpose of avoiding asset exhaustion without new legislation.”]

Medicare Parts B and D (a.k.a. SMI or Supplementary Medical Insurance) cover physician, hospital outpatient, prescription drug, and other healthcare services. The law specifies that these parts of Medicare are automatically funded with general revenues to cover any shortfalls between dedicated revenues and expenses. [“2013 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” Centers for Medicare and Medicaid Services, May 31, 2013. <www.cms.gov>. Page 44: “[B]oth the Part B and Part D accounts of the SMI trust fund will remain in financial balance for all future years because beneficiary premiums and general revenue transfers will be set at a level to meet expected costs each year.”]
“Medicare also has a Part C, which serves as an alternative to traditional Part A and Part B coverage. Under this option, beneficiaries can choose to enroll in and receive care from private ‘Medicare Advantage’ and certain other health insurance plans. Medicare Advantage and Program of All-Inclusive Care for the Elderly (PACE) plans receive prospective, capitated payments for such beneficiaries from the HI [Part A] and SMI Part B trust fund accounts; the other plans are paid on the basis of their costs.” [“2013 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” Centers for Medicare and Medicaid Services, May 31, 2013. <www.cms.gov>. Page 1.]
Medicare’s “closed-group population … includes all persons currently participating in the program as either taxpayers or beneficiaries, or both.” [“2013 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” Centers for Medicare and Medicaid Services, May 31, 2013. <www.cms.gov>. Page 251.]

Medicare’s “closed-group unfunded obligation” represents “the financial burden or liability being passed on to future generations.” [Textbook: Fiscal Challenges: An Interdisciplinary Approach to Budget Policy. Edited by Elizabeth Garrett, Elizabeth A. Graddy, and Howell E. Jackson. Cambridge University Press, 2009. Chapter 6: “Counting the Ways: The Structure of Federal Spending.” By Howell E. Jackson. Page 207: “The measure featured here is the ‘closed-group liability’ for each program. This measure reflects the financial burden or liability being passed on to future generations.”]

Previous Medicare participants wash out of the calculations below, because their taxes and benefits have already been paid.

[16] Calculated with data from the “2015 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” United States Department of Health and Human Services, Centers for Medicare and Medicaid Services, July 22, 2015. <www.cms.gov>

Page 11: “Table II.B1.—Medicare Data for Calendar Year 2014 … Assets at end of 2014 …Total [=] $266.4”

Page 216: “The first line of table V.G2 [which displays unfunded Part A obligations] shows the present value of future expenditures less future taxes for current participants, including both beneficiaries and covered workers [i.e., taxpayers]. Subtracting the current value of the HI [Hospital Insurance or Part A] trust fund (the accumulated value of past HI taxes less outlays) results in a “closed group” unfunded obligation of $8.6 trillion.”

Page 219: “Table V.G4.—Unfunded Part B Obligations for Current and Future Program Participants through the Infinite Horizon [Present values as of January 1, 2015; dollar amounts in trillions] … Equals unfunded obligations for past and current participants … General revenue contributions [=] 14.7”

Page 221: “Table V.G6.—Unfunded Part D Obligations for Current and Future Program Participants through the Infinite Horizon [Present values as of January 1, 2015; dollar amounts in trillions] … Equals unfunded obligations for past and current participants … General revenue contributions [=] 5.2.”

CALCULATION: $8.6 trillion in closed-group unfunded obligations for Medicare Part A + $14.7 in closed-group unfunded obligations for Part B + $5.2 in closed-group unfunded obligations for Part D = $28.5 trillion in closed-group unfunded obligations for the Medicare program

[17] See here, here, and here for details regarding the manner in which publicly traded companies are required to calculate their debt and obligations using accrual-based accounting. The following two footnotes show that the federal budget, in contrast, is calculated on a cash basis. These next two footnotes also show that accrual-based accounting is used in the “Financial Report of the United States Government,” which was originally the source for all of the shortfall figures cited above. However, in 2009, the Financial Management Service of the U.S. Treasury, which produces the Financial Report of the U.S. Government, stopped providing individual values for the “closed group” shortfalls of the Social Security and Medicare programs. Since that time, the report has only shown a “closed group” total for all social insurance programs combined. For the 2009 and 2010 reports, Just Facts requested and received the components of this total from the U.S. Treasury. For the 2011 report, the U.S. Treasury refused to provide these figures despite repeated requests from Just Facts. Thus, Just Facts now calculates these figures using data from the Social Security and Medicare Trustees Reports.

[18] “2008 Financial Report of the United States Government.” U.S. Department of the Treasury, 2008. <www.fiscal.treasury.gov>

Page 21 (in pdf):

Each year, the Administration issues two reports which detail the financial results for the Government. The President’s Budget (Budget), the Government’s primary financial planning and control tool, describes how the Government spent and plans to spend the money it collects. By comparison, the accrual-based Financial Report of the United States Government (Report) includes the cost of operations, the sources used to finance those costs, how much the Government owns and owes, and the outlook for its social insurance programs.

Page 30 (in pdf):

President’s Budget	Financial Report of the U.S. Government
Prepared primarily on a ‘cash basis’	Prepared on an ‘accrual basis’

[19] Report: “Understanding the Primary Components of the Annual Financial Report of the United States Government.” U.S. Government Accountability Office, September, 2005. <www.gao.gov>

Page 5:

Accrual accounting, which is also used by private business enterprises, is the basis for U.S. generally accepted accounting principles for federal government entities. It is intended to provide a complete picture of the federal government’s financial operations and financial position. The federal government primarily uses the cash basis of accounting for its budget, which is the federal government’s primary financial planning and control tool.

Page 6:

The accrual basis of accounting recognizes revenue when it is earned and recognizes expenses in the period incurred, without regard to when cash is received or disbursed. The federal government, which receives most of its revenue from taxes, nevertheless recognizes tax revenue when it is collected, under an accepted modified cash basis of accounting.

[20] “2008 Financial Report of the United States Government.” U.S. Department of the Treasury, 2008. <www.fiscal.treasury.gov>

Page 51 (in pdf):

The [social insurance] estimates are actuarial present values² of the projections and are based on the economic and demographic assumptions representing the trustees’ best estimates as set forth in the relevant Social Security and Medicare trustees’ reports and in the relevant agency performance and accountability reports for the RRB and the Department of Labor (Black Lung). …

² Present values recognize that a dollar paid or collected in the future is worth less than a dollar today, because a dollar today could be invested and earn interest. To calculate a present value, future amounts are thus reduced using an assumed interest rate, and those reduced amounts are summed.

Page 60 (in pdf):

Participants for the Social Security and Medicare programs are assumed to be the “closed group” of individuals who are at least age 15 at the start of the projection period, and are participating as either taxpayers, beneficiaries, or both, except for the 2007 Medicare programs for which current participants are assumed to be at least 18 instead of 15 years of age.

Page 105 (in pdf):

The present values of future expenditures in excess of future revenue are the current amounts of funds needed to cover projected shortfalls, excluding the starting trust fund balances, over the projection period. They are calculated by subtracting the actuarial present values of future scheduled contributions and dedicated tax income by and on behalf of current and future participants from the actuarial present value of the future scheduled benefit payments to them or on their behalf.

[21] Report: “Social Security and Medicare Trust Funds and the Federal Budget.” By James Duggan and Christopher Soares. Office of Economic Policy, U.S. Department of Treasury, March 2008. <www.treas.gov>

Page 16: “The resulting present value is the amount that would have to be put in the bank today at the assumed interest rate to fund the future cash flows.”

[22] “2008 Financial Report of the United States Government.” U.S. Department of the Treasury, 2008. <www.fiscal.treasury.gov>

NOTE: In addition to the “closed group” projections, the annual Financial Report of the United States Government also contains projections for the “open-group” and “infinite horizon.” Details are below.

Page 10: “ ‘Closed’ Group and ‘Open’ Group differ by the population included in each calculation. From the [Statement of Social Insurance], the ‘Closed’ Group includes: (1) participants who have attained eligibility and (2) participants who have not attained eligibility. The ‘Open’ Group adds future participants to ‘Closed’ Group.”

Page 122:

Current participants in the Social Security and Medicare programs form the “closed group” of taxpayers and/or beneficiaries who are at least age 15 at the start of the projection period. For the 2007 Medicare projections, current participants are at least 18 years of age at the beginning of the projection period. Since the projection period for the Social Security, Medicare, and Railroad Retirement social insurance programs consists of 75 years, the period covers virtually all of the current participants’ working and retirement years, a period that could be more than 75 years in a relatively small number of instances.

Page 137:

[W]hen calculating unfunded obligations, a 75-year horizon includes revenue from some future workers but only a fraction of their future benefits. In order to provide a more complete estimate of the long-run unfunded obligations of the programs, estimates can be extended to the infinite horizon. The open-group infinite horizon net obligation is the present value of all expected future program outlays less the present value of all expected future program tax and premium revenues. …

In comparison to the analogous 75-year number in Table 5, extending the calculations beyond 2082, captures the full lifetime benefits and taxes and premiums of all current and future participants. The shorter horizon understates financial needs by capturing relatively more of the revenues from current and future workers and not capturing all of the benefits that are scheduled to be paid to them.

[23]

Federal Debt, Liabilities, Obligations, and Assets at Close of the 2015 Fiscal Year
Category	(Billions $)
Publicly Held Debt^{a b}	13,172.5
Liabilities^c	8,279
Social Security Future Expenditures in Excess of Future Dedicated Revenues^{d b}	29,451
Medicare Future Expenditures in Excess of Future Dedicated Revenues^{e b}	28,766
Assets^f	-3,229.8
Total	76,438

NOTES:

(a) “Fiscal Year 2015 Financial Report of the United States Government.” U.S. Department of the Treasury, February 25, 2016. <www.fiscal.treasury.gov>
Page 60: “United States Government Balance Sheets as of September 30, 2015 … (In billions of dollars) … Federal debt securities held by the public and accrued interest [=] 13,172.5”
(b) “Publicly held debt” differs from the “national debt” in that it excludes “intergovernmental debt,” which is money that the federal government owes to various trust funds such as Social Security’s. Just Facts uses the publicly held debt in this calculation because this is the convention of the Financial Report of the United States Government, which is the source for the federal assets and liabilities cited in the table above. Facts regarding why and how the federal government keeps its books in this manner are covered in the section of this research entitled “Government Accounting.” Hence, to account for the portion of the national debt that consists of monies owed to the Social Security and Medicare Trust Funds, the shortfalls for these programs in the table above do not include the trust fund balances.
(c) See here
(d) Calculated by adding Social Security’s unfunded closed-group obligation of $26,661 billion to Social Security’s trust fund assets of $2,790 billion (see here). The sum of these figures equals $29,450 billion.
(e) Calculated by adding Medicare’s unfunded closed-group obligation of $28,500 billion to Medicare’s trust fund assets of $266 billion (see here). The sum of these figures equals $28,766 billion.
f) Page 60: “United States Government Balance Sheets as of September 30, 2015, and 2014”

Assets	2015 (billions $)
Cash and other monetary assets	305.1
Accounts and taxes receivable, net	117.8
Loans Receivable and Mortgage-Backed Securities, Net	1216.0
Inventories and related property, net	320.6
Property, plant, and equipment, net	893.9
Debt and equity securities	104.4
Investments in Government-Sponsored Enterprises	106.3
Other assets	165.7
Total	3,229.8

[24] Calculated with data from the footnote above and the report: “Financial Accounts of the United States: Flow of Funds, Balance Sheets, and Integrated Macroeconomic Accounts, Third Quarter 2015.” Board of Governors of the Federal Reserve System, December 10, 2015. <www.federalreserve.gov>

Page 134: “B.101 Balance Sheet of Households and Nonprofit Organizations … Billions of dollars; amounts outstanding end of period, not seasonally adjusted … [Line] 41 Net worth … 2015 Q3 [=] 85,181.5”

NOTE: Household assets detailed in this table include items such as real estate, corporate equities, mutual funds, equity in noncorporate businesses, life insurance, pension fund reserves, and consumer durable goods. Liabilities detailed in this table include items such as home mortgages and consumer credit. Nonprofit organizations are explicitly named in the title of this table because their assets are not considered household property, whereas assets of for-profit entities are considered household property.

CALCULATION: $76,438 in federal debts, liabilities, and Social Security/Medicare obligations / $85,181.5 net worth of households and nonprofit organizations = 90%

[25] Webpage: “Updated PPI Commodity Weight Allocations to Stage-of-Processing Indexes.” Bureau of Labor Statistics. Last modified February 18, 2009. <www.bls.gov>

“SOP 3130 - Consumer Durable Goods: contains nonfood products, ready for final consumption, with a life expectancy of more than three years. Examples of durable goods include furniture, passenger cars, and appliances.”

[26] Dataset: “Monthly Population Estimates for the United States: April 1, 2010 to December 1, 2016.” U.S. Census Bureau, Population Division, December 2015. <www.census.gov>

“Resident Population … October 1, 2015 [=] 322,136,791”

CALCULATION: $76,438,000,000,000 / 322,136,791 people = $237,284/person

[27] Dataset: “Average Number of People per Household, by Race and Hispanic Origin, Marital Status, Age, and Education of Householder: 2015.” U.S. Census Bureau, November 2015. <www.census.gov>

“Total households [=] 124,587,000”

CALCULATION: $76,438,000,000,000 / 124,587,000 households = $613,531/household

[28] Dataset: “Table 1.1.5. Gross Domestic Product.” U.S. Department of Commerce, Bureau of Economic Analysis, February 26, 2016. <www.bea.gov>

“[Billions of dollars] Seasonally adjusted at annual rates … Gross Domestic Product … 2015Q3 [=] 18,060.2”

CALCULATION: $76,438,000,000,000 / $18,060,200,000,000 GDP = 423%

[29] Dataset: “Table 3.2. Federal Government Current Receipts and Expenditures.” U.S. Department of Commerce, Bureau of Economic Analysis, February 26, 2016. <www.bea.gov>

“[Billions of dollars] Seasonally adjusted at annual rates … Total receipts … 2014Q3 [=] 3,487.5”

CALCULATION: $76,438,000,000,000 / $3,487,500,000,000 receipts = 2,192%

[30] “2008 Financial Report of the United States Government.” U.S. Department of the Treasury, 2008. <www.fiscal.treasury.gov>

Page 28 (in pdf): “The SOSI [Statement of Social Insurance] provides additional perspective on the Government’s long term estimated exposures and costs. However, it should be noted that the Government’s financial statements do not reflect future costs implied by any current policy, such as national defense, the global war on terrorism, and disaster relief and recovery.”

[31] “2010 Financial Report of the United States Government.” U.S. Department of the Treasury, December 21, 2010. <www.fms.treas.gov>

Page 5: “Further, the long-term nature of these costs and their sensitivity to a wide range of complex assumptions can, in some cases, cause significant fluctuation in agency and Governmentwide costs from year to year. … At VA and other agencies that administer postemployment benefit programs, these fluctuations are attributable to an array of assumptions and variables including interest rates, inflation, beneficiary eligibility, life expectancy, and cost of living.”

Page 131: “Assumptions are made about many economic and demographic factors, including gross domestic product (GDP), earnings, the CPI, the unemployment rate, the fertility rate, immigration, mortality, disability incidence and terminations and, for the Medicare projections, health care cost growth.”

[32] “2014 Annual Report of the Board of Trustees of The Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds.” United States Social Security Administration, July 28, 2014. <www.ssa.gov>

Page 8: “The intermediate assumptions reflect the Trustees’ best estimates of future experience. Therefore, most of the figures in this overview present only the outcomes under the immediate assumptions. Any projection of the future is, of course, uncertain. For this reason, the Trustees also present results under low-cost and high-cost alternatives to provide a range of possible future experience.”

Page 18: “Uncertainty of the Projections … Significant uncertainty surrounds the intermediate assumptions.”

NOTE: For a detailed explanation of Social Security’s finances, visit Just Facts’ research on this issue at <www.justfacts.com>

[33] “2014 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” Centers for Medicare and Medicaid Services, July 28, 2014. <www.cms.gov>

Pages 276–277:

STATEMENT OF ACTUARIAL OPINION …

In past reports, the Board of Trustees has emphasized the virtual certainty that actual Part B expenditures will exceed the projections under current law due to further legislative action to avoid substantial reductions in the Medicare physician fee schedule. Current law would require a physician fee reduction of almost 21 percent on April 1, 2015—an implausible expectation.

Since lawmakers have overridden these scheduled reductions each year since 2003, the Trustees have changed the basis of their projections of Part B expenditures from current law to a projected baseline, which includes an assumption that the physician payment updates will equal the increase averaged over the last 10 years. This change results in a far more reasonable expectation of Medicare expenditures than occurs under current law. The projected baseline estimates are summarized throughout the main body of this report, while current-law estimates are included in appendix C.

The Affordable Care Act is making important changes to the Medicare program that are designed, in part, to substantially improve its financial outlook. While the ACA has been successful in reducing many Medicare expenditures to date, there is a strong possibility that certain of these changes will not be viable in the long range. Specifically, the annual price updates for most categories of non-physician health services will be adjusted downward each year by the growth in economy-wide productivity. The ability of health care providers to sustain these price reductions will be challenging, as the best available evidence indicates that most providers cannot improve their productivity to this degree for a prolonged period given the labor-intensive nature of these services.

Absent an unprecedented change in health care delivery systems and payment mechanisms, the prices paid by Medicare for health services will fall increasingly short of the costs of providing these services. By the end of the long-range projection period, Medicare prices for many services would be less than half of their level without consideration of the productivity price reductions. Before such an outcome would occur, lawmakers would likely intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result. Overriding the productivity adjustments, as lawmakers have done repeatedly in the case of physician payment rates, would lead to substantially higher costs for Medicare in the long range than those projected in this report.

NOTES:

Credit for bringing this fact to our attention belongs to Alex Adrianson of the Heritage Foundation. [Commentary: “What If Things that Have No Chance of Happening Happen? Asks Medicare’s Actuaries.” By Alex Adrianson. InsiderOnline, August 12, 2010. <www.insideronline.org>]
Cuts in Medicaid prices under the Affordable Care Act affect “hospital, skilled nursing facility, home health, hospice, ambulatory surgical center, diagnostic laboratory, and many other services.” [“2013 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” Centers for Medicare and Medicaid Services, May 31, 2013. <www.cms.gov>. Page 273.]
For a detailed explanation of Medicare’s finances, visit Just Facts’ research on this issue at <www.justfacts.com>

[34] For an explanation of the differences between “total” and “current” expenditures, see <www.bea.gov>

[35] Calculated with data from:

a) Dataset: “Table 3.2. Federal Government Current Receipts and Expenditures.” United States Department of Commerce, Bureau of Economic Analysis. Last revised September 29, 2016. <www.bea.gov>

b) “Glossary.” United States Department of Commerce, Bureau of Economic Analysis. Last modified November 4, 2016. <www.bea.gov>

Current tax receipts. Tax revenues received by government from all sources. It is the sum of personal current taxes, taxes on production and imports, taxes on corporate income, and taxes from the rest of the world.

Contribution for government social insurance. Employer contributions for government social insurance as well as payments by employees, the self-employed, and other individuals who participate in government social insurance programs.

Income receipts on assets. … For government, it consists of interest and miscellaneous receipts and dividends.

Current transfer receipts. Government net transfer receipts from businesses and from persons. These receipts largely consist of deposit insurance premiums, net insurance settlements, donations, fines, fees, certain penalty taxes, and excise taxes paid by nonprofit institutions serving households.

Current surplus of government enterprises. The current operating revenue and subsidies received by government enterprises from other levels of government less the current expenses of government enterprises.

c) Webpage: “What are FICA and SECA taxes?” United States Social Security Administration. Last reviewed or modified March 11, 2016. <faq.ssa.gov>

The law requires employers to withhold taxes from employee earnings to fund the Social Security and Medicare programs. These are called Federal Insurance Contributions Act (FICA) taxes. Your employer also pays a tax equal to the amount withheld from employee earnings. The self-employed pay Self-Employed Contributions Act (SECA) taxes on net earnings. SECA taxes also fund Social Security and Medicare.

d) Email from the U.S. Bureau of Economic Analysis to Just Facts, March 19, 2015.

“[C]apital transfer receipts only include estate and gift taxes….”

NOTE: An Excel file containing the data and calculations is available upon request.

[36] Calculated with data from:

a) Dataset: “Table 3.2. Federal Government Current Receipts and Expenditures.” United States Department of Commerce, Bureau of Economic Analysis. Last revised September 29, 2016. <www.bea.gov>
Line items 1 and 23: “Current receipts” and “Current expenditures”

b) Dataset: “Table 1.1.5. Gross Domestic Product.” United States Department of Commerce, Bureau of Economic Analysis. Last revised September 29, 2016. <www.bea.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[37] Calculated with data from:

a) Dataset: “Table 3.2. Federal Government Current Receipts and Expenditures.” United States Department of Commerce, Bureau of Economic Analysis. Last revised September 29, 2016. <www.bea.gov>
Line items 39 and 42: “Total receipts” and “Total expenditures.”

b) Dataset: “Table 1.1.5. Gross Domestic Product.” United States Department of Commerce, Bureau of Economic Analysis. Last revised September 29, 2016. <www.bea.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[38] Although the below-cited table of “Government Current Expenditures by Function” includes a line item for “Highways,” the BEA’s definition of “Government Current Expenditures” does not include “Gross Investment,” which is defined as “what government spends on structures, equipment, and software, such as new highways, schools, and computers.” Such spending is included in “Total Government Expenditures,”* for which the BEA does not provide a breakdown by function.

* Webpage: “FAQ: BEA seems to have several different measures of government spending. What are they for and what do they measure?” United States Department of Commerce, Bureau of Economic Analysis. Last updated November 4, 2016. <www.bea.gov>

[39] Calculated with data from:

a) Dataset: “Table 3.16. Government Current Expenditures by Function.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised November 3, 2016. <www.bea.gov>

b) Report: “Fiscal Year 2017 Historical Tables: Budget Of The U.S. Government.” White House Office of Management and Budget, February 8, 2016. <www.whitehouse.gov>
Pages 54-63: “Table 3.1—Outlays by Superfunction and Function: 1940–2021.”

NOTES:

[40] Calculated with data from:

a) Dataset: “The Distribution of Household Income and Federal Taxes, 2013.” Congressional Budget Office, June 2016. <www.cbo.gov>

b) Report: “The Distribution of Household Income and Federal Taxes, 2013.” Congressional Budget Office, June 2016. <www.cbo.gov>

Page 2: “In this report, CBO analyzed the distribution of four types of federal taxes: individual income taxes, payroll (or social insurance) taxes, corporate income taxes, and excise taxes.”

Page 6:

For this analysis, federal taxes include individual income taxes, payroll taxes, corporate income taxes, and excise taxes, which together accounted for 93 percent of all federal revenues in fiscal year 2013. Revenues from states’ deposits for unemployment insurance, estate and gift taxes, miscellaneous fees and fines, and net income earned by the Federal Reserve, which make up the remaining 7 percent, are not allocated to households in this analysis, mainly because it is uncertain how to attribute those revenues to particular households.

Page 11: “Because of the complexity of estimating state and local taxes for individual households, this report considers federal taxes only. Researchers differ about whether state and local taxes are, on net, regressive, proportional, or slightly progressive, but most agree that state and local taxes are less progressive than federal taxes.”

Page 31:

Before-tax income is market income plus government transfers. Market income consists of labor income, business income, capital gains (profits realized from the sale of assets), capital income excluding capital gains, income received in retirement for past services, and other sources of income. Government transfers are cash payments and in-kind benefits from social insurance and other government assistance programs. Those transfers include payments and benefits from federal, state, and local governments.

Page 27:

Government transfers consist of the cost of two types of benefits:

• Cash. Payments from Social Security, unemployment insurance, Supplemental Security Income, Temporary Assistance for Needy Families (and its predecessor, Aid to Families With Dependent Children), veterans’ programs, workers’ compensation, and state and local government assistance programs.

• In-Kind Benefits. The cost of Supplemental Nutrition Assistance Program vouchers (popularly known as food stamps); school lunches and breakfasts; housing assistance; energy assistance; and benefits provided by Medicare, Medicaid, and the Children’s Health Insurance Program.

Page 6:

Transfers as measured in this report do not equal total government spending on the transfer programs included in the analysis. The values of most transfers are based on amounts reported in the Census Bureau’s Current Population Survey. The values of transfers from Medicare, Medicaid, and the Children’s Health Insurance Program are based on the Census Bureau’s estimate of the government’s average cost of providing those benefits. In addition, because some transfers go to recipients outside the scope of the survey data collected by the Census Bureau and because some recipients misreport the amount of transfer payments they receive, the total amount of government transfers observed in the data used here is less than the total amount the government spends through those transfer programs. See the appendix for more details.

NOTE: An Excel file containing the data and calculations is available upon request.

[41] Brief: “Federal Debt and the Risk of a Fiscal Crisis.” Congressional Budget Office, July 27, 2010. <www.cbo.gov>

Page 1: “Some of those consequences would arise gradually: A growing portion of people’s savings would go to purchase government debt rather than toward investments in productive capital goods such as factories and computers; that ‘crowding out’ of investment would lead to lower output and incomes than would otherwise occur.”

[42] Report: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010 (Revised August 2010). <www.cbo.gov>

Page xi: “Large budget deficits would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment—which in turn would lower income growth in the United States.”

[43] Paper: “Tempting Fate: The Federal Budget Outlook.” By Alan J. Auerbach and William G. Gale. Brookings Institution, June 30, 2011. <www.brookings.edu>

Page 16: “[S]ustained large deficits will reduce future national income and living standards.”

[44] Brief: “Federal Debt and the Risk of a Fiscal Crisis.” Congressional Budget Office, July 27, 2010. <www.cbo.gov>

Page 1: “Rising interest costs might also force reductions in spending on important government programs.”

[45] Brief: “Federal Debt and the Risk of a Fiscal Crisis.” Congressional Budget Office, July 27, 2010. <www.cbo.gov>

Page 1: “[I]f the payment of interest on the extra debt was financed by imposing higher marginal tax rates, those rates would discourage work and saving and further reduce output.”

[46] Book: This Time is Different: Eight Centuries of Financial Folly. By Carmen M. Reinhart (University of Maryland) and Kenneth S. Rogoff (Harvard University). Princeton University Press, 2009.

Page xxvii: “Our aim here is to be expansive, systematic, and quantitative: our empirical analysis covers sixty-six countries over nearly eight centuries.”

Page 175: “[I]nflation has long been the weapon of choice in sovereign defaults on domestic debt and, where possible, on international debt.”

Page 77: “Inflation conditions often continue to worsen after an external default.¹²”

Page 398: “¹²Domestic defaults produce even worse inflation outcomes; see chapter 9.”

Page 175: “[G]overnments engage in massive monetary expansion, in part because they can thereby gain a seigniorage tax on real money balances (by inflating down the value of citizen’s currency and issuing more to meet demand). But they also want to reduce, or even wipe out, the real value of public debts outstanding.”

Page 400: “Seigniorage is simply the real income a government can realize by exercising its monopoly on printing currency. The revenue can be broken down into the quantity of currency needed to meet the growing transactions demand at constant prices and the remaining growth, which causes inflation, thereby lowering the purchasing power of existing currency.”

[47] Brief: “Federal Debt and the Risk of a Fiscal Crisis.” Congressional Budget Office, July 27, 2010. <www.cbo.gov>

Page 7:

[A]s governments create money to finance their activities or pay creditors during fiscal crises, they raise inflation. Higher inflation has negative consequences for the economy, especially if inflation moves above the moderate rates seen in most developed countries in recent years.[footnote omitted] Higher inflation might appear to benefit the U.S. government financially because the value of the outstanding debt (which is mostly fixed in dollar terms) would be lowered relative to the size of the economy (which would increase when measured in dollar terms). [footnote omitted] However, higher inflation would also increase the size of future budget deficits.

[48] Brief: “Federal Debt and the Risk of a Fiscal Crisis.” Congressional Budget Office, July 27, 2010. <www.cbo.gov>

Page 1: “Moreover, rising debt would increasingly restrict the ability of policymakers to use fiscal policy to respond to unexpected challenges, such as economic downturns or international crises.”

[49] Brief: “Federal Debt and the Risk of a Fiscal Crisis.” Congressional Budget Office, July 27, 2010. <www.cbo.gov>

Page 7: “A sudden increase in interest rates would also reduce the market value of outstanding government bonds, inflicting losses on investors who hold them. That decline could precipitate a broader financial crisis by causing losses for mutual funds, pension funds, insurance companies, banks, and other holders of federal debt—losses that might be large enough to cause some financial institutions to fail.”

[50] Report: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010 (Revised August 2010). <www.cbo.gov>

Page xi: “Over time, higher debt would increase the probability of a fiscal crisis in which investors would lose confidence in the government’s ability to manage its budget, and the government would be forced to pay much more to borrow money.”

Page 14: “The federal government could not issue ever-larger amounts of debt relative to the size of the economy indefinitely. If debt continued to rise rapidly relative to GDP, investors at some point would begin to doubt the government’s willingness to pay interest on that debt.”

[51] Brief: “Federal Debt and the Risk of a Fiscal Crisis.” Congressional Budget Office, July 27, 2010. <www.cbo.gov>

Pages 4–5:

A rising level of government debt would have another significant negative consequence. Combined with an unfavorable long-term budget outlook, it would increase the probability of a fiscal crisis for the United States. In such a crisis, investors become unwilling to finance all of a government’s borrowing needs unless they are compensated with very high interest rates; as a result, the interest rates on government debt rise suddenly and sharply relative to rates of return on other assets. Unfortunately, there is no way to predict with any confidence whether and when such a crisis might occur in the United States; in particular, there is no identifiable tipping point of debt relative to GDP indicating that a crisis is likely or imminent. But all else being equal, the higher the debt, the greater the risk of such a crisis. …

The history of fiscal crises in other countries does not necessarily indicate the conditions under which investors might lose confidence in the U.S. government’s ability to manage its budget or the consequences for the nation of such a loss of confidence. On the one hand, the United States may be able to issue more debt (relative to output) than the governments of other countries can, without triggering a crisis, because the United States has often been viewed as a “safe haven” by investors around the world, and the U.S. government’s securities have often been viewed as being among the safest investments in the world. On the other hand, the United States may not be able to issue as much debt as the governments of other countries can because the private saving rate has been lower in the United States than in most developed countries, and a significant share of U.S. debt has been sold to foreign investors.

[52] Paper: “Public Debt Overhangs: Advanced-Economy Episodes Since 1800.” By Carmen M. Reinhart (University of Maryland), Kenneth S. Rogoff (Harvard University), and Vincent R. Reinhart (chief U.S. economist at Morgan Stanley). Journal of Economic Perspectives, Summer 2012. Pages 69–86. <online.wsj.com>

Page 70:

In this paper, we use the long-dated cross-country data on public debt developed by Reinhart and Rogoff (2009) to examine the growth and interest rates associated with prolonged periods of exceptionally high public debt, defined as episodes where public debt to GDP exceeded 90 percent for at least five years. (The basic results here are reasonably robust to choices other than 90 percent as the critical threshold, as in Reinhart and Rogoff 2010a, b).¹ Over the years 1800–2011, we find 26 such episodes across the advanced economies. While data limitations may have prevented us from including every episode of high public debt in advanced economies since 1800, we are confident that this list encompasses the preponderance of such episodes. To focus on the association between high debt and long-term growth, we only cursorily treat shorter episodes lasting under five years, of which there turn out to be only a few. The long length of typical public debt overhang episodes suggests that even if such episodes are originally caused by a traumatic event such as a war or financial crisis, they can take on a self-propelling character.

Consistent with a small but growing body of research, we find that the vast majority of high debt episodes—23 of the 26—coincide with substantially slower growth. On average across individual countries, debt/GDP levels above 90 percent are associated with an average annual growth rate 1.2 percent lower than in periods with debt below 90 percent debt; the average annual levels are 2.3 percent during the periods of exceptionally high debt versus 3.5 percent otherwise.

CALCULATION: (3.5 - 2.3) / 3.5 = 34.3%

[53] Calculated with data from:

a) “The Debt to the Penny and Who Holds It.” Bureau of the Public Debt, United States Department of the Treasury. Accessed March 31, 2011 at <www.treasurydirect.gov>

b) Dataset: “Table 1.1.5. Gross Domestic Product.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised March 25, 2011. <www.bea.gov>

CALCULATIONS:

Quarter	Debt (billions $)	GDP (billions $)	Debt/GDP
2009-Q4	12,311.3	14,277.3	86%
2010-Q1	12,773.1	14,446.4	88%
2010-Q2	13,203.5	14,578.7	91%
2010-Q3	13,561.6	14,745.1	92%
2010-Q4	14,025.2	14,871.4	94%

NOTE: An Excel file containing the data and calculations is available upon request.

[54] Textbook: Microeconomics for Today (Sixth edition). By Irvin B. Tucker. South-Western Cengage Learning, 2010.

Page 450: “GDP per capita provides a general index of a country’s standard of living. Countries with low GDP per capita and slow growth in GDP per capita are less able to satisfy basic needs for food, shelter, clothing, education, and health.”

[55] Working paper: “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff.” By Thomas Herndon, Michael Ash, and Robert Pollin. Political Economy Research Institute, April 15, 2013. Revised 4/22/13. <www.peri.umass.edu>

Page 21: “Table 3: Published and replicated average real GDP growth, by public debt/GDP category”

NOTE: An Excel file containing the data and calculations is available here. See the tab entitled “HAP results.”

[56] Constitution of the United States. Signed September 17, 1787. <justfacts.com>

Article I, Section 7:

[Clause 1] All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

[Clause 2] Every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States; If he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it. If after such Reconsideration two thirds of that House shall agree to pass the Bill, it shall be sent, together with the Objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a Law. But in all such Cases the Votes of both Houses shall be determined by yeas and Nays, and the Names of the Persons voting for and against the Bill shall be entered on the Journal of each House respectively. If any Bill shall not be returned by the President within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall be a Law, in like Manner as if he had signed it, unless the Congress by their Adjournment prevent its Return, in which Case it shall not be a Law.

Article I, Section 8, Clause 1: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States….”

[57] Report: “A Citizen’s Guide to the Federal Budget: Fiscal Year 2000.” White House Office of Management and Budget, January 1999. <www.gpo.gov>

Pages 18–19:

• Discretionary spending, which accounts for one-third of all Federal spending, is what the President and Congress must decide to spend for the next year through the 13 annual appropriations bills. It includes money for such activities as the FBI and the Coast Guard, for housing and education, for space exploration and highway construction, and for defense and foreign aid.

• Mandatory spending, which accounts for two-thirds of all spending, is authorized by permanent laws, not by the 13 annual appropriations bills. It includes entitlements—such as Social Security, Medicare, veterans’ benefits, and Food Stamps—through which individuals receive benefits because they are eligible based on their age, income, or other criteria. It also includes interest on the national debt, which the Government pays to individuals and institutions that hold Treasury bonds and other Government securities. The President and Congress can change the law in order to change the spending on entitlements and other mandatory programs—but they don’t have to.

[58] Report: “GAO Strategic Plan, 2007-2012.” U.S. Government Accountability Office, March 2007. <www.gao.gov>

Page 15:

Table 2: Forces Shaping the United States and Its Place in the World

Changing security threats: The world has changed dramatically in overall security, from the conventional threats posed during the Cold War era to more unconventional and asymmetric threats. Providing for people’s safety and security requires attention to threats as diverse as terrorism, violent crime, natural disasters, and infectious diseases. The response to many of these threats depends not only on the action of the U.S. government but also on the cooperation of other nations and multilateral organizations, as well as on state and local governments and the private and independent sectors. Complicating such efforts are a number of failed states allowing the trade of arms, drugs, or other illegal goods; the spread of infectious diseases; and the accommodation of terrorist groups. …

Economic growth and competitiveness: Economic growth and competition are also affected by the skills and behavior of U.S. citizens, the policies of the U.S. government, and the ability of the private and public sectors to innovate and manage change. … Importantly, the saving and investment behavior of U.S. citizens affects the capital available to invest in research, development, and productivity enhancement. …

Global interdependency: Economies as well as governments and societies are becoming increasingly interdependent as more people, information, goods, and capital flow across increasingly porous borders. …

Societal change: The U.S. population is aging and becoming more diverse. As U.S. society ages and the ratio of elderly persons and children to persons of working age increases, the sustainability of social insurance systems will be further threatened. Specifically, according to the 2000 census, the median age of the U.S. population is now the highest it has ever been, and the baby boomer age group—people born from 1946 to 1964, inclusive—was a significant part of the population.

[59] Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>

Pages 77, 79: “CBO’s extended alternative fiscal scenario is based on the assumptions that certain policies that are now in place but are scheduled to change under current law will be continued and that some provisions of law that might be difficult to sustain for a long period will be modified. The scenario, therefore, captures what some analysts might consider to be current policies, as opposed to current laws.”

[60] Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Tab 2: “Economic Variables Underlying the Long-Term Budget Projections and Projections of GDP and Population.”

[61] Calculated with the dataset: “Unemployment Rate, LNS14000000.” U.S. Department of Labor, Bureau of Labor Statistics. Accessed June 23, 2015 at <data.bls.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[62] Calculated with the dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Tab 2: “Economic Variables Underlying the Long-Term Budget Projections and Projections of GDP and Population.”

NOTE: An Excel file containing the data and calculations is available upon request.

[63] Calculated with the dataset “Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised May 29, 2015. <www.bea.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[64] Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Tab 6. “Summary Data for the Extended Alternative Fiscal Scenario, Without Macroeconomic Feedback.”

[65] Calculated with the dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Figure 1-3. “Spending and Revenues Under CBO’s Extended Baseline, Compared With Past Averages.”

[66] Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Tab 6. “Summary Data for the Extended Alternative Fiscal Scenario, Without Macroeconomic Feedback.”

[67] Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Figure 1-3. “Spending and Revenues Under CBO’s Extended Baseline, Compared With Past Averages.”

[68] Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>

Pages 117–118:

Under its extended alternative fiscal scenario last year, CBO assumed that lawmakers would not allow various restraints on the growth of Medicare costs and health insurance subsidies to exert their full effect after the first 10 years of the projection period. However, this year, after reassessing the uncertainties involved, CBO no longer projects whether or when those restraints might wane. Instead, for those elements of the alternative fiscal scenario, there are now no differences from the extended baseline. For both, CBO projects that growth rates for Medicare costs will move linearly over 15 years (from 2024 to 2039) to the underlying rate that the agency has projected and that the exchange subsidies will do the same. (One exception to that new approach, though, concerns Medicare’s payment rates for physicians’ services. This year, as in previous years, projected spending under the alternative fiscal scenario reflects the assumption that those payment rates would be held constant at current levels rather than being cut by about a quarter at the beginning of 2015, as scheduled under current law.)

[69] “2014 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” Centers for Medicare and Medicaid Services, July 28, 2014. <www.cms.gov>

Pages 276–277:

STATEMENT OF ACTUARIAL OPINION …

Absent an unprecedented change in health care delivery systems and payment mechanisms, the prices paid by Medicare for health services will fall increasingly short of the costs of providing these services. By the end of the long-range projection period, Medicare prices for many services would be less than half of their level without consideration of the productivity price reductions. Before such an outcome would occur, lawmakers would likely intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result. Overriding the productivity adjustments, as lawmakers have done repeatedly in the case of physician payment rates, would lead to substantially higher costs for Medicare in the long range than those projected in this report.

[70] Constructed with data from:

a) Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

b) Dataset: “An Update to the Budget and Economic Outlook: Fiscal Years 2014 to 2024.” Congressional Budget Office, August 2014. <www.cbo.gov>

[71] Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>

Page 8:

Debt held by the public represents the amount that the federal government has borrowed in financial markets (by issuing Treasury securities) to pay for its operations and activities.³

³ When the federal government borrows in financial markets, it competes with other participants for financial resources and, in the long run, crowds out private investment, reducing economic output and income. In contrast, federal debt held by trust funds and other government accounts represents internal transactions of the government and has no direct effect on financial markets. (That debt and debt held by the public together make up gross federal debt.)

Page 43: “Thereafter, spending for [Medicare] Part A would begin to increase more rapidly than income to the HI [Hospital Insurance] trust fund, CBO projects, and the trust fund would be exhausted sometime around 2030.”

Page 51: “Another commonly used measure of Social Security’s sustainability is the trust funds’ date of exhaustion. Under CBO’s extended baseline, the DI [Disability Insurance] trust fund would be exhausted in fiscal year 2017 and the OASI [Old Age and Survivors Insurance] trust fund would be exhausted in calendar year 2032.”

NOTE: For more detail about debt owed to federal trust funds, click here and here.

[72] Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

“Figure 1-1. Federal Debt Held by the Public”

“Figure 6-3. Long-Run Effects of the Fiscal Policies in CBO’s Extended Alternative Fiscal Scenario”

NOTE: These debt projections account for the economic effects of federal debt, taxes, and spending. Per CBO:

The results with economic feedback include the economic effects of the budget policies and the effects of that economic feedback on the budget. Those results are CBO’s central estimates from ranges determined by alternative assessments about how much deficits “crowd out” investment in capital goods such as factories and computers (because a larger portion of people’s savings is being used to purchase government securities) and how much people respond to changes in after-tax wages by adjusting the number of hours they work.

[Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>. Page 76.]

[73] Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>

Pages 12-13:

Second, CBO has estimated the amount by which delaying policy changes to reduce deficits would increase the size of the policy adjustments needed to achieve any chosen goal for debt. If the goal was to have the debt equal 74 percent of GDP in 2039 but to wait to implement new policies until 2020, the combination of increases in revenues and reductions in noninterest spending over the 2020–2039 period would need to be 1.5 percent of GDP, rather than the 1.2 percent of GDP needed to reach that goal if policy changes took effect in 2015 (see Figure 1-2). If lawmakers waited even longer—until 2025—to take action, the policy changes over the 2025–2039 period would need to amount to 2.1 percent of GDP. If, instead of aiming to keep debt from rising relative to GDP, lawmakers wanted to return debt to its historical average percentage of GDP—but policy changes did not take effect until 2020—the policy changes would need to amount to 3.2 percent rather than 2.6 percent of GDP. Waiting an additional five years would require even larger changes, amounting to 4.3 percent of GDP.

Third, CBO has studied how waiting to resolve the long-term fiscal imbalance would affect various generations of the U.S. population. In 2010, CBO compared economic outcomes under a policy that would stabilize the debt-to- GDP ratio starting in 2015 with outcomes under a policy that would delay stabilizing the ratio until 2025.⁶ That analysis suggested that generations born after about 2015 would be worse off if action to stabilize the debt-to-GDP ratio was postponed to 2025. People born before 1990, however, would be better off if action was delayed—largely because they would partly or entirely avoid the policy changes needed to stabilize the debt—and generations born between 1990 and 2015 could either gain or lose from a delay, depending on the details of the policy changes.⁷

6. See Congressional Budget Office, Economic Impacts of Waiting to Resolve the Long-Term Budget Imbalance (December 2010), <www.cbo.gov>. That analysis was based on a projection of slower growth in debt than CBO now projects, so the estimated effects of a similar policy today would be close, but not identical, to the effects estimated in that earlier analysis.

7. Those conclusions do not incorporate the possible negative effects of a fiscal crisis or effects that might arise from the government’s reduced flexibility to respond to unexpected challenges.

[74] Report: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010 (Revised August 2010). <www.cbo.gov>

Page 16:

Waiting to close the fiscal gap would make the necessary changes larger. To illustrate the costs of delay, CBO simulated the effects of closing the fiscal gap under the alternative fiscal scenario beginning in 2011, 2015, 2020, or 2025. Those simulations indicate that postponing action would substantially increase the size of the policy adjustments needed to put the budget on a sustainable course. For example, if lawmakers wanted to close the fiscal gap through 2035 but did not begin until 2015, they would have to reduce primary spending or increase revenues over that period by 5.7 percent of GDP, rather than by 4.8 percent if they acted in 2011 (see Figure 1-3). If they waited until 2020 to close the fiscal gap through 2035, they would have to cut noninterest outlays or raise revenues over that period by 7.9 percent of GDP. Moreover, those simulations omit the effects that deficits and debt would have on economic growth and interest rates in the intervening years; incorporating such effects would make the impact of delaying policy changes even more severe.

[75] Webpage: “Paul Davidson.” University of Tennessee Knoxville, 2011. <econ.bus.utk.edu>

[76] Commentary: “Making Dollars and Sense of the U.S. Government Debt.” By Paul Davidson. Journal of Post Keynesian Economics, Summer 2010. Pages 663–667. <econ.bus.utk.edu>

Pages 664–665.

[77] Webpage: “Douglas J. Amy.” Mount Holyoke College, 2011. <www.mtholyoke.edu>

[78] Commentary: “The Deficit Scare: Myth vs. Reality.” By Douglas J. Amy. Accessed March 22, 2011 at <www.governmentisgood.com>

[79] Webpage: “Paul Krugman.” New York Times, 2011. <www.nytimes.com>

[80] Commentary: “How Big Is $9 Trillion?” By Paul Krugman. New York Times, August 23, 2009. <krugman.blogs.nytimes.com>

[81] Calculated with data from:

a) Dataset: “Table 3.2. Federal Government Current Receipts and Expenditures.” United States Department of Commerce, Bureau of Economic Analysis. Last revised February 25, 2011. <www.bea.gov>
Line item 20: “Current expenditures”

b) Dataset: “Table 1.1.5. Gross Domestic Product.” United States Department of Commerce, Bureau of Economic Analysis. Last revised February 25, 2011. <www.bea.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[82] Calculated with data from “Fiscal Year 2012 Historical Tables, Budget of the U.S. Government.” White House Office of Management and Budget, 2010. <www.whitehouse.gov>
Page 139: “Table 7.1—Federal Debt at the End of Year: 1940–2016 … Total Debt held by the Public as a Percentage of GDP.”

CALCULATION:
108.7 (publicly held debt as a % of GDP in 1946) - 36.4 (publicly held debt as a % of GDP in 1985) = 72.3

[83] Calculated with data from:

a) Dataset: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010. <www.cbo.gov>
Subset: “Summary Data for the Alternative Fiscal Scenario (percentages of gross domestic product)” <www.cbo.gov>

b) Dataset: “Table 3.2. Federal Government Current Receipts and Expenditures.” United States Department of Commerce, Bureau of Economic Analysis. Last revised February 25, 2011. <www.bea.gov>
Line items 20: “Current expenditures”

c) Dataset: “Table 1.1.5. Gross Domestic Product.” United States Department of Commerce, Bureau of Economic Analysis. Last revised February 25, 2011. <www.bea.gov>

NOTES:

The methodologies used by the above-cited government agencies to quantify federal spending differ. The CBO uses “total outlays” for projections, and the BEA uses “current expenditures” for historical data back to World War II. The CBO’s spending figure for 2010 is 24.3%, and the figure calculated using BEA data is 25.4%. Thus, Just Facts uses the term “over” to describe the relationship between historical and projected data in this context.
An Excel file containing the data and calculations is available upon request.

CALCULATIONS:

Average total outlays from 2011–2050 = 32.8% of GDP
Average current expenditures from 1946–1985 = 18.4%
(32.8 – 18.4) / 18.4 = .782

[84] Calculated with the dataset: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010. <www.cbo.gov>

Subset: “Summary Data for the Alternative Fiscal Scenario”

344 (publicly held debt as a % of GDP in 2050) - 67 (publicly held debt as a % of GDP in 2011) = 277

[85] Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>

Page 8: “CBO’s long-term projections extend beyond the usual 10-year budget window to focus on the 25-year period ending in 2039. They generally reflect current law, following the agency’s April 2014 baseline budget projections through 2024 and then extending the baseline concept into later years; hence, they constitute what is called the extended baseline.”

[86] Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Tab 1. “Summary Data for the Extended Baseline.”

[87] Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>

Pages 7–8: “… CBO projects, revenues would remain roughly stable relative to GDP for the next 10 years as an increase in individual income taxes was offset by a decline in receipts from corporate income taxes and remittances from the Federal Reserve (all relative to the size of the economy).”

Page 18:

Revenue projections through 2024 follow the 10-year baseline, which generally incorporates the assumption that various tax provisions will expire as scheduled even if they have routinely been extended in the past. After 2024, rules for individual income taxes, payroll taxes, excise taxes, and estate and gift taxes are assumed to evolve as scheduled under current law.¹³ Because of the structure of current tax law, total federal revenues from those sources are estimated to grow faster than GDP over the long run. Revenues from corporate income taxes and other sources (such as receipts from the Federal Reserve System) are assumed to remain constant as a percentage of GDP after 2024….

¹³ The sole exception to the current-law assumption applies to expiring excise taxes dedicated to trust funds. The Deficit Control Act requires CBO’s baseline to reflect the assumption that those taxes would be extended at their current rates. That law does not stipulate that the baseline include the extension of other expiring tax provisions, even if they have been routinely extended in the past.

Page 59: “After 2024, revenues would continue rising faster than GDP, largely for two reasons: Growth in real (inflation-adjusted) income and the interaction of the tax system with inflation would push a greater proportion of income into higher tax brackets; and certain tax increases enacted in the Affordable Care Act (ACA) would generate increasing amounts of revenues relative to the size of the economy.”

Pages 64–65:

Under CBO’s extended baseline, marginal tax rates on income from labor and capital would rise over time. The effective federal marginal tax rate on labor income—that is, the marginal tax rate on labor income averaged across taxpayers using weights proportional to their labor income—is projected to increase from about 29 percent in calendar year 2014 to 34 percent in 2039…. By contrast, the effective federal marginal tax rate on capital income (returns on investment) is projected to rise only from 18 percent to 19 percent over that period.

Page 66:

The cumulative effect of rising prices would significantly reduce the value of some parameters of the tax system that are not indexed for inflation. As one example, CBO estimates that the amount of mortgage debt eligible for the mortgage interest deduction, which is not indexed for inflation, would fall from $1 million today to less than $600,000 in 2039 measured in today’s dollars. As another example, the portion of Social Security benefits subject to taxation would increase from about 30 percent now to about 50 percent by 2039, CBO estimates, because the thresholds for taxing benefits are not indexed for inflation.

[88] Calculated with data from:

a) Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>
Tab 1. “Summary Data for the Extended Baseline (Percentage of Gross Domestic Product). … Revenues … 2084 [=] 23.5”
Figure 1-3. “Spending and Revenues Under CBO’s Extended Baseline, Compared With Past Averages. (Percentage of Gross Domestic Product) … Revenues … Total … Average, 1974–2013 [=] 17.4.”

b) Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>
Page 60: “Over the past 40 years, total federal revenues have ranged from a high of 19.9 percent of GDP (in 2000) to a low of 14.6 percent (in 2009 and 2010), with no evident trend over time….”

CALCULATION: (23.5% - 17.4%) / 17.4% = 35%

[89] Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Tab 1. “Summary Data for the Extended Baseline (Percentage of Gross Domestic Product).”

[90] Calculated with the dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Tab 1. “Summary Data for the Extended Baseline (Percentage of Gross Domestic Product). … Total Spending … 2040 [=] 26.0.”

Figure 1-3. “Spending and Revenues Under CBO’s Extended Baseline, Compared With Past Averages. (Percentage of Gross Domestic Product) … Spending … Total … Average, 1974–2013 [=] 20.5.”

CALCULATION: (26.0% - 20.5%) / 20.5% = 27%

[91] Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>

Page 8:

CBO’s 10-year and extended baselines are meant to serve as benchmarks for measuring the budgetary effects of proposed changes in federal revenues or spending. They are not meant to be predictions of future budgetary outcomes; rather, they represent CBO’s best assessment of how the economy and other factors would affect revenues and spending if current law generally remained unchanged. In that way, the baselines incorporate the assumption that some policy changes that lawmakers have routinely made in the past—such as preventing the sharp cuts to Medicare’s payment rates for physicians that are called for by law—will not be made again.

Page 16: “… the projections incorporate the reduction in Medicare’s payments to physicians scheduled for 2015 and the reductions in Medicare spending specified in the Budget Control Act of 2011, as amended, for 2015 through 2024.”

[92] “2014 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” Centers for Medicare and Medicaid Services, July 28, 2014. <www.cms.gov>

Pages 276–277:

STATEMENT OF ACTUARIAL OPINION …

Absent an unprecedented change in health care delivery systems and payment mechanisms, the prices paid by Medicare for health services will fall increasingly short of the costs of providing these services. By the end of the long-range projection period, Medicare prices for many services would be less than half of their level without consideration of the productivity price reductions. Before such an outcome would occur, lawmakers would likely intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result. Overriding the productivity adjustments, as lawmakers have done repeatedly in the case of physician payment rates, would lead to substantially higher costs for Medicare in the long range than those projected in this report.

[93] Report: “Budgetary and Economic Outcomes Under Paths for Federal Revenues and Noninterest Spending Specified by Chairman Ryan, April 2014.” Congressional Budget Office, April 1, 2014. <www.cbo.gov>

Page 2: “The amounts of federal debt and economic output estimated for all of the scenarios in this report are highly uncertain. That uncertainty stems from the difficulties inherent in projecting the effects of federal fiscal policies, especially far into the future.”

Page 12:

The projections for debt, revenues, spending, and economic output presented in this report are highly uncertain for many reasons. The projections are based on CBO’s central estimates for key parameters of economic behavior—including the extent to which government borrowing crowds out capital investment and the effect that changes in real after-tax wages have on the supply of labor.¹¹ Estimates of those and other economic parameters are uncertain, and analysis using different parameters can produce results that are substantially higher or lower than CBO’s central estimates.

[94] Report: “The Path to Prosperity: Fiscal Year 2015 Budget Resolution.” House Budget Committee, April 2014. <budget.house.gov>

Pages 58–59:

The Medicare reform envisioned in this budget resolution begins with a commitment to keep the promises made to those who now are in or near retirement. Consequently, for those who enter the program before 2024, the Medicare program and its benefits will remain as they are, without change.

For future retirees, the budget supports an approach known as “premium support.” Starting in 2024, seniors (those who first become eligible by turning 65 on or after January 1, 2024) would be given a choice of private plans competing alongside the traditional fee-for-service Medicare program on a newly created Medicare Exchange. Medicare would provide a premium-support payment either to pay for or offset the premium of the plan chosen by the senior, depending on the plan’s cost. For those who were 55 or older in 2013, they would remain in the traditional Medicare system.

The Medicare recipient of the future would choose, from a list of guaranteed-coverage options, a health plan that best suits his or her needs. This is not a voucher program. A Medicare premium-support payment would be paid, by Medicare, directly to the plan or the fee-for-service program to subsidize its cost. The program would operate in a manner similar to that of the Medicare prescription-drug benefit. The Medicare premium-support payment would be adjusted so that the sick would receive higher payments if their conditions worsened; lower-income seniors would receive additional assistance to help cover out-of-pocket costs; and wealthier seniors would assume responsibility for a greater share of their premiums.

This approach to strengthening the Medicare program—which is based on a long history of bipartisan reform plans—would ensure security and affordability for seniors now and into the future. In September 2013, the Congressional Budget Office analyzed illustrative options of a premium support system. They found that a program in which the premium-support payment was based on the average bid of participating plans would result in savings for affected beneficiaries as well as the federal government.⁵²

Moreover, it would set up a carefully monitored exchange for Medicare plans. Health plans that chose to participate in the Medicare Exchange would agree to offer insurance to all Medicare beneficiaries, to avoid cherry-picking, and to ensure that Medicare’s sickest and highest-cost beneficiaries receive coverage.

While there would be no disruptions in the current Medicare fee-for-service program for those currently enrolled or becoming eligible before 2024, all seniors would have the choice to opt in to the new Medicare program once it began in 2024. This budget envisions giving seniors the freedom to choose a plan best suited for them, guaranteeing health security throughout their retirement years.

⁵² Congressional Budget Office, “A Premium Support System for Medicare: Analysis of Illustrative Options,” 18 Sept. 2013.

[95] Report: “The Path to Prosperity: Fiscal Year 2015 Budget Resolution.” House Budget Committee, April 2014. <budget.house.gov>

Page 59: “Also starting in 2024, the age of eligibility for Medicare would begin to rise gradually to correspond with Social Security’s retirement age and the fee-for-service benefit would be modernized to have a single deductible and by reforming supplemental insurance policies.”

[96] Calculated with “Summary Tables for the Path to Prosperity: Fiscal Year 2015 Budget Resolution.” House Budget Committee, April 2014. <budget.house.gov>

a) Table S-3. “FY2015 House Budget by Major Category (Outlays in Billions) … Medicare (Net) … 2016 [=] $552 … 2020 [=] $684 … 2024 [=] $855.”

b) Table S-4. “FY2015 House Budget vs. Current Policy by Major Category (Outlays in Billions) … Medicare (Net) … 2016 [=] $-3 … 2020 [=] $-13 … 2024 [=] $-38.”

CALCULATIONS:

-$3 / ($552 + $3) = -0.5%
-$13 / ($684 + $13) = -1.9%
-$38 / ($855 + $38) = -4.3%

[97] Report: “The Path to Prosperity: Fiscal Year 2015 Budget Resolution.” House Budget Committee, April 2014. <budget.house.gov>

Pages 54–55:

Provide State Flexibility on Medicaid. One way to secure the Medicaid benefit is by converting the federal share of Medicaid spending into an allotment that each state could tailor to meet its needs, indexed for inflation and population growth. Such a reform would end the misguided one-size-fits-all approach that has tied the hands of state governments. States would no longer be shackled by federally determined program requirements and enrollment criteria. Instead, each state would have the freedom and flexibility to tailor a Medicaid program that fit the needs of its unique population.

The budget resolution proposes to transform Medicaid from an open-ended entitlement into a block-granted program like SCHIP [State Children’s Health Insurance Program]. These programs would be unified under the proposal and grown together for population growth and inflation.

This reform also would improve the health-care safety net for low-income Americans by giving states the ability to offer their Medicaid populations more options and better access to care. Medicaid recipients, like all other Americans, deserve to choose their own doctors and make their own health-care decisions, instead of having Washington make those decisions for them.

There are numerous examples across the country where states have used the existing, but limited, flexibility of Medicaid’s waiver program to introduce innovative reforms that produced cost savings, quality improvements, and beneficiary satisfaction. The state of Indiana implemented such reforms through the Healthy Indiana Plan, a patient-centered system that provided health coverage to uninsured residents who didn’t qualify for Medicaid. Enrollees in this program had access to benefits such as physician services, prescription drugs, both patient and outpatient hospital care, and disease management.

The Medicaid reforms proposed in the fiscal year 2015 budget provide all states with the necessary flexibility to pursue reforms similar to the Indiana plan.

Based on this kind of reform, this budget assumes $732 billion in savings over ten years, easing the fiscal burdens imposed on state budgets and contributing to the long-term stabilization of the federal government’s fiscal path.

[98] Report: “The Path to Prosperity: Fiscal Year 2015 Budget Resolution.” House Budget Committee, April 2014. <budget.house.gov>

Page 55:

Repeal the Medicaid Expansions in the New Health-Care Law. The recently enacted health-care law calls for major expansions in the Medicaid program beginning in 2014. These expansions will have a significant impact on the federal share of the Medicaid program and will dramatically increase outlays.

In the face of enormous stress on federal and state budgets and declining quality of care in Medicaid, the new health-care law would increase the eligible population for the program by one-third. For fiscal years 2015 through 2024, CBO projects the new law will increase federal spending by $792 billion.

This future fiscal burden will have serious budgetary consequences for both federal and state governments. While the health law requires the federal government to finance 100 percent of the Medicaid costs associated with covering new enrollees, this provision begins to phase out in fiscal year 2016. At that time, state governments will be required to assume a share of this cost. This share increases from fiscal year 2016 through 2020, when states will be required to finance 10 percent of the health law’s expansion of Medicaid.

Not only does this expansion magnify the challenges to both state and federal budgets, it also binds the hands of local governments in developing solutions that meet the unique needs of their citizens. The health-care law would exacerbate the already crippling one-size-fits-all enrollment mandates that have resulted in below-market reimbursements, poor health-care outcomes, and restrictive services. The budget calls for repealing the Medicaid expansions contained in the health-care law and removing the law’s burdensome programmatic mandates on state governments. Adopting this option would save $792.4 billion over ten years.

[99] Calculated with “Summary Tables for the Path to Prosperity: Fiscal Year 2015 Budget Resolution.” House Budget Committee, April 2014. <budget.house.gov>

a) Table S-3. “FY2015 House Budget by Major Category (Outlays in Billions) … Medicaid & Other Health … 2016 [=] $311 … 2020 [=] $343 … 2024 [=] $403.”

b) Table S-4. “FY2015 House Budget vs. Current Policy by Major Category (Outlays in Billions) … Medicaid & Other Health … 2016 [=] -$31 … 2020 [=] -$80 … 2024 [=] -$124.”

CALCULATIONS:

-$31 / ($311 + $31) = -9.1%
-$80 / ($343 + $80) = -18.9%
-$124 / ($403 + $124) = -23.5%

[100] Report: “The Path to Prosperity: Fiscal Year 2015 Budget Resolution.” House Budget Committee, April 2014. <budget.house.gov>

Pages 55–56:

Repeal the Exchange Subsidies Created by the New Health-Care Law. According to CBO estimates, the health law proposes to spend $1.2 trillion over the next ten years providing eligible individuals with subsidies to purchase government-approved health insurance. These subsidies can only be used to purchase plans that meet standards determined by the new health-care law. In addition to this enormous market distortion, the law also stipulates a complex maze of eligibility and income tests to determine how much of a subsidy qualifying individuals may receive.

The new law couples these subsidies with a mandate for individuals to purchase health insurance and bureaucratic controls on the types of insurance that may legally be offered. Taken together, these provisions will undermine the private insurance market, which serves as the backbone of the current U.S. health-care system. Exchange subsidies will undermine the competitive forces of the marketplace. Government mandates will drive out all but the largest insurance companies. Punitive tax penalties will force individuals to purchase coverage whether they choose to or not. Further, this budget does not condone any policy that would require entities or individuals to finance activities or make health decisions that violate their religious beliefs. This budget provides for the repeal of the President’s onerous health-care law for this and many other reasons.

Left in place, the health law will create pressures that will eventually lead to a single-payer system in which the federal government determines how much health care Americans need and what kind of care they can receive. This budget recommends repealing the architecture of this new law, which puts health-care decisions into the hands of bureaucrats, and instead allowing Congress to pursue patient-centered health-care reforms that actually bring down the cost of care by empowering consumers.

… To be clear, this budget repeals all federal spending related to the health law’s exchange subsidies and related spending.

[101] Dataset: “Budgetary and Economic Outcomes Under Paths for Federal Revenues and Noninterest Spending Specified by Chairman Ryan, April 2014.” Congressional Budget Office, April 1, 2014. <www.cbo.gov>

Figure 9: “Spending Excluding Interest Payments Under Various Budget Scenarios, With Macroeconomic Effects (Percentage of Gross Domestic Product) … Paths for Revenues and Noninterest Spending Specified by Chairman Ryan … 2015 [=] 18.9 … 2025 [=] 16.0 … 2035 [=] 16.4”

[102] Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Figure 1-3: “Spending and Revenues Under CBO’s Extended Baseline, Compared With Past Averages (Percentage of Gross Domestic Product). … Spending … Net Interest … Average, 1947 to 2013 [=] 2.2 … Total Spending… Average, 1947 to 2013 [=] 20.5”

CALCULATION: 20.5 – 2.2 = 18.3 total spending less net interest

[103] Dataset: “Budgetary and Economic Outcomes Under Paths for Federal Revenues and Noninterest Spending Specified by Chairman Ryan, April 2014.” Congressional Budget Office, April 1, 2014. <www.cbo.gov>

Figure 11: “Revenues Under Various Budget Scenarios, With Macroeconomic Effects (Percentage of Gross Domestic Product) … Paths for Revenues and Noninterest Spending Specified by Chairman Ryan … 2015 [=] 18.2 … 2025 [=] 18.4 … 2032 [=] 19.0”

[104] Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Figure 1-3: “Spending and Revenues Under CBO’s Extended Baseline, Compared With Past Averages (Percentage of Gross Domestic Product). … Revenues … Total Revenues … Average, 1947 to 2013 [=] 17.4”

[105] NOTE: These debt projections account for the economic effects of federal debt, taxes, and spending. As explained by CBO:

[Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>. Page 76.]

[106] Constructed with data from:

a) Dataset: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>
“Figure 1-1. Federal Debt Held by the Public”
“Figure 6-3. Long-Run Effects of the Fiscal Policies in CBO’s Extended Alternative Fiscal Scenario”

b) Dataset: “Budgetary and Economic Outcomes Under Paths for Federal Revenues and Noninterest Spending Specified by Chairman Ryan.” Congressional Budget Office, April 1, 2014. <www.cbo.gov>

[107] Article: “Poll Shows Budget-Cuts Dilemma.” By Neil King Jr. and Scott Greenberg. Wall Street Journal, March 3, 2011. <www.wsj.com>

[108] Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 2014. <www.cbo.gov>

Pages 19–20:

Spending for the Major Health Care Programs and Social Security

Mandatory programs have accounted for a rising share of the federal government’s noninterest spending over the past few decades, averaging 60 percent in recent years. Most of the growth in mandatory spending has involved the three largest programs—Social Security, Medicare, and Medicaid. Federal outlays for those programs together made up more than 40 percent of the government’s noninterest spending, on average, during the past 10 years, compared with less than 30 percent four decades ago.

Most of the anticipated growth in noninterest spending as a share of GDP over the long term is expected to come from the government’s major health care programs: Medicare, Medicaid, the Children’s Health Insurance Program, and the subsidies for health insurance purchased through the exchanges created under the ACA. CBO projects that, under current law, total outlays for those programs, net of offsetting receipts, would grow much faster than the overall economy, increasing from just below 5 percent of GDP now to 8 percent in 2039…. Spending for Social Security also would increase relative to the size of the economy, but by much less—from almost 5 percent of GDP in 2014 to more than 6 percent in 2039 and beyond….

Those projected increases in spending for Social Security and the government’s major health care programs are attributable primarily to three causes: the aging of the population, rising health care spending per beneficiary, and the ACA’s expansion of federal subsidies for health insurance.

[109] Article: “AP-CNBC Poll: Cut services to balance the budget.” By Alan Fram and Jennifer Agiesta. Associated Press, November 30, 2010. <archive.boston.com>

Eighty-five percent worry that growing red ink will harm future generations—the strongest expression of concern since AP polls began asking the question in 2008. Fifty-six percent think the shortfalls will spark a major economic crisis in the coming decade. …

Asked to choose between two paths lawmakers could follow to balance the budget, 59 percent in the AP-CNBC Poll preferred cutting unspecified government services while 30 percent picked unspecified tax increases.

[110] Article: “Experts Warn Debt May Threaten Economy.” By Robert Tanner. Associated Press, Aug 27, 2005. <ap.org>

The AP/Ipsos poll of 1,000 adults taken July 5–7 found that a sweeping majority—70 percent—worried about the size of the federal deficit either “some” or “a lot.”

But only 35 percent were willing to cut government spending and experience a drop in services to balance the budget. Even fewer—18 percent—were willing to raise taxes to keep current services. Just 1 percent wanted to both raise taxes and cut spending. The poll has a margin of error of 3 percentage points.

[111] “The Tea Is Cooling: The First Session of the 113th Congress. Policy Paper No. 173. BillTally Report 113-2.” National Taxpayers Union Foundation, July 10, 2014. <www.ntu.org>

Page 2: “During the First Session of the 113th Congress, Representatives authored 496 spending bills and 112 savings bills. Senators drafted 332 increase bills and 56 savings bills. While the number of increases was the lowest seen since the 105th Congress, this is also the first time in several years that there were fewer cut bills introduced compared to the preceding Congress.”

[112] Appendix C: “BillTally Methodology Rules.” National Taxpayers Union Foundation. Accessed May 18, 2015 at <www.ntu.org>

Pages i–ii:

In cases where a Member cosponsors the same spending in more than one bill (e.g., cosponsored more than one universal health care bill), the same spending is offset and thus is not counted twice toward the Member’s total. …

Inclusions

In estimating the cost of reauthorization and appropriation bills, NTUF [National Taxpayers Union Foundation] counts only the net increase or decrease in cost over the prior year’s authorization or appropriation.

Page iv:

Sources of Cost Estimates

The estimates contained in the BillTally study are generally obtained from sources outside of NTUF. Where there is more than one estimate available for a given bill, NTUF uses the most credible source. Where NTUF obtains estimates from more than one equally credible source, NTUF uses the least optimistic (largest increase/smallest reduction) estimate. In cases where cost estimates are not readily available from any outside source, NTUF will attempt to calculate an estimate (with the assistance of the sponsor where possible). Generally, these estimates prove to be low compared to the actual cost of the program.

Page vi:

Accuracy

The scope and nature of the BillTally cost survey make total precision impossible. To maximize accuracy and ensure fairness, NTUF provides Members of Congress with a significant review period to comment confidentially on the accuracy of their own reports. In response to these comments, NTUF makes appropriate changes to the BillTally database. To the extent that more up-to-date information comes to light, it will be reflected in subsequent reports. However, the comprehensive nature of the database makes it unlikely that errors with respect to individual bills will alter the general findings of this study.

[113] “The Tea Is Cooling: The First Session of the 113th Congress. Policy Paper No. 173. BillTally Report 113-2.” National Taxpayers Union Foundation, July 10, 2014. <www.ntu.org>

Pages 1–3:

This report summarizes data from NTUF’s [National Taxpayers Union Foundation’s] BillTally accounting software, which computes the cost or savings of all legislation introduced in the First Session of the 113th Congress that affects spending by at least $1 million. Agenda totals for individual lawmakers were developed by cross indexing their sponsorship and cosponsorship records with cost estimates for 608 House bills and 388 Senate bills under BillTally accounting rules that prevent the double counting of overlapping proposals. All sponsorship and cost data in this report were reviewed confidentially by each Congressional office prior to publication. Appendix A lists all Members alphabetically, Appendix B lists members by state delegation, and Appendix C gives a thorough explanation of the BillTally methodology. …

In the House, the average Democrat called for net spending hikes of $396.5 billion—nearly a hundred billion less than in the previous Congress and the lowest since the 107th Congress. This spending would have boosted FY 2013’s total outlays by 11 percent.

During the previous Congress, the typical House Republican proposed, on net, a record level of spending cuts: $130.2 billion. In this current Congress, the amount of cuts receded by over a third, to $82.6 billion. Relative to FY 2013 total outlays, this would have reduced spending by just over 2 percent.

As recently as the 111th Congress (2009), the average Senate Democrat supported legislation that would have increased total spending by $133.7 billion (which would have represented a 4 percent increase in total budgetary outlays for that year). In this Congress their average net agenda amounted to $18.3 billion in new spending, which would grow the budget by one half of a percentage point. This marks the Senate Democrats’ lowest recorded net spending agenda since the 104th Congress.

As in the previous Congress, the average Senate Republican was a net cutter, but called for a smaller level of reductions. The result was a net agenda that went from -$238.7 billion to -$159.1 billion (both net cuts). That amount would have shaved FY 2013 total outlays by 4.6 percent. …

A Senator’s or Representative’s record of authored and sponsored bills can be viewed as his or her legislative “wish list,” free from the pressure of party leaders that normally comes with the voting process. By tabulating the cost and/or savings of each Member’s agenda, taxpayers can gain a better understanding of the policy interests as well as the guiding budgetary philosophies of their elected representatives.

Pages 8–10:

Table 3. House Sponsorship of Legislation in the First Sessions of the Past Twelve Congresses by Party (Dollar Amounts in Millions) … Democrats … 113th Congress … Proposed Increases [=] $406,795 … Proposed Cuts [=] ($10,311) … Net Agendas [=] $396,483 … Percent Change in Fiscal Year Budget Outlays [=] 11.48 … Republicans … 113th Congress … Proposed Increases [=] $8,633 … Proposed Cuts [=] ($91,280) … Net Agendas [=] ($82,647) … Percent Change in Fiscal Year Budget Outlays [=] -2.39

Table 4. Senate Sponsorship of Legislation in the First Sessions of the Past Twelve Congresses by Party (Dollar Amounts in Millions) … Democrats … 113th Congress … Proposed Increases [=] $21,530 … Proposed Cuts [=] ($3,233) … Net Agendas [=] $18,296 … Percent Change in Fiscal Year Budget Outlays [=] 0.53 … Republicans … 113th Congress … Proposed Increases [=] $5,792 … Proposed Cuts [=] ($164,895) … Net Agendas [=] ($159,103) … Percent Change in Fiscal Year Budget Outlays [=] -4.61

[114] “The Tea Is Cooling: The First Session of the 113th Congress. Policy Paper No. 173. BillTally Report 113-2.” National Taxpayers Union Foundation, July 10, 2014. <www.ntu.org>

Pages 8–10: “Table 3. House Sponsorship of Legislation in the First Sessions of the Past Twelve Congresses by Party (Dollar Amounts in Millions)” … “Table 4. Senate Sponsorship of Legislation in the First Sessions of the Past Twelve Congresses by Party (Dollar Amounts in Millions)”

[115] Speech: “Address of the President to Joint Sessions of Congress.” President George W. Bush, February 27, 2001. <georgewbush-whitehouse.archives.gov>

[116] Article: “$1.35 trillion tax cut becomes law.” By Kelly Wallace. CNN, June 7, 2001. <www.cnn.com>

“President George W. Bush signed into law Thursday the first major piece of legislation of his presidency, a $1.35 trillion tax cut over 10 years.”

[117] Calculated with data from the footnote above and:

a) Webpage: “The Debt to the Penny and Who Holds It.” Bureau of the Public Debt, United States Department of the Treasury. Accessed November 4, 2016 at <www.treasurydirect.gov>
“Total Public Debt Outstanding … 06/07/2001 [=] 5,672,373,164,658 … 01/20/2009 [=] 10,626,877,048,913”

b) Dataset: “Table 1.1.5. Gross Domestic Product.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised October 28, 2016. <www.bea.gov>
“Gross Domestic Product (billions $) … 2001 Q3 [=] 10,639.5 … 2009 Q1 [=] 14,383.9”

c) Webpage: “Calculate duration between two dates.” Accessed November 9, 2016 at <www.timeanddate.com>
“From and including: Thursday, June 7, 2001 … To, but and including: Tuesday, January 20, 2009 … It is 2785 days from the start date to the end date, end date included”

CALCULATIONS:

2,785 days / 365.25 days per year = 7.62 years
$5,672,373,164,658 debt on June 7, 2001 / $10,639,500,000,000 GDP in 2001Q3 = 53.3%
$10,626,877,048,913 debt on January 20, 2009 / $14,383,900,000,000 GDP in 2009Q1 = 73.9%
(73.9% - 53.3%) / 7.62 years = 2.70% per year

[118] Webpage: “Vetoes by President George W. Bush.” United States Senate. Accessed March 15, 2011 at <www.senate.gov>

Vetoes overridden:

H.R.2419: Food, Conservation, and Energy Act of 2008*

H.R.6124: Food, Conservation, and Energy Act of 2008*

H.R.6331: Medicare Improvement for Patients and Providers Act of 2008

H.R.1495: Water Resources Development Act of 2007

* NOTE: “The House and Senate passed H.R. 2419 over veto, enacting 14 of 15 farm bill titles into law. The trade title (title III) was inadvertently excluded from the enrolled bill. To remedy the situation, both chambers re-passed the farm bill conference agreement (including the trade title) as H.R. 6124, again over veto. H.R. 6124, in section 4, repealed Public Law 110-234 and amendments made by it, effective on the date of that Act’s enactment.” Webpage: “H.R.2419: Food, Conservation, and Energy Act of 2008.” Library of Congress. Accessed November 2, 2016 at <www.congress.gov>

[119] Calculated with data from:

a) Cost estimate: “H.R. 2419, Food, Conservation, and Energy Act of 2008.” Congressional Budget Office, May 13, 2008. <www.cbo.gov>
“Relative to CBO’s March 2008 baseline projections, we estimate that enacting H.R. 2419 would increase direct spending by about $3.6 billion over the 2008-2018 period, assuming that the legislation would remain in effect throughout that period. JCT and CBO estimate that revenues would increase under the legislation by $0.7 billion over the same period. On balance, those changes would produce net costs (increases in deficits or reductions in surpluses) of about $2.9 billion over the 11-year period, relative to CBO’s most recent baseline projections.”

b) Cost estimate: “H.R. 6331, Medicare Improvements for Patients and Providers Act of 2008.” Congressional Budget Office, July 23, 2008. <www.cbo.gov>
“CBO estimates that enacting H.R. 6331 will increase direct spending by less than $50 million over the 2008-2013 period and by $0.3 billion over the 2008-2018 period. In addition, the Joint Committee on Taxation (JCT) estimates that the act will increase federal revenues by $0.2 billion over the 2008-2013 period and by $0.4 billion over the 2008-2018 period. In total, CBO estimates that the act will reduce deficits (or increase surpluses) by $0.1 billion over the 2008-2013 period and by less than $50 million over the 2008-2018 period.”

c) Cost estimate: “H.R. 1495: Water Resources Development Act of 2007.” Congressional Budget Office, September 24, 2007. <www.cbo.gov>
“Assuming appropriation of the necessary amounts, including adjustments for increases in anticipated inflation, CBO estimates that implementing this conference agreement for H.R. 1495 would result in discretionary outlays of about $11.2 billion over the 2008-2012 period and an additional $12.0 billion over the 10 years after 2012. (Some construction costs and operations and maintenance would continue or commence after those first 15 years.)”

CALCULATION: $2.9 billion (over 2008–2018 for H.R. 2419) + $0.1 billion (over 2008-2013 for H.R. 6331) + $11.2 billion (over 2008–2012 for H.R. 1495) + $12.0 billion (over 2013–2022) = 26.2 billion over 2008–2022

[120] “Remarks at the Fiscal Responsibility Summit.” By Barack Obama. Government Printing Office, February 23, 2009. <www.whitehouse.gov>

[121] Transcript: “Obama’s Remarks at Stimulus Bill Signing.” Washington Post, February 17, 2009. <www.washingtonpost.com>

“The American Recovery and Reinvestment Act that I will sign today, a plan that meets the principles I laid out in January, is the most sweeping economic recovery package in our history.”

[122] Calculated with data from the footnote above and:

a) Webpage: “The Debt to the Penny and Who Holds It.” Bureau of the Public Debt, United States Department of the Treasury. Accessed November 2, 2016 at <www.treasurydirect.gov>
“Total Public Debt Outstanding … 01/20/2009 [=] 10,626,877,048,913 … 9/30/2016 [=] 19,573,444,713,937”

c) Webpage: “Calculate duration between two dates.” Accessed November 2, 2016 at <www.timeanddate.com>
“From and including: Tuesday, January 20, 2009 … To and including: Friday, September 30, 2016 … It is 2811 days from the start date to the end date, end date included”

CALCULATIONS:

2,811 days / 365.25 days per year = 7.70 years
$10,626,877,048,913 debt on January 20, 2009 / $14,383,900,000,000 GDP in 2009 Q1 = 73.9%
$19,573,444,713,937 debt on September 30, 2016 / $18,651,200,000,000 GDP in 2016 Q3 = 104.9%
(104.9% - 73.9%) / 7.70 years = 4.0% per year

[123] Webpage: “Vetoes by President Barack H. Obama.” United States Senate. Accessed November 4, 2016 at <www.senate.gov>

[124] Cost estimate: “S. 2040: Justice Against Sponsors of Terrorism Act.” Congressional Budget Office, January 28, 2016. <www.cbo.gov>

“CBO estimates that implementing S. 2040 would have no significant effect on the federal budget.”

[125] “2010 Annual Report of the Board of Trustees of The Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds.” United States Social Security Administration, August 9, 2010. <www.ssa.gov>

Page 138: “The Federal Old-Age and Survivors Insurance (OASI) Trust Fund was established on January 1, 1940 as a separate account in the United States Treasury. The Federal Disability Insurance (DI) Trust Fund, another separate account in the United States Treasury, was established on August 1, 1956. All the financial operations of the OASI and DI programs are handled through these respective funds.”

[126] Report: “The Debt Limit: History and Recent Increases.” By D. Andrew Austin. Congressional Research Service, April 29, 2008. <fpc.state.gov>

Summary: “[D]ebt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases debt held by government accounts.”

[127] Webpage: “Debt versus Deficit: What’s the Difference?” United States Department of the Treasury, Bureau of the Public Debt, August 5, 2004. Last updated October 10, 2008. <www.treasurydirect.gov>

“Additionally, the Government Trust Funds are required by law to invest accumulated surpluses in Treasury securities. The Treasury securities issued to the public and to the Government Trust Funds (intragovernmental holdings) then become part of the total debt.”

[128] “2010 Annual Report of the Board of Trustees of The Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds.” Board of Trustees of the Federal OASDI Trust Funds, August 9, 2010. <www.ssa.gov>

Page 221: “Funds not withdrawn for current monthly or service benefits, the financial interchange, and administrative expenses are invested in interest-bearing Federal securities, as required by law; the interest earned is also deposited in the trust funds.”

[129] Report: “Federal Debt and Interest Costs.” Congressional Budget Office, December 2010. <www.cbo.gov>

Page IX:

Because those trust funds and other government accounts are part of the federal government, transactions between them and the Treasury are intragovernmental; that is, the government securities in those funds are an asset to the individual programs but a liability to the rest of the government. The resources needed to redeem the government securities in the trust funds and other accounts in some future year must be generated from taxes, income from other government sources, or borrowing by the government in that year.

[130] Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2011.” White House Office of Management and Budget. <www.whitehouse.gov>

Page 57: “The … Federal social insurance and employee retirement programs … own 93 percent of the debt held by Government accounts….”

[131] “The Debt to the Penny and Who Holds It.” United States Department of the Treasury, Bureau of the Public Debt. Accessed April 5, 2011 at <www.treasurydirect.gov>

NOTE: As shown in this source, the Bureau of the Public Debt breaks down the “Total Public Debt Outstanding” into “Debt Held by the Public” and “Intragovernmental Holdings.” Forthcoming facts define these terms.

[132] Report: “The Debt Limit: History and Recent Increases.” By D. Andrew Austin. Congressional Research Service, April 29, 2008. <fpc.state.gov>

Summary:

Total debt of the federal government can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases debt held by the public. Second, debt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases debt held by government accounts. The sum of debt held by the public and debt held by government accounts is the total federal debt.

[133] Webpage: “Frequently Asked Questions About the Public Debt.” United States Department of the Treasury, Bureau of the Public Debt. Last updated April 1, 2016. <www.treasurydirect.gov>

What is the Debt Held by the Public?

“The Debt Held by the Public is all federal debt held by individuals, corporations, state or local governments, Federal Reserve Banks, foreign governments, and other entities outside the United States Government less Federal Financing Bank securities. Types of securities held by the public include, but are not limited to, Treasury Bills, Notes, Bonds, TIPS, United States Savings Bonds, and State and Local Government Series securities.”

[134] Paper: “Government Debt.” By Douglas W. Elmendorf (Federal Reserve Board) and N. Gregory Mankiw (Harvard University and the National Bureau of Economic Research), January 1998. <www.federalreserve.gov>

Page 2: “The figure shows federal debt ‘held by the public,’ which includes debt held by the Federal Reserve System but excludes debt held by other parts of the federal government, such as the Social Security trust fund.”

[135] Report: “Federal Debt and Interest Costs.” Congressional Budget Office, December 2010. <www.cbo.gov>

Pages 13-14:

Ownership of Federal Debt Held by the Public …

A significant amount of federal debt is held by the Federal Reserve—the nation’s central bank and an independent entity within the government that is responsible for conducting monetary policy, among other activities.

[136] Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2011.” White House Office of Management and Budget. <www.whitehouse.gov>

Page 125: “The gross Federal debt is defined to consist of both the debt held by the public and the debt held by Government accounts. Nearly all the Federal debt has been issued by the Treasury and is sometimes called ‘public debt,’ but a small portion has been issued by other Government agencies and is called ‘agency debt.’ ”

[137] Report: “The Debt Limit: History and Recent Increases.” By D. Andrew Austin. Congressional Research Service, April 29, 2008. <fpc.state.gov>

[138] Testimony: “An Overview of Federal Debt.” By Paul L. Posner. United States General Accounting Office, June 24, 1998. <www.gao.gov>

Page 2: “[G]overnment held debt is expected to grow due to the large projected increases in trust fund surpluses invested in special Treasury securities.”

[139] Webpage: “Frequently Asked Questions About the Public Debt.” United States Department of the Treasury, Bureau of the Public Debt. Last updated April 1, 2016. <www.treasurydirect.gov>

What are Intragovernmental Holdings?

Intragovernmental Holdings are Government Account Series securities held by Government trust funds, revolving funds, and special funds; and Federal Financing Bank securities. A small amount of marketable securities are held by government accounts.

[140] Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2011.” White House Office of Management and Budget. <www.whitehouse.gov>

Page 56: “For the purposes of the Budget, ‘debt held by the public’ is defined as debt held by investors outside of the Federal Government, both domestic and foreign, including U.S. State and local governments and foreign governments. It also includes debt held by the Federal Reserve.”

[141] “2009 Financial Report of the United States Government.” U.S. Department of the Treasury, February 26, 2010. <www.fiscal.treasury.gov>

Page 4: “[T]he largest contributors to the Government’s net cost include … the interest paid on debt held by the public (i.e., publicly-held debt).”

[142] Report: “Monthly Statement of the Public Debt of the United States, September 30, 2016.” United States Department of the Treasury, Bureau of the Public Debt. <www.treasurydirect.gov>

	Millions $
Debt Held By the Public	14,173,424
Intragovernmental Holdings	5,400,021
Total	19,573,445

[143] United States Code Title 31, Subtitle III, Chapter 31, Subchapter II, Section 3123: “Payment of obligations and interest on the public debt.” Accessed April 7, 2011 at <www.law.cornell.edu>

Section (a): “The faith of the United States Government is pledged to pay, in legal tender, principal and interest on the obligations of the Government issued under this chapter.”

[144] Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2011.” White House Office of Management and Budget. <www.whitehouse.gov>

Page 57:

However, issuing debt to Government accounts does not have any of the credit market effects of borrowing from the public. It is an internal transaction of the Government, made between two accounts that are both within the Government itself. Issuing debt to a Government account is not a current transaction of the Government with the public; it is not financed by private saving and does not compete with the private sector for available funds in the credit market. While such issuance provides the account with assets—a binding claim against the Treasury—those assets are fully offset by the increased liability of the Treasury to pay the claims, which will ultimately be covered by taxation or borrowing. Similarly, the current interest earned by the Government account on its Treasury securities does not need to be financed by other resources. …

… For all these reasons, debt held by the public and debt net of financial assets are both better gauges of the effect of the budget on the credit markets than gross Federal debt.

[145] Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2010.” White House Office of Management and Budget. <www.whitehouse.gov>

Page 223: “Debt is the largest legally binding obligation of the Federal Government. At the end of 2008, the Government owed $5,803 billion of principal to the individuals and institutions who had loaned it the money to fund past deficits.”

NOTE: As proof that the statement above excludes the debt owed to federal entities, consider that at the end of fiscal year 2008 (September 30, 2008), the gross national debt was $10,025 billion, which consisted of $5,809 billion of publicly held debt and $4,216 billion of government-held debt. [“The Debt to the Penny and Who Holds It.” United States Department of the Treasury, Bureau of the Public Debt. Accessed April 4, 2011 at <www.treasurydirect.gov>]

[146] Report: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010 (Revised August 2010). <www.cbo.gov>

Page 13:

The most meaningful measure of federal debt for such projections is debt held by the public, which represents the amount that the government is borrowing in the financial markets (by issuing Treasury securities) to pay for federal operations and activities. That borrowing competes with other participants in the credit markets for financial resources and can crowd out private investment.¹⁴

¹⁴In contrast, debt held by trust funds and other government accounts—which, together with debt held by the public, make up gross federal debt—represents internal transactions of the government and thus has no effect on credit markets.

[147] “2008 Financial Report of the United States Government.” U.S. Department of the Treasury, 2008. <www.fiscal.treasury.gov>

Page 26: “Intra-governmental debt is not shown on the balance sheet because claims of one part of the Government against another are eliminated for consolidation purposes (see Financial Statement Note 11).”

[148] “2010 Annual Report of the Board of Trustees of The Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds.” United States Social Security Administration, August 9, 2010. <www.ssa.gov>

Page 141: “Another source of income to the trust funds is interest received on investments held by the trust funds. That portion of each trust fund that is not required to meet the current cost of benefits and administration is invested, on a daily basis, primarily in interest-bearing obligations of the U.S. Government (including special public-debt obligations described below).”

Page 2: “Total income was $807 billion ($689 billion in tax revenue and $118 billion in interest earnings), and assets held in special issue U.S. Treasury securities grew to $2.5 trillion.”

[149] Table VI.F7: “Operations of the Combined OASI and DI Trust Funds, in Constant 2010 Dollars, Calendar Years 2010-85 [In billions].” United States Social Security Administration, Office of the Chief Actuary. Last reviewed or modified August 5, 2010. <www.ssa.gov>

NOTES:

The “combined OASI and DI Trust Funds” comprise the “Social Security Trust Fund.”
Just Facts has conducted extensive research on Social Security, and all of the Social Security Administration’s solvency projections include the monies owed to the program by the federal government.

[150] “Status of the Social Security and Medicare Programs: A Summary of the 2000 Annual Reports.” Social Security and Medicare Boards of Trustees, April 2000. <www.ssa.gov>

Page 1: “Trust fund operations, in billions of dollars … HI [Hospital Insurance, a.k.a., Medicare Part A] … Assets (end of 1999) [=] 44.8”

[151] “Prosperity for America’s Families: The Gore Lieberman Economic Plan.” Gore/Lieberman, Inc., September 2000. <www.cnn.com>

NOTE: Just Fact searched this document from cover to cover three times while examining all usages of the word “debt.” In all such instances, the debt owed to public entities is not mentioned, acknowledged, or included in any of the data. This document uses the phrases “publicly held debt” and “debt held by the public” a total of five times. On more than 150 other occasions, the document uses terms such as “debt,” “federal debt,” and “national debt,” when in fact, it is actually referring only to the debt owed to non-federal entities in many of these cases.

[152] “Prosperity for America’s Families: The Gore Lieberman Economic Plan.” Gore/Lieberman, Inc., September 2000. <www.cnn.com>

Page 12: “But with Social Security projected to become insolvent in 2037* and Medicare in 2025,† they face looming challenges that are just around the corner.”

NOTES:

* The Social Security program required the money owed to it by the federal government in order to remain solvent until the date given in the Gore-Liebermann proposal. In 2000, Social Security tax revenues were “expected to exceed expenditures until 2015,” but the program was projected to remain solvent until 2037 by collecting on the principal and interest owed by the federal government to the Social Security trust fund. [“2000 Annual Report of the Board of Trustees of The Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds.” Board of Trustees of the Federal OASDI Trust Funds, March 30, 2000. <www.ssa.gov>
Pages 3-4: “Under the intermediate assumptions, OASDI [Social Security] tax revenues are estimated to exceed expenditures until 2015 (1 year later than estimated in last year’s report). Total income (including interest earnings on the trust funds) will exceed expenditures through 2024. It is estimated that beginning in 2025, trust fund assets would have to be redeemed to cover the difference until the assets of the combined funds are exhausted in 2037, 3 years later than estimated in last year’s report.”]
† The same applies here. The Medicare program required the money owed to it by the federal government in order to remain solvent until the date given in the Gore-Liebermann proposal. [“Status of the Social Security and Medicare Programs: A Summary of the 2000 Annual Reports.” Social Security and Medicare Boards of Trustees, April 2000. <www.ssa.gov>
Page 8: “Key Dates For The Trust Funds … HI [i.e., Hospital Insurance or Medicare Part A] … First year outgo exceeds income including interest [=] 2017 … Year trust fund assets are exhausted [=] 2025”]
For more details about how the Gore Lieberman Economic Plan misleads with regard to the national debt, visit Just Facts’ essay, “The Impact of Social Security on the National Debt.”

[153] United States Code Title 31, Subtitle II, Chapter 11, Section 1102: “Fiscal year.” Accessed April 7, 2011 at <www.law.cornell.edu>

“The fiscal year of the Treasury begins on October 1 of each year and ends on September 30 of the following year.”

[154] “The Debt to the Penny and Who Holds It.” United States Department of the Treasury, Bureau of the Public Debt. Accessed April 5, 2011 at <www.treasurydirect.gov>

October 1, 2009: $11,920,519,164,319

September 30, 2010: $13,561,623,030,892

CALCULATION: $13,561,623,030,892 - $11,920,519,164,319 = $1,641,103,866,573 increase in national debt during fiscal year 2010

NOTE: Using a different methodology, the White House Office of Management and Budget arrives at a very similar figure of $1,653 billion. [Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2012.” White House Office of Management and Budget. <www.whitehouse.gov>
Page 61: “In [fiscal year] 2010 the … gross Federal debt increased by $1,653 billion….”]

[155] “Economic Report of the President (together with the Annual Report
of the Council of Economic Advisers).” White House, February 2011. <www.whitehouse.gov>

Page 40: “The Federal budget deficit on September 30, the end of fiscal year 2010, was $1.29 trillion, down about 8.5 percent from $1.41 trillion the year before.”

[156] Article: “Obama’s budget deficit: Still $1.3 trillion.” By Richard Wolf. USA Today, October 15, 2010. <content.usatoday.com>

“The $1.29 trillion is the official U.S. budget deficit for the 2010 fiscal year, which ended two weeks ago.”

[157] Article: “Fiscal 2010 deficit thins to $1.29 trillion.” By Donna Smith. Reuters, October 16, 2010. <www.reuters.com>

[158] Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2012.” White House Office of Management and Budget. <www.whitehouse.gov>

Page 135: “Unified budget includes receipts from all sources and outlays for all programs of the Federal Government, including both on- and off-budget programs.”

Page 137: “The Federal Government has used the unified budget concept as the foundation for its budgetary analysis and presentation since the 1969 Budget….”

Page 64: “Debt held by Government accounts.—The amount of Federal debt issued to Government accounts depends largely on the surpluses of the trust funds, both on-budget and off-budget, which owned 92 percent of the total Federal debt held by Government accounts at the end of 2010. … The remainder of debt issued to Government accounts is owned by a number of special funds and revolving funds.”

Page 73: “The trust fund surplus reduces the total budget deficit or increases the total budget surplus….”

Pages 68-69 contain a listing of all federal programs to which money is owed: “Debt Held by Government Accounts (in Millions of Dollars) … Investment or Disinvestment … 2010 Actual [=] 178,723”

NOTE: To understand how this all fits together, see the calculation shown two footnotes below.

[159] Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2012.” White House Office of Management and Budget. <www.whitehouse.gov>

Page 139:

To illustrate the budgetary and non-budgetary components of a credit program, consider a portfolio of new direct loans made to a cohort of college students. To encourage higher education, the Government offers loans at a lower cost than private lenders. Students agree to repay the loans according to the terms of their promissory notes. The loan terms may include lower interest rates or longer repayment periods than would be available from private lenders. Some of the students are likely to become delinquent or default on their loans, leading to Government losses to the extent the Government is unable to recover the full amount owed by the students. … In other words, the subsidy cost is the difference in present value between the amount disbursed by the Government and the estimated value of the loan assets the Government receives in return. Because the loan assets have value, the remainder of the transaction (beyond the amount recorded as a subsidy) is simply an exchange of financial assets of equal value and does not result in a cost to the Government.

Page 129:

Borrowing is not exactly equal to the deficit, and debt repayment is not exactly equal to the surplus, because of the other means of financing such as those discussed in this section. …

The budget treats borrowing and debt repayment as a means of financing, not as receipts and outlays. …

In 2010, the Government borrowed $1,474 billion from the public, bringing debt held by the public to $9,019 billion. This borrowing financed the $1,293 billion deficit in that year as well as the net effect of other means of financing, such as changes in cash balances and other accounts discussed below. …

The budget records the net cash flows of credit programs in credit financing accounts. These accounts include the transactions for direct loan and loan guarantee programs, as well as the equity purchase programs under TARP….

Page 63: “In 2010 the deficit was $1,293 billion while these other factors—primarily the net disbursements of credit financing accounts—increased the need to borrow by $181 billion.”

NOTE: To understand how this all fits together, see the calculation shown in the next footnote.

[160] The following calculation reconciles the reported budget deficit for fiscal year 2010 and the increase in national debt during this period. All data are from the footnotes above.

$1,293 billion “deficit” + $181 billion “other means of financing” + $179 billion increase in “debt held by government accounts” = $1,653

This figure of $1,653 is exactly the same as that cited in the source for all of the data used in this calculation. [Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2012.” White House Office of Management and Budget. <www.whitehouse.gov>
Page 61: “In [fiscal year] 2010 the … gross Federal debt increased by $1,653 billion….”]

[161] Webpage: “About PolitiFact.” Accessed November 4, 2016 at <www.politifact.com>

PolitiFact is a project of the Tampa Bay Times and its partners to help you find the truth in politics.

Every day, reporters and researchers from PolitiFact and its partner news organization examine statements by members of Congress, state legislators, governors, mayors, the president, cabinet secretaries, lobbyists, people who testify before Congress and anyone else who speaks up in American politics. We research their statements and then rate the accuracy on our Truth-O-Meter – True, Mostly True, Half True, Mostly False and False. The most ridiculous falsehoods get our lowest rating, Pants on Fire.

[162] Fact check of Rahm Emanuel’s statement: “We’ve added, in the last eight years, $4 trillion of debt to the nation’s obligations.” PolitiFact, January 18, 2009. <www.politifact.com>

At the end of the Clinton administration, there were several years of budget surpluses. …

When Bush took office, the national debt was $5.73 trillion. When he left, it was $10.7 trillion. …

[163] See the statement above. Also, per the source below, the national debt was $5.73 trillion on Bush’s inauguration date of January 20, 2001.

[164] Webpage: “The Debt to the Penny and Who Holds It.” United States Department of the Treasury, Bureau of the Public Debt. Accessed April 9, 2011 at <www.treasurydirect.gov>

NOTE: In cases where data for the exact date is not available, the closest date is used (never more than four days away).

Year	National debt (in billions $) at start of fiscal year (October 1)
1993	4,406
1994	4,693
1995	4,988
1996	5,235
1997	5,421
1998	5,541
1999	5,653
2000	5,662
2001	5,806

NOTE: The facts contained in this footnote pertain to the differing accounting criteria that PolitiFact applied to Bush and Clinton. Facts regarding the actual figures and the propriety of linking the national debt solely to the president are presented further below.

[165] Report: “Monthly Statement of the Public Debt of the United States.” U.S. Bureau of the Public Debt, September 30, 2016. <www.treasurydirect.gov>

[166] Paper: “Government Debt.” By Douglas W. Elmendorf (Federal Reserve Board) and N. Gregory Mankiw (Harvard University and the National Bureau of Economic Research), January 1998. <www.federalreserve.gov>

Page 2: “The figure shows federal debt ‘held by the public,’ which includes debt held by the Federal Reserve System….”

[167] Calculated with data from:

a) Report: “Treasury Bulletin.” U.S. Department of the Treasury, Financial Management Service, September 2016. <www.fiscal.treasury.gov>
Page 42: “Table OFS-2.—Estimated Ownership of U.S. Treasury Securities”

b) Webpage: “The Debt to the Penny and Who Holds It.” Bureau of the Public Debt, United States Department of the Treasury. Accessed November 4, 2016 at <www.treasurydirect.gov>
“12/31/2015 … Debt Held by the Public [=] $13,672,522,257,291.59 … Intragovernmental Holdings [=] $5,249,656,752,129.30 … Total Public Debt Outstanding [=] $18,922,179,009,420.89”

c) Report: “Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks.” U.S. Federal Reserve, December 31, 2015. <www.federalreserve.gov>
“Dec 30, 2015 … U.S. Treasury securities [=] 2,461,554 [millions $] … Federal agency debt securities [=] 32,944”

NOTE: An Excel file containing the data and calculations is available upon request.

[168] Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2017.” White House Office of Management and Budget. <www.whitehouse.gov>

Page 47.

[169] Calculated with the dataset: “Major Foreign Holders of Treasury Securities Holdings at End of Period (in billions of dollars).” U.S. Department of the Treasury, October 18, 2016. <ticdata.treasury.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[170] Article: “Experts Warn Debt May Threaten Economy.” By Robert Tanner. Associated Press, Aug 27, 2005. <ap.org>

“In a very real sense, the U.S. economy is dependent on the central banks of Japan, China and other nations to invest in U.S. Treasuries and keep American interest rates down. The low rates here keep American consumers buying imported goods.”

[171] Report: “China’s Holdings of U.S. Securities: Implications for the U.S. Economy.” By Wayne M. Morrison and Marc Labonte. Congressional Research Service, January 9, 2008. <fpc.state.gov>

Page 9:

All else equal, Chinese government purchases of U.S. assets increases the demand for U.S. assets, which reduces U.S. interest rates.

If China attempted to reduce its holdings of U.S. securities, they would be sold to other investors (foreign and domestic), who would presumably require higher interest rates than those prevailing today to be enticed to buy them. … All else equal, the reduction in Chinese Treasury holdings would cause the overall foreign demand for U.S. assets to fall, and this would cause the dollar to depreciate. … The magnitude of these effects would depend on how many U.S. securities China sold; modest reductions would have negligible effects on the economy given the vastness of U.S. financial markets.

[172] Report: “China’s Holdings of U.S. Securities: Implications for the U.S. Economy.” By Wayne M. Morrison and Marc Labonte. Congressional Research Service, January 9, 2008. <fpc.state.gov>

Pages 10-11:

A potentially serious short-term problem would emerge if China decided to suddenly reduce their liquid U.S. financial assets significantly. The effect could be compounded if this action triggered a more general financial reaction (or panic), in which all foreigners responded by reducing their holdings of U.S. assets. The initial effect could be a sudden and large depreciation in the value of the dollar, as the supply of dollars on the foreign exchange market increased, and a sudden and large increase in U.S. interest rates, as an important funding source for investment and the budget deficit was withdrawn from the financial markets. The dollar depreciation would not cause a recession since it would ultimately lead to a trade surplus (or smaller deficit), which expands aggregate demand.²⁸ (Empirical evidence suggests that the full effects of a change in the exchange rate on traded goods takes time, so the dollar may have to “overshoot” its eventual depreciation level in order to achieve a significant adjustment in trade flows in the short run.)²⁹ However, a sudden increase in interest rates could swamp the trade effects and cause a recession. Large increases in interest rates could cause problems for the U.S. economy, as these increases reduce the market value of debt securities, cause prices on the stock market to fall, undermine efficient financial intermediation, and jeopardize the solvency of various debtors and creditors. Resources may not be able to shift quickly enough from interest-sensitive sectors to export sectors to make this transition fluid. The Federal Reserve could mitigate the interest rate spike by reducing short-term interest rates, although this reduction would influence long-term rates only indirectly, and could worsen the dollar depreciation and increase inflation.

Some U.S. officials have expressed doubts that a Chinese sell-off of U.S. securities would cause liquidity problems or have much of an impact on the U.S. economy. In January 2007, Secretary of Treasury Henry Paulson was asked at a Senate Banking Committee hearing whether or not he was concerned over China’s large ownership of U.S. debt. Paulson stated that the daily volume of trade in Treasury securities was larger than China’s total Treasury securities holdings and concluded: “given the size of our debt outstanding and the way it trades and the diversity and so on, that’s not at the top of the list.”

²⁸ A sharp decline in the value of the dollar would also reduce living standards, all else equal, because it would raise the price of imports to households. This effect, which is referred to as a decline in the terms of trade, would not be recorded directly in GDP, however.

²⁹ Since the decline in the dollar would raise import prices, this could temporarily increase inflationary pressures. The effect would likely be modest, however, since imports are small as a share of GDP and import prices would only gradually rise in response to the fall in the dollar.

[173] Report: “China’s Holdings of U.S. Securities: Implications for the U.S. Economy.” By Wayne M. Morrison and Marc Labonte. Congressional Research Service, January 9, 2008. <fpc.state.gov>

Pages 11-12.

[174] Article: “Clinton wraps Asia trip by asking China to buy U.S. debt.” Agence France-Presse, February 22, 2009. <www.breitbart.com>

[175] Article: “China threatens ‘nuclear option’ of dollar sales.” By Ambrose Evans-Pritchard. London Telegraph, August 8, 2007. <www.telegraph.co.uk>

[176] Article: “Chinese see U.S. debt as weapon in Taiwan dispute.” By Bill Gertz. Washington Times, February 10, 2010. <washingtontimes.com>

[177] Article: “Beijing vows not to use U.S. debt for political gain.” Washington Times, March 10, 2010. <www.washingtontimes.com>

[178] Calculated with data from:

a) “Monthly Statement of the Public Debt of the United States.” U.S. Bureau of the Public Debt, September 30, 2016. <www.treasurydirect.gov>
“Table III - Detail of Treasury Securities Outstanding, September 30, 2016 … Government Account Series - Intragovernmental Holdings”

b) Report: “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2017.” White House Office of Management and Budget. <www.whitehouse.gov>
Page 42: “The Government account holdings of Federal securities are concentrated among a few funds: the Social Security Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) trust funds; the Medicare Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) trust funds; and four Federal employee retirement funds. These Federal employee retirement funds include two trust funds, the Military Retirement Fund and the Civil Service Retirement and Disability Fund, and two special funds, the uniformed services Medicare- Eligible Retiree Health Care Fund (MERHCF) and the Postal Service Retiree Health Benefits Fund (PSRHBF).”

NOTE: An Excel file containing the data and calculations is available upon request.

[179] Article: “New Cuts Detailed in Agreement for $38 Billion in Reductions.” By Lisa Mascaro. Los Angeles Times, April 12, 2011. <www.latimes.com>

[180] Article: “Congress Sends Budget Cut Bill to Obama.” By Andrew Taylor, Associated Press, Apr 14, 2011. <www.northjersey.com>

[181] Article: “Budget Deal to Cut $38 Billion Averts Shutdown.” By Carl Hulse. New York Times, April 8, 2011. <www.nytimes.com>

[182] “Cost estimate for H.R. 1473, the Department of Defense and Full-Year Continuing Appropriations Act of 2011 (Additional Information).” Congressional Budget Office, April 14, 2011. <www.cbo.gov>

The estimated range provided above is lower than the estimated net change in budget authority (the authority for federal agencies to enter into obligations) for 2011 that would result from enactment of H.R. 1473 [i.e., “the $38 billion budget cut”], compared with earlier continuing resolutions. For example, Public Law 111-322, which funded the government’s operations through March 4, provided (on an annualized basis) budget authority of $1,087.5 billion for nonemergency appropriations for fiscal year 2011—an amount that is relatively close to the funding level for 2010.* In contrast, H.R. 1473 would provide net new budget authority of $1,049.8 billion, producing a difference of $37.7 billion. That difference reflects reductions in budget authority for BOTH regularly appropriated discretionary programs and some mandatory programs.

NOTES:

To help sort through the intricacies of this matter, Just Facts queried the legislative director of a U.S. congressman to identify the proper baselines for these cuts (referenced in this footnote and the one below). Just Facts then double-checked these figures in various ways to ensure continuity.
* This figure is $1,089.7 billion, which equates to a cut of $39.9 billion relative to 2010.† [Document: “Subcommittee Allocations for FY 11 Continuing Resolution - 302(b)s.” U.S. House of Representatives, Committee on Appropriations, February, 3, 2011. <appropriations.house.gov>
“The following table outlines the spending limits and cuts announced by Chairman Rogers for each Appropriations Subcommittee for the CR [continuing resolution] … Regular [i.e., nonemergency] Discretionary only (Budget authority; in millions) … Total Fiscal Year 2010 Enacted [=] 1,089,671”

† CALCULATION: $1,089.7 billion (enacted budget authority during 2010) - $1,049.8 billion (budget authority under the 2011 budget cut) = $39.9 billion differential

[183] Calculated with data from:

a) “Fiscal Year 2012 Historical Tables, Budget of the U.S. Government.” White House Office of Management and Budget, 2010. <www.whitehouse.gov>
Page 21: “Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits, 1789–2016”
Page 211: “Table 10.1—Gross Domestic Product and Deflators used in the Historical Tables, 1940–2016”

b) Report: “An Analysis of the President’s Budgetary Proposals for Fiscal Year 2012.” Congressional Budget Office. April 2011. <www.cbo.gov>
Page 2: “Table 1-1. Comparison of Projected Revenues, Outlays, and Deficits Under CBO’s March 2011 Baseline and CBO’s Estimate of the President’s Budget (Billions of dollars) … 2011 … Revenues [=] 2,230 … Outlays [=] 3,629 … Total Deficit = -1,399.”
Page 4: “Table 1-2. CBO’s Estimate of the President’s Budget … Gross Domestic Product … 2011 [=] 15,034 [billions $]”

NOTE: An Excel file containing the data and calculations is available upon request.

[184] Same as above.

[185] Same as above.

[186] Transcript: “Fareed Zakaria GPS.” CNN, February 14, 2010. <transcripts.cnn.com>

NOTE: Credit for bringing this fact to our attention belongs to NewsBusters [“Fareed Zakaria: Bush Tax Cuts Are Largest Cause of Budget Deficit.” By Noel Sheppard. February 14, 2010. <www.newsbusters.org>].

[187] Letter: “From Peter R. Orszag (CBO Director) to John M. Spratt, Jr. (House Budget Committee Chairman).” Congressional Budget Office, July 20, 2007. <www.cbo.gov>

JCT [the Joint Committee on Taxation] estimated the revenue effects of EGTRRA and JGTRRA at the time the acts were considered in 2001 and 2003, respectively. Taken together, those estimates imply a loss of revenues totaling $165 billion in 2007. As you requested, CBO has calculated the debt-service costs that would result in 2007 from the legislation under an assumption that they were financed in full by additional debt rather than offset elsewhere in the budget. On that basis, CBO estimates that the revenue loss in JCT’s projections would lead to additional debt-service costs of $46 billion in 2007, for a total budgetary cost of $211 billion. On the same basis, the agency estimates the total budgetary costs, including interest, for 2008 through 2011 to be $233 billion, $245 billion, $269 billion, and $215 billion, respectively.

NOTES:

Per the Bureau of Labor Statistics’ “CPI Inflation Calculator,” $269 billion in 2007 had the same buying power as $282.90 in 2010. [Accessed April 13, 2011 at <www.bls.gov>]
The projections in this letter are likely overestimates given the ensuing recession’s widespread negative effects on tax revenues.

[188] Just Facts has conducted a search of all federal agencies for this data and found that the previous footnote provides the most current federal source for this data. On April 11, 2011, Just Facts sent correspondence to the Congressional Budget Office, White House Office of Management and Budget, and Joint Committee on Taxation asking if they had “published research that quantifies the actual (not projected) revenue effects of EGTRRA and JGTRRA during 2010.” These acronyms collectively refer to the “Bush tax cuts” and stand for the “Economic Growth and Taxpayer Relief Act of 2001” and the “Jobs and Growth Tax Relief Reconciliation Act of 2003.” The Joint Committee on Taxation and White House Office of Management and Budget replied negatively. The Congressional Budget Office did not respond. Just Facts located several estimates by nonprofit organizations but found the methodologies questionable. In 2016, Just Facts conducted another search of CBO and found nothing later than the previous footnote.

[189] Calculated with data from the footnote above and “Analytical Perspectives: Budget of the U.S. Government, Fiscal Year 2012.” White House Office of Management and Budget. <www.whitehouse.gov>

Page 120: “Table 12–1. Totals For the Budget and the Federal Government (In billions of dollars) … 2010 Actual … Outlays (Unified) [=] 3,456 … Deficit (Unified) [=] 1,293.”

CALCULATIONS:

$282.90 billion reduced revenue from the Bush tax cuts / $1,293 reported budget deficit = 21.9%
$282.90 billion reduced revenue from the Bush tax cuts / $3,456 budget outlays = 8.2%

[190] Report: “The 2014 Long-Term Budget Outlook.” Congressional Budget Office, July 15, 2014. <www.cbo.gov>

Page 56: “CBO’s baseline and extended baseline are meant to be benchmarks for measuring the budgetary effects of legislation, so they mostly reflect the assumption that current laws remain unchanged.”

Page 66:

Most parameters of the tax code are not indexed for real income growth, and some are not indexed for inflation. As a result, the personal exemption, the standard deduction, the amount of the child tax credit, and the thresholds for taxing income at different rates all would tend to decline relative to income over time under current law. One consequence is that, under the extended baseline, average federal tax rates would increase in the long run.

NOTE: For more details about this phenomenon, which is known as “bracket creep, see Just Facts’ research on taxes.

[191] Report: “The Budget and Economic Outlook: An Update.” Congressional Budget Office, August 2011. <www.cbo.gov>

Page 85:

Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA): This legislation (Public Law 107-16) significantly reduced tax liabilities (the amount of tax owed) between 2001 and 2010 by cutting individual income tax rates, increasing the child tax credit, repealing estate taxes, raising deductions for married couples who file joint returns, increasing tax benefits for pensions and individual retirement accounts, and creating additional tax benefits for education. EGTRRA phased in many of those changes, including some that did not become fully effective until 2010. For legislation that modified or extended provisions of EGTRRA, see Jobs and Growth Tax Relief Reconciliation Act of 2003 and Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.

Page 87:

Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA): This legislation (Public Law 108-27) reduced taxes by advancing to 2003 the effective date of several tax reductions previously enacted in the Economic Growth and Tax Relief Reconciliation Act of 2001. JGTRRA also increased the exemption amount for the individual alternative minimum tax, reduced the tax rates for income from dividends and capital gains, and expanded the portion of capital purchases that businesses could immediately deduct through 2004. Those tax provisions were set to expire on various dates. (The law also provided roughly $20 billion for fiscal relief to states.)

[192] Calculated with the dataset: “Table 3.2. Federal Government Current Receipts and Expenditures.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised July 29, 2016. <www.bea.gov>

NOTES:

This dataset goes back to 1929. That federal revenues never exceeded 20% of GDP prior to 1929 is ascertained from a 2010 Congressional Budget Office report that (1) projected federal revenues (as a portion of GDP) in 2020 will exceed those in 2000 by one tenth of a percentage point, and (2) makes the following statement: “Revenues would also rise considerably under current law; by the 2020s, they would reach higher levels relative to the size of the economy than ever recorded in the nation’s history.” [Report: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010 (Revised August 2010). <www.cbo.gov>]
An Excel file containing the data and calculations is available upon request.

[193] Report: “Major Tax Issues in the 111th Congress.” By Jane G. Gravelle and Pamela J. Jackson. Congressional Research Service, May 6, 2009. <royce.house.gov>

Page 2: “Prior to the recent downturns, the economy performed relatively strongly through the first half of 2007, yielding 22 consecutive quarters of real growth.”

NOTE: The federal government often revises its official figures for GDP. Per the next footnote, real GDP growth was positive for 25 consecutive quarters from 2001 Q4 through 2007 Q4. This however, may change with future revisions.

[194] Calculated with the dataset: “Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised July 29, 2016. <www.bea.gov>

NOTE: An Excel file containing the data and calculations is available upon request.

[195] Calculated with data from the report: “Updated Budget Projections: 2016 to 2026.” Congressional Budget Office, March 24, 2016. <www.cbo.gov>

Supplementary dataset: “Historical Budget Data—March 2016.” <www.cbo.gov>
“Table 2. Revenues, by Major Source, Since 1966 (In Billions of Dollars)”

NOTE: An Excel file containing the data and calculations is available upon request.

[196] Commentary: “The graph all budget discussions should start with.” By Ezra Klein. Washington Post, April 11, 2011. <www.washingtonpost.com>

[197] Examine the graph available via the hyperlink in the footnote above.

[198] Dataset: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010. <www.cbo.gov>

Tab: “Summary Extended-Baseline”

[199] Commentary: “The graph all budget discussions should start with.” By Ezra Klein. Washington Post, April 11, 2011. <www.washingtonpost.com>

NOTE: The graph shows revenues and expenditures, but the vertical axis is unlabeled. Thus, one cannot see that the data represents percentages of GDP, while the text of the piece provides a misleading impression for the scale of the tax increases.

[200] Report: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010 (Revised August 2010). <www.cbo.gov>

Page 6: “Revenues would also rise considerably under current law; by the 2020s, they would reach higher levels relative to the size of the economy than ever recorded in the nation’s history. … First, ongoing increases in real income would push taxpayers into higher tax brackets. Second, ongoing inflation, even if modest, would cause more people to owe tax under the AMT [Alternative Minimum Tax]. And third, the recently enacted excise tax on certain high-premium health insurance plans would have a growing effect on revenues.”

Page 13: “[T]he effective marginal tax rate on labor income would rise from 29 percent today to about 38 percent in 2035. … All told, average tax rates (taxes as a share of income) would rise considerably, and people at various points in the income scale would pay a very different percentage of their income in taxes than people at the same points do today.”

Page 60: “Estate and gift taxes are projected to increase as a share of GDP following the reinstatement of the estate tax after 2010. The dollar amount of an estate that is exempt from taxation will remain fixed at $1 million starting in 2011 and not be indexed for inflation thereafter; as a result, a greater share of wealth would become subject to the tax over time.”

Page 64: “Over the coming decades, the cumulative effect of rising prices will sharply reduce the value of some parameters of the tax system that are not indexed for inflation. Under the extended-baseline scenario, the estate tax exemption, which will be $1 million in 2011 under current law, would be worth about $600,000 (in 2010 dollars) by 2035….”

[201] Calculated with data from:

a) Report: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010 (Revised August 2010). <www.cbo.gov>
Page 55: “Over the past 40 years, total federal revenues have ranged from 14.8 percent to 20.6 percent of GDP, averaging 18.1 percent, with no evident trend over time….”
NOTE: Using data from the source cited below, Just Facts updated the figure for average federal revenues over the past 40 years to reflect 40-year backward look from 2011 instead of 2010. This changes the figure from 18.1% to 18.0%.

b) Dataset: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010. <www.cbo.gov>
Figure A-1: “Revenues and Primary Spending, by Category, Under CBO’s Long-Term Budget Scenarios, Through 2084 (percentage of gross domestic product). … Extended-Baseline Scenario”

NOTE: An Excel file containing the data and calculations is available upon request.

[202] Calculated with the dataset: “The Long-Term Budget Outlook.” Congressional Budget Office, June 2010. <www.cbo.gov>

Figure A-1: “Revenues and Primary Spending, by Category, Under CBO’s Long-Term Budget Scenarios, Through 2084 (percentage of gross domestic product). … Extended-Baseline Scenario”

NOTE: An Excel file containing the data and calculations is available upon request.

[203] Constitution of the United States. Signed September 17, 1787. <justfacts.com>

Article I, Section 7:

[Clause 1] All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

[204] Report: “The Debt Limit: History and Recent Increases.” By D. Andrew Austin. Congressional Research Service. Updated April 29, 2008.

Page 2: “The debt limit also provides Congress with the strings to control the federal purse, allowing Congress to assert its constitutional prerogatives to control spending. The debt limit also imposes a form of fiscal accountability, which compels Congress and the President to take visible action to allow further federal borrowing when the federal government spends more than it collects in revenues.”

[205] Fact check of Rahm Emanuel’s statement: “We’ve added, in the last eight years, $4 trillion of debt to the nation’s obligations.” PolitiFact, January 18, 2009. <www.politifact.com>

At the end of the Clinton administration, there were several years of budget surpluses. …

When Bush took office, the national debt was $5.73 trillion. When he left, it was $10.7 trillion. …

… the debt increased greatly under Bush.

[206] Calculated with data from:

a) Dataset: “Table 1.1.5. Gross Domestic Product.” U.S. Department of Commerce, Bureau of Economic Analysis. Last revised April 29, 2015. <www.bea.gov>

b) Webpage: “Dates of Sessions of the Congress, Present-1789.” Accessed May 19, 2015 at <www.senate.gov>

c) Webpage: “Past Inauguration Ceremonies.” Joint Congressional Committee on Inaugural Ceremonies. Accessed November 4, 2016 at <www.inaugural.senate.gov>

d) Webpage: “Party Divisions of the House of Representatives (1789-Present).” U.S. House of Representatives, Office of the Clerk. Accessed May 19, 2015 at <history.house.gov>

e) Webpage: “Party Division in the Senate, 1789-Present.” U.S. Senate Historical Office. Accessed May 19, 2015 at <www.senate.gov>

f) Webpage: “The Debt to the Penny and Who Holds It.” Bureau of the Public Debt, United States Department of the Treasury. Accessed May 19, 2015 at <www.treasurydirect.gov>

NOTES:

Debt/GDP calculations are performed with seasonally adjusted GDP figures from the quarters in which Presidential and Congressional power shifts occurred.
In cases where a Congressional and Presidential power shift occur in the same quarter, the date of the presidential power shift is used as the milestone for the debt.
An Excel file containing the data and calculations is available upon request.

[207] Report: “A Citizen’s Guide to the Federal Budget: Fiscal Year 2000.” White House Office of Management and Budget, January 1999. <www.gpo.gov>

[208] Report: “GAO Strategic Plan, 2007-2012.” U.S. Government Accountability Office, March 2007. <www.gao.gov>

Page 15:

Table 2: Forces Shaping the United States and Its Place in the World

Friday, December 2, 2016

Dedicated to those who fell and those who carry on...

Wednesday, November 30, 2016

Says volumes about Amherst, Massachusetts...

Tuesday, November 29, 2016

The National Debt... How much do you know?

Nav
Menu

Introductory Notes

Quantifying the National Debt

Causes of the National Debt

Spending and Taxes

Spending Distribution

Tax Distribution

Consequences

Politics

Responsibility

Current Policies

Alternative Policies

Public Opinion

Congresses

Presidents

Government Accounting

Trust Funds and the Two Main Categories of Debt

“Deficits” and “Surpluses”

Ownership

Debt Owed to Non-Federal Entities

Debt Owed to Foreign Entities

Debt Owed to Federal Entities

Media

Budget Cuts

Tax Cuts

The “Do Nothing” Plan

Context

Footnotes

Friday, December 2, 2016

Dedicated to those who fell and those who carry on...

Wednesday, November 30, 2016

Says volumes about Amherst, Massachusetts...

Tuesday, November 29, 2016

The National Debt... How much do you know?

NavMenu

Introductory Notes

Quantifying the National Debt

Causes of the National Debt

Spending and Taxes

Spending Distribution

Tax Distribution

Consequences

Politics

Responsibility

Current Policies

Alternative Policies

Public Opinion

Congresses

Presidents

Government Accounting

Trust Funds and the Two Main Categories of Debt

“Deficits” and “Surpluses”

Ownership

Debt Owed to Non-Federal Entities

Debt Owed to Foreign Entities

Debt Owed to Federal Entities

Media

Budget Cuts

Tax Cuts

The “Do Nothing” Plan

Context

Footnotes

Nav
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