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2012 Federal Budget Outlook NIHB January 24, 2012 Joan Huffer Center on Budget and Policy Priorities 1
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Federal Debt Under Current Policies is Unsustainable cbpp.org 4/28/20152NOT FOR DISTRIBUTION
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Tax Cuts, Wars Account for Half of Public Debt by 2019 4/28/20153
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Ryan plan would get two-thirds of cuts from programs for low- and moderate-income people 4 Source: “The Path to Prosperity” FY2012 Budget Resolution
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1.Cuts discretionary spending by $1 trillion over 10 years through caps on discretionary spending. 2.Set up bipartisan, bicameral Joint Select Committee to identify additional $1.5 trillion in savings. Failed to reach agreement. 3.$1.2 trillion in across-the-board cuts (sequestration) begins January 2013 unless Congress acts. Deficit Reduction Under the Budget Control Act 4/28/20155 cbpp.org
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Supercommittee Failure Triggers Sequestration 4/28/20156
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Sequestration Means Deep Cuts Throughout Budget 4/28/20157
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Sequestration will be on TOP of Discretionary Caps 4/28/20158
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$1.2 trillion across-the-board spending cuts will not affect: Medicaid and Children’s Health Insurance Program Supplemental Nutrition Assistance Program (Food Stamps) Child Care Entitlements (mandatory) Child Nutrition Earned Income Tax Credits (EITC), Child Tax Credit (CTC), ACA Premium Credits [but NOT cost-sharing subsidies] Supplemental Security Income (SSI) Temporary Assistance to Needy Families (TANF) 4/28/20159 Core Low-Income Entitlement Programs Exempt from Sequestration
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Short-term threats UI benefits, weeks could be cut back Cuts to health care programs to pay for SGR Shielding defense from sequestration without revenue savings could lead to: - Loss of exemption for some low-income programs - Increased cuts to NDD 10
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Fiscal Policies Collide at End of 2012 11 2001-2010 tax cuts expire at end of 2012 $1.2 trillion sequestration scheduled to begin in January 2013 Debt ceiling may need to be raised by early 2013 FY2013 Appropriations bills may or may not be completed
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Principles for Deficit Reduction cbpp.org Balance primary budget, stabilize debt to GDP. Need a balanced approach: everything must be on the table Should not increase poverty or inequality Boost economy in short-run 4/28/2015
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Past Deficit-Reduction Packages Included Large Revenue Increases 13
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Taxes Do Not Necessarily Harm the Economy or Cost Jobs 14
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Helpful Resources Office of Management & Budget (OMB) – www.whitehouse.gov/omb U.S. Senate Budget Committee – http://budget.senate.gov U.S. House Budget Committee – http://budget.house.gov Congressional Budget Office (CBO) – www.cbo.gov THOMAS – Library of Congress – http://thomas.loc.gov Center on Budget and Policy Priorities – www.cbpp.org
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