1. www.concordcoalition.org THE CONCORD COALITION presented by Robert L. Bixby, Executive Director THE CONCORD COALITION www.concordcoalition.org Fiscal Future: The Challenges Ahead

2. www.concordcoalition.org THE CONCORD COALITION Estate & Gift Taxes ($18 billion) Composition of FY 2010 Federal Government Revenues and Outlays (Deficit: $1.29 Trillion) Interest Domestic* Social Security Medicare & Medicaid Other Entitlements Defense Other Taxes Corporate Taxes Social Insurance Taxes Individual Income Taxes Outlays: $3.45 trillion ** Revenue: $2.1 trillion *Includes all appropriated domestic spending such as education, transportation, homeland security, housing assistance and foreign aid. **Numbers may not add due to the preliminary nature of the fiscal year numbers. Source: CBO October 2010 and Department of Treasury 2010.

3. www.concordcoalition.org THE CONCORD COALITION Current Policy Trends Lead to Large Sustained Deficits Fiscal Years 2011-2020 CBO August 2010 Baseline The Concord Coalition Plausible Baseline assumes that discretionary spending grows at the rate of nominal GDP, that war costs slow gradually, that Medicare physician payment cuts are postponed, and that all expiring tax provisions (including those from the 2009 stimulus package) are extended with AMT relief. Source: Congressional Budget Office, August 2010 and Concord Coalition analysis. Billions of Dollars -$15.2 Trillion Deficit -$6.2 Trillion Deficit

4. www.concordcoalition.org THE CONCORD COALITION  CBO August 2010 Baseline CBO’s Estimate of the President’s Budget Federal Spending vs. Revenues as a Percent of GDP (FY 1980-2020) CBO August Baseline Compared to the President’s Budget Source: Congressional Budget Office, August 2010.. Average outlays: 21.0% Average revenues: 18.3% Percentage of GDP ActualProjected

5. www.concordcoalition.org THE CONCORD COALITION Debt Held by the Public as a Percent of GDP 1940-2040 Source: GAO Analysis, 2010 and OMB Historical Tables 2010. As a Percentage of GDP ActualProjected World War II 108.6% 2010 63.6%

6. www.concordcoalition.org THE CONCORD COALITION Percent of Debt Held by the Public Owned by Foreigners (1987-2010) Source: United States Treasury Department, Treasury Bulletin, September 2010. Percentage of Ownership of Publicly-Held Debt

7. www.concordcoalition.org THE CONCORD COALITION Interest Costs Go Through The Roof Source: Congressional Budget Office August 2010 and CBO’s Analysis of the President’s Budget, March 2010. Billions of Dollars

8. www.concordcoalition.org THE CONCORD COALITION Social Security, Medicare, & Medicaid as a Percentage of the Federal Budget All other Federal Spending $2.07 Trillion 59% Social Security, Medicare and Medicaid $1.42 Trillion 41% Source: Congressional Budget Office, August 2010.

9. www.concordcoalition.org THE CONCORD COALITION Social Security, Medicare, Medicaid and Interest Consume All Federal Revenues in Less Than 15 Years Year Percentage of Revenues Social Security, Medicare and MedicaidInterest Source: Government Accountability Office, 2010.

10. www.concordcoalition.org THE CONCORD COALITION America’s Population is Aging Population age 65 and Over Source: Social Security and Medicare Trustees’ Report, 2010. Year Percentage of Population Aged 65 and Over

11. www.concordcoalition.org THE CONCORD COALITION Health Care Costs are Rising Faster Than the Economy Source: Congressional Budget Office, June 2010. Percentage of GDP Historic Level of Federal Revenues Historic Level of Federal Spending Assumes that health care cost growth will not exceed GDP growth. Assumes that health care cost growth continues at the average rate for the past 40 years (2.5 percentage points greater than GDP growth.) Assumes that health care cost growth rate declines to 1.0 percentage point greater than GDP growth— consistent with the assumption used by the Medicare Trustees.

12. www.concordcoalition.org THE CONCORD COALITION Federal Health Care Spending Under Current Law Source: Congressional Budget Office, June 2010. Percentage of GDP 2009 Projection 2010 Projection 2009 Projection 2010 Projection Excluding Effects of Recent Health Care Legislation 2010 Projection

13. www.concordcoalition.org THE CONCORD COALITION Factors Explaining Future Federal Spending on Medicare, Medicaid, and Social Security Source: Congressional Budget Office, June 2010. Percent of Growth Attributed to:20352080 Health Care Cost Growth37%56% Aging63%44%

14. www.concordcoalition.org THE CONCORD COALITION Sources of Growth in the Federal Budget Over the Next 30 Years Source: Government Accountability Office and Congressional Budget Office. 2010. Individual Income Taxes = 6.5% Current Defense Spending = 4.7%

15. www.concordcoalition.org THE CONCORD COALITION Defense Discretionary Spending as a Percentage of GDP Source: Congressional Budget Office, August 2010. As a Percentage of GDP

16. www.concordcoalition.org THE CONCORD COALITION Outlays of Select Non-Defense Discretionary Programs (FY 2010 Projected) Source: Congressional Budget Office, January 2010. *includes ground, air, and water Education Transportation Housing, Natural VeteransForeign Aid General Science, Energy & Resources Government Space & Nutrition Asst.Technology

17. www.concordcoalition.org THE CONCORD COALITION Non-Defense Discretionary Spending as a Percentage of GDP Source: Congressional Budget Office, January 2010. As a Percentage of GDP

18. www.concordcoalition.org THE CONCORD COALITION Current fiscal policy is on an unsustainable path Federal Outlays as a Percentage of GDP Social Security Medicaid Medicare All Other Interest Source: Government Accountability Office, 2010. Average tax revenue

19. www.concordcoalition.org THE CONCORD COALITION Key Points of Agreement Members of the Fiscal Wake-Up Tour do not necessarily agree on the ideal levels of spending, taxes and debt, but we do agree on the following key points: Current fiscal policy is unsustainable There are no easy solutions, such as cutting waste fraud and abuse or growing our way out of the problem. Finding solutions will require bipartisan cooperation and a willingness to discuss all options. Public engagement and understanding is vital in finding solutions. This is not about numbers. It is a moral issue.