The Congressional Budget Office is out with a new Budget and Economic Outlook today, and it’s bad news for those who’d like to believe all is well with the economy.
Some key takeaways:
- The economy will grow for this year and next, and continue at a slower rate in future years based on a shrinking labor supply.
- For the first time since 2009, the deficit-to-GDP ratio will rise faster than GDP does. In other words, deficits will grow faster than economic output.
- Major changes exist in this report compared to last one. It projects deficit levels roughly one-and-a-half trillion dollars more than the last report did. A key difference? Fall’s budget deals.
- Mandatory programs are still squeezing the budget, on track to be 15% of the economy by 2025
Read the full summary here.
In last night’s Democratic Presidential debate, Hillary Clinton came to the defense of the Affordable Care Act, which her Republican would-be rivals want to roll back — and her Democratic rival Senator Bernie Sanders wants to replace with a single-payer system.
“We now have driven costs down to the lowest they’ve been in 50 years,” Clinton said, “Now we’ve got to get individual costs down. That’s what I’m planning to do.”
Her claim almost instantly earned scorn on social media– because of course the per-person costs of healthcare have been rising steadily over the past 50 years. But does she have a point regardless? Here’s what you need to know:
- It’s possible that Clinton honestly meant to refer to something else. Especially considering her next statement that “we’ve got to get individual costs down,” there’s reason to believe she did not mean to refer to individual costs to begin with. In fact, the Clinton campaign has insisted that she had actually meant to refer to a slowing rate of growth in healthcare costs.
- Clinton’s secondary claim is probably false. While a PolitiFact analysis found in 2012 that healthcare costs had grown slower between 2009 and 2011 than over the last 50 years, more recent data shows that this slower growth rate might not exist anymore.
- Ultimately, Clinton was misleading, deliberately or not. Did Sec. Clinton actually mean to discuss growth rates? Were she and her team unaware of updated data casting doubt on those claims, too? These questions are difficult to answer and ultimately not the important point. Secretary Clinton implied one of two things — that healthcare costs are falling, or that their rate of growth is slower now than in the past. The latter is questionable, and the former is unquestionably false.
Note: This post originally appeared at the Institute to Reduce Spending.
In a Fiscal Times op-ed today, Reject the Debt signer Representative Mark Sanford (SC-1) urges tonight’s Presidential debate to address the number-one threat to your savings and way of life; how Washington is spending your money.
It took two hundred years for our nation to accumulate $5 trillion in debt, yet during just the eight years of the George W. Bush presidency, it doubled and moved from $5 to $10 trillion. Now in the Obama presidency, it is doubling again, moving from $10 to $20 trillion. A freight train is coming at us, and we are not discussing it.
Tonight, viewers can expect to hear conversation about gun rights, trade, national defense, refugees, and more, but whether anyone will ask where the money comes from remains to be seen. Representative Sanford is making a call to action for a discussion on debt, but will moderators and candidates answer the phone?
Buzz is building for tonight’s State of the Union, President Obama’s final address during his term. And while partisan squabbling and political reactions will no doubt abound, what should voters — particularly those who care about the nation’s pocketbook — be watching for?
Domestic spending will matter
President Obama is likely to address some controversial domestic priorities, not all of which are very relevant for the nation’s finances. Viewers should be on the lookout for talk of programs and initiatives such as the Affordable Care Act or Medicaid expansion — and more importantly, specifics on how these goals will be funded. It won’t necessarily all be bad news, however. The President has teamed up with unlikely allies to pursue criminal justice reform, which could feature prominently in tonight’s address and offers the potential to save taxpayer money.
Today, Congress is likely to pass a 2,000-page deal that was unveiled at 2 AM last Wednesday morning. The House passed the measure earlier today, and it was sent to the Senate for likely passage. The deal is rustling feathers across the aisle for various provisions ranging from domestic surveillance to a collection of controversial tax breaks. It provides for $1.067 trillion that’s subject to discretionary spending caps, and another $83 billion where Congress is allowed to raise those caps (mostly via the all-too-familiar Overseas Contingency Operations, OCO, war account).
From a spending perspective, fiscal conservatives should be troubled by several things:
- $650 million for seven Growlers, an F-18 fighter jet variant that the Navy did not request
- $1.3 billion for 11 more F-35 jets than the Pentagon requested
- $51.5 million more for the Drug Enforcement Agency (DEA)
- $14 million per year for a catfish inspection program — that has yet to inspect a single fish
The total price tag of the legislation is eyebrow-raising, as is the manner in which it was unveiled — even the best and brightest in Congress can hardly be expected to read and understand 2,000 pages of legislation within just a few days!
Ultimately, this increasingly familiar Christmas standoff should remind us of how important process and rules are. If the system is so broken that the way it’s supposed to work just doesn’t happen anymore, perhaps it’s time to rethink the rules of the game before taxpayers get another beast dropped on us next holiday season.