Understanding Federal Commitments to Housing and Health Care
Yesterday, the Congressional Budget Office put out An Overview of Federal Support for Housing. In the report, CBO outlined the nearly $300 billion in housing-related spending and tax breaks offered this year.
Recently, the government has undertaken extraordinary efforts to help prop up the housing sector. Interestingly enough, though, most of our support for the sector has nothing to do with the current economic crisis, and has been in place for decades.
In presenting its data, CBO focussed mainly on the amount of money spent to support homeownership versus rentership, and the amount of money issued in the form of spending versus tax expenditures.
We use their data to divide housing support another way -- the amount spent because of the economic crisis ("stimulus") versus the amount regularly spent. It's true that the government has paid out well over $100 billion to help refinance mortgages, support Fannie Mae and Freddie Mac, and offer a new home-buyer tax credit. But over $160 billion would have been spent in 2009 anyway, on everything from the mortgage interest deduction ($80 billion) to Section 8 housing ($16 billion).
As CBO emphasizes in this report, most support for housing coming from the tax code rather than the spending side of the budget. In adding them together, they are in many ways trying to mimic a relatively new measurement they have been using to show the effects of health care reform legislation -- the Federal Budgetary Commitment to Health Care.
In a report released on October 30, the CBO tried to show how the House and Senate Finance health care reform bills would change the federal government's health care obligations both on the spending side (mainly from Medicare and Medicaid) and the tax side (mainly from the employer sponsored insurance tax exclusion).
Below, we have attempted to show the actual Federal Budgetary Commitment to Health Care in 2009. Our actual numbers may differ some from CBO's, but should give an idea of how much is being committed.