(Un)happy Fiscal New Year!
Today, October 1st, marks the first day of the 2014 fiscal year for the government, and the first day of a government shutdown in which 40 percent of government workers have been sent home. Over the past year, we (partially) dived over the fiscal cliff, saw the start of sequestration after it was delayed for two months, and still did not touch the long-term drivers of debt. Here are some of the important numbers from last fiscal year.
- Increase in public debt: $656,596,378,105.73. Debt held by the public rose to $11.9 trillion, up from $11.3 trillion last year, although debt has been almost flat since April, largely because the Treasury Department has used extraordinary measures to avoid hitting the debt ceiling. Gross debt, which includes both public debt and intergovernmental holdings, increased to $16.7 trillion from $16.2 trillion.
- How much legislation increased the ten-year deficit, relative to current law: $4 trillion. In the January fiscal cliff deal, lawmakers chose to extend nearly all of the 2001/2003/2009 tax cuts and many other provisions without offsetting savings. Doing nothing and going over the fiscal cliff would have been disastrous for the economy in the short term, but the 10-year deficit would be $4 trillion smaller.
- How much legislation decreased the ten-year deficit, relative to current policy: $650 billion. When compared against a pessimistic "current policy" baseline that assumed all the tax cuts would be extended, policymakers were able to reduce the deficit by $650 billion, mostly by raising taxes on high-income individuals.
- Budget deficit as a share of GDP: 3.8 percent, down from 6.8 percent last year. Even though the short-term deficit has declined as legislated deficit reduction takes effect and the economy recovers, we've written many times that Congress still needs to deal with the long-term drivers of our debt. Under our current course, debt will equal the size of our economy by 2038.
- Minimum savings necessary to put debt on a clear downward path: $2.2 trillion. Although Congress has enacted some reforms in recent years, our budget projections show Congress must still enact $2.2 trillion of savings over the next ten years to put debt on a clear downward path this decade. In addition, the Congressional Budget Office found savings of $2 trillion are necessary just to keep the economy on its present course.
- Total number of FY 2014 funding bills passed: Zero. Congress has not passed any appropriations bills for the current fiscal year. The House has only passed 4 of 12, while the Senate has not passed any.
- Total number of temporary CRs passed to avoid a shutdown for FY 2014: Zero.
- Percent cut to spending as a result of sequester: 6.4 percent. After a short-delay, sequestration kicked in at the beginning of March, cutting all government programs across the board, which we think is a particularly dumb way to budget.
- Total tax expenditures eliminated under a blank slate: $1.3 trillion every year, or more than $16 trillion over ten years. Bigger than any other section of the budget, tax expenditures have been targeted under the Senate Finance Committee's "clean slate" approach, which eliminates all tax expenditures and forces lawmakers to justify adding them back. The House Ways and Means Committee is also expected to mark up a tax reform bill this fall. As we've explained in our Tax Break-down series, tax reform offers to an opportunity to simultaneously simplify the tax code, reduce tax rates, and reduce the deficit.
- Number of comprehensive Medicare plans offered last year: at least 8, including Simpson-Bowles, the Bipartisan Path Forward, the American Enterprise Institute, the Bipartisan Policy Center, the Brookings Institution, the Center for American Progress, the Commonwealth Fund, and the Urban Institute. (The National Coalition on Health Care also released a plan, but it was before the fiscal year). Health spending is the main driver of our long-term debt, and reforming Medicare offers an opportunity to bend the health care cost curve.
- Health Reform bills enacted by Congress: Zero.
- Number of years until Social Security becomes insolvent for the disabled: Two. Barring any federal action, the Disability Insurance (DI) trust fund will be exhausted in 2016 and could only pay 80 percent of scheduled benefits.
- Number of blogs written by CRFB: 627. We'll keep providing timely analysis of budget issues, and there are sure to be plenty in the coming year.
- Number of press releases in which CRFB or Fix the Debt have called for policymakers to put debt on a clear downward path: 106. We've constantly said that Congress should use the opportunity presented by fiscal negotiations to come to a long-term agreement that will put debt on a clear declining path by the end of the decade and address tax and entitlement reform.
- Number of times they have done it: Zero. We're still waiting.