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Brave New World: Advocacy in the Era of
Deficit Reduction
Emily Holubowich, MPPSenior Vice President
CRD AssociatesFollow Me! @healthfunding
Join the Twitter Conversation #NDDUnited
Overview
• During this presentation I’ll cover:– Key budgetary concepts– Why deficit reduction is important– How to reduce the deficit (according to experts)
• What’s been done to date– What austerity means for your members– Advocacy efforts to date– Suggested strategies
Deficit vs. Debt
• Deficit is difference between receipts & outlays– Receipts include money the government brings in
from taxes, fees, and other income– Outlays include all spending on programs, and
interest payments on the debt• Debt is total amount of money owed to creditors
– Accumulations of deficits– US Debt ~ $16 trillion (and counting)
Mandatory vs. Discretionary
• Discretionary spending is at Congress’ “discretion”– “Defense” discretionary is military spending– “Nondefense” discretionary or “NDD” is
everything else• Research, education, food/drug/airline/public safety
• Mandatory spending enacted by law– Entitlement Programs (e.g., Medicare)
• To change spending, must change eligibility rules
ABSENT REFORMS, DEBT WILL SKYROCKET IN THE COMING DECADES
19721976
19801984
19881992
19962000
20042008
20122016
20202024
20282032
20362040
20442048
20520%
50%
100%
150%
200%
250%
% o
f G
DP
Note: Unlike current law, the Bipartisan Policy Center’s Plausible Baseline assumes that the 2001, 2003, and 2010 tax cuts are extended, the AMT is indexed to inflation, Medicare’s physician payment rates are maintained at their current rate (the “doc fix”), the looming sequester from the Budget Control Act of 2011 is lifted, and troops stationed overseas decline to 45,000 by 2015
Debt breaches 100% of GDP in 2027
Sources: Congressional Budget Office (January 2012) and Bipartisan Policy Center extrapolations
HEALTH CARE COSTS ARE THE PRIMARY DRIVER OF THE DEBT
20122014
20162018
20202022
20242026
20282030
20322034
20362038
20402042
20442046
20482050
20520%
2%
4%
6%
8%
10%
12%
14%
Health Care Spending
Social Security
Discretionary Spending (Defense and Non-Defense)
Other Mandatory Programs
% o
f G
DP
Sources: Congressional Budget Office’s Alternative Fiscal Scenario (January 2012), additionally assuming that troops overseas decline to 45,000 by 2015; Bipartisan Policy Center extrapolations
REVENUE UNDER CURRENT POLICIES SIMPLY WILL NOT BE ENOUGH
1998 1999 2000 200115
16
17
18
19
20
21
22
18.0%
19.9%19.5%
20.6%
19.8%
(projected)
%o
f G
DP
Revenues Averaged 20% of GDP When the Budget Was Balanced…
Source: Congressional Budget Office alternative fiscal scenario (January 2012)
Fiscal years
2012-2022 Average
…and that Was Before the Baby Boomers Arrived
How Do We Fix It?• Several bipartisan, expert commissions
recommend “balanced approach”– Reduce spending
• Defense and nondefense discretionary spending• Mandatory spending
– Entitlement reform
– Increase revenue• Tax reform
• Total deficit reduction package of $4 trillion needed to stabilize the debt
Budget Control Act: Reigning in Deficit• Two-phase debt ceiling increase
– Phase 1: $900 billion through end of 2011– Phase 2: $1.2-$1.5 trillion through November
2012• Increases contingent upon offsets
– Phase 1 offset: discretionary caps over decade• FY 2013 capped at $1.047 trillion
– Phase 2 offset: determined by “supercommittee”• If no agreement, “sequester” takes effect• Budgetary tool designed to force compromise
Sequester: The Price of Failure• Effective January 2, 2013
– Across the board cuts of $984 billion over 10 years, or $109 billion annually
• Cuts equally divided between defense and non-defense– Non-defense discretionary: $322 billion (8%)– Defense discretionary: $492 billion (12%)– Medicare: $123 billion (capped at 2%)– Other mandatory $47 billion
• Social Security, Medicaid, and low-income support programs exempt
Impact of Unbalanced Approach?• Efforts have focused on spending cuts, only
– “NDD” now lowest level since Eisenhower• Cut by 10 percent, on average since FY 2010• By 2022, another 7 percent cut under Budget Control
Act spending caps• More cuts by “sequestration” January 2013
– For “NDD” alone:• 1 million jobs lost• $120.5 billion Gross State Product lost • $63 billion income lost
If You Do the Math…
• Completely *eliminating* all NDD programs won’t balance the budget– Cuts alone won’t stop deficits and debt
• Experts agree: balanced approach needed to reduce the deficit and debt
But This Is POLITICS!• Republicans’ fix: exempt defense
– Make NDD and entitlements bear the brunt• Democrats’ fix: balanced approach where
“rich pay fair share”– Balance or Bust! White House standing ground
• No carve outs• No exemptions• No delays
Driving Toward the “Fiscal Cliff”• CR at current levels through March 2013
– Avoids shutdown showdown pre-election• Nothing substantive before election
– No political will to make tough decisions• Hellacious lame duck
– Bush tax cuts expire– “Extenders” package expires
• Unemployment benefits, payroll tax holiday, Medicare physician payment fix
– Sequester!
The Tea Leaves• Lame duck scenarios
– Balanced approach • How balanced is “balanced?”
– Kick the can• How long?• What’s the offset, if any?
– “Carve-out” bills• Exempt defense• Exempt Medicare
– Cancel altogether• How do we react?
– Know when to hold ‘em, and when to fold ‘em– You can’t always get what you want
Fiscal Discipline = Advocacy Conundrum
• Post-BCA World– Game changer for appropriations advocates
• No sacred cows• Lowering the bar for measuring success• Where money comes from now matters
– Free lunch is over• Deficit/debt is crisis, requires action now• Associations face tough choices
– Actions to save one priority may undermine another
What We’re Doing About It• Budget Control Act defines us as community• “All for one” approach to advocacy
– NDD Summit developed as ad hoc “network of networks” to coordinate:• Education of policymakers, policy professionals, and
public• Advocacy for a balanced approach to deficit reduction
that does not include further cuts to NDD programs
NDD Community
NDD Summit
NDD Steering Committee
• All those interested in protecting NDD
• 60 leaders of coalitions• Vet materials, strategy• Disseminate
information, guidance
• 15 individuals• “Staff” of NDD Summit
Activities to Date• Inside Beltway
– Customizable NDD fact sheet– NDD Sign On Letter
• 3,000 national, state, local organizations– NDD Rally
• 350 participants; trending on Twitter– NDD Call/Tweet Day
– 400 tweeters, 500K reached, 1.75 million impressions– Media Visibility
• WashPo, HuffPo, PBS, NYTimes; trade press
• Outside Beltway– Grassroots Toolkit– Local editorials
Tools to Engage• “NDD United” Grassroots Toolkit available at
www.publichealthfunding.org– “Deficit Reduction and You” video tutorial– Sequestration FAQs– Tips for Editorials
• With sample Op Ed, letter to editor– Town Hall Tip Sheet
• Sample questions & flyer for distributing at events– Press Event Tip Sheet– Social Media Tip Sheet
Surviving in a Post-BCA World…
Associations *should* continue to advocate for funding…
To advance these priorities, must associations go where they haven’t gone before…?
Contact Information
Emily J. Holubowich, MPPSenior Vice President
Cavarocchi Ruscio Dennis Associates∙ ∙202.484.1100
[email protected] Me! @healthfunding