Spending, Taxes, & Deficits: A Book of Chartsmedia4.manhattan-institute.org/sites/e21/files/...Projected 2050 Budget Deficits are Entirely Driven by Social Security & Medicare Shortfalls

Spending, Taxes, & Deficits:A Book of Charts

Brian RiedlSenior Fellow, Manhattan Institute

October 2020

Highlights

2

-- Why the Deficit Could Top $3 Trillion Yet Again Within a Decade (p. 15)

-- Each 1% Interest Rate Rise Adds 20% of GDP to 30-Year Debt (16)

--Washington Spent $50,000 per Household in 2020 (21)

-- What Happened to the 2011 BCA Spending Caps? (26-27)

-- 90% of 2019-2030 Deficit Rise is From SocSec & Medicare Shortfalls (37)

-- What is Driving CBO’s Projected $104 Trillion Deficit over 30 Years? (46-52)

-- A Menu of Tax Increase Options (57)

-- Joe Biden’s Spending Proposals Would Cost $11 Trillion (63-64)

-- Does the U.S. Have the OECD’s Most Progressive Tax Code? (84)

-- Is it Possible that the 1980s Defense Build Up Paid for Itself? (88)

-- What Really Caused the 1990s Budget Surpluses? (89)

-- The Comprehensive Bush Budget Record (91-92)

-- The Comprehensive Obama Budget Record (93-100)

Methodology

Nearly all charts were built with publicly-available government data from the Office of Management and Budget (OMB), Congressional Budget Office (CBO), U.S. Treasury, Council of Economic Advisors (CEA), Bureau of Labor Statistics (BLS), Bureau of Economic Analysis (BEA), and Census Bureau.

Unless otherwise noted, short time periods are expressed in nominal dollars, medium time periods are expressed in inflation-adjusted dollars, and long time periods are expressed as percentage of the economy.

Sources for any chart can be obtained by contacting Brian Riedl at [email protected].

3

Charts are Organized into 11 Chapters

1) Rising Budget Deficits and National Debt

2) What is Driving the Debt? Soaring Federal Spending

3) Discretionary Spending is Not Driving the Long-Term Debt

4) Mandatory Spending and Entitlement Costs are Rising Rapidly

5) The 30-Yr Debt Estimates are Driven by Social Security & Medicare Shortfalls

6) Can’t We Just Raise Taxes, Cut Defense, & Nationalize Health Care Instead?

7) Progressive Proposals Would Dig the Debt Even Deeper

8) Tax Revenues Will Continue Growing Faster Than the Economy

9) The Tax Code Has Become Increasingly Progressive

10) Countering Tax, Spending, & Deficit Myths of the 1980s Through 2008

11) A Comprehensive Accounting of the Obama Fiscal Record4

Chapter 1

Rising Budget Deficits and National Debt

5

CBO Projects $2 Trillion Budget Deficits Within a Decade, Assuming Current Policies are Extended

6

-779-984

-3,132

-1,814

-1,280-1,132 -1,180 -1,225 -1,275

-1,414-1,596

-1,770

-2,025

-$3,500

-$3,000

-$2,500

-$2,000

-$1,500

-$1,000

-$500

$0

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

No

min

al

$B

illio

ns

Fiscal YearSource: OMB Historical Table 1.1, and September 2020 CBO Baseline,

updated for current-policy tax cut extensions, and removal of timing shifts. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Budget Deficits are Once Again Soaring(Adjusted for Inflation)

7

-$3,500

-$3,000

-$2,500

-$2,000

-$1,500

-$1,000

-$500

$0

$500

1990 1995 2000 2005 2010 2015 2020 2025 2030

Infl

ati

on

-Ad

jus

ted

(2

02

0)

$B

illi

on

s

Fiscal Year

$-197

(2007)

$-1,684

(2030)

$-3,132

(2020)

CBO BaselineHistorical

$-1,677

(2009)

$343

(2000)

$-395

(1990)

Source: Sept. 2020 CBO baseline and historical data, adjusted to assume

extension of the 2017 tax cuts, and adjusted into 2020 dollars.Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

The 2020 Deficit Dwarfs the “Great Recession” and is the Largest Since World War II

8

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030

Pe

rce

nta

ge

of

GD

P

Fiscal Year

Hi

-30%

(1943)

-6%

(1983)

2%

(2000)

-7%

(2030)-10%

(2009)

-16%

(2020)

Source: Sept. 2020 CBO baseline and historical data,

adjusted to assume extension of the 2017 tax cuts. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

The 2020 Budget Deficit is Set to Exceed the Combined 2016 Through 2019 Deficits

9

$3,132

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

1 2

Bu

dg

et

Defi

cit

in

No

min

al

$B

illio

ns

2020 Budget

Deficit

$3,016

Author: Brian Riedl,

Manhattan Institute --

@Brian_Riedl

2016

2019 Budget

Deficit

2018

2017

Source: Sept. 2020 CBO baseline, Treasury data, and historical data.

The National Debt Will Nearly Double Through 2030

$0

$5

$10

$15

$20

$25

$30

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Deb

t in

In

flati

on

-Ad

jus

ted

(2020)

$T

rillio

ns

Fiscal Year

$16.9

(2019)

$29.3

(2030)

National Debt Held by

the Public

$6.1

(2006)

CBO Baseline, Adjusted

for Current Policies


Manhattan Institute -

- @Brian_RiedlSource: Sept. 2020 CBO baseline and historical data,

adjusted to assume extension of the 2017 tax cuts.

11

The National Debt is Set to Surpass the Previous World War II Peak

0%

20%

40%

60%

80%

100%

120%

140%

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030

De

bt

He

ld b

y t

he

Pu

bli

c (

%G

DP

)

Fiscal Year

Historical Debt Held by the Public as a Percentage of GDP

CBO

Baseline

106%

(1946)

23%

(1974)

48%

(1993-95)

114%

(2030)

39%

(2008)

98%

(2020)

Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Source: OMB Historical Table 7.1, and September

2020 CBO Baseline adjusted for current policies.

CBO Long-Term Baseline Shows Unsustainable Debt

12

0%

40%

80%

120%

160%

200%

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Deb

t H

eld

by t

he P

ub

lic (

%G

DP

)

Fiscal Year

Projected Debt Levels

Historical Debt Levels

48%

(1993-1995)23%

(1974)

195%

(2050)

98%

(2020)

35%

(2007)

106%

(1946)



- @Brian_RiedlSource: CBO 2020 Long-Term Budget Outlook

Note: This is the rosy scenario that assumes no wars,

no recessions and continued low interest rates.

It also assume all tax cuts expire as scheduled.

In 2020, the National Debt Surpassed $200,000 Per Household

13

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

1990 1995 2000 2005 2010 2015 2020 2025 2030

Infl

ati

on

-Ad

jus

ted

(2

02

0)

Do

lla

rs

Fiscal Year

$61,354

(1990)

$102,680

(2008)

$78,050

(2000)

$201,171

(2020)

$230,383

(2030)

Historical Debt Per Household

CBO Baseline


Source: OMB Historical Table 7.1, September 2020 CBO

Baseline, and Census Bureau data.

Projected New Federal Debt Added by Decade– Unless Reforms are Enacted

14

$3.9

$9.1

$15.0

$23.4

$39.3

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

1990s 2000s 2010s 2020s 2030s 2040s

Infl

ati

on

-Ad

jus

ted

(2020)

$T

rillio

ns

Decade

$1.3


Source: CBO 2020 Long-Term Budget Outlook

adjusted to reflect the current-policy baseline.

15

If Interest Rates Return to 1990s or 2000s Levels, Net Interest Costs – and the Deficit – Will Soar

-$3,500

-$3,000

-$2,500

-$2,000

-$1,500

-$1,000

-$500

$0

$500

2000 2005 2010 2015 2020 2025 2030

Su

rplu

s/D

efi

cit

in

No

min

al

$B

illio

ns

Fiscal Year

Baseline2000s Interest Rates1990s Interest Rates

$-161

(2007

$-2,674

(2030)

$236(2000)

Historical and CBO Current-Policy Baseline Deficits

$-1,413(2009)

$-3,243

(2030)

$-2,025

(2030)

$-3,132(2020)

Source: Calculated using September 2020 CBO (current-policy) Baseline data, OMB

sensitivity tables, and CEA historical interest rate data. Amounts in nominal $billions.



@Brian_Riedl

16

Rising Interest Rates Could Push the National Debt Past 250% of GDP Within 30 Years

0%

50%

100%

150%

200%

250%

300%

2020 2025 2030 2035 2040 2045 2050

Nati

on

al

Deb

t as a

%G

DP

Fiscal Year

CBO Baseline

(Assumes rates gradually rise from

2.1% to 4.4% between 2030 and 2050)

7%

8%

6%

5%

231%

255%

281%

209%

195%

16Source: Calculations using the 2020 CBO Long-Term Baseline.

Alternative scenarios assume higher interest rates phase-in between 2031 & 2050.

Most economists agree that a steeply rising debt will raise interest rates.



@Brian_Riedl

Average interest paid rate on national debt:

1980s – 10.5%

1990s – 6.9%

2000s – 4.8%

2010s – 2.1%

2020s – 1.4% (CBO projection)

2050 – 4.4% (CBO projection)

Chapter 2

What is Driving the Debt?Soaring Federal Spending

17

Background: Federal Spending & Taxes: 1930-2030

18

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030

Perc

en

tag

e o

f G

DP

Fiscal Year

Revenues

Spending


Source: OMB Historical Table 1.2 (1930-2019), and September 2020

CBO baseline, adjusted to include current-policy tax cut extensions.

Over the Next Decade, Above-Average Spending Will Drive Most of the Rising Deficit

19

10%

12%

14%

16%

18%

20%

22%

24%

26%

28%

30%

32%

34%

1960 1970 1980 1990 2000 2010 2020 2030

Perc

en

tag

e o

f G

DP

Fiscal Year

Revenues

Spending 23.2%(2030)

16.6%

(2030)1960-2019 Average: 17.3%

1960-2019 Average: 20.0%


Source: OMB Historical Table 1.2 (1930-2019), and September

2020 CBO Baseline, adjusted to include tax cut extensions.

Rising Spending – Not Falling Revenues –Drives the Long-Term Deficit

20

0%

5%

10%

15%

20%

25%

30%

35%

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Perc

en

tag

e o

f G

DP

Fiscal Year

20.0%

(1960-2019)

17.3%

(1960-2019)

Federal Spending

Tax Revenues

31.2%

(2050)

18.6%

(2050)

(17.8% if 2017 tax

cuts are extended)

Author: Brian Riedl, Manhattan Institute -- @Brian_RiedlSource: CBO 2020 Long-Term Budget Outlook.

Coronavirus Pushed 2020 Federal Spending Past $50,000 per Household

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

1990 1995 2000 2005 2010 2015 2020 2025 2030

Infl

ati

on

-Ad

jus

ted

(2

02

0)

Do

lla

rs

Fiscal Year

$23,977

(1990)

$24,418

(2001)

$41,072

(2030)$28,828

(2007)

$50,868

(2020)

CBO September

2020 Baseline

Actual Spending per Household

21


Source: OMB Historical Table 1.1, September 2020

CBO Baseline, and Census Bureau data.

Net Interest Costs are Set to Spike Even Despite Interest Rates Averaging Just 1.5%

22

$0

$100

$200

$300

$400

$500

$600

1990 1995 2000 2005 2010 2015 2020 2025 2030

Infl

ati

on

-Ad

juste

d (

2020)

$B

illi

on

s

Fiscal Year

$581

(2030)

CBO Current-

Policy Baseline

Spending on Net Interest

$338

(2020)$329

(1990)

Source: OMB Historical Table 3.2 and September 2020 CBO Baseline,

adjusted for tax cut extensions and for inflation into 2020 dollars. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Chapter 3

Discretionary Spending is Not Driving the Long-Term Debt

23

24

Despite Recent Increases, Discretionary Spending Remains Below its Historic Average

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

1962 1968 1974 1980 1986 1992 1998 2004 2010 2016 2022 2028

Fed

era

l S

pen

din

g (

%G

DP

)

Fiscal Year

Non-Defense Discretionary

Defense Discretionary

9.1%

(1968)

2.9%

(1999-2001) 3.2%

(2019)2.8%

(2030)3.3%

(1962)

5.0%

(1980)

3.1%

(2019)

2.8%

(2030)


Source: OMB Historical Table 8.4, and

September 2020 CBO Baseline.

Since 1990, Non-Defense Discretionary Spending Has Grown 3 Times Faster than Defense

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Infl

ati

on

-Ad

jus

ted

(2

01

9)

$B

illi

on

s

Fiscal Year

Non-Defense: Up 88%

Defense: Up 25%

(Includes war spending)

$356

(1990)

$670

(2019)

$533

(1990)

$664

(2019)

25


Source: OMB Historical Table 8.1, and CBO January

2019 Baseline, converted into 2019 dollars.

26

Budget Deals Weakened the Budget Control Act (BCA) Discretionary Spending Caps

933

1,013

1,090

1,0501,043

1,012

975 995 1,016 1,040 1,0651,092

1,1191,146

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

$B

illi

on

s o

f B

ud

get

Au

tho

rity

Fiscal Year

Black – 2008-2012 Actuals & Original 2013-2021 CBO Baseline

Blue – Original 2013-2021 BCA Caps

Red – Final Figures After Budget Deals

1,208

1,245

1,066

1,0141,012

1,070

992

1,288 1,298


Source: Congressional Budget Office

Excludes OCO and emergency spending.

Amounts in nominal $billions

What Became of the $1,788 Billion in Promised 2013-2021 Discretionary Savings Under the Budget Control Act?

27

Promised

Figures assume lawmakers stick to the

2020-2021 spending deal.

*Other savings consist of mandatory

savings and revenue increases.

Lawmakers also circumvented the caps

through the ChIMPs gimmick, and by

adding extra defense money to the Iraq

& Afghanistan “emergency” bills that

do not count against these spending

caps.

$488 billion was

repealed (27%)

$1,015 billion was

enacted (57%)

$285 billion was

replaced by other

savings thru 2029

(16%)*

Author: Brian Riedl, Manhattan Institute -- @Brian_RiedlSource: Calculations based on CBO Data, as of August 2019.

Statutory Budget Caps Sharply Reduce Discretionary Spending – Until They are Ignored After a Few Years

0%

2%

4%

6%

8%

10%

12%

1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019 2024 2029

Dis

cre

tio

na

ry S

pe

nd

ing

(%

GD

P)

Fiscal Year

Baseline

Budget Control

Act, 2013-2021Several Multi-year

Budget Deals

Covered 1986-2002

2009

Stimulus

Source: OMB Historical Table 8.4, and January 2019 CBO (current-policy) Baseline.



@Brian_Riedl

The Six Major Deficit-Reduction Deals Since 1983 Relied Mostly on Discretionary Savings

29

New Taxes

18.8%

Discretionary

Savings 52.8%

Medicare

Provider

Cuts

Other

Mandatory

Savings

8.0%

Interest

Savings

11.9%

8.4%


The 6 Largest Deficit Reduction Deals Since 1983 Were:

1983 Social Security Deal (Saved 0.52% of GDP)

1985 Gramm-Rudman Hollings Act (1.72%)

1990 Bush “Andrew Air Force Base” Deal (1.45%)

1993 Clinton Budget Deal (1.08%)

1997 Balanced Budget Deal (0.72%)

2011 Budget Control Act (1.01%)

Savings listed as scored at time of enactment. Many cuts

were later reversed, and the 1985 law was invalidated by the

Supreme Court and replaced with a 1987 version.

Source: Brian Riedl “Getting To Yes: A History Of Why

Budget Negotiations Succeed, and Why They Fail” (2019)

Combined Components of the 6 Deals

Chapter 4

Mandatory Spending and Entitlement Costs are Rising Rapidly

30

31

Major Components of the 2019 Federal Budget

2019 Outlays $Millions Per

Household%

Social Security $1,046,955 $8,125 23%

National Defense 684,568 5,312 15%

Medicare 651,199 5,053 14%

Medicaid 418,681 3,249 9%

Net Interest 393,498 3,054 9%

Income Security Programs 349,458 2,712 8%

Veterans Benefits 200,458 1,556 4%

Education 112,863 876 2%

Justice Administration 71,780 557 2%

Health Research & Regulation 68,678 533 2%

Highways & Mass Transit 63,580 493 1%

International Affairs 54,337 422 1%

All Else 413,133 3,206 9%

Total 4,529,188 35,148 100%

2019 Revenues $Million Per

Household %

Ind. Income Taxes $1,698,353 $13,180 49%

Social Insurance Taxes 1,242,405 9,641 36%

Corporate Taxes 216,194 1,678 6%

Excise Taxes 98,669 766 3%

Customs Duties/Fees 69,469 539 2%

Fed. Reserve Earnings 48,783 379 1%

Estate/Gift Taxes 19,295 150 1%

Other Revenues 44,488 345 1%

Total Receipts 3,437,656 26,677 100%

Source: OMB Historical Tables

2.1, 2.4, 2.5, 3.2, and 8.5 Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Mandatory Spending is Squeezing Discretionary Spending

32

1965

Mandatory

(34%)Defense

(43%)

Domestic

Discretionary

(23%)

2019

Mandatory

(70%)

Defense

(15%)

Domestic

Discretionary

(15%)

Source: OMB Historical Table 8.3Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

33

Composition of Federal Spending, 1962-2019

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018

Fiscal Year

Social Security & Medicare

Defense (including

Antipoverty Programs

Net Interest

Other Programs

13%

38%

49%

9%

29%

6%

20

18%

15%

3%

Source: OMB Historical

Tables 3.2, 8.5, and 10.1 Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Social Security, Health Entitlements, & Interest Costs Drive 90% of the 2008-2030 Spending Hikes

34

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Infl

ati

on

-Ad

jus

ted

(2

02

0)

$B

illi

on

s

Fiscal Year

$1,448

$3,289

$552

$580

$735

$467

$304

$739

Social Security & Health Entitlements

(up $1,841 billion)

Non-Defense Discretionary (up $105 billion)

Defense & Wars (up $4 billion)

$627 $732

Other Entitlements (up $113 billion)

Source: September 2020 CBO (Baseline and

historical data), adjusted for inflation Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

The 2017 Tax Cuts are a Relatively Minor Contributor to Soaring Deficits

35

-$3,500

-$3,000

-$2,500

-$2,000

-$1,500

-$1,000

-$500

$0

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Bu

dg

et

Defi

cit

in

No

min

al

$B

illio

ns

Fiscal Year

$-459

(2015)

Underlying CBO Budget Deficit -

- Driven by Social Security,

Health Benefits, & Debt Interest

$-1,415

(2009)

Pandemic

Response

$-2025

(2030)

Recession

& Federal

Response

Source: Calculated using CBO September 2020 (current-policy) Baseline data.

Assumes that new tax cuts are renewed.

Resulting interest costs are incorporated into each category.



@Brian_Riedl

Rising Social Security & Medicare Shortfalls Drive Nearly the Entire Rising Deficit Between 2019-2030

-$3,500

-$3,000

-$2,500

-$2,000

-$1,500

-$1,000

-$500

$0

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Bu

dg

et

Defi

cit

in

No

min

al

$B

illio

ns

Fiscal Year

$-430

$-1,516

$28

$-230

$-228

$-224

Annual deficit is projected to rise

from $984 billion to $2,025 billion

All Other Policies

2017 Tax Cuts (Extended)

Discretionary Spending Cap Increases

General Revenue Transfers to Pay

Social Security & Medicare Benefits

Pandemic

Legislation

$-156

$-79

Source: Calculated using Jan 2019 CBO (current-policy) Baseline and CBO 2019 Long-Term Baseline.



General revenues include interest payments on trust funds, as they represent a net cost to the rest of the budget.



- @Brian_Riedl

Rising Social Security & Medicare Shortfalls Drive 90% of Rising Deficit Between 2019-2030

-430 -470 -610 -722 -759 -839 -926 -1020 -1125 -1219 -1362 -1516-224-255

-259 -223 -192 -172-167 -142

-163-194

-211-230

-156-175

-159 -164 -169 -174-179 -185

-193-203

-214-228

-$3,500

-$3,000

-$2,500

-$2,000

-$1,500

-$1,000

-$500

$0

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Bu

dg

et

De

fic

it in

No

min

al $

Bil

lio

ns

Fiscal Year

-1414

Pandemic Relief Legislation

2017 Tax Cuts (Extended)

All Other Policies

-1280

-1814

-3311

-984

-1770

-1132-1275

-1596

-1180 -1225

Discretionary Spending Cap Increases

-2025

General Revenue Transfers to Pay Social Security & Medicare Benefits



- @Brian_Riedl

Each category includes the portion of interest on the national debt that it is responsible for.

General revenue transfers include interest payments on trust funds, which are a net cost to the rest of the budget.

Source: Calculated using Sept. 2020 CBO (current-policy) Baseline.

-$10.6

-$3.0-$2.2 -$2.0

-$0.2

-$12

-$10

-$8

-$6

-$4

-$2

$0

$T

rill

ion

s o

f N

om

inal D

oll

ars Higher

Disc. Caps2017 Tax

CutsRest of the

Budget

Impact on 2020-2030 CBO Budget Deficit

General

Revenue

Transfers

to Social

Security &

Medicare

Pandemic

Legislation



@Brian_Riedl

Major Components of the $18.0 Trillion Deficit Projected Over 2020-2030 Period

Source: Calculated using Sept. 2020 (current-policy) Baseline and Long-Term Baseline.



General revenues include interest payments on trust funds, as they represent a net cost to the rest of the budget.

Note: General revenue transfers to Social

Security & Medicare will grow from $470 billion

to $1,516 billion between 2020 & 2030

39

Anti-Poverty Spending Has Soared Regardless of Party Control of Government

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

Fe

de

ral S

pe

nd

ing

(%

GD

P)

Fiscal Year

Cash & Other Aid

Housing

Health Care

Food Aid

3.2%

(2008)

1.8%

(1980)

0.5%

(1962)

2.6%

(2000)

4.2%

(2010)3.9%

(2019)

Source: OMB Historical Tables 3.2, 8.5, and 10.1 Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

From 2001 through 2019, SNAP (Food Stamp) Caseloads Grew 17 Times as Fast as the Poverty Population

40

3%

106%

136%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Individuals in Poverty SNAP Caseloads Total Spending

Perc

en

tag

e I

ncre

ase

Sources: Department of Agriculture and Census Bureau. The

poverty rate fell from 11.7% to 10.5% over this period.

Up 1 Million

Up

18 Million

Up

$37 Billion

(After

Inflation)


In 2019, Washington Made $164 Billion in Improper Payments

41

$44

$17

$17

$29

$57

$0 $10 $20 $30 $40 $50 $60

Other High-Risk Programs

Medicare Advantage (PartC)

Earned Income Tax Credit(EITC)

Medicare Fee-for-Service

Medicaid

2019 Improper Payments ($Billions)

Source: OMB at https://paymentaccuracy.gov/ Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Veterans’ Programs Have Earned Healthy Funding Increases

42

$0

$50

$100

$150

$200

$250

2001 2010 2020

Infl

ati

on

-Ad

jus

ted

(2

02

0)

$B

illi

on

s

Fiscal Year

$129

$65

$215

Source: OMB Historical Table 3.2,

adjusted for inflation Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Why the Debt Limit Matters All 8 Major Deficit-Reduction Laws Since 1985

Were Attached to Debt Limit Legislation

43

Year Major Deficit-Reduction Law Attached to

Debt Limit?

1985 Gramm-Rudman-Hollings Deficit Caps

1987 Gramm-Rudman-Hollings Deficit Caps II

1990 Bush Tax Increases & Spending Caps

1993 Clinton Deficit Reduction Package

1996 Line-Item Veto Act (later struck down by Supreme Court)

1997 Balanced Budget Act

2009 Statutory Pay-As-You-Go Act

2011 Budget Control Act (Cutting $2.1 Trillion)


Source: Compiled by the Committee

For a Responsible Federal Budget

Chapter 5

The 30-Year Debt Estimates are Driven by Social Security and Medicare Shortfalls

44

Federal Budget, 1960-2050 (Projected)

45

0%

5%

10%

15%

20%

25%

30%

35%

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Perc

en

tag

e o

f G

DP

Fiscal Year

15.5%

8.1%

2.0%

2.8%

Social Security &

Health Entitlements

Defense & Wars

2.8%

Source: CBO 2020 Long-Term Budget Outlook and OMB Historical Tables.

Revenue


Manhattan Institute

@Brian_Riedl

Note: This is the rosy

scenario that assumes:

• no more wars

• no more recessions

• 2017 tax cuts expire

• health costs slow

• the interest rate

paid on the national

debt remains far

below average even

as the debt rises

to195% of GDP

What is Causing $104 Trillion 2020-2050 Budget Deficit?Social Security & Medicare: $101 Trillion Deficit

The Rest of the Budget: $3 Trillion Deficit

46

-$80

-$70

-$60

-$50

-$40

-$30

-$20

-$10

$0

Su

rplu

s/D

efi

cit

in

No

min

al $

Tri

llio

ns

Social Security

$-27.0

$-3.3

Rest of the

Federal Budget

Purple – Program Deficit

Blue – Interest Costs Directly

Attributable to Program Deficit

$-30.7

$-70.5

$-11.8

$-18.9

Medicare

$-43.5

Source of $104.7 Trillion Budget Deficit Projected over 2020-2050 Period ($Nominal)


Manhattan Institute

-- @Brian_Riedl

Note: Social Security & Medicare deficits are the benefits that must

be paid from general revenues because payroll taxes, premiums,

and other non-interest trust fund revenues are insufficient. CBO

assumes full benefits will continue even after trust fund insolvency.

Source: Calculations from CBO 2020

Long-Term Budget Outlook. To inflation

adjust, trim amounts by one-third.

Projected 2050 Budget Deficits are Entirely Driven by Social Security & Medicare Shortfalls

47

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Social Security & Medicare Systems Rest of the Federal Budget

Perc

en

tag

e o

f G

DP

5.8%

11.3%

12.8%

20.0%

Dedicated

Revenues

Revenues

Outlays

Outlays

Note: 2050 is the final year of the latest CBO 30-year budget projection.

Source: CBO 2020 Long-Term Budget Outlook.

Each outlay category includes portion of national debt interest attributed to its 2020-2050 deficits.



- @Brian_Riedl

48

Social Security’s Cash Shortfalls are Driven by Retiring Baby Boomer Costs and Resulting Interest Costs

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2020 2025 2030 2035 2040 2045 2050

Pe

rce

nta

ge

of

GD

P

Fiscal Year

Social Security Revenue from Payroll Taxes & Taxation of Benefits

Social Security Outlays

8.6%

6.3%

5.3%

5.0%4.4%


Manhattan Institute

-- @Brian_RiedlSource: Calculated using CBO 2020 Long-Term Baseline. Revenues do not include trust fund interest

transfers. Interest costs are those directly attributable to Social Security’s annual deficits over this period.

49

Medicare’s Cash Shortfalls are Driven by Soaring Benefit Costs and Resulting Interest Costs

0%

2%

4%

6%

8%

10%

12%

2020 2025 2030 2035 2040 2045 2050

Pe

rce

nta

ge

of

GD

P

Fiscal Year

Medicare Payroll Taxes & Dedicated Revenues

Medicare Outlays

11.3%

6.0%

3.5%

1.5%

1.4%


Manhattan Institute

-- @Brian_RiedlSource: Calculated using CBO 2020 Long-Term Baseline. Outlays are net of premiums paid.

Interest costs are those directly attributable to Medicare’s annual deficits over this period.

Social Security Faces a $31 Trillion Shortfall over 30 Years - $28 Trillion if Including the Trust Fund

50

$51.6

$73.5

$2.9

$11.8

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2020-50 Revenues 2020-50 Outlays

$N

om

inal

Tri

llio

ns

$85.3

$54.5

Green = Transfers from

redeeming the Social

Security Trust Fund.

The Trust Fund contains no

economic resources and

must be redeemed by new

taxes and borrowing.

In other words, it does not

future save taxpayers a

dime or reduce the true

shortfall.

Program

Outlays

Interest Costs

Payroll Taxes &

Benefit Taxes



@Brian_Riedl

Source: Calculated using the CBO 2020 Long-Term Budget Outlook. Interest costs reflect those

directly attributable to 2020-2050 Social Security shortfalls.

Medicare Faces a $71 Trillion Cash Shortfall Over the Next 30 years

51

$60.3

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2020-50 Revenues 2020-50 Outlays

$N

om

inal

Tri

llio

ns

$87.3Medicare’s $71 shortfall

equals 67% of the total

federal budget deficit

projected by CBO over the

2020-2050 period.

Annual projected shortfall:

2020: 2.0% of GDP

2050: 4.6% of GDP (9.9%

including interest cost).

Program

Outlays

Interest Costs

$16.7

Payroll Taxes &

HI Trust Fund

$27.0



@Brian_RiedlSource: Calculated using the CBO 2020 Long-Term Budget Outlook. Benefits are net of senior premiums.

Interest costs reflect those directly attributable to 2020-2050 Medicare shortfalls.

The Typical Retiring Couple Will Receive $3 in Medicare Benefits for Every $1 Paid into the System –and Also Come Out Ahead in Social Security

52

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Social Security Medicare

Infl

ati

on

-Ad

jus

ted

(2

01

8)

Do

lla

rs

$599,000

$498,000

$161,000

$669,000

Taxes

Paid In

Taxes Paid In

Benefits

ReceivedBenefits

Received

(net of

premiums

paid)

Represents typical, average-income married couple turning 65 in 2020

Calculations represent expected present values.

Source: Urban Institute (2018) Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Cost of 2017 Tax Cuts vs. Major Entitlements Over 30 Years

53

$6.8$18.9

$43.5

$5.2

$11.8

$27.0

$0

$10

$20

$30

$40

$50

$60

$70

$80

2017 Tax Cuts(Extended)

Social SecurityCash Deficit

MedicareCash Deficit

$N

om

inal

Tri

llio

ns

$30.7

$70.6

$12.0

Blue – Interest Costs

Purple – Principal Costs



@Brian_RiedlSource: Calculated using the CBO 2020 Long-Term

Budget Outlook earlier CBO tax estimates

2020-2050 Projected Totals

Social Security’s Deficits Will Steeply Increase, While Medicare Also Faces Rising Deficits

54

-$400

-$350

-$300

-$250

-$200

-$150

-$100

-$50

$0

$50

2016 2018 2020 2022 2024 2026 2028 2030

No

min

al $

Bil

lio

ns

Fiscal Year

$-11

$-398

$-113

Medicare Part A (HI)

Social Security (DI)

Source: September 2020 CBO Baseline Supplemental Trust Fund Tables.

Excludes general revenue transfers into the programs, such as interest payments.



@Brian_Riedl

Medicare and Social Security Trust Funds Face Bankruptcy in 4 and 11 Years, Respectively

55

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$0

$50

$100

$150

$200

$250

2015 2017 2019 2021 2023 2025 2027 2029 2031

No

min

al $

Bil

lio

ns

No

min

al $

Bil

lio

ns

Medicare Part A (HI)

Trust Fund Balance

Social Security (OASI)

Trust Fund Balance

Fiscal Year

2024 2031

Source: September 2020 CBO Baseline

Supplemental Trust Fund Tables. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Chapter 6

Can’t We Just Raise Taxes, Cut Defense, and Nationalize Health Care Instead?

56

No “Easy” Pay-Fors for Social Security & Medicare:Programs Face Shortfalls of 6% of GDP by 2040s

57


Manhattan Institute

@Brian_Riedl

Tax Proposals (static scoring) 10-Yr Savings

($Billions)

Long-Term Savings

(%GDP)

Raise Payroll Tax by 10 Percentage Points, no wage limit $8,982 3.60%

Impose a 20% Value-Added Tax (VAT) – like a national sales tax $7,680 3.35%

Raise Income Tax Rates Across-the-Board by 10 Percentage Points $9,054 3.30%

Double 35% and 37% Tax Brackets to 70% and 74% (plus 15% state/payroll) $4,504 1.70%

Impose Bernie Sanders’ 8% Wealth Tax (data from Penn-Wharton) $2,809 1.07%

Eliminate FICA Cap – 15.3% Payroll Tax on All Wages (data from SSA) $2,180 0.84%

Raise Corporate Tax Rate by 20 Percentage Points $1,926 0.87%

Repeal All Itemized Tax Deductions $1,312 0.99%

Carbon Tax of $25/Metric Ton – no rebate for households hit $1,099 0.43%

Impose a 0.1% Tax on Financial Transactions $777 0.37%

Repeal Entire 2017 Tax Law (data from CBO/JCT) $455 (Mostly scheduled)

Tax Dividends & CapGains as Income over $1M & End Step-Up (data from TPC) $448 0.19%

Impose Bernie Sanders’ 77% Estate Tax (data from Sanders) $336 0.13%

Impose a 0.15% "Bank Tax" on Large Financial Institutions $103 0.03%

30% Minimum "Buffett Tax" for Millionaires $66 0.03%

Tax Carried Interest as Ordinary Income $14 0.01%

Spending Proposals

Cut Defense Budget to European Target of 2% of GDP (data from CBO baseline) $2,899 0.80%

Source: Dec. 2018 CBO “Budget Options” book unless otherwise noted.

These static estimates do not account for revenues lost to the economic impact. Combining policies

may also create interaction effects or duplicate the same policies, so these cannot be summed.

It Would Take Nearly All Progressive Hikes Just to Balance the Budget

Progressive Tax Proposal 2021-2030 Source

Repeal All 2017 Tax Cuts, Including Low-Income $455 CBO Data (dynamic)

8% Wealth Tax (Sanders) $2,809 Penn-Wharton (dynamic)

Lift Social Security Tax Wage Cap $2,180 Social Security Admin.

70% Income Tax Rate Over $10 Million (AOC) $189 Tax Foundation (dynamic)

Mark-to-Market Taxation & Higher Capital Gains Rates $2,000 CRS, Warren campaign

77% Estate Tax (Sanders) $336 Sanders campaign

“Real Corporate Profits Tax” (Warren) $476 Tax Foundation (dynamic)

Repeal Major Corporate Tax Preferences $2,000 Various (dynamic)

Financial Transactions Tax of 0.1% $777 CBO Options

Financial Institutions Tax of 0.15% $103 CBO Options

Repeal Oil & Gas Tax Breaks $9 CBO Options

Carbon Tax ($25/metric ton) – No Household Rebate $1,099 CBO Options

Interest Savings (net of add'l econ/interaction losses) $500 Author estimate

Total Savings Over Decade $12,933


Manhattan Institute

-- @Brian_Riedl

All figures in $billions

Policies would balance 10-year budget, but 2030s deficits would re-emerge.

CBO Forecasts $13 Trillion Deficit over 2021-2030

Defense is Not Driving the Deficit – and Even Eliminating It Completely Would Not Come Close to Financing Soaring

Long-Term Entitlement Costs

59

0%

2%

4%

6%

8%

10%

12%

14%

16%

1970 1980 1990 2000 2010 2020 2030 2040 2050

Fed

era

l S

pen

din

g (

%G

DP

)

Fiscal Year

Defense

Social Security and Health Entitlements



@Brian_Riedl

Source: OMB Historical Tables 3.2, and 10.1;

and CBO 2020 Long-Term Outlook.

Even 100% Tax Rates on Small Businesses and Upper-Income Families Could Not Come Close to

Balancing the Long-Term Budget

60

16.0%

6.6%

10.4%

14.5%

4.0%

5.5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2020 2030 2040 2050 $1 million $500,000

Pe

rce

nta

ge

of

GD

P

----- Projected Budget Deficit -----

All untaxed personal &

small business adjusted

gross income (AGI)

annually earned above the

listed income threshold

Source: CBO September 2020 Long-Term Budget Outlook adjusted into current-

policy baseline and analysis of IRS 2018 (latest year) income tables.


Manhattan Institute

-- @Brian_Riedl

61

$13,970 $12,552$13,248

$21,078

$5,371 $7,973

$13,248

$14,203

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Colorado Plan(failed referendum)

Vermont Plan(abandoned)

California Plan(abandoned)

Bernie SandersNational Plan

Ave

rag

e A

nn

ua

l C

os

t P

er-

Ho

us

eh

old

$20,524

$35,280

$26,497

$19,340

New Spending & Taxes

Redirect Existing Govt. Funds

Source: Public scores of Vermont and California bills, and Colorado Health

Institute data. Sanders calculated from Urban Institute 2016 score of plan


Manhattan Institute

@Brian_Riedl

Single-Payer Health Plans Do Not Save MoneyThey Would Require Huge Per-Household

Tax Increases

Chapter 7

Progressive Proposals Would Dig the Debt Even Deeper

62

Joe Biden has Proposed $11 Trillion in New Spending Over the Decade

Spending Proposal ($Billions) 2021-2030 Source

Health & ACA Expansions (net of spending offsets) $1,450 CRFB

Reduce Medicare Eligibility Age to 60 $300 Author Estimate

Climate and Infrastructure Initiative $2,000 Biden Campaign Website

Expand Social Security and SSI $1,000 CRFB

K-12 and Preschool Expansions $750 CRFB

College and Post-Secondary Education $750 Biden Campaign

Buy American Initiative (net*) $400 Biden Campaign Website

Housing Assistance $640 Biden Campaign Website

Family Leave Assistance $550 CBO Score of Family Act

Combat Opioid Addiction $125 Biden Campaign

Economic Stimulus (Endorsed Heroes Act) $3,000 CBO Score of Heroes Act

Total Spending Over Decade $10,965


Manhattan Institute

-- @Brian_Riedl

*Some of this $700 billion initiative would take place within climate/infrastructure spending.

CRFB = Committee for a Responsible Federal Budget

Figures do not include additional interest costs of new borrowing

Biden’s Spending Increase Proposals Dwarf Recent Democratic Pres. Candidates

$2

$1

$2

$11

$2

$1

$2

$3.6

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

$11

$12

Kerry 2004 Obama 2008 Clinton 2016 Biden 2020

No

min

al

$T

rillio

ns

Purple = Spending Increases

Red = Tax Increases

Source: Tax Policy Center, Committee For a Responsible Federal Budget,

American Enterprise Institute, and public scores of Biden plans



@Brian_Riedl

Ten-Year Budget Estimates of Candidate Plans ($Trillions)

Common Far-Left Proposals Would Cost Between $36 Trillion and $95 Trillion Over the Decade

65


Manhattan Institute

@Brian_Riedl*All figures are over ten years, and in $trillions.

Common Spending Proposal Low* High* Notes

Medicare-For-All 30.0 38.0 Sanders has conceded “between $30 to $40 trillion”

Government Job Guarantee — 30.1 Sanders proposal

Climate and Clean Energy 2.0 16.3 Sanders is the high figure

Free Public College Tuition & Loan Forgiveness 1.5 3.0 Low figure reflects partial loan forgiveness

Affordable Housing 0.1 2.5 Sanders is the high figure

Social Security Expansion 0.5 1.8 Warren & Sanders are the high figure

Teacher Pay and K-12 funding 0.3 1.2

Infrastructure Buildup 1.0 1.0

Universal Child Care & Paid Family/Medical Leave 0.3 1.0

Subtotal: New Spending Proposals 35.7 94.9 Baseline is $60 trillion spending over 2020-2029

CBO Baseline Budget Deficit, 2021-2030 13.0 13.0

Total Federal Budget Deficit 48.7 107.9 Out of a $257 trillion projected GDP (CBO)

Popular Spending Offsets

Cut Defense to European Levels -2.9 -2.9 Baseline is 3% of GDP. NATO target is 2%

Medicare-For-All - Capture State Govt Savings -3.0 -3.0 It is not clear Washington could capture this

Remaining Budget Shortfall To Fill 42.8 102.0 Requires > Doubling $45T in Federal Revenues

66

Medicare-For-All’s 11% of GDP Cost is on Top of Current Medicare’s Large and Growing Shortfall

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2020 2025 2030 2035 2040 2045 2050

Perc

en

tag

e o

f G

DP

Fiscal Year

Medicare Payroll Taxes & Dedicated Revenues

14.8%

6.0%

3.5%

1.5% 1.4%

Current Medicare Outlays

17.0%

Medicare’s

Growing

Baseline

Shortfall

Added M4A

Cost – Still

Needs a

Dedicated

Funding

Source


Manhattan Institute

-- @Brian_Riedl

Source: Calculated using CBO 2020 Long-Term Baseline and Medicare-For-All Estimates from the

Committee For A Responsible Federal Budget (CRFB). Other health spending like Medicaid will

rise from 2.6% to 3.2% of GDP, but that portion is already fully designed for general revenues.

67

0%

5%

10%

15%

20%

25%

30%

35%

40%

All UntaxedIncome Over $1

Million

All BillionaireWealth

Entire DefenseBudget

Proposed NewSpending

Perc

en

tag

e o

f G

DP

4.7% 3.0%

37.6%

3.2%

Medicare-For-All

(12.5%)

Climate (Sanders)

(6.3%)

Job Guarantee

(11.7%)

Free College & Loan Forgiveness (1.0%)

Baseline 10-yr

Deficit (6.1%)


Manhattan Institute

-- @Brian_Riedl

No, Defense Cuts & Taxing Millionaires Cannot Finance Current Deficit or Liberal Wishlist

Sources: Author calculations using data from CBO, IRS, liberal candidates, and liberal think tanks

Several Major Progressive Proposals Overwhelmingly Benefit Upper-Income Families

Sources: Calculated using data from the Urban Institute and Tax Policy Center. SALT=State and Local Tax deduction

Also: Medicare-For-All could hurt most of the 75 million Medicaid recipients who already pay

little-to-no premiums/copays, but would likely be pay the broad based taxes required to fund full cost of law.

A carbon tax would raise costs 2% for the bottom quintile, vs. 1% for top quintile.

Zero-emission mandates will raise car/home prices & kill working-class fossil fuel jobs.



@Brian_Riedl

$380

$544

$597

$80

$192

$4$0

$100

$200

$300

$400

$500

$600

Free Public College Student Loan Forgiveness Repeal SALT Cap

No

min

al

$b

illio

ns

Family

income

over $120k

Top-earning

25%

Top-earning

20%

Under $30k

Bottom-

earning

25%

Bottom

60%

Ten-Year Distribution of Benefits

Chapter 8

Tax Revenues Will Continue Growing Faster Than the Economy

69

Rising Spending – Not Falling Revenues –Drives the Long-Term Deficit

70

0%

5%

10%

15%

20%

25%

30%

35%

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Perc

en

tag

e o

f G

DP

Fiscal Year

20.0%

(1960-2019)

17.3%

(1960-2019)

Federal Spending

Tax Revenues

31.2%

(2050)

18.6%

(2050)

(17.8% if 2017 tax

cuts are extended)

Author: Brian Riedl, Manhattan Institute -- @Brian_RiedlSource: CBO 2020 Long-Term Budget Outlook.

Income Tax Revenues Have Remained Relatively Constant Regardless of the Top Tax Rate

71

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1934 1944 1954 1964 1974 1984 1994 2004 2014

Top Income Tax Rate Income Tax Revenues (%GDP)

Fiscal Year

Average Top Rate / Revenues

1950s: 90.5% / 7.2%

1960s: 80.3% / 7.6%

1970s: 70.2% / 7.9%

1980s: 48.4% / 8.2%

1990s: 36.7% / 8.1%

2000s: 36.2% / 7.8%

2010s: 37.7% / 7.8%

Correlation

1950-2020:

-0.18

Source: OMB Historical Table 2.3, and

U.S. Treasury SOI Tax Stats – Historical Table 23 Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Individual Income Tax Revenues Will Rise – Even With the Tax Cuts – Due to Real Bracket Creep

& Taxable Retirement Distributions

6%

7%

8%

9%

10%

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Ind

ivid

ua

l In

co

me

Ta

x R

eve

nu

es

(%

GD

P)

Fiscal Year

Tech Bubble

& Burst

Deep

Recession

Reagan

Tax Cuts

Bracket Creep

Deep

Recession

CBO Baseline with

(Tax Cuts Extended)

72

Source: OMB Historical Table 2.3, and September 2020 CBO (current-policy) Baseline. Real bracket creep is

when rising incomes (above inflation) push taxpayers into higher tax brackets, raising their average tax rate.


Manhattan Institute

-- @Brian_Riedl

High Capital Gains Tax Rates Have Not Produced More Revenue

73

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1954 1960 1966 1972 1978 1984 1990 1996 2002 2008 2014

Top Capital Gains Tax Rate Capital Gains Tax Revenues (%GDP)

Fiscal Year

Correlation: -0.31

Source: Tax Tables, U.S. Treasury Office of Tax Analysis.Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Before the TCJA Cut it to 26% (incl. 5% State Taxes)U.S. had the Highest Corporate Tax Rate in the OECD

74

39%

32%32%

30%30%30%

30%28%28%

28%

26%26%

25%

25%

25%

25%

25%

25%

24%23%

22%

22%

22%

21%

21%

21%

20%20%

20%

20%

19%19%

19%19%

15%

13%

9%

0%

10%

20%

30%

40%

Un

ite

d S

tate

s -

201

7

Fra

nc

e

Po

rtu

ga

l

Au

str

alia

Me

xic

o

Ge

rma

ny

Jap

an

Ne

w Z

ea

lan

d

Ita

ly

Ko

rea

Ca

na

da

Un

ite

d S

tate

s -

202

0

Au

str

ia

Be

lgiu

m

Ch

ile

Ne

the

rla

nd

s

Sp

ain

Lu

xem

bo

urg

Gre

ece

Isra

el

De

nm

ark

No

rwa

y

Tu

rke

y

Sw

ed

en

Sw

itze

rla

nd

Slo

va

k R

ep

ub

lic

Es

ton

ia

Fin

lan

d

Icela

nd

Latv

ia

Cze

ch

Rep

ub

lic

Po

lan

d

Slo

ve

nia

Un

ite

d K

ing

do

m

Lit

hu

an

ia

Ire

lan

d

Hu

ng

ary

To

p C

orp

ora

te T

ax

Ra

te

Source: OECD Stats (2020), Tax Table II.1. Tax rates

include federal, state, province and local corporate taxes.

Notes: While all countries allow businesses to reduce their taxes through

exemptions, deductions, and credits, the U.S. has been among the highest

effective corporate tax rates too.Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

The U.S. has Finally Caught Up With the Rest of the OECD on Corporate Tax Competitiveness

75

32%31%30%

30%29%

28%27%26%25% 25%25% 25% 25% 25% 25%25% 24%24% 24%24% 23%

0%

5%

10%

15%

20%

25%

30%

35%

40%2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

To

p C

orp

ora

te T

ax

Ra

te

United States – 39%

Average of Other

34 OCED Nations

26%

Source: OECD Stats (2020), Tax Table II.1. Tax rates

include federal, state, province and local corporate taxes. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

The Economy Matters More: President Obama Oversaw $500 Billion in New Taxes –and Also Lost $3.2 Trillion to Economic Downgrades

76

-$822

$1,328

-$3,153-$3,500

-$3,000

-$2,500

-$2,000

-$1,500

-$1,000

-$500

$0

$500

$1,000

$1,500

No

min

al $

Bil

lio

ns

Added Revenue from

Tax Hikes

Lost Revenue from

Economic

Downgrades and

Technical

Re-estimates

Lost Revenue from

Tax Cuts

Figures reflect 2009-2019 estimates, as of

January 2017 when Pres. Obama left office

Source: Congressional Budget Office data. Between January 2009 and January 2017, Congress and President Obama enacted legislation

adding $516 billion to 2009-2019 revenues (against a current-policy baseline). During that same period, the unexpectedly-weak economic

recovery and related technical estimates reduced 2009-19 revenues by $3,153 billion. Note that the initial January 2009 CBO baseline had

already incorporated the projected 2009-19 revenue losses from the recession. These additional economic downgrades reflect the weak

recovery, particularly in the later years. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Taxes Cannot Easily Close Security & Medicare Shortfall:Will Need Added Revenues of 6% of GDP by 2040s

77


Manhattan Institute

@Brian_Riedl

Tax Proposals (static scoring) 10-Yr Savings

($Billions)

Long-Term Savings

(%GDP)

Raise Payroll Tax by 10 Percentage Points, no wage limit $8,982 3.60%

Impose a 20% Value-Added Tax (VAT) – like a national sales tax $7,680 3.35%

Raise Income Tax Rates Across-the-Board by 10 Percentage Points $9,054 3.30%

Double 35% and 37% Tax Brackets to 70% and 74% (plus 15% state/payroll)* $4,504 1.70%

Impose Bernie Sanders’ 8% Wealth Tax (data from Penn-Wharton) $2,809 1.07%

Eliminate FICA Cap – 15.3% Payroll Tax on All Wages (data from SSA) $2,180 0.84%

Raise Corporate Tax Rate by 20 Percentage Points $1,926 0.87%

Repeal All Itemized Tax Deductions $1,312 0.99%

Carbon Tax of $25/Metric Ton – no rebate for households hit $1,099 0.43%

Impose a 0.1% Tax on Financial Transactions $777 0.37%

Repeal Entire 2017 Tax Law (data from CBO/JCT) $455 (Mostly scheduled)

Tax Dividends & CapGains as Income over $1M & End Step-Up (data from TPC) $448 0.19%

Impose Bernie Sanders’ 77% Estate Tax (data from Sanders) $336 0.13%

Impose a 0.15% "Bank Tax" on Large Financial Institutions $103 0.03%

30% Minimum "Buffett Tax" for Millionaires $66 0.03%

Tax Carried Interest as Ordinary Income $14 0.01%

Source: Dec. 2018 CBO “Budget Options” book unless otherwise noted.

These static estimates do not account for revenues lost to the economic impact. Combining policies

may also create interaction effects or duplicate the same policies, so these cannot be summed.

Chapter 9

The Tax Code Has Become Increasingly Progressive

78

The Federal Tax Code Remains Progressive

1.0%

-4.7%

-0.6%

4.5%

8.6%11.3%

13.4%15.9%

18.8%21.5%

22.9%

27.3%

31.1%

-8.7%

-13.2%

-9.7%

-4.9%-1.1%

1.7%

3.6% 5.6%

8.2%10.8%

14.0%

20.6% 23.1%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0-10$5k

10-20$17k

20-30$25k

30-40$34k

40-50$45k

50-60$60k

60-70$79k

70-80$105k

80-90$145k

90-95$204k

95-99$344k

99-99.9$1006k

Top.1%$8M

20

19

Ave

rag

e T

ax

Ra

te

Income Distribution Range and Average Family Cash Income

Average Tax Rate Paid For Federal Income Taxes

Average Tax Rate Paid for All Federal Taxes

Source: U.S. Treasury, Office of Tax Analysis.

Data represents 2019 Distribution of Tax Burden, Current Law



- @Brian_Riedl

Average Federal Tax Rate Paid by Income Category, 1979-2017

80

0%

5%

10%

15%

20%

25%

30%

35%

40%

1979 1983 1987 1991 1995 1999 2003 2007 2011 2015

Ave

rag

e F

ed

era

l Ta

x R

ate

Pa

id

Fiscal Year

27%

19%

26%

18%

15%

9%

22%

1%

9%

Second 20%

14%

Bottom 20%

Fourth 20%

Middle 20%

Top 20%

32%Top 1%35%

Note: Includes federal income, payroll,

corporate, and excise taxes paid.

Author: Brian Riedl, Manhattan Institute -- @Brian_RiedlSource: Calculations using CBO "Distribution

of Household Income, 2017” (2020)

The Federal Tax Burden (For All Combined Taxes) Has Grown More Progressive Over Time

81

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1979 1983 1987 1991 1995 1999 2003 2007 2011 2015

Pe

rce

nta

ge

of

Fe

de

ral Ta

x B

urd

en

P

aid

by Q

uin

tile

Fiscal Year

55%

14%

69%

17%

7%2%

22%

0%

4%

Second 20%

9%

Bottom 20%

Fourth 20%

Middle 20%

Top 20%

Percentage of Federal Tax Burden Financed by Income Quintile, 1979-2017



The Highest-Earning 20 Percent of Taxpayers Pay 87 Percent of All Federal Individual Income Taxes

82

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015

Pe

rce

nta

ge

of

Inc

om

e T

ax

Bu

rde

n

Pa

id b

y Q

uin

tile

Fiscal Year

65%

11%

87%

13%

4%

0%

20%

-4%

-1%

Second 20%

4%

Bottom 20%

Fourth 20%

Middle 20%

Top 20%

Percentage of Federal Income Tax Burden

Financed by Income Quintile, 1979-2017



Even Controlling for Income Inequality, Income Taxes Have Become More Progressive, With the Highest-Earning 20

Percent Increasing Their Income Tax Share

-2

-1

0

1

2

3

1979 1983 1987 1991 1995 1999 2003 2007 2011 2015

Sh

are

of

Inc

om

e T

ax

es

Pa

id D

ivid

ed

b

y t

he

Sh

are

of

Inc

om

e E

arn

ed

Fiscal Year

1.36

0.67

1.47

0.67

0.42

-0.03

0.88

-1.26

-0.11

Second 20%

0.34

Bottom 20%

Fourth 20%

Middle 20%

Top 20%

Top 1%1.92

2.10

83Source: Calculations using CBO "Distribution


“Progressivity ratio” refers to the share of all individual income taxes paid divided by the share of pre-tax income earned. So a group that pays

40% of the taxes while earning 20% of the income has a progressivity ratio of 2. Ratios above 1 represent tax burdens exceeding their share

of the income, while ratios below 1 represent tax burdens below their income share. Negative figures reflect a negative tax burden.


Progressivity Ratio by Income Rank, 1979-2017

0.800.84

0.900.940.95

1.001.011.02

1.071.101.101.11

1.141.15

1.171.171.181.191.201.20

1.221.26

1.281.29

1.35

0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5

SwitzerlandPolandIceland

BelgiumNorwaySweden

JapanDenmarkGermany

AustriaFrance

OECD-24Slovak Republic

LuxembourgCzech Republic

KoreaItaly

New ZealandUnited Kingdom

FinlandCanadaIreland

NetherlandsAustralia

United States

Progressivity Ratio

Note: For the highest-earning

10% of taxpayers, these figures

refer to their share of the nation’s

taxes paid, divided by their share

of the nation’s pre-tax income

earned.

So if the top decile pays 30% of

the taxes and earns 20% of the

income, its ratio is 1.5.

Even Controlling for Income Inequality, the U.S. Has the Most Progressive Income/Payroll Tax Code in the OECD

84

Source: OECD (2008) and Tax Foundation. The U.S tax code has since

become even more progressive. Figures also exclude value-added taxes

that make many other OECD nations’ tax codes even less progressive.Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Chapter 10

Countering Tax, Spending, & Deficit Myths of the 1980s Through 2008

85

The Reagan Tax Cuts Did Not Starve the Government –Spending Worsened the 1980s Deficits

86

16.8%

17.3% 17.4%17.8%

17.2%

18.1%

19.4%

21.6%

15%

16%

17%

18%

19%

20%

21%

22%

1950s 1960s 1970s 1980s

Pe

rce

nta

ge

of

GD

P

Purple = Spending

Taxes

Paid In

Red = Revenues

Source: OMB Historical Table 1.3 Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Why Did 1980s Budget Deficits Exceed the 1970s Deficits?

87

5.7%

4.3% 4.4%

3.6%

1.4%

5.6%

4.0%

5.8%

3.6%

2.7%

0%

1%

2%

3%

4%

5%

6%

Fe

de

ral S

pe

nd

ing

(P

erc

en

tag

e o

f G

DP

)

Fell during

1970s,

rose back

during 1980s

1970s

1980s increase:

60% - added debt

40% - higher

interest rates

1970s1970s1970s 1970s 1980s1980s1980s1980s 1980s

Source: OMB Historical Table 8.4, and interest rate calculations

using the Economic Report of the President Table B-25.



@Brian_Riedl

Non-Defense

Discretionary

Other

Entitlement

Programs

Defense Social

Security &

Medicare

Interest on

Debt

1970s Average Percentage of GDP: Revenue 17.4%, Spending 19.4%, Deficit: 2.0%

1980s Average Percentage of GDP: Revenue 17.8%, Spending 21.6%, Deficit: 3.8%

To the Extent it Contributed to the Soviet Collapse,the 1980s Defense Buildup Eventually Paid for Itself

88

0%

1%

2%

3%

4%

5%

6%

7%

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

De

fen

se

Sp

en

din

g (

%G

DP

)

Fiscal Year

Initial 1980 Baseline of 4.8% of GDP

1992-2001 Post-Cold War Wind Down:

Average of 3.5% of GDP

(1.3% below 1980 baseline)

1981-1991 Cold War Buildup:

Average of 5.5% of GDP

(0.7% above 1980 Baseline)


Manhattan Institute

-- @Brian_Riedl

Source: OMB

Historical Tables

3.2, and 10.1

Note: Some believe that America’s 1980s defense buildup pushed the

Soviets into an unaffordable arms race that contributed to its economic

problems and ultimately a more accommodating posture towards the West,

each of which contributed to Soviet destabilization and collapse.

The 1990s Budget Was Balanced by an Economic Boom and the Cold War Peace Dividend

(and by Washington Not Spending All the Savings)

0.7%

2.2%

-1.7%

-0.9%

-0.4% -0.4% -0.5%

-2%

-1%

0%

1%

2%

3%

Ch

an

ge

in

Pe

rce

nta

ge

of

GD

P

Change Between 1992 Peak Deficit of 4.5% of GDP,and 2000 Peak Surplus of 2.3% of GDP

Revenues Jumped 2.9% of GDP Spending Fell 3.9% of GDP

Defense

cuts after

Cold War

ends

Interest

savings

Reduced

unemployment

costs

Grew faster than

Social Security

benefits

Strong Economy

Various

small

savings1993 Clinton

tax hike

Economic

growth &

small tax

changes

89Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

Source: OMB Historical Tables 2.3, 3.2, and 10.1;

and the CBO (1993) score of tax increases

The May 2003 Supply-Side Tax Rate Cuts Were More Successful Than They are Credited For

90

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

-10%

-5%

0%

5%

10%

15%

2001 2002 2003 2004 2005 2006

Business Investment

Growth

Real GDP

Growth

Source: BEA, BLS, S&P. The 2003 tax cuts reduced marginal tax rates for families, small

businesses, & investors. The less-successful 2001 tax cuts were more rebate-based.

The 2007 housing crash that ended this mini-boom was unrelated to these tax policies.


Manhattan Institute

@Brian_Riedl

93.0%

93.5%

94.0%

94.5%

95.0%

95.5%

96.0%

800

900

1,000

1,100

1,200

1,300

1,400

2001 2002 2003 2004 2005 2006

S&P 500Employment (and

Unemployment) Rate

May

/ 5.0%

/ 4.0%

/ 4.5%

/ 6.0%

/ 5.5%

/ 6.5%

/ 7.0%

May

The “Bush Tax Cuts” for Upper-Income Taxpayers Caused Only 7% of the 2001-2011 Fiscal Decline Under President Bush

91

Economic & Technical Downgrades, 32%

"Bush Tax Cuts" -Earners Over $250k,

7%

"Bush Tax Cuts" -Earners Under

$250k, 16%

2008 Economic Stimulus Act, 2%

Other Tax Policies, 5%

Defense Spending, 21%

Non-Defense Discretionary Spending, 8%

Other Entitlement Reforms, 4%

Medicare Prescription Drug Program, 3%

TARP, 2%

Note: When President Bush

took office, CBO forecast a

$5.9 trillion surplus over the

FY 2001-2011 period.

When he left office in

January 2009, CBO was

showing a $4.4 trillion deficit

over that same decade.

This chart accounts for the

$10.3 trillion fiscal decline.

Green – Tax Legislation

Blue – Spending Legislation

Red – Non-Legislative


Manhattan Institute

@Brian_Riedl

Source: Calculations based on a CBO June 2012 report, and CBO baseline updates over

2001-11 period. Tax distribution data was estimated using Treasury data accumulated by the

Tax Policy Center. Each category’s cost includes its resulting net interest expenses.

President Bush Oversaw a $10.3 Trillion Decline from the Inherited 2001-2011 Budget Projections

(All numbers in nominal $billions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2001-2011

CBO January 2001 Projected Surplus 281 313 359 397 433 505 573 635 710 796 889 5,891

Legislative Changes

"Bush Tax Cuts" - Earners Over $250k -22 -12 -48 -82 -74 -71 -72 -78 -81 -88 -71 -699

"Bush Tax Cuts" - Earners Under $250k -52 -27 -112 -191 -172 -165 -169 -181 -189 -206 -167 -1,631

Defense Spending -5 -36 -85 -130 -165 -195 -229 -294 -332 -343 -357 -2,171

Non-Defense Discretionary Spending 2 -17 -34 -46 -74 -91 -83 -107 -120 -118 -114 -802

AMT Patch, Tax Extenders, Other Tax Changes -1 -44 -44 -33 -12 -12 -55 -89 -129 -42 -30 -489

Medicare Prescription Drug Program 0 0 0 -4 -6 -29 -44 -50 -56 -62 -70 -321

TARP Financial Bailouts 0 0 0 0 0 0 0 0 -194 -16 -12 -221

Economic Stimulus Act of 2008 0 0 0 0 0 0 0 -160 -25 3 0 -181

Other Entitlement Reforms -8 -14 -36 -29 -36 -51 -44 -41 -74 -52 -46 -432

Economic & Technical Re-estimates

Economic/Technical Downgrades -67 -319 -377 -295 -212 -140 -39 -95 -696 -577 -520 -3,337

CBO January 2009 Budget Surplus/Deficit 128 -158 -378 -413 -318 -248 -161 -459 -1,186 -703 -498 -4,394

Memorandum

Legislative Changes -87 -150 -358 -514 -540 -614 -696 -1,000 -1,199 -923 -867 -6,947

Economic & Technical Re-estimates -67 -319 -377 -295 -212 -140 -39 -95 -696 -577 -520 -3,337

Total Deficit Changes -154 -469 -735 -809 -752 -754 -735 -1,095 -1,895 -1,500 -1,386 -10,285

Revenue Changes -144 -383 -561 -573 -416 -282 -248 -431 -750 -738 -622 -5,148

Spending Changes -10 -88 -176 -237 -335 -471 -486 -663 -1,147 -761 -765 -5,138

92

Source: Author calculations based on a CBO June 2012 report, and CBO baseline updates over 2001-11 period. Positive

numbers add to deficit, negative numbers reduce deficit. Legislative changes include associated interest costs and

savings. Ending 2090-2011 figures represent estimates on January 2009 when President Bush left office.

See “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl.


Manhattan Institute

@Brian_Riedl

Chapter 11

A Comprehensive Accounting of the Obama Fiscal Record

93

President Obama Oversaw 2009-2019 Budget Deficits $4.6 Trillion Beyond the Inherited Baseline

-$1,600

-$1,400

-$1,200

-$1,000

-$800

-$600

-$400

-$200

$0

2006 2008 2010 2012 2014 2016 2018

No

min

al $

Bil

lio

ns

Fiscal Year

Actual Budget Deficits

CBO Baseline Deficit, January 2009

Note: The January 2009 CBO

baseline already incorporated the

10-year effects of the 2007-2009

recession, and the policies

inherited from President Bush.

The added Obama deficits consist

of $5 trillion in new legislation,

partially offset by $400 billion saved

by the sluggish recovery, as lower

interest rates and thus interest

costs offset the lower revenues

94

Source: CBO data. FY 2017-2019 "actuals" reflect CBO baseline as of January 2017, and thus reflect the

deterioration of the full ten-year budget picture.



Manhattan Institute

@Brian_Riedl

Under President Obama, the 2009-2019 Deficit Worsened by $4.6 Trillion Relative to the Inherited

January 2009-19 Baseline

95

-$4,988

-$3,153

$397$820

$2,314

-$5,000

-$4,000

-$3,000

-$2,000

-$1,000

$0

$1,000

$2,000

$3,000

No

min

al $

Bil

lio

ns

2009-2019 Deficit Impact

Revenue

Downgrades

(Weak Recovery

& Technical

Re-estimates)

Automatic

Entitlement

Savings Due to

Weak Economy

& Technical

Re-estimates

New

Legislation

Signed by

President

Obama

Automatic

Interest Savings

Due Mostly to

Falling Interest

Rates from Weak

Recovery

Faster Recovery

of Financial

Bailout Costs

Purple = Deficit changes unrelated to 2009-17 legislation.

Sum to $378 billion in deficit reduction

Source: Author calculations based on CBO baseline updates and bill scores. Positive figures reduce the deficit, negative figures worsen

the deficit. The January 2009 baseline already incorporated the long-term effects of the recession. Subsequent economic downgrades

reflect the unexpectedly-weak recovery after the recession ended. See “Obama's Fiscal Legacy: A Comprehensive Overview of

Spending, Taxes, and Deficits,” by Brian Riedl.Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl

President Obama Oversaw a $4.6 Trillion Decline from the Inherited 2009-2019 Budget Projections

96

Source: “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl (based on CBO data).

Positive numbers add to deficit, negative numbers reduce deficit. Legislative changes include associated interest costs and savings. Ending

2017-2019 figures represent estimates as of January 2017 when President Obama left office.


Manhattan Institute

@Brian_Riedl

(All numbers in nominal $billions) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009-19

CBO January 2009 Baseline Budget Deficit -1,186 -703 -498 -264 -257 -250 -234 -272 -234 -188 -235 -4,321

Legislative Changes

Renewing Pre-2009 Tax Policies -27 -114 -239 -273 -382 -363 -421 -528 -539 -596 -654 -4,135

2009 ARRA Stimulus -163 -311 -175 -63 -58 -55 -39 -29 -33 -39 -46 -1,010

Subsequent Stimulus and Recession Relief -7 -106 -233 -269 -93 -15 -17 -41 -44 -56 -67 -948

Renewing Pre-2009 Health Laws 0 -3 -16 -20 -19 -15 -16 -19 -19 -15 -12 -154

Other Mandatory Spending Legislation -7 -7 -16 -25 -29 -13 1 -1 4 12 13 -69

Hurricane Sandy Relief 0 0 0 0 -5 -13 -12 -11 -10 -7 -6 -64

BCA Mandatory Sequesters 0 0 0 0 10 14 16 16 18 20 22 117

Affordable Care Act 0 -7 -2 19 44 51 51 30 17 30 41 275

Other Revenue Legislation 4 18 -4 21 7 35 27 56 37 39 41 282

Other Discretionary Spending and OCO Reforms -18 -49 -84 -59 36 89 124 144 150 183 202 718

Economic and Technical Re-estimates

Revenue Effect - Economic Changes -33 27 3 -17 -180 -197 -256 -329 -287 -299 -352 -1,920

Revenue Effect - Techncial Re-estimates -159 -178 -118 -254 -54 -125 -7 -33 -121 -92 -93 -1,233

Financial Bailout Cost Re-Estimates -1 126 5 -28 113 89 33 25 26 7 0 397

Mandatory Spending - Economic/Technical Re-estimates 176 10 65 30 -23 24 1 71 125 151 190 820

Interest Spending - Economic/Technical Re-estimates 8 1 12 113 210 261 309 332 350 363 356 2,314

Actual Deficits and January 2017 Baseline Deficit -1,413 -1,294 -1,300 -1,087 -680 -485 -438 -587 -559 -487 -601 -8,931

Memorandum

Total Legislative Changes -219 -577 -768 -668 -488 -286 -286 -382 -418 -429 -467 -4,988

Total Economic and Technical Re-estimates -8 -14 -33 -155 66 51 81 67 93 130 101 378

Total Deficit Changes -227 -592 -801 -823 -423 -235 -205 -315 -325 -299 -366 -4,610

Tax Revenue Impact of CBO Economic Growth Downgrades (and Upgrades) Under President Obama

97

-$33

$27$3

-$17

-$180-$197

-$256

-$329

-$287 -$299

-$352-$400

-$300

-$200

-$100

$0

$100

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

No

min

al $

Bil

lio

ns

Fiscal Year

Source: CBO budget baselines between March 2009 and January 2017. See “Obama's Fiscal

Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl.

Note: Consists of gained/lost revenues specifically resulting from

economic growth upgrades and downgrades between March 2009 and

January 2017. Post-2016 figures reflect latest estimates.


Manhattan Institute

@Brian_Riedl

CBO Economic Downgrades Under President Obama Have Sharply Lowered Interest Rates

and Therefore Net Interest Costs

98

-$4 -$2-$26

-$121

-$206

-$252

-$319-$346

-$363-$398

-$418

-$500

-$400

-$300

-$200

-$100

$0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Inte

res

t S

avin

gs

in

No

min

al $

Bil

lio

ns

Fiscal Year

Source: CBO budget baselines between March 2009 and January 2017. See “Obama's Fiscal

Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl.

Note: Consists of net interest savings directly attributed to lower interest rates

from economic downgrades occurring between March 2009 and January 2017.

Post-2016 figures reflect latest estimates.Author: Brian Riedl,

Manhattan Institute

@Brian_Riedl

President Obama’s Eight Annual Budget Requests Proposed Large Tax and Spending Increases

99

$1,844

$988

-$265-$500

$0

$500

$1,000

$1,500

$2,000

No

min

al

$B

illio

ns

Proposed Tax

Increases &

Immigration

Revenues

Proposed

Spending

Program

IncreasesNet Interest

Impact of

Proposals

Source: OMB, President's Budget Proposals, FY 2010 - FY 2017. Includes new proposals hidden in the

budget baseline, and excludes OCO proposals due to the lack of a plausible baseline to score them

against. Also excludes current-policy extensions of long-time tax cuts and Medicare payment rates.



Manhattan Institute

@Brian_Riedl

The Obama Spending Spree Ended When the GOP Took the House in 2011

100

$338

$515

-$216

-$23

-$70

-$18-$38

-$3

$314$16

-$34

-$39-$130

-$102-$119

-$95

-$300

-$200

-$100

$0

$100

$200

$300

$400

$500

$600

$700

111-1st(2009)

111-2nd(2010)

112-1st(2011)

112-2nd(2012)

113-1st(2013)

113-2nd(2014)

114-1st(2015)

114-2nd(2016)

No

min

al $

Bil

lio

ns

Mandatory Spending Enacted (rolling 10-year score)

New Spending Enacted by Year – Excluding Basic Renewals of

Existing Tax, Health, and Unemployment Policies

Yearly Discretionary Budget Authority Relative to

January 2009 CBO Baseline

Congressional Session and Year Enacted

Source: Author calculations based on CBO and JCT bill scores. Discretionary spending figures exclude emergency

appropriations for OCO (which would otherwise show even larger 2011-2016 savings) and Hurricane Sandy.



Manhattan Institute

@Brian_Riedl

Documents

Spending, Taxes, & Deficits: A Book of Chartsmedia4.manhattan-institute.org/sites/e21/files/...Projected 2050 Budget Deficits are Entirely Driven by Social Security & Medicare Shortfalls