FEDERAL BUDGET PROBLEMS

Economic Woes• National debt = $17 trillion +• US Budget Deficit = $1.2 trillion• National unemployment rate 7.3%• Unemployment in some Alaska villages

2 to 3 times that of national average• Stock market very volatile

Where do Federal Tax Dollars Go?

Medicare13.8%

Medicaid7.4%

Social Security21.6%

Net Interest6.5%

National Defense18.2%

BIA0.07%

IHS0.12%

Non-Defense 14.8%

Other17.5%

Discretionary

Man

dato

ry

Non-Defense, Discretionary portion of budget very small!

FY 2013 Outlays

Center on Budget and Policy Priorities; last revised Feb. 3, 2004

Domestic Discretionary Funding Is a Shrinking Share of Total Program Costs

Share of Total 2001 2008 Change

Defense & security 21.7% 29.2% +7.5%

Social Security, Medicare/caid 45.9% 43.5% -2.4%

Other mandatory programs 14.0% 12.5% -1.4%

Domestic discretionary 18.4% 14.7% -3.7%

Total program costs 100% 100% 0.0%

Notes: Figures may not add due to rounding. The defense/security figures also include veterans, homeland security, and international affairs. Medicare is net of premiums. Figures for 2008 are CBO’s January estimate plus supplemental discretionary funding requested by President Bush. Totals exclude net interest.

Center on Budget and Policy Priorities; last revised Feb. 3, 2004

Domestic Discretionary Funding Has Been Growing More Slowly Than Any Other Set of Programs

(Average annual rate of growth, from 2001 through 2008)

  nominal real real per person

Defense & security 12.0% 9.1% 8.1%

Social Security, Medicare/caid 6.5% 3.8% 2.8%

Other mandatory programs 5.7% 3.0% 2.0%

Domestic discretionary 4.0% 1.3% 0.3%

Average, all program costs 7.3% 4.6% 3.6%

WHAT CONTRIBUTES TO

DEFICIT SPENDING &

NATIONAL DEBT?

Sources of Federal Deficits - 2009-2019

9

Federal Revenues Will Be Inadequate In Coming

Decades

Source: CBPP projections based on CBO data

Tax Cuts, 48%

Entitlements, 8%

Domestic Discretionary

(except Homeland

Security), 7%

Defense, Homeland

Security, and International,

37%

Legislation Adding to Deficits:Mostly Tax Cuts & Defense

Source: CBPP calculations from Congressional Budget Office data. Reflects costs above an adjusted CBO current services baseline.

Cost in 2005 of legislation enacted since January 2001

Center on Budget and Policy Priorities; last revised Feb. 3, 2005.

THE MOST EXPENSIVE MYTH:

Tax breaks for the rich will stimulate the economy!

 1990 95 2000 2005 2010

Clinton years

Bush Tax Cuts

Dow Jones Index

Obama Elected

Tax Breaks Impact on Unemployment Rates

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

2

4

6

8

10

12

Rate at January of Each Year

Rate

TaxBreaks

NATIVE AMERICAN

PROGRAM BUDGETS

Since 1980 Native American

programs have lost ground to

inflation while per capita

spending has gone up for other

citizens

Overall Per Capita Vs.Indian Per Capita

Relative Budget Change From 1975 (inflation adjusted)

Overall Per Capita Vs.Indian Per Capita

Relative Budget Change From 1975 (inflation adjusted)

-60%

-40%

-20%

0%

20%

40%

60%

80%

Overall U.S. Per Capita Expenditure

Indian Per Capita Expenditure

2001

When Congress has approved

increases to the BIA budgets

those increases went to Central

Office administration

BIA 2002 to 2008

1 2 3 4 5

2002 Change 2008Inflation

16%

Tribal Priority Allocation $752,156 -$57,662 $694,534 -7.7%

Other Recurring $586,968 $433,454 $1,020,422 73.8%

Non-Recurring $72,798 -$ $ -%

Central Office Ops $58,106 $116,954 $175,060 201.3%

Regional Office Ops $62,679 -$18,182 $44,497 -29%

Special Programs $267,102 -$91,414 $223,467 -33.7%

Fish Wildlife

Park Service

Geo Survey

Land Management

Reclamation

Indian Affairs

0 5 10 15 20 25 30

8%

30%

BUDGET INCREASES: 6 LARGEST INTERIOR AGENCY

FY2004 TO FY2012

BUDGET INCREASES (DECREASES): 6 LARGEST INTERIOR AGENCIES

FY2012 PRESIDENT’S REQUEST VS. FY 2010 ENACTED LEVEL

NPS FWS USGS BLM BOR BIA($150)

($100)

($50)

$0

$50

$100

$150

$200

Mill

ion

s

- $120 million

+ $140 million

SEQUESTRATION

http://www.cartoonistgroup.com/copyno.php

Budget Control Act of 2011

1. Increased debt limit into 2013 in two stages enabling payment for existing commitments

2. Cut discretionary spending by $917 B over 10 years

3. Established a bipartisan, bicameral committee to identify additional $1.5 trillion or more in deficit reduction by November 23. House and Senate to vote by December 23 without amendment or filibuster.

4. Balanced Budget Amendment to Constitution to be considered separately.

Super Committee Fails So …

• Budget Sequestration suppose to start Jan 1, 2013 – delayed until end of March.

• Approximate 7-10% across the board cuts in nearly all domestic programs; similar cuts to defense programs

Sequestration

• Budget Sequestration for FY 2013 – Partial Year– 5.21% Cut for the BIA– $228 million cut for the IHS– VA Medical System not cut– Some low-income programs protected,

but not the Tribal programs

Sequester Impact

• Lack of Super Committee agreement last fall led to across the board spending cuts, “Sequestration.” 5.2% Cut.

• Sequestration means all deficit reduction is from spending.

• Non-Defense Discretionary budgets are already cut deeply through 10 year spending caps.

Impacts on Specific Indian Programs

• Across the Board cuts will be worse than .2% compared to FY10:– Due to recent year reductions…– Indian Housing Block Grant -21%– Indian Student Education, -13%– Tribal Community Oriented Policing Grants -25%– BIA, Operation of Indian Programs - 14%– Indian Health Service is subjected to the higher

8.2% cut, not the 2% special rule that the CRS reported in August.

Federal Budget - Hard Facts

At least one-third of all Federal spending is funded through borrowing.

Debt Ceiling. Extended to about mid-February 2014

The BCA has life until 2021

BUDGET PROPOSALS

Speaker Boehner

Proposed returning to FY 2008 budget levels

A cut of about 15% from FY 2010FY 2008, after factoring in inflation, was

itself a cut of about 15% from FY 2002 levels

Chairman Ryan Plan Chairman Paul Ryan’s plan gets nearly two-

thirds of its $4.5 trillion in budget cuts over 10 years from programs for the needy

$2.17 trillion in reductions from Medicaid and related health care.

$350 billion in cuts in mandatory programs serving

low-income Americans (other than Medicaid).

$400 billion in cuts in low-income discretionary

programs.

Center on Budget and Policy Priorities; last revised Feb. 3, 2004

CBO Report: Ryan Plan Would Nearly End Most of Government Other Than Social

Security, Health Care, and Defense by 2050

• Plan would shrink federal spending to 20 % of Gross Domestic Product (GDP) by 2015 and to 14.75 % of GDP by 2050

• The lowest level since 1951, a time when Medicare and Medicaid did not exist.

Ryan Budget: two-thirds of cuts from programs for low- and moderate-income

people

35Source: “The Path to Prosperity” FY2012 Budget Resolution

Obama FY 2014 Budget

• Would End Sequestration• Increases Tax Revenue• Imposes Cuts on Medicaid and Medicare• Basically hold Indian programs harmless,

except for effects of inflation

President’s FY 2014 Proposed Budget

• Bureau of Indian Affairs: $2.56 billion– An increase of $31.2 million above FY 2012

• $21.2 million less Contract Support increase

– Current Rate of Inflation: 1.5%– $38.4 million x 2: $76.8 million

the Administration proposes putting caps on contract support costs moving it to a separate account/providing them on a contract by contract basis

BIG ISSUE – WOULD OVERTURN RAMAH SUPREME COURT CASE

Notably…

DONE WITHOUT TRIBAL CONSULTATION; IN VIOLATION OF OBAMA EXECUTIVE ORDER ON CONSULTATION!

Department of the Interior FY 2014 Budget = 4% Increase

• 5.11% all other than BIA

• BIA - 1.2% increase ($31 million)

–.8% less Indirect Cost ($10 million)

– Inflation: 1.5%

• If funded equitably to other DOI Bureaus BIA funding increases should be $134 million instead of $31 million

FY 2013 IHS Funding – Pres.

• IHS will be funded at $4.422 billion. That's an increase from the $4.307 billion estimate for fiscal year 2012.

• It's also an increase from the $4.069 billion that the IHS saw in fiscal year 2011.

• Increase of $115 million.• Did not full fund Contract Support Costs• Partially protected from Sequestration

Non-Defense Discretionary Spending

2012 2013 2014 2015 2016 2017 2018 2019 2020 20211.4%

1.6%

1.8%

2.0%

2.2%

2.4%

2.6%

2.8%

3.0%

3.2%

3.4%

3.6%

Lowest Level since 1970

CBO Jan 2011 NDD Projections

BCA Caps/Obama/ Domenici-Rivlin

Bowles-Simpson

BCA with Sequester

Chairman Ryan's Budget

% o

f GD

P

House Act

On Party Line voting, House has passed legislation to hold the Defense Budget Harmless, and basically double cuts to the Domestic Discretionary Programs.

CR defunds Obamacare

What is Likely?Federal Government shut down; further risk US credit rating.

CR for three months, under FY 2013 Sequestration, with further negotiation.

Negotiations fail and there is a second year of sequestration – worse than the first.

MEMBERS OF CONGRESS NOT

MOTIVATED TO END

SEQUESTRATION

Blue / Red States in 2012

Blue / Red Counties in 2012

There will never be a meaningful cut to the

federal deficit without more income!

If Bush Tax Cuts had Expired

Sources of Federal Deficits - 2009-2019

Rich get RicherThe rich in this country

have never done better as during this past decade!

04/11/2023 58

Income Gains Have been Concentrated at the Top

cbpp.org

Income Growth has been Very Uneven Recently

Widening Class Disparities

• The rich have never been richer• 42 million Americans live in poverty

– 1 out of every 6– 15.6 % of all Americans– 22% of all children– The highest rate of poverty since 1993

No wonder why there is so much political unrest in these countries!

• Libya• Egypt • Syria• Mexico

Countries Where Rich Are Too Rich and Poor Too Poor

Gunalcheesh!

Thank You for Your Kind Attention!

Howa!

My Name is Ed ThomasAnd I Approved This Message!

How a Bill Becomes Law

As Introduced

As amended in committee

As amended on the second

reading

As enacted As funded by joint

committee

As implemented

by state agencies

As reported by the media

As understood

by the Public

What was actually needed!