TBD TITLE SLIDE

The Economy, Jobs, and Fiscal Responsibility From Main Street to Wall Street to Washington

September 7th – October 9th

1

24%

Federal Spending as a Percentage of GDP

Federal Spending $3.8 Trillion in 2012 Dollars

2012

2

The Federal Government has Grown Dramatically

2%

Federal Spending $16 Billion in 2012 Dollars

1912

Source: Historical Statistics of the United States, Millennial Edition On Line, Cambridge 2006; Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII

#10Million

3

We’ve Lost Control of the Budget

3% 97%

Controlled Yearly

1912

67% 33%

Auto Pilot

2012 Source: Historical Statistics of the United States, Millennial Edition On Line, Table Ea636–643 Federal government expenditure, by major function: 1789–1970. Congressional Budget Office, Historical Tables. Compiled by TCAII.

#10Million

4

Where the Money Goes

National Defense

18.7% International

Affairs & Foreign Aid

1.5%

Other Discretionary

14.6%

Social Security

20.4%

Medicare

12.6%

Medicaid

6.7%

Other Mandatory

19.7%

Net Interest

5.9%

Source: OMB, Historical Tables, 8.5, 8.8. Compiled by TCAII.

Social Security & Medicare Combined 33%

#10Million

5

Federal Spending and Revenue Trends

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

1912 1922 1932 1942 1952 1962 1972 1982 1992 2002 2012

Fede

ral G

over

nmen

t Spe

ndin

g

In T

rilli

ons o

f Con

stan

t 201

2 D

olla

rs

Republican President Democrat President Revenues

Sources: Office of Management & Budget, Historical Tables; Bureau of Labor Statistics; Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII

#10Million

6

Federal Debt Levels

0%

50%

100%

150%

200%

250%

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Publ

icly

Hel

d Fe

dera

l Deb

t as a

Per

cent

ageo

of G

DP

Actual Debt Projected Debt

Source: CBO, Long-Term Budget Outlook, 2009, 2012. Compiled by TCAII.

#10Million

7

Federal Financial Sink Hole

$6.9

$17.4 $0.5

$1.9

$3.8

$9.2

$9.2

$37.0

$0

$10

$20

$30

$40

$50

$60

$70

2000 2011

Trill

ions

of P

rese

nt V

alue

Dol

lars

Explicit Liabilities Commitments & Contingencies Social Security Medicare

SOURCE: Data from the Department of Treasury, 2011 Financial Report of the United States Government. Compiled by TCAII. Note: Actuary’s alternative estimates are used for 2011 Medicare projected benefits cost.

$20.4 Trillion (Your Share $72,500)

$65.5 Trillion (Your Share $210,200)

#10Million

8

Comparative Government Debt Burdens

78.9% 79.0% 88.4% 89.0%

106.6% 112.4%

123.4%

153.2%

31.2%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Germany Spain United Kingdom France United States Portugal Italy Greece

Tota

l Gov

ernm

ent D

ebt A

s a

Per

cent

age

of th

e E

cono

my

Source: IMF, World Economic Outlook, April 2012; U.S. Treasury, Debt to the Penny; OMB, Historical Tables. Compiled by TCAII Note: Additional data with dotted line represents intra-governmental holdings for the United States. All figures are estimates for 2012.

Total U.S. Debt 137.8%

#10Million

9

The Federal Public Debt

$0

$2

$4

$6

$8

$10

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

Fede

ral P

ublic

Deb

t In

Trill

ions

of D

olla

rs

U.S. Debt Held by The FED Other Domestically Held U.S. DebtAll Other U.S. Debt Held by Foreigners U.S. Debt Held by China

Source: U.S. Department of the Treasury. Compiled by TCAII. Note: All data from September the end of the fiscal year.

#10Million

10

Our Fiscal Future

1.4% 3.3% 6.7%

10.8% 5.0%

5.3%

6.0%

6.1%

4.8% 5.9%

7.8%

9.3%

11.7% 8.5%

10.2%

9.9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2012 2020 2030 2040

Perc

enta

ge o

f GD

P

Net Interest Social Security Medicare & Medicaid All Other Revenue

Source: Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII. Note: Alternative Fiscal Scenario used for all figures. Medicaid number are estimated and illustrative, they are derived from CBO’s LTBO June 2012 Data.

#10Million

11

Social Insurance Cash Flows

($2.5)

($2.0)

($1.5)

($1.0)

($0.5)

$0.0

2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054 2057 2060 2063 2066 2069 2072 2075 2078 2081 2084

Tri

llion

s of 2

012

Dol

lars

HI OASDI

Source: Social Security, OASDI and HI Annual Non-interest Income, Cost, and Balance in Current Dollars, Calendar Years 2012-90, Table VI.F9. Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII. Note: Intermediate projections used.

#10Million

12

Social Insurance Payments vs. Benefits

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

Paid In Benefits Received

U.S

. Dol

lars

Source: Urban Institute. Compiled by TCAII. Note: Two-earner couple with one spouse earning an average wage ($43,500 in 2011) and one earning a low wage ($19,500 in 2011). Turning 65 in 2011.

315% Difference

#10Million

13

Comparative Health Care Costs

$3,361

$4,363 $3,978 $4,218

$3,137 $3,722 $3,487

$7,960

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

OECD Average Canada France Germany Italy Sweden United Kingdom United States

Per

Cap

ita H

ealth

Car

e C

osts

Source: OECD, Health Data, 2011. Compiled by TCAII. Note: Based on 2009 expenditures.

72.2% 70.6% 77.9% 76.9% 77.9% 81.5% 84.1% 47.7% Public Health Expenditures as a Percentage of Total Health Expenditures

#10Million

14

Relative Defense Spending

$690 Bil.

$0

$100

$200

$300

$400

$500

$600

$700

$800

Bill

ions

of C

onst

ant 2

010

US

Dol

lars

Israel

Turkey

Australia

Canada

Korea, South

Brazil

Italy

Germany

India

Saudi Arabia

Japan

UK

France

Russia

China, P. R.

$670 Bil.

Source: SIPRI Military Expenditure Database, Military Expenditure by Country, In Constant (2010) US$ millions. Compiled by TCAII.

#10Million

15

Comparative Tax Burden 2012

0%

10%

20%

30%

40%

50%

Mexico Japan United States Australia UnitedKingdom

Canada Germany Netherlands France

Tota

l Tax

Bur

den

as a

Per

cent

age

of G

DP

Source: International Monetary Fund, World Economic Outlook Database, April 2012. Compiled by TCAII.

#10Million

16

Select Individual Tax Expenditures (2010-2014)

$0

$100

$200

$300

$400

$500

$600

$700

Exclusion of EmployerContributions for

Healthcare*

Deduction for MortgageInterest on Owner-Occupied

Residences

Reduced Rates of Tax onDividends and Long-Term

Capital Gains

Earned Income Credit Deductions for CharitableContributions, Other than

Education and Health

Bill

ions

of D

olla

rs

Source: The Joint Committee on Taxation, Background Information on Tax Expenditure Analysis and Historical Survey of Tax Expenditure Estimates, JCX-15-11, February 28, 2011. Note: *This only includes income taxes, There are estimates that suggest that if an analysis included payroll taxes the total cost would be over $1 trillion for the same time period.

Total individual tax expenditures for the period 2010-2014 will be greater than $3 trillion dollars.

#10Million

17

Effective Federal Income Tax Rates

-6.7% -5.4%

-2.9%

0.8%

3.2%

5.7% 7.2%

9.9%

14.7%

17.5% 18.9%

-10%

-5%

0%

5%

10%

15%

20%

25%

Less Than$10,000

$10,000 -$20,000

$20,000 -$30,000

$30,000 -$40,000

$40,000 -$50,000

$50,000 -$75,000

$75,000 -$100,000

$100,000 -$200,000

$200,000 -$500,000

$500,000 -$1,000,000

More Than$1,000,000

Eff

ectiv

e In

divi

dual

Fed

eral

Inco

me

Tax

Rat

e

Source: Urban Institute and Brookings Institution, Tax Policy Center, Distribution tables by Dollar Income Class, T11-0315 - Effective Federal Tax Rates by Filing Status and Demographics, Under Current Law, by Cash Income Level, 2011. Compiled by TCAII. Note: About half of individuals who file federal tax returns pay no income tax.

#10Million

2013 2013-2022 2001/2003/2010 Tax Cuts $110 Billion $2.8 Trillion

Alternative Minimum Tax Patches $125 Billion $1.7 Trillion

Jobs Measures $115 Billion $150 Billion

Medicare Physician Payments $10 Billion $150 Billion

Budget Control Act Sequester $65 Billion $980 Billion

"Tax Extenders" $30 Billion $455 Billion

Health Care Reform Taxes $25 Billion $420 Billion

Net Interest N/A $1.2 Trillion

Total (Without Jobs Measures) ~$400 Billion $7.9 Trillion

Total (With Jobs Measures) ~$500 Billion $8.1 Trillion

18

The Year End Fiscal Cliff

#10Million

19

Source: 2010, Institute for Truth in Accounting. All information from State CAFRs Numbers in red denote burden per taxpayer, Numbers in black denote a surplus per taxpayer

Taxpayer’s Burden by State 2010 (Thousands of Dollars)

1. Alaska 2. Wyoming 3. North Dakota 4. Utah 5. Nebraska 6. South Dakota 7. Montana 8. Iowa 9. Oregon 10. Tennessee 11. Arkansas 12. Idaho 13. Minnesota 14. Colorado 15. Florida 16. Arizona 17. Virginia

$21.2 $20.2

$9.5 $2.6 $2.4 $1.4 $0.3 $0.5 $0.9 $1.1 $1.7 $2.6 $2.6 $2.9 $2.9 $3.3 $3.6

18. Nevada 19. Missouri 20. Georgia 21. Indiana 22. Kansas 23. Texas 24. Wisconsin 25. Ohio 26. New Hampshire 27. Vermont 28. Washington 29. Pennsylvania 30. South Carolina 31. New Mexico 32. Oklahoma 33. Alabama 34. Louisiana

$3.7 $3.8 $3.9 $3.9 $4.6 $5.5 $5.7 $6.0 $8.2 $9.1 $9.8

$10.3 $10.5 $11.8 $12.6 $14.3 $14.7

35. North Carolina 36. Maine 37. Mississippi 38. Delaware 39. New York 40. Maryland 41. Rhode Island 42. West Virginia 43. Michigan 44. California 45. Massachusetts 46. Kentucky 47. Illinois 48. Hawaii 49. New Jersey

50. Connecticut

$14.8 $15.0 $15.7 $16.3 $17.2 $17.3 $18.8 $20.5 $20.8 $21.4 $23.2 $23.5 $31.6 $32.7 $35.8

$49.0

#10Million

20

Protecting Their Future

1912

#10Million

1. Pro Growth

2. Socially Equitable

3. Culturally Acceptable

4. Mathematically Accurate

5. Politically Feasible

6. Bipartisan Support 21

6 Key Principles for Reform

#10Million

• Budgeting

• Social Security

• Health Care

• Medicare & Medicaid

• Defense

• Taxes

• Other

• Political

22

Areas of Reforms

#10Million

No Budget, No Pay

Recapture Control over the Budget

Reform Federal Budget Controls (Pay-Go Rules, Debt to GDP Targets)

23

Budgeting

#10Million

Raise The Taxable Wage Base Cap

Gradually Raise the Retirement Eligibility Ages

Revise Benefit Structure Based on Income

Supplemental Retirement Savings Account

24

Social Security

#10Million

25

Health Care

Basic Level of Health Coverage for all Citizens

Revise Payment Practices to be Evidence Based

Phase Out the Tax Exclusion for Employer Provided Health

Insurance

#10Million

Impose an Annual Budget for Medicare & Medicaid Spending

Make Medicare Premiums Subsidies More

Needs Based

Rationalize Medicaid Minimum Standard

26

Medicare & Medicaid

#10Million

Require Cost Consideration in Defense Planning

Right-Size our Bases and Force Structure

Modernize Purchasing and Compensation Practices

27

Defense

#10Million

Reform Individual Federal Income Tax

Reform Corporate Federal Income Tax

Determine Income Level Where No Income Tax is Paid

28

Taxes

#10Million

Develop a Strategic Framework for the Federal Government

Create Government Transformation

Task Force

29

Other

#10Million

Redistricting Reform

Integrated & Open Primaries

Campaign Finance Reform

Term Limits

30

Political

#10Million

• Committee for a Responsible Federal Budget-www.crfb.org (www.FixtheDebt.org)

• Committee for Economic Development - www.ced.org

• Common Sense Coalition - www.thecommonsensecoalition.com

• Concord Coalition - www.concordcoalition.org

• No Labels - www.nolabels.org

• Rebellious Truths - www.rebellioustruths.org

• The Can Kicks Back - www.thecankicksback.org

31

Partner Organizations

#10Million

• Educate yourself and others on the facts, tough choices and solutions (Participate in Live Online Town Hall on September 15 at www.KeepingAmericaGreat.org)

• Use the “Serious 7: Serious Questions for Serious Candidates”

• Make these issues the top priority on election day

• Hold our elected officials accountable

32

What You Can Do

#10Million