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Choosing the Nation's Fiscal Future (2010)

Chapter: Front Matter

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

Choosing the Nation’s Fiscal Future

Committee on the Fiscal Future of the United States

Division of Behavioral and Social Sciences and Education

NATIONAL RESEARCH COUNCIL and NATIONAL ACADEMY OF PUBLIC ADMINISTRATION

THE NATIONAL ACADEMIES PRESS

Washington, D.C.
www.nap.edu

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

THE NATIONAL ACADEMIES PRESS

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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.

This study was supported by Grant No. 07-90771-000-HCD to the National Academy of Sciences and Grant No. 07-90771-001-HCD to the National Academy of Public Administration from the John D. and Catherine T. MacArthur Foundation. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project.

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Suggested citation: National Research Council and National Academy of Public Administration. (2010). Choosing the Nation’s Fiscal Future. Committee on the Fiscal Future of the United States. Washington, DC: The National Academies Press.

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

THE NATIONAL ACADEMIES

Advisers to the Nation on Science, Engineering, and Medicine


The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences.


The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering.


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The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council.


www.national-academies.org

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

THE NATIONAL ACADEMY OF PUBLIC ADMINISTRATION

The National Academy of Public Administration (National Academy) is a non-profit, independent organization of top policy and management leaders who tackle the most critical, timely, and challenging problems facing American government. With a network of more than 650 distinguished Fellows who lead the institution and guide its work, the National Academy is trusted across government to provide objective analysis and find practical, innovative solutions to management problems by bringing the best thinking and experience to bear on government problems. National Academy Fellows are elected by peers based on their impressive contributions to and experience in the field of public leadership and management. The Fellowship includes former cabinet officers, members of Congress, governors, mayors, and state legislators, as well as distinguished scholars, business executives, and public administrators. Individually, they are experts and trusted thought leaders; collectively, they are a national treasure.


Established over 40 years ago and chartered by Congress, the National Academy continues today to make a positive impact in America by helping federal state and local governments respond effectively to current circumstances and changing conditions. The National Academy is led by Kenneth S. Apfel and Timothy B. Clark, who serve as chair and vice chair, and Jennifer L. Dorn, who is president and chief executive officer.


www.napawash.org

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
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COMMITTEE ON THE FISCAL FUTURE OF THE UNITED STATES

John L. Palmer, Cochair,

Maxwell School, Syracuse University

Rudolph G. Penner, Cochair,

Executive Office Research, Urban Institute, Washington, DC

Joseph Antos,

Healthcare and Retirement Policy, American Enterprise Institute, Washington, DC

Kenneth S. Apfel,

School of Public Policy, University of Maryland

Richard C. Atkinson, President Emeritus,

University of California, San Diego

Alan J. Auerbach,

Department of Economics, University of California, Berkeley

Rebecca M. Blank,*

Economic Studies, Brookings Institution, Washington, DC

Andrea L. Campbell,

Department of Economics, Massachusetts Institute of Technology

Chris Edwards,

Tax Policy Studies, Cato Institute, Washington, DC

Dana P. Goldman,

Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California

Robert F. Hale,*

American Society of Military Comptrollers, Alexandria, VA

Ellen Hughes-Cromwick,

World Headquarters, Ford Motor Company, Dearborn, MI

Joseph J. Minarik,

Committee for Economic Development, Washington, DC

Olivia S. Mitchell,

Wharton School, University of Pennsylvania

Sean O’Keefe, Chief Executive Officer,

EADS North America, Arlington, VA

Gilbert S. Omenn,

University of Michigan Medical School, University of Michigan

June E. O’Neill,

Zicklin School of Business, Baruch College, City University of New York

Paul L. Posner,

Department of Public and International Affairs, George Mason University

Robert D. Reischauer, President,

Urban Institute, Washington, DC

Margaret C. Simms,

Low Income Working Families, Urban Institute, Washington, DC

William E. Spriggs,*

Department of Economics, Howard University

Thomas C. Sutton,

Pacific Life Insurance Company (Retired), Newport Beach, CA

Susan Tanaka,

Citizen Education and Engagement, Peter G. Peterson Foundation, New York, New York

Ruth A. Wooden, President,

Public Agenda, New York, New York

*

Resigned in early 2009 to accept an appointment in the Obama Administration.

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
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F. Stevens Redburn, Study Director

Jane L. Ross, Senior Staff Officer

Mark David Menchik, Senior Program Officer

Kathy A. Ruffing, Senior Program Officer (March-November 2008)

Malay Majmundar, Senior Program Associate

Danielle Johnson Bland, Senior Program Assistant

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

Foreword

This report represents the outcome of a joint and shared effort between our two organizations: the National Academy of Public Administration (NAPA) and the National Academy of Sciences (NAS). In their respective spheres, these two institutions play important roles by bringing to bear expert advice on some of the most significant challenges facing our nation.

At the request of and with the support of the John D. and Catherine T. MacArthur Foundation and using procedures of the National Research Council, NAS and NAPA jointly undertook a 2-year study of the long-term fiscal challenge facing the United States. The work was performed by a stellar committee representing a diversity of disciplines and practices, a wealth of experience with the federal budget and various public policies, and a wide range of political and policy views. The committee has worked in harmony and forged a strong consensus under the leadership of its cochairs, John Palmer and Rudy Penner. We thank them for their leadership and the entire committee for their extraordinary efforts.

No one reading this report can avoid being struck by the magnitude of the long-term budget challenge facing the federal government. Other studies have called attention to this challenge in similar terms. Uniquely, however, this study provides a framework that leaders and others can use to systematically consider a range of choices to put the federal budget on a sustainable course.

This report neither presumes nor recommends a particular path to a stable fiscal future. In a democracy, it is not the role of experts from outside the government to decide important policy questions, especially questions of this magnitude. That is the task of political leaders. And voters have the

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Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
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responsibility to engage in the issues, elect officials who understand the challenges, and then hold them accountable for acting responsibly.

As a group of experts, the committee is providing the basis for making policy decisions and their professional judgment about the key issues for our fiscal future. It acknowledges the differences in values and perspectives that must be reconciled in order to reach agreement. It illustrates the range, as well as the difficulty, of the policy choices that have to be faced. It also offers a set of analytical tools for weighing those choices, including practical tests that can be applied to budget proposals to determine their fiscal prudence.

Much is at stake. If we as a nation do not grapple promptly and wisely with the changes needed to put the federal budget on a sustainable course, all of us will find that the public goals we most value are at risk. This report will have served its purpose if its insights and analytical framework are widely used to support serious discussion of this most urgent question. We hope that it will receive the widest possible attention.


Ralph J. Cicerone

President

National Academy of Sciences

Chair

National Research Council


Jennifer L. Dorn

President and Chief Executive Officer

National Academy of Public Administration

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

Acknowledgments

This study is the product of the generous support, hard work, and dedication of many organizations and individuals. The officers and staff of the John D. and Catherine T. MacArthur Foundation originated the idea for the study and provided its funding. They maintained strong support and interest throughout the course of the work.

Jennifer Dorn, president and chief executive officer of the National Academy of Public Administration; Lois Fu, senior adviser to the president of the National Academy of Public Administration; Michael Feuer, executive director of the Division of Behavioral and Social Sciences and Education (DBASSE) at the National Research Council (NRC); and Jane Ross, director of DBASSE’s Center for Economic, Governance, and International Studies provided leadership in the development of the study and continued support through the study process.

We owe special thanks to our fellow committee members, who gave long hours to this project, providing not only in-depth analyses, but also drafts—and repeated redrafts—of text for the report. The members hold a broad range of views on topics related to this study, and they used those differences to explore a very wide range of policy ideas and to draft a report that would be useful to individuals and groups with diverse beliefs and priorities.

A great deal of the success of this project is due to its excellent staff, who performed innumerable analyses and produced many drafts of the report. We are especially indebted to our study director, Steve Redburn, who managed the overall work of the panel, led a complex set of analytic activities, and helped us to meet our deadlines. The fast pace of the work

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

and the outstanding quality of the final product are due to an important extent also to the work of Mark Menchik, Malay Majmundar, Kathy Ruffing, and Danielle Bland. Eugenia Grohman, associate executive director of DBASSE, shared her extensive experience at critical points in the study process, especially in editing the manuscript.

Staff members of the Social Security Administration’s Office of the Chief Actuary provided cost estimates on various proposals contained in the report’s illustrative scenarios and reviewed text for completeness and accuracy. The Urban Institute-Brookings Institution Tax Policy Center contributed to the detailed analysis in the report by producing simulations of tax changes that were part of several illustrative scenarios. Barry Anderson and his colleagues in the Budgeting and Public Expenditures Division of the Public Governance and Territorial Development Directorate of the Organisation for Economic Co-operation and Development produced a study of the international experience with long-term budgeting.

This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the Report Review Committee of the NRC. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making the published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process.

We thank the following individuals for their participation in the review of this report: Henry J. Aaron, Economic Studies Program, Brookings Institution, Washington, DC; Robert Greenstein, Center on Budget and Policy Priorities, Washington, DC; Edwin L. Harper, Public Affairs/Government Relations, Assurant, Inc., Washington, DC; Ron Haskins, Brookings Institution, Washington, DC; Peter S. Heller, Paul H. Nitze School of Advanced International Studies, Johns Hopkins University; James R. Horney, Center on Budget and Policy Priorities, Washington, DC; Philip G. Joyce, George Washington University; Lawrence S. Lewin, Executive Consultant, Chevy Chase, MD; Alicia H. Munnell, Carroll School of Management, Boston College; William Nordhaus, Department of Economics, Yale University; Marilyn Rubin, Department of Public Management, John Jay College of Criminal Justice; John B. Shoven, Department of Economics, Stanford University; and Theda Skocpol, Department of Government, Harvard University.

Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations nor did they see the final draft of the report before its release. The review of this report was overseen by Charles F. Manski, De-

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

partment of Economics, Northwestern University, and M. Granger Morgan, Department of Engineering and Public Policy, Carnegie Mellon University. Responsibility for the final content of this report, however, rests entirely with the authoring committee and the institutions.


John L. Palmer and Rudolph G. Penner, Cochairs

Committee on the Fiscal Future of the United States

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Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
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 Primary Tests for Fiscal Prudence,

 

58

   

 Secondary Tests for Fiscal Prudence,

 

60

   

 Applying the Framework,

 

62

   

 Notes,

 

63

4

 

Choices for a Sustainable Budget

 

65

   

 Spending Options,

 

66

   

 Options for Medicare and Medicaid,

 

66

   

 Options for Social Security,

 

67

   

 Options for Defense and Other Domestic Spending,

 

67

   

 Revenue Options,

 

68

   

 Budget Scenarios,

 

69

   

 Low Path,

 

70

   

 Intermediate Paths,

 

71

   

 High Path,

 

71

   

 Conclusion,

 

72

   

 Note,

 

73

5

 

Options for Medicare and Medicaid

 

75

   

 The Current Context,

 

75

   

 Four Trajectories,

 

78

   

 Health Spending,

 

80

   

 Reasons for Increasing Spending,

 

81

   

 Health Spending and the Federal Budget,

 

82

   

 Reform Issues,

 

84

   

 Competing Reform Objectives,

 

84

   

 Uncertainty About What Works,

 

85

   

 Broad Reform Approaches,

 

86

   

 A Single-Payer Health Insurance System,

 

86

   

 A “Robust Public Option,”

 

87

   

 A “Non-Robust Public Option,”

 

88

   

 Price Controls,

 

89

   

 Individual, Cost-Conscious Choice of Insurance Plans,

 

89

   

 Eliminating Group Health Insurance,

 

90

   

 Summary of Broad Reform Approaches,

 

91

   

 Specific Reform Options,

 

91

   

 Imposing Caps on Federal Health Spending,

 

92

   

 System Reforms with Direct Implications for Slowing Federal Health Spending Growth,

 

94

   

 System Reforms with Indirect Implications for Slowing Federal Health Spending Growth,

 

98

   

 Caveats Regarding Savings from Reform,

 

101

   

 Conclusion,

 

101

   

 Notes,

 

102

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
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6

 

Options for Social Security

 

105

   

 Program Overview,

 

106

   

 Financial Projections,

 

110

   

 Options to Restore Solvency,

 

110

   

 Overview,

 

110

   

 Option 1:  Benefit Changes Only,

 

116

   

 Option 2:  Two-Thirds Benefit Growth Reductions, One-Third Payroll Tax Increases,

 

118

   

 Option 3:  One-Third Benefit Growth Reductions, Two-Thirds Payroll Tax Increases,

 

121

   

 Option 4:  Payroll Tax Increases Only,

 

123

   

 Conclusion,

 

123

   

 Notes,

 

125

7

 

Options for Defense and Other Domestic Spending

 

129

   

 Spending Categories and Trends,

 

130

   

 Debates About Spending,

 

130

   

 Spending Trends,

 

132

   

 Four Options,

 

133

   

 Option 1:  Cut Spending by 20 Percent,

 

135

   

 Option 2:  Cut Spending by 8 Percent,

 

137

   

 Option 3:  Increase Spending by 5 Percent,

 

138

   

 Option 4:  Increase Spending by 16 Percent,

 

139

   

 Conclusion,

 

140

   

 Notes,

 

141

8

 

Revenue Options

 

143

   

 The Current Tax Structure,

 

144

   

 Revenue Levels and Sources,

 

144

   

 Complexity of the Tax Code,

 

145

   

 Issues in Tax Reform,

 

146

   

 Simplification,

 

147

   

 Economic Efficiency and Growth,

 

148

   

 International Context,

 

150

   

 Fairness,

 

152

   

 Illustrative Tax Options,

 

154

   

 Current Tax Structure,

 

156

   

 Simplified Tax Structure,

 

158

   

 Effects of the Options on Distribution of the Tax Burden,

 

162

   

 Conclusions,

 

167

   

 Notes,

 

168

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
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Figures, Tables, and Boxes

FIGURES

S-1

 

The long-run budget outlook,

 

2

S-2

 

Debt savings from stabilizing the debt-to-GDP ratio in 12 years,

 

3

S-3

 

Projected federal spending under the committee’s four scenarios,

 

5

1-1

 

The long-term budget outlook,

 

13

1-2

 

The long-term outlook for the debt,

 

14

1-3

 

Factors in projected Social Security, Medicare, and Medicaid spending, 2009-2079, as a percentage of GDP,

 

18

1-4

 

Federal outlays in fiscal 2008,

 

19

1-5

 

Federal spending as a percentage of GDP, 1962-2008,

 

21

1-6

 

Federal revenues and borrowing in fiscal 2008,

 

22

2-1

 

Federal government spending by function, 1962-2007,

 

37

2-2

 

General government total tax and nontax receipts as a percentage of nominal GDP in 2008,

 

41

3-1

 

Debt savings from stabilizing debt-to-GDP ratio in 12 years,

 

60

5-1

 

Federal health spending under four sustainable budget trajectories and in the baseline,

 

78

5-2

 

Average excess cost growth in Medicare and Medicaid,

 

80

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
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6-1

 

Annual Social Security benefits and earnings replacement rates, for workers who retire at age 65, scheduled for 2010,

 

108

6-2

 

Social Security benefits as a percentage of total income, for families and individuals aged 65+, by quintile of total income, 2006,

 

109

6-3

 

Social Security scheduled spending and tax revenues as a percentage of GDP,

 

111

6-4

 

Cumulative Social Security revenue less spending under current-law tax rates and scheduled benefits,

 

111

6-5

 

Monthly Social Security benefits for workers who retire at age 65 under current law and under option 1 (in 2009 dollars),

 

117

6-6

 

Social Security benefits as a percentage of past earnings for new retirees at age 65 under current law and under Option 1,

 

117

6-7

 

Monthly Social Security benefits for workers who retire at age 65 under current law and under Option 2 (in 2009 dollars),

 

120

6-8

 

Social Security benefits as a percentage of past earnings for new retirees at age 65 under current law and under Option 2,

 

120

6-9

 

Annual Social Security payroll tax projected for 2010 and for 2050 under current law and under Option 2 (in 2009 dollars),

 

120

6-10

 

Monthly Social Security benefits for workers who retire at age 65 under current law and under Option 3 (in 2009 dollars),

 

122

6-11

 

Social Security benefits as a percentage of past earnings for new retirees at age 65 under current law and under Option 3,

 

122

6-12

 

Annual Social Security payroll tax projected for 2010 and for 2050 under current law and under Option 3 (in 2009 dollars),

 

122

6-13

 

Annual Social Security payroll tax projected for 2010 and for 2050 under current law and under Option 4 (in 2009 dollars),

 

124

7-1

 

Defense and other domestic spending as a percentage of GDP, 1962-2008,

 

132

7-2

 

Defense and other domestic spending as a share of GDP in 2019 under four options,

 

134

8-1

 

Federal government revenues as a share of GDP,

 

144

8-2

 

Tax revenues as a share of GDP,

 

151

8-3

 

Top corporate tax rates in the United States and 30 OECD countries,

 

152

8-4

 

Current tax structure: top personal income tax rates for the committee’s four scenarios,

 

157

8-5

 

Personal income tax rates for the first and second brackets under a simplified tax structure for the committee’s four scenarios,

 

161

8-6

 

Distribution of the percentage share of combined federal taxes by relative income in 2050 for the committee’s four scenarios,

 

163

Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
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9-1

 

Projected federal spending under the committee’s four scenarios,

 

174

9-2

 

Projected federal debt under the committee’s four scenarios,

 

175

9-3

 

Projected federal deficits under the committee’s four scenarios,

 

175

9-4

 

Federal spending and revenues under the committee’s low scenario,

 

176

9-5

 

Deviation from the study baseline for revenues and noninterest outlays under the committee’s low scenario,

 

176

9-6

 

Federal spending and revenues under the committee’s high scenario,

 

177

9-7

 

Deviation from the study baseline for revenues and noninterest outlays under the committee’s high scenario,

 

177

9-8

 

Federal spending and revenues under the committee’s intermediate-1 scenario,

 

179

9-9

 

Deviation from the study baseline for revenues and noninterest outlays under the committee’s intermediate-1 scenario,

 

179

9-10

 

Federal spending and revenues under the committee’s intermediate-2 scenario,

 

180

9-11

 

Deviation from the study baseline for revenues and noninterest outlays under the committee’s intermediate-2 scenario,

 

180

TABLES

6-1

 

Four Illustrative Social Security Options: Overview,

 

114

8-1

 

Federal Tax Structure and Revenue Levels Under the Committee’s Four Paths,

 

155

8-2

 

Percentage Change in After-Tax Income Under the Committee’s Four Scenarios in Comparison with Current Law for Selected Income Groups, in percent,

 

164

BOXES

1-1

 

Committee Charge,

 

11

1-2

 

The Deficit and the Debt,

 

12

1-3

 

Constructing a Budget Baseline,

 

14

1-4

 

Uncertainties,

 

15

1-5

 

Tax Expenditures,

 

23

2-1

 

Health: An Example of Values and Choices,

 

42

2-2

 

Government Size and Economic Growth,

 

44

3-1

 

The Arithmetic of the Debt,

 

52

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Suggested Citation:"Front Matter." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
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5-1

 

2009 Health Care Reform Proposal: Affordable Health Care for America Act,

 

76

5-2

 

Medicare and Medicaid,

 

83

6-1

 

Sustaining the Social Security Trust Fund,

 

112

8-1

 

Distortions in the Current Tax Code,

 

149

10-1

 

The 1990 Budget Agreement,

 

190

10-2

 

Australia’s Experience with Long-Term Budgeting,

 

195

10-3

 

New Zealand’s Budget Principles,

 

198

10-4

 

Automatic Balancing Mechanisms in Canada, Germany, and Sweden,

 

204

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A mismatch between the federal government's revenues and spending, now and in the foreseeable future, requires heavy borrowing, leading to a large and increasing federal debt. That increasing debt raises a serious challenge to all of the goals that various people expect their government to pursue. It also raises questions about the nation's future wealth and whether too much debt could lead to higher interest rates and even to loss of confidence in the nation's long-term ability and commitment to honor its obligations. Many analysts have concluded that the trajectory of the federal budget set by current policies cannot be sustained.

In light of these projections, Choosing the Nation's Fiscal Future assesses the options and possibilities for a sustainable federal budget. This comprehensive book considers a range of policy changes that could help put the budget on a sustainable path: reforms to reduce the rate of growth in spending for Medicare and Medicaid; options to reduce the growth rate of Social Security benefits or raise payroll taxes; and changes in many other government spending programs and tax policies. The book also examines how the federal budget process could be revised to be more far sighted and to hold leaders accountable for responsible stewardship of the nation's fiscal future.

Choosing the Nation's Fiscal Future will provide readers with a practical framework to assess budget proposals for their consistency with long-term fiscal stability. It will help them assess what policy changes they want, consistent with their own values and their views of the proper role of the government and within the constraints of a responsible national budget. It will show how the perhaps difficult but possible policy changes could be combined to produce a wide range of budget scenarios to bring revenues and spending into alignment for the long term. This book will be uniquely valuable to everyone concerned about the current and projected fiscal health of the nation.

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