Spending, Taxes & Deficits:

A Book of Charts

Brian Riedl
Senior Fellow, Manhattan Institute
November 2022
 Highlights

-- In Just 20 Months, President Biden Added $4.8 Trillion to 10-year Deficits (p. 11)
-- Individual Income Taxes in 2022 Shattered Records as a %GDP (14)
-- How Did Washington Go From Budget Surpluses to Escalating Deficits? (26-27)
-- What Happened to the 2011 BCA Spending Caps? (32-33)
-- Rising Social Security & Medicare Shortfalls Drive Nearly Entire 2019-32 Deficit Rise (40-44)
-- What is Driving CBO’s Projected $114 Trillion Deficit over 30 Years? (52-58)
-- Why the Deficit Could Top $3 Trillion Yet Again Within a Decade (66)
-- Each 1% Interest Rate Rise Adds $30 Trillion (or 45% of GDP) to 30-Year Debt (69)
-- A Menu of Tax Increase Options With 10-Year and Long-Term Estimates (74-75)
-- Does the U.S. Have the OECD’s Most Progressive Tax Code? (103)
-- Is it Possible that the 1980s Defense Build Up Paid for Itself? (110)
-- What Really Caused the 1990s Budget Surpluses? (111)
-- The Comprehensive Bush Budget Record (113-114)
-- The Comprehensive Obama Budget Record (115-122)
-- The Comprehensive Trump Budget Record (123-128)
2
 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.

Questions on specific charts can be addressed by contacting Brian Riedl

at Briedl@manhattan-institute.org.

3
 Charts are Organized into 13 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. 30-Yr Debt Estimates are Driven by Social Security & Medicare Shortfalls
6. What Happens to the Debt if Interest Rates Rise?
7. Can’t We Just Raise Taxes, Cut Defense, & Nationalize Health Care
Instead?
8. Progressive Proposals Would Dig the Debt Even Deeper
9. Tax Revenues Will Continue Growing Faster Than the Economy
10. The Tax Code Has Become Increasingly Progressive
11. Countering Tax, Spending, & Deficit Myths of the 1980s Through 2008
12. A Comprehensive Accounting of the Obama Fiscal Record
13. A Comprehensive Accounting of the Trump Fiscal Record
4
Rising Budget Deficits and
National Debt
Chapter 1

5
 Budget Deficits to Resume Steep Growth
Even After Pandemic
$0

-$500
-$585
-$665
-$779
Nominal $Billions

-$1,000
-$984 -$1,000
-$1,203
-$1,500 -$1,375 -$1,406
-$1,472-$1,486
-$1,664
-$1,835
-$2,000
-$1,995
-$2,161
-$2,253
-$2,500

-$2,775
-$3,000
-$3,129

-$3,500
2016 2018 2020 2022 2024 2026 2028 2030 2032
Fiscal Year
Source: OMB historical table 1.1, and May 2022 CBO baseline (with timing shifts removed) adjusted for final FY 22 figures and
legislation enacted through September 2022. Assumes most 2017 tax cuts expire on schedule. 6
 Budget Deficits are Set to Rise Steeply
(Adjusted for Inflation)
$374
$500 (2000)

$0
Inflation-Adjusted (2022) $Billions

Historical
-$500 CBO baseline
$-214
$-431 (2007)
-$1,000 (1990)

-$1,500 $-1,375
(2022)
$-1,827
-$2,000 $-1,822
(2009)
(2032)
-$2,500

-$3,000 $-3,408
(2020)
-$3,500
1990 1995 2000 2005 2010 2015 2020 2025 2030
Fiscal Year

Source: OMB historical table 1.1, and May 2022 CBO baseline (with timing shifts removed) adjusted for final FY 22 figures and
legislation enacted through September 2022. Assumes most 2017 tax cuts expire on schedule. 7
 Deficits Will Rise to Levels Seen only During
Wars, Deep Recessions, and Pandemics
5%
2%
(2000)
0%
Budget Deficit (%GDP)

-5%
-6%
(1983) -8%
-10%
-10% (2032)
(2009)
-15%
-15%
(2020)
-20%
Hi

-25%
-30%
(1943)
-30%
1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Fiscal Year
Source: OMB historical table 1.1, and May 2022 CBO baseline (with timing shifts removed) adjusted for final FY 22 figures and
legislation enacted through September 2022. Assumes 2017 tax cuts are renewed. 8
 The 2020 Budget Deficit Exceeded
the Combined 2016 Through 2019 Deficits
$4,000
Budget Deficit in Nominal $Billions

$3,500
$3,016 $3,129

$3,000
2019 Budget
$2,500 Deficit

$2,000 2020 Budget

Deficit
2018
$1,500

$1,000 2017

$500
2016
$0

Source: July 2021 CBO baseline, Treasury data, and historical data. 9
 The 2021-2031 Projected Budget Deficit Has
Grown by $3.8 Trillion Since Biden Took Office
Fiscal Year
$0
2015 2017 2019 2021 2023 2025 2027 2029 2031
-$500
CBO baseline Deficit, February 2021
Nominal $Billions

-$1,000

-$1,500
Baseline Deficit,
-$2,000 October 2022

-$2,500

-$3,000

-$3,500

Source: CBO. October 2022 figures reflect May 2022 CBO baseline (with timing shifts removed) adjusted for final FY 22 figures and
legislation enacted through September 2022. 10
 In Just 20 Months, President Biden Added $4.8
Trillion to 10-year Deficits

Legislation or Executive Order 10-year Cost

($Billions)
American Rescue Plan $1,850
FY 2022 Omnibus Bill $625
Bipartisan Infrastructure Law $370
Honoring our PACT Act $280
SNAP Expansion $185
Health-Related Executive Orders $175
CHIPS and Science Act $80
Ukraine Supplementals $55
Inflation Reduction Act -$240
Student Debt Relief $750
Net Interest From Above Policies $700
Total 10-year Cost $4,830

Source: Committee For a Responsible Federal Budget, based on CBO and OMB data.
Does not account for budget deficit changes driven by economic and technical factors. 11
 2022 Tax Revenues Were $1 Trillion Above Pre-
Pandemic Levels (Adjusted for Inflation)
$5,000 4896

4277
Inflation-Adjusted Federal Revenues ($Billions)

$4,000 3821 3810 3818 3747 3822 3726

3593
3364
3024
$3,000 2895
2773

$2,000

$1,000

$0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Fiscal Year
Source: OMB Historical Table 2.3, and final 2022 Treasury data.
12
 2022 Tax Revenues Were the Second-Highest
Ever Outside of World War II
25%

20.5% 19.8%
Federal Revenues (%GDP)

20.0%
(1944) (2000) (2022)
19.9%
20% (1945)

15%

10%
Federal Revenues
(%GDP)

5%

0%
1940 1950 1960 1970 1980 1990 2000 2010 2020
Fiscal Year
Source: OMB Historical Table 2.3, and final 2022 Treasury data.
13
 In 2022, Individual Income Tax Revenues
Exceeded 10% of GDP for the First Time Ever
12%
10.7%
Tech Bubble (2022)
10% & Burst
Individual Income Tax Revenues (%GDP)

WWII Reagan Deep

Tax Cuts Recession
8%

6%

Individual Income Tax

4% Revenues (%GDP)

2%

0%
1940 1950 1960 1970 1980 1990 2000 2010 2020
Fiscal Year
Source: OMB Historical Table 2.3, and final 2022 Treasury data.
14
 The National Debt is in the Middle of a
Historic Surge
$40
$35.1
Debt in Inflation-Adjusted (2022) $Trillions

(2032)
$35

$30
$24.3
$25 (2022)
$18.5
$20 (2019)

$15 CBO Baseline, Adjusted

for Current Policies
$10 $6.6
(2006) National Debt Held by
the Public
$5

$0
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032
Fiscal Year
Source: May 2022 CBO baseline and historical data, adjusted to assume extension of the 2017 tax cuts. 15
 The National Debt is Set to Surpass
the World War II Peak Within a Decade
120%
106% 110%
(1946) (2032)
Debt Held by the Public (%GDP)

100% 98%
(2022)

CBO
80%
Baseline

60% 48%
(1993-95)
39%
23% (2008)
40%
(1974)

20%
Historical Debt Held by the Public as a Percentage of GDP

0%
1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Fiscal Year
Source: OMB Historical Table 7.1, and May 2022 CBO baseline. 16
 CBO Long-Term Baseline Shows
Unsustainable Debt
200%
Note: This is the rosy scenario that assumes no wars, 185%
no recessions and continued low interest rates. It also (2052)
Debt Held by the Public (%GDP)

assume all tax cuts expire as scheduled.

160%

106% 98%
120%
(1946) (2022)

80%
Projected
48% 39% Debt Levels
(1993-95) (2008)
40% 23%
(1974)

Historical Debt Levels

0%
1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Fiscal Year
Source: CBO 2022 Long-term Budget Outlook. 17
 The National Debt Has Surpassed
$180,000 Per Household
$200,000
$185,442
$180,000 (2022)
Inflation-Adjusted (2022) Dollars

$160,000

$140,000

$120,000

$100,000 $64,924
(2008)
$80,000 $50,328
(1990) $51,573
$60,000 (2000)
$40,000 National Debt Held by the Public
Per Household
$20,000

$0
1990 1995 2000 2005 2010 2015 2020
Fiscal Year

Source: OMB Historical Table 7.1, May 2022 CBO baseline, and Census Bureau data. 18
 Projected New Federal Debt Added by Decade

$40

$35
Inflation-adjusted (2022) $Trillions

$30

$25

$20 $38.8

$15
$24.7
$10 $18.5

$5 $10.0
$2.5 $4.3
$0
1990s 2000s 2010s 2020s 2030s 2040s
Decade

Source: CBO 2022 long-term budget outlook adjusted to reflect the current-policy baseline. 19
 U.S. Government Debt is Increasingly Financed by
the Federal Reserve and Domestic Lenders
$25
$22.1
Debt Held by the Public in

$20
Nominal $Trillions

$17.5 $10.7
Other
Domestic
$15
Lenders
$8.0
$10.4
$10 $5.8 Federal
Reserve
$3.8 $2.5

$1.7 Other Intl.

$5 $4.6 $5.2 Lenders
$2.8
$1.1 $1.3 $1.2 Japan
$0 $1.2 $1.1 $1.0 China
Dec. 2011 Mar. 2020 May 2022

Source: U.S. Treasury, Federal Reserve. 20

 A Rising Share of U.S. Government Debt is Financed
by the Federal Reserve and Domestic Lenders
100%

90%
Share of Debt Held by the Public

80% 36.0% Other

45.9% 44.8% Domestic
Lenders
70%

60%
16.0%
50% Federal
14.4%
24.1% Reserve
40%
26.8%
30%
26.3% Other Intl.
Lenders
20% 21.9%
10.1%
10% 7.3% Japan
11.0% 5.1%
6.2% 4.1% China
0%
Dec. 2011 Mar. 2020 May 2022

Source: U.S. Treasury, Federal Reserve 21

 What Is Driving the Debt?
Soaring Federal Spending
Chapter 2

22
 Background: Federal Spending & Taxes:
1930-2032
50%

45%

40%

35%
Percentage of GDP

30%
Spending
25%

20%

15%
Revenues
10%

5%

0%
1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030

Fiscal Year
Source: OMB Historical Table 1.2 (1930-2020), and May 2022 CBO baseline, adjusted to include current-policy tax cut extensions. 23
 Over the Next Decade, Above-Average
Spending Will Drive Most of the Rising Deficit
34%
32%
30%
28%
Spending 24.3%
Percentage of GDP

26%
1960-2021 Average: 20.4% (2032)
24%
22%
20%
18%
16%
Revenues 18.2%
14%
1960-2021 Average: 17.4% (2032)
12%
10%
1960 1970 1980 1990 2000 2010 2020 2030
Fiscal Year
Source: OMB Historical Table 1.2 (1930-2020), and May 2022 CBO baseline 24
 Rising Spending – Not Falling Revenues –
Drives the Long-Term Deficit

35%

30%

Federal Spending 30.2%

Percentage of GDP

25%
20.4% (2052)
(1960-2021)
20%

19.1%
15%
17.4% Tax Revenues (2052)
(1960-2021)
10%
(18.3% if 2017 tax
cuts are extended)
5%

0%
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Fiscal Year
Source: CBO 2022 Long-term Budget Outlook 25
 What Happened to Those Budget Surpluses?
2000: Budget Surplus of 2.3% of GDP
2022: Budget Deficit of 5.6% of GDP
4%
Revenues Fell 3.6%
3.2% Spending Jumped 7.7% of GDP
0.2% of GDP
Change in Percentage of GDP

3%
Social
Security & Other
2% Mandatory
Health
Entitlements Spending
1% 0.7%
Tax Revenues 0.1% Net Interest
0%
-0.2% Non-Defense Defense 0.0%
Discretionary
(Half is the one-time
-1%
student loan bailout)

-2%
Change Between 2000 Peak Surplus of 2.3% GDP,
and 2022 Deficit of 5.6% of GDP

.
Both 2000 and 2022 showed above-average tax revenues. On average, post-2000 revenues have been 1% of GDP below the
previous two decades. Source: OMB historical tables and May 2022 CBO baseline. 26
 Entitlement Programs – not Defense – are
Driving Spending Upward
2022 spending increase above 2000 levels in inflation-adjusted $billions
(Percentage increase over 2000 levels in parentheses)

Social Security (88%) $563

Medicare (144%) $444

Medicaid (218%) $406

Other Mandatory (196%) $724

Student Loan Bailout (NA) $379

Defense (62%) $288

Non-Defense Discretionary (90%) $455

Net Interest (51%) $181

$0 $100 $200 $300 $400 $500 $600 $700 $800

Source: OMB Historical Table 3.2 and CBO final 2022 figures, adjusted for inflation.
Total spending rose by $3,439 billion, or 121%. Real GDP rose by 54%. 27
 Coronavirus Legislation Pushed 2020 and 2021
Federal Spending Past $55,000 per Household

$60,000
$55,568 $49,803
Inflation-Adjusted (2022) Dollars

$55,000 (2021)
$47,873 (2032)
$50,000 (2022)
$45,000
$40,000
$31,373
$35,000
$26,149 $27,059 (2007)
$30,000 (1990) (2000) CBO Baseline
$25,000
$20,000
$15,000
Actual Spending per Household
$10,000
$5,000
$0
1990 1995 2000 2005 2010 2015 2020 2025 2030
Fiscal Year
Source: OMB Historical Table 1.1, May 2022 CBO baseline, and Census Bureau Data. 28
Discretionary Spending Is Not
Driving the Long-term Debt
Chapter 3

29
 Despite Recent Increases, Discretionary Spending
Should Resume Falling as a Share of the Economy
10%
9.1%
9%
(1968)
8%
Federal Spending (%GDP)

7%
Defense Discretionary
6%
3.9%
5%
(2022) 3.4%
4% 5.0% (2032)
3.3% (1980)
3%
(1962)
2.9% 3.1% 2.7%
2% (1999-01) (2022)
Non-Defense Discretionary (2032)
1%

0%
1962 1968 1974 1980 1986 1992 1998 2004 2010 2016 2022 2028
Fiscal Year

Source: OMB Historical Table 8.4, and May 2022 CBO baseline. 30
 Since 1990, Non-Defense Discretionary Spending
Has Grown 5 Times Faster than Defense
$2,000
Inflation-Adjusted (2022) $Billions

$1,800

$1,600

$1,400
$962
$1,200 (2022)
Non-Defense: Up 146%
$1,000
$390
$800
(1990)
$600 $755
$585 (2022)
$400 Defense: Up 29%
(1990)
$200 (Includes war spending)

$0
1990 1994 1998 2002 2006 2010 2014 2018 2022
Fiscal Year
Source: OMB historical table 8.1, and May 2022 CBO baseline, converted into 2022 dollars. 31
 Budget Deals Weakened the Budget Control
Act (BCA) Discretionary Spending Caps
$1,400
Black – 2008-2012 Actuals & Original 2013-2021 CBO baseline
Blue – Original 2013-2021 BCA Caps
Red – Final Figures After Budget Deals 1288 1298
$1,300
$Billions of Budget Authority

1245
1208
$1,200

$1,100 1090
1043 1066 1070
1050
1013 1012 1012 1014
$1,000
1146
1119
933 1092
1065
$900
992 1016 1040
975 995

$800
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Fiscal Year
Source: Congressional Budget Office. Excludes OCO and Emergency Spending. Amounts In Nominal $Billions 32
 What Became of the $1,788 Billion in Promised
2013-2021 Discretionary Savings Under the
Budget Control Act?
*Other savings consist of
mandatory savings and
$488 billion was
revenue increases.
repealed (27%)

Lawmakers also circumvented

the caps through the ChIMPs
$285 billion was gimmick, and by adding extra
replaced by other defense money to the Iraq &
savings thru 2029 Afghanistan “emergency” bills
(16%)* that do not count against these
$1,015 billion was spending caps.
enacted (57%)

Source: Calculations based on CBO Data, as of July 2021. Excludes emergency appropriations related to the pandemic, 33
 Budget Caps Sharply Reduce Discretionary
Spending – For a Few Years Until They Get Ignored
12%

2009
Discretionary Spending (%GDP)

10%
Stimulus

8%

6%

Several Multi-year
Budget
4% Budget Deals
Control Act,
Covered 1986-2002
2013-2021 Baseline
2%

0%
1972 1977 1982 1987 1992 1997 2002 2007 2012 2017 2022 2027 2032

Fiscal Year
Source: OMB Historical Table 8.4, and May 2022 CBO baseline. 34
 The Six Major Deficit-Reduction Deals Since
1983 Relied Mostly on Discretionary Savings
Combined Components of the 6 Deals The 6 Largest Deficit Reduction Deals
Since 1983 Were:
Interest ➢ 1983 Social Security Deal (Saved 0.52%
Savings of GDP)
11.9% ➢ 1985 Gramm-Rudman Hollings Act
New (1.72%)
Taxes
➢ 1990 Bush “Andrew Air Force Base” Deal
18.8%
(1.45%)
➢ 1993 Clinton Budget Deal (1.08%)
➢ 1997 Balanced Budget Deal (0.72%)
Other ➢ 2011 Budget Control Act (1.01%)
Mandatory
Savings 8.0% Savings scored at time of enactment. Many
cuts were later reversed, and the 1985 law
Discretionary
Medicare Savings was invalidated by the Supreme Court and
Provider 52.8% replaced with a 1987 version.
Cuts 8.4%
Source: Brian Riedl, “Getting to Yes: A
History of Why Budget Negotiations
Succeed, and Why They Fail.” 2019

35
 Mandatory Spending and
Entitlement Costs Are Rising
Rapidly
Chapter 4

36
 Major Components of the 2022 Federal Budget

Per Per
House- House-
2022 Outlays $Millions hold % 2022 Revenues $Millions hold %
Social Security $1,046,955 $9,293 18% Ind. Income Taxes $2,263,370 $17,247 51%
National Defense 684,568 5,941 12% Soc. Insurance Taxes 1,445,596 $11,016 33%
Medicare 651,199 5,799 11%
Corporate Taxes 382,560 $2,915 9%
Income Security Programs 418,681 4,714 7%
Fed. Reserve Earning 107,749 $821 2%
Medicaid 393,498 4,281 7%
Net Interest 349,458 Excise Taxes 92,638 $706 2%
2,721 6%
Veterans Benefits 200,458 2,088 3% Customs Duties/ Fees 84,113 $641 2%
Education 112,863 1,727 2% Estate/Gift Taxes 25,742 $196 1%
Fed. Retirement & Disability 71,780 1,251 1% Other Revenues 34,858 $266 1%
Health Research & Regulation 68,678 930 1% Total Receipts 4,436,626 33,808 100%
General Fiscal Assistance 63,580 895 1%
Highways & Mass Transit 54,337 741 1%
All Else 1,735,521 4,209 30%
Total 5,851,576 44,590 100%

Source: OMB Historical Tables 2.1, 2.4, 2.5, 3.2, and 8.5. Excludes student loan bailout that occurred after OMB report. 37
 Mandatory Spending is Squeezing
Discretionary Spending
1965 2022

Mandatory
Mandatory (71%)
(34%) Defense
(43%)

Defense
(13%)
Domestic
Discretionary Domestic
(23%) Discretionary
(16%)

Source: OMB Historical Table 8.3 38

 Composition of Federal Spending, 1962-2022

100%
29%
90% 25%
Other Programs
80%
6%
70% Net Interest
6%
3%
60% Antipoverty Programs
13% 22%
50%

40%
Social Security & Medicare
30% 49%
34%
20%

10% Defense (including wars) 13%

0%
1962 1970 1978 1986 1994 2002 2010 2018
Fiscal Year

Source: OMB Historical Tables 3.2, 8.5, and 10.1 39

 Social Security, Health Entitlements, & Interest Costs
Drive 86% of the 2032 Spending Hike Over 2008 Level
$8,000
Inflation-Adjusted (2022) $Billions

$7,000
$965
$6,000

$3,776
$5,000
$330
$4,000 Social Security &
$1,576 Health Entitlements
(up $2,200 billion)
$3,000

$2,000 $508 Other Entitlements (up $132 billion) $640

$683 Non-Defense Discretionary (up $338 billion) $1,021

$1,000
$800 $807
Defense & Wars (up $7 billion)
$0
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032
Fiscal Year
Source: May 2022 CBO (baseline and historical data), adjusted for inflation 40
 The 2017 Tax Cuts are a Relatively Minor
Contributor to Soaring Deficits
$0
Recession Underlying CBO Budget Deficit - Driven by
-$500 & Federal Social Security, Health Care, & Debt Interest
Budget Deficit in Nominal $Billions

Response $-459
(2015)
-$1,000

-$1,500
$-1,415
(2009)
-$2,000

-$2,500

-$3,000 Pandemic $-2,740

Response (2032)

-$3,500
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032
Fiscal Year
Source: Calculated using CBO May 2022 (current-policy) Baseline data.
Assumes that tax cuts are renewed. Resulting interest costs are incorporated into each category. 41
 Rising Social Security & Medicare Shortfalls
Drive Nearly the Entire 2019-2032 Deficit Rise
$0
General Revenue Transfers to Pay
Budget Deficit in Nominal $Billions

-$500 Social Security & Medicare Benefits

All Other $-1,866

-$1,000 Policies

-$1,500 (Including
pandemic) $-423
-$2,000

-$2,500 $-452
Annual deficit is projected to rise
-$3,000 from $984 billion to $2,740 billion

-$3,500
2019 2021 2023 2025 2027 2029 2031
Fiscal Year

Source: Calculated using May 2022 CBO (current-policy) baseline and CBO 2022 Long-Term baseline.
Resulting interest costs are incorporated into each category.
General revenues include interest payments on trust funds, as they represent a net cost to the rest of the budget. 42
 Rising Social Security & Medicare Shortfalls Drive
Nearly Entire 2019-2032 (non-Pandemic) Deficit Rise
$0
-366 -478 -444 -420 -561 -667 -772 -897 -1026
-$500 -223
Budget Deficit in Nominal $Billions

-253 -258 -226 -1170 -1317

-254 -1483
-395 -213 -1653
-209 -1866
-$1,000 -731 -277 -263
-391
-984 -1092 -329
-493
-1271 -346
-$1,500 -553 -359
-1377 -1473 -569 -375
-2074
-1713 -606 -396
-$2,000 -2398 -619
-1924 -423
-608
-2122 -601
-$2,500 -2295
-452
-2466
General Revenue Transfers to Pay -2651
-2775 Social Security & Medicare Benefits -2740
-$3,000
-3129 2017 Tax Cuts (Extended)
All Other Policies
-$3,500
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
Fiscal Year
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 May 2022 CBO (current-policy) baseline. 43
 Major Components of the $21.1 Trillion Deficit
Projected Over 2022-2032 Period
$3
$1.2
$Trillions of Nominal Dollars

$1

Pandemic 2018-2022 Rest of the

-$1 2017 Tax
Legislation Discretionary Budget
Cuts
-$3 General Spending
-$2.7
Revenue Deals
Transfers -$3.4
-$5 -$4.4
to Social
Security &
-$7
Medicare Note: General revenue transfers to
-$9 Social Security & Medicare will grow
from $420 billion to $1,866 billion
between 2022 & 2032
-$11
-$11.8
-$13
Impact on 2022-2032 CBO Budget Deficit

Source: Calculated using May 2022 (current-policy) baseline and Long-Term baseline, adjusted for subsequent legislation.
Assumes that new tax cuts are renewed. Resulting interest costs are incorporated into each category.
General revenues include interest payments on trust funds, as they represent a net cost to the rest of the budget. 44
 Anti-Poverty Spending Has Soared Regardless
of Party Control of Government
8.0% 7.6%
(2021)
7.0%
Federal Spending (%GDP)

6.0%

5.0% 4.2%
(2010)
4.0% 3.2%
2.6% (2008)
(2000)
3.0% 1.8%
(1980) Cash & Other Aid Food Aid
2.0%
Housing
0.5%
1.0% (1962) Health Care

0.0%

Fiscal Year
Source: OMB Historical Tables 3.2, 8.5, and 10.1 45
 From 2001-2019, SNAP (Food Stamp) Caseloads
Grew 17 Times as Fast as the Poverty Population
160%

140% 137%
Percentage Increase

120% Up
106% $37 Billion
100%
(After Inflation)
80% Up
18 Million
60%

40%

3%
20%
Up 1 Million
0%
Individuals in Poverty SNAP Caseloads Total Spending

Sources: Department of Agriculture and Census Bureau. The poverty rate fell from 11.7% to 10.5% over this period. 46
 Veterans’ Programs Have Earned
Healthy Funding Increases
$300
$274
Inflation-Adjusted (2022) $Billions

$250

$200

$154
$150

$100
$78

$50

$0
2002 2012 2022
Fiscal Year

Source: OMB Historical Table 3.2, adjusted for inflation 47

 In 2021, Washington Made $281 Billion in
Improper Payments
Medicaid $99

Unemployment Insurance $78

Medicare Fee-for-Service $25

Medicare Advantage (Part C) $23

Other High-Risk Programs $56

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100

2021 Improper Payments ($Billions)

Source: OMB at https://paymentaccuracy.gov/ 48

 Pandemic Benefit Fraud and Overpayments
Exceeded Large Categories of Federal Spending

Pandemic Benefit Fraud $320

Veterans Benefits $200
Education $108
Transportation $96
Health Research & Regulation $66
Justice Administration $66
International Affairs $53
Farm Subsidies $38
Natural Resources & Environment $38
$0 $50 $100 $150 $200 $250 $300 $350
$Billions

Source: Pandemic figure consists of reported fraud and overpayments in unemployment benefits, Paycheck Protection Program loans,
and Economic Injury Disaster loans. Other programs show OMB 2019 spending totals to reflect typical (non-pandemic) budgets. 49
 Why the Debt Limit Matters
All 8 Major Deficit-Reduction Laws Since 1985
Were Attached to Debt Limit Legislation
Attached to
Year Major Deficit-Reduction Law 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 50

The 30-Year Debt Estimates Are
Driven by Social Security and
Medicare Shortfalls
Chapter 5

51
 Federal Budget, 1960-2052 (Projected)
35% Note: This CBO rosy scenario assumes:
• No more wars or recessions, and health costs slow
• 2017 tax cuts expire
30% • Modest interest rate paid on the national debt.

7.2%
25%
Revenue
Percentage of GDP

20% 15.1%

15% Social Security &

Health Entitlements

10%

1.9%
5%
3.3%
Defense & Wars
2.6%
0%
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Fiscal Year
Source: CBO 2022 Long-Term Budget Outlook and OMB Historical Tables. 52
What is Causing $114 Trillion 2022-2052 Budget Deficit?
Social Security & Medicare: $116 Trillion Deficit
The Rest of the Budget: $2 Trillion Surplus
Rest of the
Social Security Medicare Federal Budget
Surplus/Deficit in Nominal $Trillions

$10
$1.9
$0
-$10 -$21.4
-$20
-$48.1
-$30 -$14.4
-$40
$-35.8 Purple – Program Deficit
-$50
Blue – Interest Costs Directly
-$60
-$32.4 Attributable to Program Deficit
-$70
-$80
$-80.5
-$90
Source of $114.4 Trillion Budget Deficit Projected over 2022-2052 Period
($Nominal)
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 2022 Long-Term Budget Outlook. To inflation adjust, trim amounts by one-third. 53
 Projected 2052 Budget Deficits are Entirely Driven
by Social Security & Medicare Shortfalls
22%
19.4%
20%
18%
16%
Percentage of GDP

13.0%
14%
12%
Outlays 10.8%
10%
8% Revenues
6.1% Outlays
6%
Dedicated
4% Revenues
2%
0%
Social Security & Medicare Systems Rest of the Federal Budget
Note: 2052 is the final year of the latest CBO 30-year budget projection.
Each outlay category includes portion of national debt interest attributed to its 2022-2052 deficits
Source: CBO 2022 Long-Term Budget Outlook.
54
 Social Security’s Cash Shortfalls are Driven by
Retiring Baby Boomer Costs and Resulting
Interest Costs
10%
8.6%
9%
8%
7% 6.4%
Percentage of GDP

6%
5.2% Social Security Outlays
5% 4.5%
5.0%
4%
Social Security Revenue from Payroll Taxes & Taxation of Benefits
3%
2%
1%
0%
2020 2025 2030 2035 2040 2045 2050
Fiscal Year

Source: Calculated using CBO 2022 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. 55
 Medicare’s Cash Shortfalls are Driven by Soaring
Benefit Costs and Resulting Interest Costs

12%
10.8%
11%
10%
9%
8%
Percentage of GDP

7%
5.9%
6%
5%
Medicare Outlays
4% 3.7%
3%
1.5% Medicare Payroll Taxes & Dedicated Revenues 1.6%
2%
1%
0%
2020 2025 2030 2035 2040 2045 2050
Fiscal Year

Source: Calculated using CBO 2022 Long-Term Baselines. Outlays are net of premiums paid.
Interest costs are those directly attributable to Medicare’s annual deficits over this period. 56
 Social Security Faces a $36 Trillion Shortfall over
30 Years - $33 Trillion if Subtracting the Trust Fund
$120

$100.7
$100 Green = Transfers from
redeeming the Social
$14.4
$Nominal Trillions

Security Trust Fund.

$80
$67.8 The Trust Fund contains
$2.8 Program no economic resources
$60 Outlays and must be redeemed by
new taxes and borrowing.
$86.3
$40 Payroll Taxes & In other words, it does not
Benefit Taxes save future taxpayers a
dime or reduce the true
$20 $65.0 shortfall.

$0
2022-52 Revenues 2022-52 Outlays

Source: Calculated using the CBO 2022 Long-Term Budget Outlook.

Interest costs reflect those directly attributable to 2022-2052 Social Security shortfalls. 57
 Medicare Faces a $80 Trillion Cash Shortfall
Over the Next 30 years
$120
$103.9
$100 Medicare’s $80 Trillion
Interest Costs
shortfall equals 70% of
$32.4
$Nominal Trillions

the total federal budget

$80 deficit projected by CBO
over the 2022-2052
period.
$60
Program
Outlays Annual projected
$40 shortfall:
$71.5
2022: 1.3% of GDP
$23.4 2052: 4.3% of GDP (9.2%
$20 including interest cost).
Payroll Taxes &
HI Trust Fund
$0
2022-52 Revenues 2022-52 Outlays

Source: Calculated using the CBO 2022 Long-Term Budget Outlook. Benefits are net of senior premiums.
Interest costs reflect those directly attributable to 2022-2052 Medicare shortfalls. 58
 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
$800,000
Inflation-Adjusted (2020) Dollars

$698,000
$700,000
$625,000
$600,000
$522,000
$500,000

$400,000 Benefits Benefits

Taxes
Received Received
$300,000 Paid In

$161,000 (net of
$200,000 premiums
Taxes Paid In paid)
$100,000

$0
Social Security Medicare

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

Calculations represent expected present values.

Source: Urban Institute (2020) 59

 Cost of 2017 Tax Cuts vs. Major Entitlements
Over 30 Years
$90
Blue – Interest Costs $80.5
$80
Purple – Principal Costs
$70
$32.4
$Nominal Trillions

$60

$50

$40
$35.8
$30 $14.4
$16.6 $48.1
$20
$7.6 $21.4
$10
$9.1
$0
2017 Tax Cuts Social Security Medicare
(Extended) Cash Deficit Cash Deficit

2022-2052 Projected Totals

Source: Calculated using the CBO 2022 Long-Term Budget Outlook and earlier CBO tax estimates 60
 Social Security’s Deficits Will Steeply Increase,
While Medicare Also Faces Rising Deficits
$50
Social Security (DI) $15
$0
-$50
Medicare Part A (HI) $-74
-$100
Nominal $Billions

-$150
-$200
-$250
-$300
-$350
-$400
$-467
-$450
-$500
2016 2018 2020 2022 2024 2026 2028 2030 2032
Fiscal Year

Excludes general revenue transfers into the programs, such as interest payments.
Source: May 2022 CBO baseline Supplemental Trust Fund Tables. 61
 Medicare Part A and Social Security Trust Funds
Face Bankruptcy in 8 and 11 Years, Respectively

$250 $3,000

$2,500
$200
Social Security (OASI)
Nominal $Billions

Trust Fund Balance

$2,000

Nominal $Billions
$150
$1,500
$100
Medicare Part A (HI) $1,000
Trust Fund Balance
$50
$500

2030 2033
$0 $0
2015 2017 2019 2021 2023 2025 2027 2029 2031 2033

Fiscal Year
Post-2032 figures are extrapolated.
Source: July 2022 CBO baseline Supplemental Trust Fund Tables. 62
What Happens to the Debt if
Interest Rates Rise?
Chapter 6

63
 Average Interest Rate Paid on U.S. Federal
Debt – Historical and CBO Projections
13%
Note: Consensus economic research
11.3% suggests that the projected 100% rise in
11%
(1981) federal debt over 30 years should, all else
Average Interest Rate

equal, raise interest rates by 3% or 4%.

9% Govt. relies on short-term debt that will
rollover into future interest rates.
Nominal
7%
Rate
6.3% 4.2%
5% (2052)
(1983) 1.8%
3% (2022) 1.9%
(2052)
Inflation-
1%
Adjusted Rate

-1%1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

-3% -4.3%
(2022)
-5%
Fiscal Year
Source: 1987 through 2052 (projected) data provided by CBO.
Earlier figures estimated using Treasury, OMB, and Federal Reserve data. 64
 Net Interest Costs are Set to Spike –
Especially if Interest Rates Exceed 2.7% Projection
$1,800
$1,702
Inflation-Adjusted (2022) $Billions

$1,600 CBO 10-year baseline assumes the federal (2032)

government pays an average interest rate of
$1,400 2.7% over the next decade 4.7%
$1,367
$1,200 (2032)
3.7%
$1,000

$800 $1,032
(2032)
$600 $359 $399
(1990) (2022)
$400

$200
CBO Current Policy Baseline
$0
1990 1996 2002 2008 2014 2020 2026 2032
Fiscal Year
Source: OMB Historical Table 3.2 and May 2022 CBO baseline, adjusted for tax cut extensions, and for inflation into 2022 dollars.
Cost of higher interest rates comes from OMB Analytical Perspectives. 65
 If Interest Rates Exceed the CBO baseline,
Net Interest Costs – and the Deficit – Will Soar
$236
$500 (2000)

$0
Surplus/Deficit in Nominal $Billions

CBO Current-Policy Baseline

-$500 Baseline
$-161
(2007) Interes Rates
-$1,000

-$1,500 $-2,740
$-1,413 (2032)
-$2,000 (2009)

-$2,500
+1%
$-3,154
-$3,000 +2%
$-3,129 +3% $-3,568
-$3,500
(2020)
$-3,982
-$4,000
2000 2004 2008 2012 2016 2020 2024 2028 2032
Fiscal Year
Source: Calculated using May 2022 CBO (current-policy) Baseline data, OMB sensitivity tables, and CEA historical interest rate
data. Amounts in nominal $billions. 66
 Rising Budget Deficits Will be Substantially
Worsened if Interest Rates Rise
5%
2.3% CBO baseline assumes the federal government pays an
(2000) average interest rate gradually rising to 4.2% by 2052
0%
CBO baseline
-2.5% Baseline
Budget Deficit (%GDP)

-5% (2015) int. Rates

-10% -11.1%
-9.8% (2052)
(2009)
-15% -15.3%
-14.9%
(2020)
-20% -20.6%

-25%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Fiscal Year
Source: Calculations using the 2022 CBO Long-Term baseline.
Most economists agree that a steeply rising debt will raise interest rates. 67
 Rising Debt is Projected to Drive Up Interest Costs –
and Rising Interest Rates Could Bury the Budget
20%

18% CBO baseline assumes the federal government pays an

average interest rate gradually rising to 4.2% by 2052
16% 16.7%
Net Interest Costs (%GDP)

(2052)
14%

12%

10% 11.4%

8%
7.2%
6%
2.2% Baseline
4%
2.2% (2022) interest
2% (2000) Rates
CBO Baseline
0%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Fiscal Year

Source: Calculations using the 2022 CBO Long-Term baseline.

Most economists agree that a steeply rising debt will raise interest rates. 68
 Rising Interest Rates Could Push the National
Debt towards 300% of GDP Within 30 Years
400%
Average interest paid rate on national debt:
1980s – 10.5%
350% 1990s – 6.9%
2000s – 4.8%
National Debt as a %GDP

2010s – 2.1% 345%

300%
2020s – 2.2% (CBO projection) +3%
2051 – 4.2% (CBO projection) 280%
250%
+2%
229%
200% +1%
185%
150%

100%

CBO Baseline
50%
(Assumes rates gradually rise to 4.2% by 2052)

0%
2020 2025 2030 2035 2040 2045 2050
Fiscal Year
Source: Calculations using the 2022 CBO Long-Term baseline
Most economists agree that a steeply rising debt will raise interest rates. 69
 The Baseline Debt is Set to Rise to 200% or 300% of
GDP – and Higher Interest Rates Would Bury U.S.
500%
Average interest paid rate on national debt:
1980s – 10.5% 464%
1990s – 6.9%
400% 2000s – 4.8% Baseline
National Debt as a %GDP

2010s – 2.1% + 1%
2020s – 2.2% (CBO baseline projection)
2050 – 4.1% (CBO baseline projection)
300% 2050 – 5.1% (CBO alternative projection)
314%
315%

200% 229% 234%

185%
100%
CBO baseline
(Assumes rates gradually rise to 4.2% over 30 years
0%
2000 2010 2020 2030 2040 2050 2060 2070

Fiscal Year
Source: 2022 CBO Long-Term baseline, with post-2052 data extrapolated.
Most economists agree that a steeply rising debt pushes up interest rates. 70
 The Share of Federal Tax Revenues Spent on
Interest on the National Debt is Projected to Surge

100%

90% 87%
Percentage of Tax Revenue

CBO baseline assumes the federal government pays an

average interest rate gradually rising to 4.2% by 2052
80%
Going to Interest

70%
Baseline
60% Interest
60%
Rate
50% +2%
38% Baseline
40% Interest
Baseline Rate
30% + 1%
Interest
20% Rate
11%
10%

0%
2022 2052
Most economists agree that a steeply rising debt will raise interest rates.
Source: Calculations using the 2022 CBO Long-Term Baseline. 71
 National Debt is Projected to Leap to 200% to
328% of GDP, Depending on Biden Proposals &
Interest Rates
400%

CBO + Biden + Interest Rates

Exceed CBO Projection by 1%
National Debt as a %GDP

300%

328%

255%
200%

202%
100%
CBO 30-Year Baseline
When Biden Took Office
(Low Interest Rates)
0%
2000 2010 2020 2030 2040 2050
Fiscal Year

Source: 2021 CBO Long-Term baseline and author calculations of Biden proposal costs.
CBO baseline assumes average interest rate paid on national debt gradually rises to 4.6% over 30 years. 72
Can’t We Just Raise Taxes, Cut
Defense, and Nationalize Health
Care Instead?
Chapter 7

73
 The Full Roster of Progressive Tax Hikes
Could Not Even Balance the 10-Year Budget
$16.2 Trillion Deficit is Forecast over 2021-2030
Progressive Tax Proposal 2021-2030 Source
Repeal All 2017 Tax Cuts, Including Low-Income $455 CBO Data (dynamic)
50% Income Tax Rate Over $200k (single) $400k (married) $1,593 CBO Options
70% Income Tax Rate Over $10 Million (AOC) $189 Tax Foundation (dynamic)
Cap Deductions at 28% Value Above $400k AGI $224 Tax Policy Center
Mark-to-Market Taxation & Higher Cap Gains Rates, No Step-up Basis $2,000 CRS, Warren campaign
Eliminate FICA Cap – 15.3% Payroll Tax on All Wages $2,180 Social Security Admin
Biden International Tax Proposals (FDII, GILTI, Inversions) $700 TPC, Tax Foundation
Aggressively Reduce Domestic Corporate Tax Preferences $1,000 Various
Warren “Real Corporate Profits Tax” $476 Tax Foundation (dynamic)
Sanders Wealth Tax as High as 8% $2,263 Tax Policy Center
Sanders Estate Tax Rate as High as 77% $383 Tax Policy Center
Carbon Tax ($25/metric ton) – No Household Rebate $1,033 CBO Options
Financial Transactions Tax of 0.1% $752 CBO Options
Financial Institutions Tax of 0.15% $103 CBO Options
Total Savings Over Decade $13,350

All figures in $billions

Deficits would continue growing significantly in the 2030s, as baseline spending soars.
Combining tax policies would create damaging interactions, including tax rates approaching 100%. 74
 No “Easy” Pay-Fors for Social Security & Medicare:
Programs Face Shortfalls of 6% of GDP by 2040s
10-Yr
Savings Long-Term
Tax Proposals (static scoring) ($Billions) Savings (%GDP)
Raise Income Tax Rates Across-the-Board by 10 Percentage Points $8,840 3.27%
Raise Payroll Tax by 10 Percentage Points, no wage limit $8,775 3.32%
Impose a 20% Value-Added Tax (VAT) – like a national sales tax $7,280 3.02%
Double 35% and 37% Tax Brackets to 70% and 74% (plus 15% state/payroll) $4,154 1.48%
Impose Bernie Sanders’ 8% Wealth Tax (data from TPC) $2,263 0.73%
Eliminate FICA Cap – 15.3% Payroll Tax on All Wages (data from SSA) $2,180 0.84%
Repeal All Itemized Tax Deductions $1,718 0.98%
50% Income Tax Rate Over $200k (single) $400k (married) $1,593 0.57%
Restore 35% Corporate Tax Rate $1,390 0.55%
Carbon Tax of $25/Metric Ton – no rebate for households hit $1,033 0.42%
Impose a 0.1% Tax on Financial Transactions $752 0.34%
Repeal Entire 2017 Tax Law (data from CBO/JCT) $455 (Mostly scheduled)
Impose Bernie Sanders’ 77% Estate Tax (data from TPC) $383 0.18%
Tax Dividends & Capital Gains as Income over $1M & End Step-Up (TPC) $373 0.17%
Impose a 0.15% "Bank Tax" on Large Financial Institutions $103 0.03%
30% Minimum "Buffett Tax" for Millionaires $66 0.03%
Spending Proposals
Cut Defense Budget to European Target of 2% of GDP (data from CBO) $2,737 0.80%
Source: Dec. 2020 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 duplications and interaction effects, so these cannot be summed. 75
Even Eliminating Defense Department Would Not
Come Close to Financing Soaring Long-Term
Entitlement Costs
16%

14%
Social Security and Health Entitlements
Federal Spending (%GDP)

12%

10%

8%

6%
Defense
4%

2%

0%
1970 1980 1990 2000 2010 2020 2030 2040 2050
Fiscal Year

Source: OMB Historical Tables 3.2, and 10.1; and CBO 2022 Long-Term Outlook. 76
 Even 100% Tax Rates on Small Businesses and
Upper-Income Families Could Not Come Close to
Balancing the Long-Term Budget
14%

12.4%
12%

10% 9.3%
Percentage of GDP

All untaxed personal &

small business adjusted
8% 7.2% gross income (AGI)
annually earned above the
listed income threshold
6% 5.6%
5.1%

4% 3.7%

2%

0%
2022 2030 2040 2050 $1 million $500,000
----- Projected Budget Deficit -----
Source: CBO July 2022 Long-Term Budget Outlook adjusted into current-policy baseline and analysis of IRS 2019 (latest year)
income tables. 77
Single-Payer Health Plans Do Not Save Money, They
Would Require Huge Per-Household Tax Increases
$40,000
Average Annual Cost Per-Household

New Spending & Taxes $35,280

$35,000
Redirect Existing Govt. Funds
$30,000
$26,497 $14,203
$25,000

$19,340 $20,524
$20,000 $13,248
$5,371 $7,973
$15,000

$10,000 $21,078
$13,970 $13,248
$12,552
$5,000

$0
Colorado Plan Vermont Plan California Plan Bernie Sanders
(failed referendum) (abandoned) (abandoned) National Plan
Source: Public scores of Vermont and California bills, and Colorado Health Institute data. Sanders calculated from Urban Institute
2016 score of plan. 78
 Medicare-For-All’s 11% of GDP Cost is on Top of
Current Medicare’s Large & Growing Shortfall
20%
16.9%
18%
Added M4A
16% Cost – Still
14% Needs a
15.0% Dedicated
Percentage of GDP

12% Funding
Source
10%
8%
5.9%
6%
3.7% Medicare’s
4% Growing
Medicare Payroll Taxes & Dedicated Revenues 1.6% Baseline
2% 1.5%
Shortfall
0%
2020 2025 2030 2035 2040 2045 2050
Fiscal Year

Source: Calculated using CBO 2022 Long-Term baseline and Medicare-For-All Estimates from the Committee For a Responsible
Federal Budget (CRFB). Other health spending like Medicaid will by rise 0.6% of GDP, but that portion is already fully designed for
general revenues. 79
Progressive Proposals Would
Dig the Debt Even Deeper
Chapter 8

80
 The 2021-2031 Projected Budget Deficit Has
Grown by $3.8 Trillion Since Biden Took Office
Fiscal Year
$0
2015 2017 2019 2021 2023 2025 2027 2029 2031
-$500
CBO baseline Deficit, February 2021
Nominal $Billions

-$1,000

-$1,500
Baseline Deficit,
-$2,000 October 2022

-$2,500

-$3,000

-$3,500

Source: CBO. October 2022 figures reflect May 2022 CBO baseline (with timing shifts removed) adjusted for final FY 22 figures and
legislation enacted through September 2022. 81
 In Just 20 Months, President Biden Added $4.8
Trillion to 10-year Deficits

Legislation or Executive Order 10-year Cost

($Billions)
American Rescue Plan $1,850
FY 2022 Omnibus Bill $625
Bipartisan Infrastructure Law $370
Honoring our PACT Act $280
SNAP Expansion $185
Health-Related Executive Orders $175
CHIPS and Science Act $80
Ukraine Supplementals $55
Inflation Reduction Act -$240
Student Debt Relief $750
Net Interest From Above Policies $700
Total 10-year Cost $4,830

Source: Committee For a Responsible Federal Budget, based on CBO and OMB data.
Does not account for budget deficit changes driven by economic and technical factors. 82
 As a Candidate, Joe Biden 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

*Some of this $700 billion initiative would take place within climate/infrastructure spending.
CRFB = Committee for a Responsible Federal Budget
Figures do not include additional interest costs of new borrowing. 83
 Biden’s Campaign Spending Proposals
Dwarfed Recent Democratic Pres. Candidates
10-year Budget Estimates of Candidate Plans ($Trillions)
$12
$11
$11
$10
Purple = Spending Increases
Nominal $Trillions

$9
Red = Tax Increases
$8
$7
$6
$5
$4
$3
$2 $2 $2 $2 $2
$2
$1 $1
$1
$0
Kerry 2004 Obama 2008 Clinton 2016 Biden 2020

Source: Tax Policy Center, Committee For a Responsible Federal Budget, American Enterprise Institute,
and public scores of Biden plans 84
Common Progressive Proposals Would Total Between
$48 Trillion and $102 Trillion Over the Decade
Common Spending Proposal Low* High* Notes
Medicare-For-All 30.0 34.0 Sanders 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 0.7 2.5 Range is Biden to Sanders proposals
Social Security and SSI Expansion 1.1 1.8 Range is Biden to Sanders & Warren proposals
K-12 funding 0.5 1.2
High Speed Rail and Other Infrastructure 1.0 1.0
Child Care & Paid Family/Medical Leave 0.5 1.0
Subtotal: New Spending Proposals 37.3 90.9 Baseline is $72 trillion spending over decade
Baseline Budget Deficit, 2023-2032 16.5 16.5
Total Federal Budget Deficit 53.8 107.4 Out of a $311 trillion projected GDP (CBO)

Popular Spending Offsets

Cut Defense to European Levels -2.7 -2.7 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 48.1 101.7 Requires > Doubling $56 T in Fed. Revenues

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

Sources: Campaigns, White House, CBO, Committee For a Responsible Federal Budget, and Manhattan Institute estimates 85
 No, Defense Cuts & Taxing Millionaires Cannot
Finance Current Deficit or Progressive Wishlist

(All 10-year Totals) $97.1

$100
Free College & Loan Forgiveness ($3)
$90 Climate
(Sanders)
$80 ($16)
Nominal $Trillions

$70
Job Guarantee
$60 ($30)

$50
$40
$30 Medicare-For-All
($32)
$20
$11.4
$10 $9.0 Baseline 10-yr
$4.7 $15.7

Deficit ($16)
$0
All Untaxed Income All Billionaire Entire Defense Proposed New
Over $1 Million Wealth Budget Spending

Sources: Author calculations using data from CBO, IRS, Forbes, progressive candidates and think tanks. 86
 Several Major Progressive Proposals
Overwhelmingly Benefit Upper-Income Families

10-year Distribution of Benefits $597

$600
$544
$500
Nominal $Billions

$400 $380
Top- Top-
$300 earning earning
Family
income 25% $192 20%
$200
over $120k Bottom
Bottom-
$100 $80 60%
earning
Under 25% $4
$0 $30k
Free Public College Student Loan Forgiveness Repeal SALT Cap
Sources: Calculated using data from the Urban Institute and Tax A carbon tax would raise costs 2% for the bottom quintile, vs. 1%
Policy Center. for top quintile.
SALT=State and Local Tax deduction. Zero-emission mandates will raise car/home prices & kill working-
class fossil fuel jobs.
Also: Medicare-For-All could hurt most of the 75 million Medicaid
recipients who already pay little-to-no premiums/copays,
but would likely pay the broad-based taxes required to fund full
cost of law.
87
 Tax Revenues Will Continue
Growing Faster than the Economy
Chapter 9

88
 Rising Spending – Not Falling Revenues –
Drives the Long-Term Deficit

35%

30%

Federal Spending 30.2%

Percentage of GDP

25%
20.4% (2052)
(1960-2021)
20%

19.1%
15%
17.4% Tax Revenues (2052)
(1960-2021)
10%
(18.3% if 2017 tax
cuts are extended)
5%

0%
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Fiscal Year
Source: CBO 2022 Long-term Budget Outlook 89
 Income Tax Revenues Have Remained Relatively
Constant Regardless of the Top Tax Rate
100% 11%
Top Income Tax Rate Income Tax Revenues (%GDP)
90% 10%

80% 9%
8%
70%
7%
60%
6%
50% Average Top Rate / Revenues
5%
1950s: 90.5% / 7.2%
40% 1960s: 80.3% / 7.6% 4%
1970s: 70.2% / 7.9%
30% 1980s: 48.4% / 8.2% 3%
1990s: 36.7% / 8.1%
20% 2000s: 36.2% / 7.8% 2%
Correlation
2010s: 37.7% / 7.8%
10% 1950-2021:
1%
-0.23
0% 0%
1934 1942 1950 1958 1966 1974 1982 1990 1998 2006 2014 2022
Fiscal Year

Source: OMB Historical Table 2.3, and U.S. Treasury SOI Tax Stats – Historical Table 23 90
 Individual Income Tax Revenues Will Rise
–Even With the Tax Cuts– Due to Real Bracket Creep
& Taxable Retirement Distributions
11% CBO baseline with
(Tax Cuts Extended)
Individual Income Tax Revenues (%GDP)

10%
Tech Bubble
Bracket Creep & Burst
9%

8%

Deep Reagan Deep

Recession Tax Cuts Recession
7%

6%
1960 1970 1980 1990 2000 2010 2020 2030
Fiscal Year
Source: OMB Historical Table 2.3, and May 2022 CBO (current-policy) Baseline. Real bracket creep is when rising incomes
(above inflation) push taxpayers into higher tax brackets, raising their average tax rate. 91
 High Capital Gains Tax Rates Have Not
Produced More Revenues
Correlation 1954-2022: -0.31
45% 1.4%
Top Capital Gains Tax Rate Capital Gains Tax Revenues (%GDP)
40%
1.2%
35%
1.0%
30%

25% 0.8%

20% 0.6%
15%
0.4%
10%
0.2%
5%

0% 0.0%
1954 1960 1966 1972 1978 1984 1990 1996 2002 2008 2014 2020
Fiscal Year

Source: CBO, Treasury Office of Tax Analysis. 92

 Before the TCJA Cut it to 26% (incl. 5% State)
U.S. had Highest Corporate Tax Rate in the OECD
38.9%
40%
(2017)
Top Corporate Tax Rate

30% 25.8%
(2022)

20%

10%

0%
Japan

Denmark

Latvia

Poland
Mexico

France

Spain

Turkey

Greece

Ireland
Korea

Netherlands

Finland
Iceland

Czech Republic
Columbia

Costa Rica

Belgium

Israel

Norway
Austria
Portugal

Estonia

Slovenia

Chile
Canada

Luxembourg

Sweden
Slovak Republic
United States - 2017

Australia

Germany

New Zealand

United States 2022

Italy

Switzerland

United Kingdom
Lithuania
Notes: While all countries allow businesses to reduce their taxes
Source: OECD Stats (2022), Tax Table II.1. Tax rates include through exemptions, deductions, and credits, the U.S. has been among
federal, state, province and local corporate taxes. the highest effective corporate tax rates too. 93
 The U.S. has Finally Caught Up With the Rest of
the OECD on Corporate Tax Competitiveness
40%
United States – 39%
35% 32% Average of Other
31% 30%
30% 34 OCED Nations
Top Corporate Tax Rate

30% 29%
28%27%
27% 26% 25% 26%
25% 25% 25% 25% 25%25%
25%24%
25% 24% 24% 23%
23% 23%

20%

15%

10%

5%

0%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Source: OECD Stats (2022), Tax Table II.1. Tax rates include federal, state, province and local corporate taxes. 94
 The Economy Matters More:
President Obama Oversaw $500 Billion in New Taxes –
and Also Lost $3.2 Trillion to Economic Downgrades
$1,500 $1,328

$1,000 Added Revenue

from Tax Hikes
$500
Nominal $Billions

$0
Lost Revenue
-$500 from Tax Cuts
Lost Revenue from
-$1,000 -$822 Economic
-$1,500 Downgrades and
Technical
-$2,000 Figures reflect 2009-2019 estimates, as of Re-estimates
January 2017 when Pres. Obama left office
-$2,500
-$3,000
-$3,153
-$3,500

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 $3,153 billion. Note that the
initial January 2009 CBO baseline had already incorporated the projected 2009-19 revenue losses from the recession. These
additional economic downgrades reflect the weak recovery, particularly in the later years. 95
Taxes Cannot Easily Close Security & Medicare Shortfall:
Would Need to Hike Taxes by 6% of GDP by 2040s
10-Yr
Savings Long-Term
Tax Proposals (static scoring) ($Billions) Savings (%GDP)
Raise Income Tax Rates Across-the-Board by 10 Percentage Points $8,840 3.27%
Raise Payroll Tax by 10 Percentage Points, no wage limit $8,775 3.32%
Impose a 20% Value-Added Tax (VAT) – like a national sales tax $7,280 3.02%
Double 35% and 37% Tax Brackets to 70% and 74% (plus 15% state/payroll) $4,154 1.48%
Impose Bernie Sanders’ 8% Wealth Tax (data from TPC) $2,263 0.73%
Eliminate FICA Cap – 15.3% Payroll Tax on All Wages (data from SSA) $2,180 0.84%
Repeal All Itemized Tax Deductions $1,718 0.98%
50% Income Tax Rate Over $200k (single) $400k (married) $1,593 0.57%
Restore 35% Corporate Tax Rate $1,390 0.55%
Carbon Tax of $25/Metric Ton – no rebate for households hit $1,033 0.42%
Impose a 0.1% Tax on Financial Transactions $752 0.34%
Repeal Entire 2017 Tax Law (data from CBO/JCT) $455 (Mostly scheduled)
Impose Bernie Sanders’ 77% Estate Tax (data from TPC) $383 0.18%
Tax Dividends & Capital Gains as Income over $1M & End Step-Up (TPC) $373 0.17%
Impose a 0.15% "Bank Tax" on Large Financial Institutions $103 0.03%
30% Minimum "Buffett Tax" for Millionaires $66 0.03%

Source: Dec. 2020 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 duplications and interaction effects, so these cannot be summed. 96
The Tax Code Has Become
Increasingly Progressive
Chapter 10

97
 The Federal Tax Code Remains Progressive
40%
31.8%
Average Tax Rate Paid for All Federal Taxes
30% 28.2%
24.2%
22.4%
2022 Average Tax Rate

19.8%
20% 16.7% 22.7%
14.3% 20.8%
12.3%
9.7%
10% 7.3% 14.9%
11.4%
2.6% 8.8%
0.6%
4.3% 6.3%
0% 2.5%
-4.4% 0.5%
-2.4%
-10% -7.1%
-8.5% Average Tax Rate Paid For Federal Income Taxes

-20% -13.9%
0-10 10-20 20-30 30-40 40-50 50-60 60-70 70-80 80-90 90-95 95-99 99-99.9 Top .1%
$6k $19k $28k $38k $48k $64k $84k $111k $153k $220k $375k $1072k $8.4M
Income Distribution Range and
Average Family Cash Income
Source: U.S. Treasury, Office of Tax Analysis.
Data represents 2022 Distribution of Tax Burden, Current Law 98
 Average Federal Tax Rate Paid by
Income Category, 1979-2018
40%
35% Top 1%
35% 30%
Average Federal Tax Rate Paid

30%
27% Top 20% 24%
25% 22%
Second 20%
20% 17%
19%
15% Middle 20% 13%
15%
Fourth 20% 8%
10%
9%
5%
Bottom 20% 0%
0%
1979 1983 1987 1991 1995 1999 2003 2007 2011 2015

Fiscal Year
Note: Includes federal income, payroll, corporate, and excise taxes paid.
Source: Calculations using CBO "Distribution of Household Income, 2018” (2021) 99
 The Federal Tax Burden (For All Combined Taxes)
Has Grown More Progressive Over Time
100%
Percentage of Federal Tax Burden Financed by Income Quintile, 1979-2018
Percentage of Federal Tax Burden

90%

80%
70%
Paid by Quintile

70%
Top 20%
60% 55%

50%

40%

30% 22%
Second 20%
20% 18%
14%
Middle 20%
10% 7% 9%
Fourth 20% 4%
2% Bottom 20%
0% 0%
1979 1983 1987 1991 1995 1999 2003 2007 2011 2015
Fiscal Year

Source: Calculations using CBO "Distribution of Household Income, 2018” (2021) 100
 The Highest-Earning 20% of Taxpayers Pay
91% of All Federal Individual Income Taxes
100%
Percentage of Federal Income Tax Burden
90% Financed by Income Quintile, 1979-2018 91%

80%
Percentage of Income Tax Burden

Top 20%
70%

60%
65%
Paid by Quintile

50%

40%

30%
20%
Second 20%
20%
11% 13%
10% Middle 20%
4% Fourth 20% 3%
0% -2%
0% Bottom 20%
-5%
-10%
1979 1983 1987 1991 1995 1999 2003 2007 2011 2015

Fiscal Year
Source: Calculations using CBO "Distribution of Household Income, 2018” (2021) 10
1
 Even Controlling for Income Inequality, Income
Taxes Have Become More Progressive
Progressivity Ratio by Income Rank, 1979-2018
3
Share of Income Taxes Paid Divided by the

Top 1%
1.92 2.28
2
Share of Income Earned

1.36 Top 20%

1.54
1 0.88
Second 20% 0.64
0.67
0.42 Middle 20% 0.26
0
-0.03 Fourth 20% -0.27

-1
Bottom 20%
-1.58
-2
1979 1983 1987 1991 1995 1999 2003 2007 2011 2015
Fiscal Year
Source: Calculations using CBO "Distribution of Household Income, 2018” (2021)
“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 10
figures reflect a negative tax burden. 2
 Even Controlling for Income Inequality, the U.S. Has
the OECD’s Most Progressive Income & Payroll Tax
United States 1.35
Australia 1.29
Netherlands 1.28
Ireland 1.26
Canada 1.22
Finland 1.20
United Kingdom 1.20
New Zealand 1.19
Italy 1.18
Korea 1.17
Czech Republic 1.17
Luxembourg 1.15
Slovak Republic 1.14
OECD-24 1.11
France 1.10
Austria 1.10 Note: For the highest-earning 10%
Germany 1.07 of taxpayers, these figures refer to
Denmark 1.02 their share of the nation’s taxes
Japan 1.01 paid, divided by their share of the
Sweden 1.00 nation’s pre-tax income earned.
Norway 0.95
Belgium 0.94 So if the top decile pays 30% of the
Iceland 0.90 taxes and earns 20% of the
Switzerland 0.89 income, its ratio is 1.5.
Poland 0.84

0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5
Progressivity Ratio
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. 103
 Upper-Income Taxpayers Overwhelmingly
Finance the Federal Government
$3,000
$2,758 Total Federal Taxes Paid by Income Class, 2022
(and overall tax rate as a share of income)
$2,600

$2,200
24.6%
$Billions

$1,800

$1,400

$1,000

$600 $571

15.7% $234
$200 11.2% $65 5.3%

-$200 -$15 -3.2%

Top 20% 2nd 20% Middle 20% 4th 20% Bottom 20%
Source U.S. Treasury Office of Tax Analysis. Data for 2022, and includes individual and corporate income, payroll, excises,
customs duties, and estate and gift taxes. 104
 Upper-Income Taxpayers Finance Nearly
the Entire Federal Income Tax
$2,000 Federal Income Taxes Paid by Income Class, 2022
$1,800 (and overall income tax rate)
$1,669
$1,600

$1,400
14.9%
$Billions

$1,200

$1,000

$800

$600

$400
$197
$200
5.4% $35 1.7%
$0
-$54 -4.4% -$59 -12.7%
-$200
Top 20% 2nd 20% Middle 20% 4th 20% Bottom 20%

Source U.S. Treasury Office of Tax Analysis. Data for 2022. 105
 How Washington Financed 365 Days
of Spending in 2022
Top 20% Earners 225 days

2nd 20% Earners 47 days

14.4%
Middle 20% Earners 19 days

Bottom 40% Earners 4 days

Fed Reserve profits; 9 days

various fines & fees

Borrowing 61 days

0 50 100 150 200 250

Days
Note: Top 20% splits to 179 days for top 10%, and 46 days for 2nd 10%.
Source: Calculated using data from U.S. Treasury Office of Tax Analysis. 106
Countering Tax, Spending, &
Deficit Myths of the 1980s
through 2008
Chapter 11

107
Reagan’s Tax Cuts Did Not Starve the Government –
Spending Worsened the 1980s Deficits
22% 21.6%

21%
Green = Revenues
Purple = Spending
Percentage of GDP

20%
19.4%

19% Taxes
Paid In
18.1%
18% 17.8%
17.3% 17.4%
17.2%
17% 16.8%

16%

15%
1950s 1960s 1970s 1980s

Source: OMB Historical Table 1.3 108

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

6% 5.7% 5.8%
5.6%
1980s increase:
5% 60% - added debt
4.4%
Federal Spending (%GDP)

4.3% 40% - higher interest rates

4.0%
4%
3.6% 3.6%

3% Fell during 2.7%

1970s,
rose back
2% during 1980s
1.4%

1%

1970s 1970s 1970s 1980s 1970s 1970s 1980s

1980s 1980s 1980s
0%
Defense Non-Defense Social Other Interest on
Discretionary Security & Entitlement Debt
Medicare Programs
Source: OMB Historical Table 8.4, and interest rate calculations using the Economic Report of the President Table B-25. 109
 To the Extent it Contributed to Soviet Collapse, the
1980s Defense Buildup Eventually Paid for Itself
7%

6%
Defense Spending (%GDP)

5% Initial 1980 Baseline of 4.8% of GDP

1981-1991 Cold War Buildup:

4% Average of 5.5% of GDP
(0.7% above 1980 Baseline)
3%

2% 1992-2001 Post-Cold War Wind Down:

Average of 3.5% of GDP
1% (1.3% below 1980 baseline)

0%
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
Fiscal Year

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.
Source: OMB Historical Tables 3.2, and 10.1 110
 The 1990s Budget Was Balanced by an Economic
Boom and the Cold War Peace Dividend
(and by Washington Not Spending All the Savings)
3%
Revenues Jumped 2.9% of GDP
Spending Fell 3.9% of GDP
Change in Percentage of GDP

2.2%
2%
Economic Strong Economy
growth &
1% small tax
0.7% changes Reduced Grew faster than Various
1993 unemployment Social Security small
Clinton tax costs savings
benefits
0% hike
Defense Interest
cuts after savings -0.4% -0.4% -0.5%
Cold War
-1% ends
-0.9%

-1.7%
-2%
1.4% Change Between 1992 Peak Deficit of 4.5% of GDP,
and 2000 Peak Surplus of 2.3% of GDP

Source: OMB Historical Tables 2.3, 3.2, and 10.1; and the CBO (1993) score of tax increases 111
 The May 2003 Supply-Side Tax Rate Cuts Were
More Successful Than They are Credited For
1,400 96.0% / 4.0%
1,300 95.5% / 4.5%
1,200 95.0% / 5.0%
1,100 94.5% / 5.5%
1,000 Employment (and 94.0% / 6.0%
S&P 500 Unemployment) Rate
900 93.5% / 6.5%
800 93.0% / 7.0%
2001 2002 2003 2004 2005 2006
May
15% 7%
Real GDP 6%
10% Business Investment
Growth 5%
Growth 4%
5% 3%
0% 2%
1%
-5% 0%
-1%
-10% -2%
2001 2002 2003 May 2004 2005 2006

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. 112
 The “Bush Tax Cuts” for Upper-Income Taxpayers
Caused Only 7% of the 2001-2011 Fiscal Decline
Under President Bush
Other Tax Policies, 5%
Non-Defense
Discretionary Spending,
2008 Economic Stimulus Defense 8%
Act, 2% Spending, 21%
Note: When President Bush took
office, CBO forecast a $5.9 trillion Other Entitlement
surplus over FY 2001-11 period. Reforms, 4%
"Bush Tax Cuts" -
When he left office in January Earners Under Medicare Prescription
2009, CBO was showing a $4.4 $250k, 16% Drug Program, 3%
trillion deficit over same decade.

This chart accounts for the $10.3 TARP, 2%

trillion fiscal decline.
Economic & Technical
Downgrades, 32%
Green – Tax Legislation
"Bush Tax Cuts" - Blue – Spending Legislation
Earners Over $250k, Red – Non-Legislative
7%

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. 113
 President Bush Oversaw a $10.3 Trillion Decline
from 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 Laws -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
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 2009-
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. 114
A Comprehensive Accounting of the
Obama Fiscal Record
Chapter 12

115
President Obama Oversaw 2009-19 Budget Deficits
$4.6 Trillion Beyond the Inherited Baseline
$0
2006 2008 2010 2012 2014 2016 2018 Note: The January 2009
-$200 CBO baseline already
CBO baseline Deficit, January 2009 incorporated the 10-year
effects of the 2007-2009
-$400
Nominal $Billions

recession, and the

policies inherited from
-$600 President Bush.
Actual Budget
-$800 Deficits The added Obama
deficits consist of $5
trillion in new
-$1,000 legislation, partially
offset by $400 billion
-$1,200 saved by the sluggish
recovery, as lower
interest rates and thus
-$1,400 interest costs offset the
lower revenues
-$1,600
Fiscal Year

Source: CBO data. FY 2017-2019 "actuals" reflect CBO baseline as of January 2017, and thus reflect the deterioration of the full 10-
year budget picture.
See “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl. 116
 Under President Obama, the 2009-2019 Deficit
Worsened by $4.6 Trillion Relative to the
Baseline He Inherited in January 2009
$3,000
$2,314
$2,000

$1,000 $820
$397
Nominal $Billions

$0
Revenue
New Downgrades Faster Automatic Automatic
-$1,000 Legislation Recovery of Entitlement Interest Savings
Signed by (Weak Financial Savings Due to Due Mostly to
-$2,000 President Recovery & Bailout Costs Weak Economy Falling Interest
Obama Technical & Technical Rates from
Re-estimates) Re-estimates Weak Recovery
-$3,000
-$3,153
-$4,000 Purple = Deficit changes unrelated to 2009-17 legislation.
Sum to $378 billion in deficit reduction
-$5,000
-$4,988 2009-2019 Deficit Impact
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. 117
 President Obama Oversaw a $4.6 Trillion Decline
from the Inherited 2009-2019 Budget Projections
(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 - Technical 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
Source: “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl (based on CBO
data). Positive numbers reduce deficit, negative numbers add to deficit. Legislative changes include associated interest costs and
savings. Ending 2017-2019 figures represent estimates as of January 2017 when President Obama left office. 118
 Tax Revenue Impact of CBO Economic Growth
Downgrades (and Upgrades) Under President Obama
$100
$27
$3
$0
Nominal $Billions

-$17
-$33
-$100

-$200 -$180
-$197

-$256
-$300 -$287 -$299
-$329
-$352
-$400
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Fiscal Year
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.
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. 119
 CBO Economic Downgrades Under President Obama
Sharply Lowered Interest Rates and Therefore Net
Interest Costs
$0
Interest Savings in Nominal $Billions

-$4 -$2
-$26
-$100
-$121
-$200
-$206
-$252
-$300
-$319
-$346
-$400 -$363
-$398
-$418

-$500
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Fiscal Year
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.
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. 120
 President Obama’s Eight Annual Budget Requests
Proposed Large Tax and Spending Increases
$2,000
$1,844

$1,500
Nominal $Billions

Proposed Tax $988

$1,000 Increases &
Immigration Proposed
Revenues Spending
$500
Program Net Interest
Increases Impact of
Proposals
$0

-$265
-$500

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.
See “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl. 121
 The Obama Spending Spree Ended When
the GOP Took the House in 2011
New Spending Enacted by Year –
Excluding Basic Renewals of Existing Tax, Health, and Unemployment Policies
$700
$600
$16 Mandatory Spending Enacted (rolling 10-year score)
$500 $314
Yearly Discretionary Budget Authority Relative to
$400
Nominal $Billions

January 2009 CBO baseline

$300
$515
$200
$338
$100
-$23 -$18 -$3
$0 -$38
-$70 -$95
-$100 -$39 -$102 -$119
-$216 -$130
-$200
-$300 -$34
111-1st 111-2nd 112-1st 112-2nd 113-1st 113-2nd 114-1st 114-2nd
(2009) (2010) (2011) (2012) (2013) (2014) (2015) (2016)
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.
See “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl. 122
A Comprehensive Accounting of the
Trump Fiscal Record
Chapter 13

123
 President Trump Oversaw 10-Year Budget Deficits
$3.9 Trillion Above the Inherited Baseline
$0
2015 2017 2019 2021 2023 2025 2027
-$500
Nominal $Billions

-$1,000

-$1,500

Actual and Projected

-$2,000 Deficits, February 2021

-$2,500

-$3,000

-$3,500
Fiscal Year

Source: CBO data.

See “Trump's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl. 124
 Under Trump, the Cost of New Initiatives Dwarfed
the Savings from Economic Growth and Falling
Interest Rates
$3,000 $2,717

$2,000 $1,304 $1,581

$1,000
$0
Nominal $Billions

Economic Spending Automatic

-$1,000 Growth Interest Savings
Revenue Savings From
-$2,000 Legislative & Revenues Technical Due Mostly to
Downgrades -$1,684
White House Re-estimates Falling Interest
-$3,000 Costs Revenues Lost Rates
(Weak
-$4,000 Recovery & to Technical
Technical Re-estimates
-$5,000 Re-estimates)
-$6,000
Purple = Deficit changes unrelated to 2017-2021
-$7,000 legislation. Sum to $3,918 billion in deficit reduction
-$8,000
-$7,787
2017-2027 Deficit Impact
Source: Author calculations based on CBO baseline updates and bill scores. Positive figures reduce the deficit, negative figures
worsen the deficit.
The cumulative 2017-2027 actual and projected budget deficits increased by $3.9 trillion during the Trump presidency.
See “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl. 125
 President Trump Oversaw a $3.9 Trillion Decline
from the Inherited 2017-2027 Budget Projections
All numbers in nominal $billions) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017-27
CBO January 2017 Baseline Budget Deficit -559 -487 -601 -684 -797 -959 -1,000 -1,027-1,165 -1,297-1,408 -9,984

Legislative and White House Policies

Pandemic Response -- -- -- -2,302-1,430 38 62 -85 -69 -72 -83 -3,940
2017 Tax Cuts -- -137 -293 -277 -262 -232 -200 -189 -190 -126 -62 -1,969
Higher Discretionary Caps - Defense -4 -21 -72 -81 -80 -84 -88 -91 -96 -101 -106 -824
Higher Discretionary Caps - Non-Defense -3 -21 -72 -75 -72 -75 -78 -80 -85 -89 -94 -744
Disaster Aid & Uncapped Disc. Spending Hikes 0 -70 -21 -62 -59 -54 -47 -43 -45 -46 -47 -493
Repeal ACA Taxes -- -1 -15 -6 -24 -28 -34 -39 -45 -50 -58 -299
Other Mandatory and Tax Legislation 0 -28 -16 -39 -60 -41 -23 -16 -21 17 27 -201
Repeal ACA Individual Mandate Penalty & IPAB -- -- 6 10 29 37 42 41 48 48 56 317
Presidential Tariffs and Subsidies -- -- 30 13 40 46 47 50 47 47 46 367
Economic and Technical Re-estimates
Revenues From Economic Changes 1 23 81 -37 145 212 191 183 174 174 156 1,304
Revenues from Technical Re-estimates -89 -133 -104 379 -129 -371 -355 -219 -252 -234 -176 -1,684
Spending from Technical Re-estimates -19 123 124 -41 248 169 157 191 195 218 216 1,581
Net Interest Costs from Econ/Technical Changes 7 -26 -30 70 191 287 361 420 466 485 485 2,717

Actual Values and CBO February 2021 Baseline Deficit -665 -779 -984 -3,132-2,258-1,056 -963 -905-1,037 -1,026-1,048 -13,853

Memorandum
Total Legislative and White House Policies -7 -278 -454 -2,819-1,917 -393 -317 -453 -455 -371 -321 -7,787
Total Economic and Technical Re-estimates -99 -14 71 371 456 297 355 575 584 643 681 3,918
Total Deficit Changes -107 -292 -383 -2,448-1,462 -96 38 122 128 271 359 -3,869

Source: “Trump’s Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl (based on CBO
data). Positive numbers reduce deficit, negative numbers add to deficit. Legislative changes include associated interest costs
and savings. Ending 2021-2027 figures represent estimates as of January 2021 when President Trump left office.
126
 Trump's Four Budget Proposals Called for Large
Tax Cuts and Vaguely-Defined Spending Cuts
$0
Tax Cuts
-$500 -$275
Nominal $Billions

Proposed Net Interest

-$1,000 -$828 Spending Impact of
Program Proposals
Savings
-$1,500

-$2,000

-$2,500

-$3,000
-$2,995

Source: Average of the CBO scores of President Trump's four yearly budget proposals.
Figures reflect the average 10-year score in each budget request.
See “Trump’s Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl 127
 The 10-year Fiscal Records of
Presidents Bush, Obama, and Trump
President Bush Fiscal Record . President Obama Fiscal Record President Trump Fiscal Record

2001-11 2009-19 2017-27

Incoming CBO 10-Year Surplus 5,891 Incoming CBO 10-Year Deficit -4,321 Incoming CBO 10-Year Deficit -9,984

Legislative Changes -6,947 Legislative Changes -4,988 Legislative & White House Policies -7,787
2001/2003 Tax Cuts -2,330 Renew AMT patch and tax extenders -2,102 Pandemic Response -3,940
Defense Spending -2,171 Renew 2001/2003 tax cuts -2,034 2017 Tax Cuts -1,969
Non-Defense Discretionary Spending -802 2009 ARRA Stimulus -1,010 Higher Discretionary Caps - Defense -824
Other Tax Policies -489 Later Stimulus and Recession Relief -948 Higher Discretionary Caps - Non-Defense -744
Medicare Drug Program -321 Renewing Pre-2009 Health Laws -154 Disaster Aid & Other Disc. Hikes -493
TARP -221 Other Mandatory Spending Bills -69 Repeal ACA Taxes -299
Economic Stimulus Act of 2008 -181 Hurricane Sandy Relief -64 Other Mandatory and Tax Bills -201
Other Entitlement Reforms -432 BCA Mandatory Sequesters 117 Repeal ACA Ind. Mandate Penalty 317
Affordable Care Act 275 Presidential Tariffs and Subsidies 367
Other Revenue Legislation 282
Discretionary Spending & OCO Reforms 718

Econ & Technical Re-estimates -3,337 Econ & Technical Re-estimates 378 Econ &Technical Re-estimates 3,918

Total Changes to Deficit Projection -10,283 Total Changes to Deficit Projection -4,610 Total Changes to Deficit Projection -3,869

Final Deficit and Outgoing -4,394 Final Deficit and Outgoing -8,931 Final Deficit and Outgoing -13,853
Projection for Same 10-Year Period Projection for Same 10-Year Period Projection for Same 10-Year Period

Source: “Trump’s Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl (based on CBO
data). Positive numbers reduce deficit, negative numbers add to deficit. Legislative changes include associated interest costs and
savings. All figures in nominal $Billions. 128