facts and nonpartisan perspectives on the issues

IN THIS ISSUE

Our Fiscal Future

Also, see the report by 16 budget and policy experts, including UI’s president and two senior fellows, who agree that Congress must wrest control of the budget process from entitlement programs on spending autopilot.

KEY FACTS

• The federal deficit is projected to exceed $500 billion in fiscal year 2008, a jump from $163 billion in 2007.
• Medicare, Medicaid, and Social Security represented 44.7 percent of federal spending in 2007 and could grow to 66.4 percent by 2030, according to the Congressional Budget Office.
• As baby boomers begin to retire and health care costs continue to rise, spending for these entitlement programs will grow much faster than revenues, pushing the deficit to an unmanageable size.
• The automatic growth of these mandatory programs ties lawmakers' hands, leaving less money in the budget for other domestic priorities.
• The gross federal debt, including holdings in trust funds, is about $9.2 trillion.
• Roughly $5 trillion (37 percent of the Gross Domestic Product) is held by the public through the federal reserve system, individuals, businesses, states, and foreign governments.
• In 2007, foreign investors held about 44 percent of the federal debt in the hands of the public.
• According to some CBO projections, the debt to GDP ratio could exceed 100 percent by 2030.

Additional analysis is available in UI reports:

• Stabilizing Future Fiscal Policy: It's Time to Pull the Trigger—Rudolph G. Penner and C. Eugene Steuerle
• Taking Back Our Fiscal Future—coauthors include Rudolph G. Penner, Robert D. Reischauer, and C. Eugene Steuerle
• Empowering the Next President—C. Eugene Steuerle
• The Financial Consequences of Fiscal Paralysis—Rudolph G. Penner