Budget Chart Book 2019 - Brian Riedl

Spending, Taxes, & Deficits:
A Book of Charts
Brian Riedl
Senior Fellow, Manhattan Institute
September 2019
Highlights
-- 90% of Rising Deficit is From Social Security & Medicare Shortfalls (p. 16)
-- Why the Deficit Could Top $3 Trillion Within a Decade (20)
-- Each 1% Interest Rate Rise Adds $11 Trillion to 30-Year Debt (21)
-- What Happened to the 2011 BCA Spending Caps? (29-30)
-- What is Driving CBO’s Projected $80 Trillion Deficit over 30 Years? (39-45)
-- A Menu of Tax Increase Options (56)
-- Democratic Presidential Proposals Would Cost up to $72 Trillion (60)
-- Does the U.S. Have the OECD’s Most Progressive Tax Code? (80)
-- Is it Possible that the 1980s Defense Build Up Paid for Itself? (84)
-- What Really Caused the 1990s Budget Surpluses? (85)
-- The Comprehensive Bush Budget Record (87-88)
-- The Comprehensive Obama Budget Record (89-96) 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.
Sources for any chart can be obtained by contacting Brian Riedl at Briedl@manhattan-
institute.org.
3
Charts are Organized into 9 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) Can’t We Just Raise Taxes, Cut Defense, & Nationalize Health Care Instead?
6) Tax Revenues Will Continue Growing Faster Than the Economy
7) The Tax Code Has Become Increasingly Progressive
8) Countering Tax, Spending, & Deficit Myths of the 1980s Through 2008
9) A Comprehensive Accounting of the Obama Fiscal Record
4
Chapter 1
Rising Budget Deficits and

National Debt
5
Background: Budget Deficits are Heading
Above Their Historical Average
5% 2%
(2000)
0%
Percentage of GDP
-5%
-6%
(1983) -7%
-10% (2029)
-10%
(2009)
-15%
-20%
-25%
-30%
Hi
(1943)
-30%
1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
Fiscal Year
Source: OMB Historical Table 1.2, and 6

January 2019 CBO (current-policy) Baseline Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Budget Deficits are Once Again Soaring
(Adjusted for Inflation)
$500 $341
(2000)
Inflation-Adjusted (2019) $Billions
$0
Historical
CBO Baseline
-$500
-$392 -$196
(1990) (2007)
-$898
-$1,000
(2019)
-$1,500
-$1,662 -$1,786
(2009) (2029)
-$2,000
1990 1995 2000 2005 2010 2015 2020 2025
Fiscal Year
Source: OMB Historical Table 1.1, and January 2019 CBO

(current-policy) Baseline, adjusted in to 2019 dollars. 7
Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
The National Debt is Set to More than Double
its Pre-Recession Level
120% 106%
(1946) 105%
(2029)
Debt Held by the Public (%GDP)
100%
80%
48%
60% CBO
(1993-95) 39%
Baseline
23% (2008)
40%
(1974)
20%
Historical Debt as a Percentage of GDP
0%
1940 1950 1960 1970 1980 1990 2000 2010 2020
Fiscal Year
Source: OMB Historical Table 7.1, and January 2019 CBO (current-policy)
8
Baseline Table 1-1. Figures refer to Debt Held by the Public Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
CBO Long-Term Baseline Shows Unsustainable Debt
150%
Note: This is the rosy scenario that assumes no wars, no 144%
Debt Held by the Public (%GDP)
recessions and continued low interest rates.

It also assume all tax cuts expire as scheduled.
(2049)
120% 106%
(1946)
90% 78%
(2018)
60% 48%
(1993-1995) 35%
23% (2007)
30% (1974)
Projected Debt Levels
Historical Debt Levels

0%
1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040
Fiscal Year
Author: Brian Riedl,
Manhattan Institute -
9
Source: CBO 2019 Long-Term Budget Outlook - @Brian_Riedl
CBO Projects $2 Trillion Budget Deficits
Within a Decade, Assuming Current Policies are Extended
$0
Nominal $Billions
-$500
-$779
-$1,000 -$898
-$1,021
-$1,149
-$1,279
-$1,500 -$1,387 -$1,444
-$1,536
-$1,643
-$2,000 -$1,825
-$2,022
-$2,188
-$2,500
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Fiscal Year
Source: OMB Historical Table 1.1, and January 2019 CBO

(current-policy) Baseline, Table 5.1 10
Chapter 2
What is Driving the Debt?

Soaring Federal Spending
11
Background: Federal Spending & Taxes: 1930-2029
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
Fiscal Year
Source: OMB Historical Table 1.2 (1930-2018), and

January 2019 CBO (current-policy) Baseline. 12
Rising Spending – Not Falling Revenues –
Drives the Long-Term Deficit
35%
30%
30.8%
20.0% (2049)
25%
Percentage of GDP
(1960-2018) Federal Spending

20%
18.1%
15% Tax Revenues
17.4% (2049)
(1960-2018)
10%
5%
0%
1962 1972 1982 1992 2002 2012 2022 2032 2042
Fiscal Year
Source: CBO 2019 Long-Term Budget Outlook,

adjusted into current-policy baseline 13
Over the Next Decade, Above-Average Spending
Will Drive Most of the Rising Deficit
30%
28%
26%
Spending 24.1%
24% (2029)
Percentage of GDP
1960-2018 Average: 20.0%

22%
20%
18%
16%
Revenues 17.0%
14% (2029)
1960-2018 Average: 17.4%
12%
10%
1960 1970 1980 1990 2000 2010 2020
Fiscal Year
Source: OMB Historical Table 1.2 (1930-2018), and

January 2019 CBO (current-policy) Baseline. 14
Entitlements Remain the Lead Driver
of Budget Deficits
$0
Underlying CBO Budget Deficit -- Driven by
Social Security, Health Benefits, & Debt Interest
Budget Deficit in Nominal $Billions
-$500 Deficit Driven

by Recession $-459
& Federal (2015)
Response
-$1,000
-$1,500 $-1,633
$-1,415 Deals Raising
(2009) Discretionary $-309
Spending Caps
-$2,000 $-247
-$2,500
2008 2011 2014 2017 2020 2023 2026 2029
Fiscal Year
Manhattan Institute --
Source: Calculated using CBO 2019 (current-policy) Baseline data. @Brian_Riedl
Assumes that new tax cuts are renewed. 15
Resulting interest costs are incorporated into each category.
Rising Social Security & Medicare Shortfalls
Drive 90% of Rising Deficit Between 2019-2029
$500
$-78 All Other Policies

Budget Deficit in Nominal $Billions
$0 $23
$-309
$-157 $-247
-$500
$-440
-$1,000 General Revenue Transfers to Pay

$-1,656
Social Security & Medicare Benefits
-$1,500
-$2,000 Annual deficit is projected to rise

from $898 billion to $2,188 billion
-$2,500
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Fiscal Year
Source: Calculated using Jan 2019 CBO (current-policy) Baseline and CBO 2019 Long-Term Baseline.
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.
- @Brian_Riedl
Rising Social Security & Medicare Shortfalls
Drive 90% of Rising Deficit Between 2018-2029
$200
-11 -29 23
-85 -78 -64 -84 -141 -180 -129 -94 -84
Budget Surplus/Deficit in Nominal
-163 -223 -262 -179 -251 -286 -309

-275 -245 -209 -208
-$300 -135 -224
-213
-157 -178 -193 -202 -223 -234 -247
-166 -174 -184
-396
-440
-$800 -516
-624
$Billions
-779 -718
-898 -799 -914 -1032 -1167
-1021 -1340
-1149
-$1,300 -1474
-1279 -1656
-1387 -1444
-1536
All Other Policies -1643
-$1,800
2017 Tax Cuts (Extended) -1825
Discretionary Spending Cap Increases
General Revenue Transfers to Pay Social Security & Medicare Benefits
-2022
-$2,300 -2188
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Fiscal Year
Each category includes the portion of interest on the national debt that it is responsible for. Author: Brian Riedl,
General revenue transfers include interest payments on trust funds, which are a net cost to the rest of the budget. Manhattan Institute -
Source: Calculated using Jan. 2019 CBO (current-policy) Baseline and CBO 2019 Long-Term Baseline. - @Brian_Riedl
Major Components of $16.4 Trillion Deficit
Projected Over 2019-2029 Period
$0
$Trillions of Nominal Dollars
General 2017 Tax Higher Discr..

-$2 Caps -$0.9
Revenue Cuts
-$2.2 Rest of the
Transfers to -$2.7
-$4 Budget
Soc. Security
& Medicare
-$6
-$8
Note: General revenue transfers to Social

-$10
Security & Medicare will grow from $440 billion
-$10.7 to $1,656 billion between 2019 & 2029
-$12
Impact on 2019-2029 CBO Budget Deficit
Source: Calculated using Jan. 2019 CBO (current-policy) Baseline and CBO 2019 Long-Term Baseline. Author: Brian Riedl,
Assumes that new tax cuts are renewed. Manhattan Institute --
Resulting interest costs are incorporated into each category. @Brian_Riedl
General revenues include interest payments on trust funds, as they represent a net cost to the rest of the budget.
Net Interest Costs are Set to Rise Dramatically
$900
$800 $849
(2029)
$700
$600
$500
$327 $383 CBO Baseline
$400
(1990) (2019)
$300
$200
$100 Spending on Net Interest

$0
1990 1995 2000 2005 2010 2015 2020 2025
Fiscal Year
Source: OMB Historical Table 3.2 and January 2019 CBO (current-policy)
Baseline Table 1.1 adjusted for inflation into 2019 dollars 19
If Interest Rates Return to 1980s or 1990s Levels,
Net Interest Costs – and Thus the Deficit – Will Soar
$236
$500 (2000)
$0
Surplus/Deficit in Nominal $Billions
Historical and CBO Current-Policy Baseline Deficits

-$500 -$161
-$1,000 (2007)
-$2,188
(2029)
-$1,500
-$1,413
-$2,000 (2009)
-$2,500 -$3,238
(2029)
-$3,000
-$4,318
-$3,500 (2029)
Baseline
-$4,000 1990s Interest Rates
1980s Interest Rates
-$4,500
2000 2004 2008 2012 2016 2020 2024 2028
Fiscal Year
Source: Calculated using January 2019 CBO (current-policy) Baseline 20

data and CEA historical interest rate data. Amounts in nominal $billions Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Rising Interest Rates Would Push the National Debt
Past 250% of GDP Within 30 Years
300%
280%
Average interest paid rate on national debt: 9%262%
250% 1980s – 10.5% 8%244%
1990s – 6.9% 7%226%
National Debt as a %GDP
2000s – 4.8% 6%
200% 2010-18 – 2.1% 210%
5%
2019-29 – 3.1% (CBO projection) 194%
2049 – 4.2% (CBO projection)
150%
100%
CBO Baseline
50%
(with current-policy adjustments)
Assumes 3% - 4% interest rate after 2029)
0%
2019 2024 2029 2034 2039 2044 2049
Fiscal Year
Source: Calculations using the 2019 CBO Long-Term Baseline.

Alternative scenarios assume higher interest rates phase-in between 2030 & 2049. 21 Author: Brian Riedl,
Most economists agree that a steeply rising debt will raise interest rates. Manhattan
21 Institute --
@Brian_Riedl
Projected New Federal Debt Added by Decade
– Unless Reforms are Enacted
$45
Inflation-Adjusted (2019) $Trillions
$38.6
$40
$35
$30
$23.6
$25
$20
$15 $13.7
$9.0
$10
$5 $3.9
$1.3
$0
1990s 2000s 2010s 2020s 2030s 2040s
Decade
Source: CBO 2019 Long-Term Budget Outlook 22

adjusted to reflect the current-policy baseline. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Washington Now Spends More Than
$34,000 Per Household
$45,000 $42,806
(2029)
Inflation-Adjusted (2019) Dollars
$40,000
$34,240
$28,648 (2019)
$35,000
(2007)
$23,827 $24,265
$30,000
(1990) (2001)
$25,000
$20,000 CBO January
2019 Baseline
$15,000
Actual Spending
$10,000 per Household
$5,000
$0
1990 1995 2000 2005 2010 2015 2020 2025
Fiscal Year
Source: OMB Historical Table 1.1, January 2019 CBO

(current-policy) baseline, and Census Bureau data 23
Each Household’s Share of the National Debt
$220,000 $215,333
(2029)
$200,000 $174,678
(2019)
$180,000
$160,000
$102,039
$140,000
(2008)
$120,000
$100,000 $60,971 $77,563
(2000)
$80,000 (1990)
CBO Baseline
$60,000
$40,000 Historical
$20,000
$0
1990 1995 2000 2005 2010 2015 2020 2025
Fiscal Year
Source: OMB Historical Table 7.1, January 2019 CBO

24
(current-policy) Baseline, and Census Bureau.
Federal Spending Will Rise by $304 Billion in FY 2019
$90
$82
$80
Increase in Nominal $Billions
$70
$60 $59
$53
$50 $48
$40
$40
$30
$22
$20
$10
$0
Retirement Interest Other Defense Non-Defense Timing
Programs* Entitlements Disc. Shifts**
*Retirement programs include: Social Security (OASI), Medicare, Civilian Retirement, and Military Retirement.
**$40 billion in 2018 spending was shifted to the end of the 2017, which made 2018 spending appear Author: Brian Riedl,
smaller, and thus the 2019 increase appear larger. Manhattan Institute
-- @Brian_Riedl
25
Source: CBO January 2019 Baseline
Chapter 3
Discretionary Spending is Not

Driving the Long-Term Debt
26
Despite Recent Increases, Discretionary Spending
Remains Below its Historic Average
10% 9.1%
(1968)
9%
Federal Spending (%GDP)
8%
Defense Discretionary
7%
6%
2.9%
5% (1999-2001)
5.0% 3.1% 2.8%
4%
(1980) (2019) (2029)
3% 3.3%
(1962) 3.2% 2.8%
2% (2019)
Non-Defense Discretionary (2029)
1%
0%
1962 1970 1978 1986 1994 2002 2010 2018 2026
Fiscal Year
Source: OMB Historical Table 8.4, and January

27
2019 CBO (current-policy) Baseline. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Since 1990, Non-Defense Discretionary Spending Has
Grown 3 Times Faster than Defense
$1,800
$1,600
$1,400
$1,200
$670
$1,000 Non-Defense: Up 88%
(2019)
$800
$356
$600 (1990)
$400 $533 Defense: Up 25% $664

(1990) (2019)
$200 (Includes war spending)
$0
Fiscal Year
Source: OMB Historical Table 8.1, and CBO January

2019 Baseline, converted into 2019 dollars 28
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
$1,300 1,288 1,298
$Billions of Budget Authority
1,245
1,208
$1,200
$1,100 1,090
1,043 1,066 1,070
1,050
1,013 1,012 1,012 1,014
$1,000
1,119 1,146
933
1,040 1,065 1,092
$900 992 975 995 1,016
$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. 29
Amounts in nominal $billions Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
What Became of the $1,788 Billion in Promised 2013-2021
Discretionary Savings Under the Budget Control Act?
Promised
$488 billion was Figures assume lawmakers stick to the
repealed (27%) 2020-2021 spending deal.
*Other savings consist of mandatory

savings and revenue increases.
$285 billion was
replaced by other
savings thru 2029 Lawmakers also circumvented the caps
(16%)* through the ChIMPs gimmick, and by
$1,015 billion was adding extra defense money to the Iraq
enacted (57%) & Afghanistan “emergency” bills that
do not count against these spending
caps.
30
Source: Calculations based on CBO Data, as of August 2019. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Statutory Budget Caps Sharply Reduce Discretionary
Spending – Until They are Ignored After a Few Years
12%
2009
10%
Stimulus
Discretionary Spending (%GDP)
8%
6%
Budget Control
Several Multi-year Act, 2013-2021
4% Budget Deals
Covered 1986-2002
Baseline
2%
0%
1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019 2024 2029
Fiscal Year
@Brian_Riedl
Source: OMB Historical Table 8.4, and January 2019 CBO (current-policy) Baseline.
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:
1983 Social Security Deal (Saved 0.52% of GDP)

1985 Gramm-Rudman Hollings Act (1.72%)
Interest 1990 Bush “Andrew Air Force Base” Deal (1.45%)
Savings 1993 Clinton Budget Deal (1.08%)
New Taxes 11.9% 1997 Balanced Budget Deal (0.72%)
2011 Budget Control Act (1.01%)
18.8%
Savings listed as scored at time of enactment. Many cuts

Other were later reversed, and the 1985 law was invalidated by the
Mandatory 8.0% Supreme Court and replaced with a 1987 version.
Discretionary
Savings
8.4% Savings 52.8%
Medicare
Provider Source: Brian Riedl “Getting To Yes: A History Of Why
Cuts Budget Negotiations Succeed, and Why They Fail” (2019)
32
Chapter 4
Mandatory Spending and Entitlement

Costs are Rising Rapidly
33
Major Components of the 2019 Federal Budget
2019 Outlays $Millions Per % 2019 Revenues $Million Per

Household Household %
Social Security $1,046,955 $8,125 23% Ind. Income Taxes $1,698,353 $13,180 49%
National Defense 684,568 5,312 15% Social Insurance Taxes 1,242,405 9,641 36%
Medicare 651,199 5,053 14% Corporate Taxes 216,194 1,678 6%
Medicaid 418,681 3,249 9% Excise Taxes 98,669 766 3%
Net Interest 393,498 3,054 9% Customs Duties/Fees 69,469 539 2%
Income Security Programs 349,458 2,712 8% Fed. Reserve Earnings 48,783 379 1%
Veterans Benefits 200,458 1,556 4% Estate/Gift Taxes 19,295 150 1%
Education 112,863 876 2% Other Revenues 44,488 345 1%
Justice Administration 71,780 557 2% Total Receipts 3,437,656 26,677 100%
Health Research & Regulation 68,678 533 2%
Highways & Mass Transit 63,580 493 1%
International Affairs 54,337 422 1%
All Else 413,133 3,206 9%
Total 4,529,188 35,148 100%
Source: OMB Historical Tables 34

2.1, 2.4, 2.5, 3.2, and 8.5 Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Mandatory Spending is Squeezing Discretionary Spending
1965 2019
Mandatory
Mandatory Defense (70%)
(34%) (43%)
Defense
(15%)
Domestic
Discretionary
(23%) Domestic
Discretionary
(15%)
Source: OMB Historical Table 8.3 35

Composition of Federal Spending, 1962-2019
100%
Other Programs 20%
90% 29%
80% 9%
70% 6% Net Interest
18%
3%
60%
13% Antipoverty Programs
50%
40% 38%
49% Social Security & Medicare
30%
20%
10% Defense 15%
(including wars)
0%
1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018
Fiscal Year
Source: OMB Historical

36
Tables 3.2, 8.5, and 10.1 Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Social Security, Health Entitlements, & Interest Costs are
Driving 92% of the 2008-2029 Spending Hikes
$7,000
$6,000
$849
$5,000
$4,000
$302 $3,226
Social Security & Health Entitlements
$3,000 (up $1,787 billion)
$1,439
$2,000
$464 Other Entitlements (up $132 billion) $596
$1,000 $623 Non-Defense Discretionary (up $73 billion) $696

$731 Defense & Wars (down $10 billion) $721
$0
2008 2011 2014 2017 2020 2023 2026 2029
Fiscal Year
Source: January 2019 CBO (current-policy) 37

Baseline and historical data, adjusted for inflation Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Federal Budget, 1960-2049 (Projected)
30%
25% 5.7%
Revenue
Note: This is the rosy
20% scenario that assumes:
-- no more wars
Percentage of GDP
-- no recessions
15.5% -- 2017 tax cuts expire
-- health costs slow down
15% Social Security & -- the interest rate paid on
Health Entitlements the national debt remains
far below average even as
the debt approaches $100
10% trillion.
2.0%
5%
2.6%
Defense & Wars 2.6%
0%
1962 1972 1982 1992 2002 2012 2022 2032 2042
Fiscal Year Author: Brian Riedl,
Manhattan Institute
Source: CBO 2019 Long-Term Budget Outlook. @Brian_Riedl 38
What is Causing $80 Trillion 2019-2049 Budget Deficit?
Social Security & Medicare: $103 Trillion Deficit
The Rest of the Budget: $23 Trillion Surplus
$30
Surplus/Deficit in Nominal $Trillions
$23.1
$10
Social Security Medicare
Rest of the
-$10 $-18.8
Federal Budget
$-12.4 $-44.0
-$30
$-31.2
Purple – Program Deficit
-$50
$-28.2 Blue – Interest Costs Directly
Attributable to Program Deficit
-$70
$-72.2
-$90
Source of $80.4 Trillion Budget Deficit Projected over 2019-2049 Period ($Nominal)

Source: Calculations from CBO Note: Social Security & Medicare deficits are the benefits that must Manhattan Institute
2019 Long-Term Budget Outlook. be paid from general revenues because payroll taxes, premiums, -- @Brian_Riedl
To inflation adjust, trim amounts by and other non-interest trust fund revenues are insufficient. CBO 39
one-third. assumes full benefits will continue even after trust fund insolvency.
Cost of 2017 Tax Cuts vs. Major Entitlements
Over 30 Years
$80
Blue – Interest Costs $72.2
$70
Purple – Principal Costs
$60 $28.2
$Nominal Trillions
$50
$40
$31.2
$30
$12.4
$20 $44.0
$12.6
$10 $5.5 $18.9
$7.0
$0
2017 Tax Cuts Social Security Medicare
(Extended) Cash Deficit Cash Deficit
2019-2049 Projected Totals Author: Brian Riedl,

Source: Calculated using the CBO 2019 Long-Term Manhattan Institute --40
Budget Outlook and CBO Alternative Scenarios @Brian_Riedl
Projected 2049 Budget Deficits are Entirely Driven
by Social Security & Medicare Shortfalls
20%
17.9%
18%
16%
14% 13.7%
Percentage of GDP
12%
Outlays 10.3%
10%
8% Revenues
5.8% Outlays
6%
4% Dedicated
Revenues
2%
0%
Social Security & Medicare Systems Rest of the Federal Budget
Note: 2049 is the final year of the latest CBO 30-year budget projection. Author: Brian Riedl,
- @Brian_Riedl
Source: CBO 2019 Long-Term Budget Outlook. 41
Each outlay category includes portion of national debt interest attributed to its 2019-2049 deficits.
Social Security’s Cash Shortfalls are Driven by Retiring
Baby Boomer Costs and Resulting Interest Costs
10%
9%
7.9%
8%
7%
6.2%
Percentage of GDP
6%
4.9% Social Security Outlays
5% 4.4%
4% 4.6%
Social Security Revenue from Payroll Taxes & Taxation of Benefits
3%
2%
1%
0%
2019 2024 2029 2034 2039 2044 2049
Fiscal Year
Source: Calculated using CBO 2019 Long-Term Baseline. Revenues do not include trust fund interest Manhattan Institute
transfers. Interest costs are those directly attributable to Social Security’s annual deficits over this period. 42 -- @Brian_Riedl
Medicare’s Cash Shortfalls are Driven by Soaring
Benefit Costs and Resulting Interest Costs
10.0%
10%
9%
8%
7%
Percentage of GDP
6%
6.0%
5%
Medicare Outlays
4%
3.0%
3%
2% 1.3% 1.4%
1%
Medicare Payroll Taxes & Dedicated Revenues
0%
2019 2024 2029 2034 2039 2044 2049
Fiscal Year

Source: Calculated using CBO 2019 Long-Term Baseline. Outlays are net of premiums paid. Manhattan Institute
Interest costs are those directly attributable to Medicare’s annual deficits over this period. 43 -- @Brian_Riedl
Social Security Faces a $31 Trillion Shortfall over 30
Years - $28 Trillion if Including the Trust Fund
$100
$87.0
$90 Green = Transfers from
Interest Costs redeeming the Social Security
$80 $12.2
$Nominal Trillions
Trust Fund.
$70 $58.8 The Trust Fund contains no
$60 $2.9 economic resources and must
$50 be redeemed by new taxes and
Program borrowing.
$40 Outlays
Payroll Taxes & In other words, it does not
$30 future save taxpayers a dime or
Benefit Taxes
$20 $74.8 reduce the true shortfall.
$10 $55.9
$0
2019-49 Revenue 2019-49 Outlays

Source: Calculated using the CBO 2019 Long-Term Budget Outlook. Interest costs reflect those
Manhattan Institute --44
directly attributable to 2019-2049 Social Security shortfalls.
@Brian_Riedl
Medicare Faces a $72 Trillion Cash Shortfall
Over the Next 30 years
$100
$89.1
$90 Medicare’s $72 shortfall equals
Interest Costs 89% of the total federal budget
$80
$Nominal Trillions
deficit projected by CBO over

$70 $27.9 the 2019-2049 period.
$60
$50 Annual projected shortfall:
2019: 1.7% of GDP
$40 Program 2049: 4.6% of GDP (8.3%
Outlays including interest cost).
$30
$17.3
$20 $61.2
Payroll Taxes &
$10
HI Trust Fund
$0
$17.3
2019-49 Revenue 2019-49 Outlays

Source: Calculated using the CBO 2019 Long-Term Budget Outlook. Benefits are net of senior premiums. Manhattan Institute --45
Interest costs reflect those directly attributable to 2019-2049 Medicare shortfalls. @Brian_Riedl
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
$669,000
$700,000
$599,000
$600,000
$498,000
$500,000
$400,000 Taxes Benefits Benefits
Paid In Received Received
$300,000
$161,000 (net of
$200,000
premiums
$100,000 Taxes Paid In paid)
$0
Social Security Medicare
Represents typical, average-income married couple turning 65 in 2020
Calculations represent expected present values.
46
Source: Urban Institute (2018) Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Social Security’s Deficits Will Steeply Increase, While
Medicare Also Faces Rising Deficits
$50
Social Security (DI)
$0
$-18
-$50
-$100 Medicare Part A (HI)
Nominal $Billions
-$150 $-103
-$200
-$250
-$300
-$350
-$400
$-412
-$450
2015 2017 2019 2021 2023 2025 2027 2029
Fiscal Year
Source: January 2019 CBO Baseline

Supplemental Trust Fund Tables. 47
Excludes general revenue transfers into
the programs, such as interest payments. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Medicare and Social Security Trust Funds Face
Bankruptcy in 7 and 13 Years, Respectively
$250 $3,000
Social Security (OASI) $2,500

$200 Trust Fund Balance
Nominal $Billions
$2,000
Nominal $Billions
$150
$1,500
$100
Medicare Part A (HI) $1,000
Trust Fund Balance
$50
$500
2026 2032
$0 $0
2015 2017 2019 2021 2023 2025 2027 2029 2031
Fiscal Year
Source: January 2019 CBO Baseline

48
Supplemental Trust Fund Tables. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Anti-Poverty Spending Has Soared Regardless of
Party Control of Government
4.2% 3.9%
4.5%
(2010) (2019)
4.0%
3.5% 3.2%
2.6% (2008)
3.0% (2000)
2.5%
1.8% Cash & Other Aid
2.0% (1980)
Food Aid
1.5%
Housing
1.0% 0.5%
(1962) Health Care
0.5%
0.0%
Fiscal Year
49
Source: OMB Historical Tables 3.2, 8.5, and 10.1 Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
From 2001 through 2017, SNAP (Food Stamp) Caseloads
Grew Nearly 7 Times as Fast as the Poverty Population
200% 172%
180%
160% 144%
Percentage Increase
140% Up
120% $46 Billion
100%
80% (After
Up
Inflation)
60% 25 Million
40% 21%
20%
Up 7 Million
0%
Individuals in Poverty SNAP Caseloads Total Spending
Sources: Department of Agriculture and Census Bureau. The

50
poverty rate increased from 11.7% to 12.3% over this period. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
In 2017, Washington Made $137 Billion in
Improper Payments
Medicaid $36
Medicare Fee-for-Service $32

Earned Income Tax Credit
(EITC) $18
Medicare Advantage (Part
C) $16
Other High-Risk Programs $35
$0 $10 $20 $30 $40 $50
2017 Improper Payments ($Billions)
51
Source: OMB at https://paymentaccuracy.gov/ Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Veterans’ Programs Have Earned
Healthy Funding Increases
$200 $200
$180
$160
$140 $126
$120
$100
$80
$62
$60
$40
$20
$0
2001 2010 2019
Fiscal Year
Source: OMB Historical Table 3.2, 52

adjusted for inflation Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Why the Debt Limit Matters
All 8 Major Deficit-Reduction Laws Since 1985
Were Attached to Debt Limit Legislation
Year Major Deficit-Reduction Law Attached to
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

53
For a Responsible Federal Budget
Chapter 5
Can’t We Just Raise Taxes, Cut Defense,

and Nationalize Health Care Instead?
54
Federal Budget, 1960-2049 (Projected)
30%
25% 5.7%
Revenue
Note: This is the rosy
20% scenario that assumes:
-- no more wars
Percentage of GDP
-- no recessions
15.5% -- 2017 tax cuts expire
-- health costs slow down
15% Social Security & -- the interest rate paid on
Health Entitlements the national debt remains
far below average even as
the debt approaches $100
10% trillion.
2.0%
5%
2.6%
Defense & Wars 2.6%
0%
1962 1972 1982 1992 2002 2012 2022 2032 2042
Fiscal Year Author: Brian Riedl,
Manhattan Institute
Source: CBO 2019 Long-Term Budget Outlook. @Brian_Riedl 55
No “Easy” Pay-Fors for Social Security & Medicare:
Programs Face Shortfalls of 6% of GDP by 2040s
Tax Proposals (static scoring) 10-Yr Savings Long-Term Savings
($Billions) (%GDP)
Raise Payroll Tax by 10 Percentage Points, no wage limit $8,982 3.60%
Impose a 20% Value-Added Tax (VAT) – like a national sales tax $7,680 3.35%
Raise Income Tax Rates Across-the-Board by 10 Percentage Points $9,054 3.30%
Double 35% and 37% Tax Brackets to 70% and 74% (plus 15% state/payroll)* $4,504 1.70%
Repeal All Itemized Tax Deductions $1,312 0.99%
Raise Corporate Tax Rate by 20 Percentage Points $1,926 0.87%
Eliminate FICA Cap – 15.3% Payroll Tax on All Wages (data from SSA) $1,959 0.85%
Repeal Entire 2017 Tax Law (CurPol baseline) (data from CBO/JCT) $1,712 0.70%
Carbon Tax of $25/Metric Ton – no rebate for households hit $1,099 0.43%
Impose a Tax on Financial Transactions $777 0.37%
Tax Dividends & Long-Term Capital Gains as Ordinary Income $593 0.23%
Impose "Bank Tax" on Large Financial Institutions $103 0.03%
30% Minimum "Buffett Tax" for Millionaires $66 0.03%
Tax Carried Interest as Ordinary Income $14 0.01%
Spending Proposals
Cut Defense Budget to European Levels (data from CBO baseline) $2,628 1.00%
Sanders Medicare-For-All Proposal (per Urban Institute, Mercatus, and Emory U.) Adds Costs 56
Source: Dec. 2018 CBO “Budget Options” book unless otherwise noted. Author: Brian Riedl,
These static estimates do not account for revenues lost to the economic impact. Combining policies Manhattan Institute
may also create interaction effects or duplicate the same policies, so these cannot be summed. @Brian_Riedl
Defense is Not Driving the Deficit – and Even Eliminating It
Completely Would Not Come Close to Financing Soaring
Long-Term Entitlement Costs
16%
Social Security and Health Entitlements
14%
12%
10%
8%
6%
57
4% Defense
2%
0%
1970 1980 1990 2000 2010 2020 2030 2040
Fiscal Year

Source: OMB Historical Tables 3.2, and 10.1;
and CBO 2019 Long-Term Outlook.
@Brian_Riedl
Even 100% Tax Rates on Small Businesses and
Upper-Income Families Could Not Come Close to
Balancing the Long-Term Budget
14%
12.9%
All untaxed personal &
12% small business adjusted
Percentage of GDP
9.8% gross income (AGI)

10% annually earned above the
listed income threshold
8% 7.1%
6%
4.2% 4.7%
4% 3.4%
2%
0%
2019 2029 2039 2049 $1 million $500,000
----- Projected Budget Deficit -----
58
Source: CBO 2019 Long-Term Budget Outlook adjusted into current-policy Manhattan Institute
baseline and analysis of IRS 2017 (latest year) income tables -- @Brian_Riedl
“Tax-the-Rich” Policies Could Finance Less than
$4 Trillion of the $40 Trillion in Promised Spending
Tax Set at Revenue-Maximizing Level Rosy Realistic Source: Rosy/ Realistic
Revenues Revenues
70% Income Tax Rate over $10 Million $292 $189 Tax Foundation
Eliminate FICA Cap – 15.3% Payroll Tax
$1,959 $1,763 CBO / CBO-10% Feedback Loss
on All Wages
Tax Dividends & Long-Term Cap. Gains as
$593 $398 CBO / CBO-33% Feedback Loss
Ordinary Income
Sen. Warren Wealth Tax of 2% to 3% $2,750 $368 Campaign / Lawrence Summers et. al
Sen. Sanders Estate Tax of 77% $315 $211 Campaign / Campaign-33% Tax Avoidance
Sen. Warren Corp. Tax Increase $872 $476 Tax Foundation
Financial Transactions Tax of 0.1% $777 $208 CBO / Tax Policy Center Economists
Bank Tax of 0.15% $103 $103 CBO
Tax Carried Interest as Ordinary Income $14 $14 CBO
Total $7,675 $3,730
Notes:
• Amounts are in $billions over ten years.
• CBO estimates typically exclude economic effects, which become larger the higher the tax rises. 59
• The payroll tax hike would raise highest marginal tax rate (federal + state + payroll) to as high as
60%, which is approximately the revenue-maximizing level. Author: Brian Riedl,
Manhattan Institute
• Adding the 70% tax rate over $10 million produces a combined marginal tax rate over 90%. @Brian_Riedl
Democratic Presidential Spending Proposals Would Cost
Between $37 Trillion & $72 Trillion Over the Decade
Common Presidential Spending Proposal Low* High* Notes
Medicare-For-All $32.0 $40.0 Sanders recently conceded this cost range
Climate and Clean Energy $2.0 $16.3 Sanders is the high figure
Government Job Guarantee — $6.8 Sanders proposal, scored by CBPP**
Free Public College Tuition & Loan Forgiveness $1.5 $3.0 Low figure reflects partial loan forgiveness
Social Security Expansion $0.5 $2.0 Warren & Sanders are the high figure
Affordable Housing $0.1 $2.0 Sanders is the high figure
Infrastructure Buildup $1.0 $1.0
Universal Child Care & Paid Family/Medical Leave $0.3 $1.0
Teacher Pay and K-12 funding $0.1 $0.5
Subtotal: New Spending Proposals $37.5 $72.6 Baseline is $60 trillion spending over 2020-2029
CBO Baseline Budget Deficit $15.5 $15.5 CBO (current policy) baseline, 2020-2029
Total Federal Budget Deficit $53.0 $88.1 Out of a $262 trillion projected GDP (CBO)
Popular Spending Offsets

Cut Defense to European Levels -$2.6 -$2.6 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 $47.4 $82.5 Requires > Doubling $44T in Federal Revenues 60
*All figures are over ten years, and in $trillions. Author: Brian Riedl,
Manhattan Institute
**Absurdly-low jobs guarantee score assumes only 9.7 million people sign up, even though generous
@Brian_Riedl
proposal would provide a higher income for roughly 70 million Americans.
Popular Campaign Promises Would Bring $57 Trillion
Shortfall – Which Taxing the Rich Cannot Close
$60 $57.5 *Other proposals consist of:
Other Proposals - Climate spending ($2T)
($10*) - Student loan relief & free college ($3T)
$Nominal Trillions over 10 Years
$50
- Social Security expansion ($2T)
- Infrastructure, housing, family leave,
child care, K-12, and other ($2T)
$40
Medicare-For-All
$30 ($32) Note: Sen. Sanders would spend an
additional $25T on a larger Medicare-For-
All plan, climate plan, and government job
$20 guarantee.
Source: January 2019 CBO (current-policy) budget

baseline, and proposal scores based on data from
$10 Baseline Deficit CBO, Urban Institute, Tax Foundation, Tax Policy
Center, and the campaigns themselves.
($15.5) $3.7
$0
Budget Gap Maximum "Tax the Author: Brian Riedl,
Manhattan Institute
Rich" Revenues @Brian_Riedl
No, Defense Cuts & Taxing Millionaires Cannot
Finance Current Deficit or Liberal Wishlist
25% 25.6%
Other Proposals (1.9%)
Free College & Loan Forgiveness (1.1%)
Job Guarantee
(2.6%)
Percentage of GDP
20%
Climate (Sanders)
(6.2%)
15%
10%
8.3%
Medicare-For-All
(13.7%)
4.7%
5%
3.0%
0%
62
All Untaxed Entire Defense Baseline Deficit Proposed New
Income Over $1 Budget (30-yr) Spending
Million Author: Brian Riedl,
Manhattan Institute
Sources: Author calculations using data from CBO, Treasury, liberal candidates, and liberal think tanks -- @Brian_Riedl
Common Tax Hike Proposals Would Close Just 2% of
the Budget Deficit – or Lose Revenue if They Trim
Economic Growth Rates by Even 0.1%
Combined Tax Increase*

$16,000 $15,494 1) Raise capital gains & dividend tax rates by 5%
$14,000 2) Buffett tax
3) Repeal oil and gas tax breaks
Nominal $Billions
$12,000 4) Tax carried interest as ordinary income

$10,000
$8,000
$6,000
Combined Tax Increase Revenue
$4,000
$2,000 $263 -$29
$0
-$2,000 Baseline 10-Yr Budget Cumulative Tax Dynamic Score if Annual
63
Deficit Increases Economic Growth Falls
From 1.8% to 1.7%
Source: CBO January 2019 (current-policy) Baseline, and tax proposals scored by CBO. Author: Brian Riedl,
OMB estimates that a 0.1% fall in annual economic growth costs the federal government Manhattan Institute --
$292 billion in revenues over the decade. @Brian_Riedl
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
$5,000 $12,552
$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 Manhattan Institute 64
Institute data. Sanders calculated from Urban Institute 2016 score of plan @Brian_Riedl
Chapter 6
Tax Revenues Will Continue Growing

Faster Than the Economy
65
Rising Spending – Not Falling Revenues –
Drives the Long-Term Deficit
35%
30%
30.8%
20.0% (2049)
25%
Percentage of GDP
(1960-2018) Federal Spending

20%
18.1%
15% Tax Revenues
17.4% (2049)
(1960-2018)
10%
5%
0%
1962 1972 1982 1992 2002 2012 2022 2032 2042
Fiscal Year
Source: CBO 2019 Long-Term Budget Outlook,

adjusted into current-policy baseline 66
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%
70% 8%
7%
60%
6%
50%
Average Top Rate / Revenues 5%
40% 1950s: 90.5% / 7.2%
1960s: 80.3% / 7.6%
4%
30% 1970s: 70.2% / 7.9% 3%
1980s: 48.4% / 8.2% Correlation
20% 2%
1990s: 36.7% / 8.1% 1950-2019:
10% 2000s: 36.2% / 7.8% -0.19 1%
2010s: 37.7% / 7.8%
0% 0%
1934 1944 1954 1964 1974 1984 1994 2004 2014
Fiscal Year
Source: OMB Historical Table 2.3, and

67
U.S. Treasury SOI Tax Stats – Historical Table 23 Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Individual Income Tax Revenues Will Rise
– Even With the Tax Cuts – Due to Real Bracket Creep
& Taxable Retirement Distributions
Individual Income Tax Revenues (%GDP)
10%
CBO Baseline with

Bracket Creep (Tax Cuts Extended)
9%
Tech Bubble
& Burst
8%
Reagan
Tax Cuts
7% Deep
Recession
Deep
Recession
6%
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Fiscal Year
Source: OMB Historical Table 2.3, and January 2019 CBO (current-policy) Baseline. Real bracket creep is @Brian_Riedl 68
when rising incomes (above inflation) push taxpayers into higher tax brackets, raising their average tax rate.
High Capital Gains Tax Rates Have Not
Produced More Revenue
Correlation: -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
Fiscal Year
Source: Tax Tables, U.S. Treasury Office of Tax Analysis. 69

Before the TCJA Cut it to 26% (incl. 5% State Taxes)
U.S. had the Highest Corporate Tax Rate in the OECD
40% 39%
32% 32% 30%

30%30% 30% 30% 28%
Top Corporate Tax Rate
28% 26%
30% 28% 28% 25% 25%
27%
25% 25% 25%23% 22% 21% 21%
20% 20%
22% 22% 21%
20% 20% 19%
20% 19% 19%19%
15%
13%
10% 9%
0%
Spain
France
Greece
Poland
Turkey
Mexico
Korea
Netherlands
Israel
Finland
Ireland
Iceland
Czech Republic
Japan
Belgium
United States -2019

Austria
Chile
Norway
Estonia
Latvia
Slovenia
Sweden
Hungary
Portugal
Canada
Luxembourg
United States - 2017
Australia
Germany
New Zealand
Slovak Republic
United Kingdom
Italy
Denmark
Switzerland
Lithuania
Notes: While all countries allow businesses to reduce their taxes through
exemptions, deductions, and credits, the U.S. has been among the highest
Source: OECD Stats (2019), Tax Table II.1. Tax rates 70
effective corporate tax rates too.
include federal, state, province and local corporate taxes. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
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
Top Corporate Tax Rate
31% 30%
30% 34 OCED Nations
30% 29%
28%27%
26% 25% 25% 25% 25% 26%
25% 25% 25% 25% 24% 24%
25% 24% 24%
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
Source: OECD Stats (2019), Tax Table II.1. Tax rates 71
include federal, state, province and local corporate taxes. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
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 from
-$500 Tax Cuts
Lost Revenue from
-$1,000 -$822 Economic
-$1,500 Downgrades and
Technical
-$2,000 Re-estimates
-$2,500
Figures reflect 2009-2019 estimates, as of
-$3,000 January 2017 when Pres. Obama left office -$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 72
weak
recovery, particularly in the later years. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Taxes Cannot Easily Close Security & Medicare Shortfall:
Will Need General Revenues of 6% of GDP by 2040s
Tax Proposals (static scoring) 10-Yr Savings Long-Term Savings

($Billions) (%GDP)
Raise Payroll Tax by 10 Percentage Points, no wage limit $8,982 3.60%
Impose a 20% Value-Added Tax (VAT) – like a national sales tax $7,680 3.35%
Raise Income Tax Rates Across-the-Board by 10 Percentage Points $9,054 3.30%
Double 35% and 37% Tax Brackets to 70% and 74% (plus 15% state/payroll)* $4,504 1.70%
Repeal All Itemized Tax Deductions $1,312 0.99%
Raise Corporate Tax Rate by 20 Percentage Points $1,926 0.87%
Eliminate FICA Cap – 15.3% Payroll Tax on All Wages (data from SSA) $1,959 0.85%
Repeal Entire 2017 Tax Law (CurPol baseline) (data from CBO/JCT) $1,712 0.70%
Carbon Tax of $25/Metric Ton – no rebate for households hit $1,099 0.43%
Impose a Tax on Financial Transactions $777 0.37%
Tax Dividends & Long-Term Capital Gains as Ordinary Income $593 0.23%
Impose "Bank Tax" on Large Financial Institutions $103 0.03%
30% Minimum "Buffett Tax" for Millionaires $66 0.03%
Tax Carried Interest as Ordinary Income $14 0.01%
73
Source: Dec. 2018 CBO “Budget Options” book unless otherwise noted. Author: Brian Riedl,
These static estimates do not account for revenues lost to the economic impact. Combining policies Manhattan Institute
may also create interaction effects or duplicate the same policies, so these cannot be summed. @Brian_Riedl
Chapter 7
The Tax Code Has Become

Increasingly Progressive
74
The Federal Tax Code Remains Progressive
35% 31.1%
30% 27.3%
25% 22.9%
21.5%
Average Tax Rate Paid for All Federal Taxes 18.8%
20%
2019 Average Tax Rate
15.9% 23.1%
13.4% 20.6%
15% 11.3%
8.6%
10% 14.0%
4.5% 10.8%
5% 8.2%
1.0%
-0.6% 3.6% 5.6%
0%
-4.7% 1.7%
-5% -1.1%
-4.9% Average Tax Rate Paid For Federal Income Taxes
-10%
-8.7% -9.7%
-15%
-13.2%
-20%
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
$5k $17k $25k $34k $45k $60k $79k $105k $145k $204k $344k $1006k .1%
Income Distribution Range and $8M
Average Family Cash Income
Source: U.S. Treasury, Office of Tax Analysis. Manhattan Institute -
Data represents 2019 Distribution of Tax Burden, Current Law - @Brian_Riedl
Average Federal Tax Rate Paid by Income Category,
1979-2013
40%
35% Top 1%
35%
34%
Average Federal Tax Rate Paid
30% Top 20%

27% 26%
25% 22%
Second 20%
20%
17%
19%
15% Middle 20%
13%
15% Fourth 20%
10%
8%
5% 8%
Bottom 20% 3%
0%
1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Fiscal Year
Note: Includes federal income, payroll,
corporate, and excise taxes paid.
Source: CBO "Distribution of Household 76

Income and Federal Taxes“ (2016) Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
The Federal Tax Burden (For All Combined Taxes)
Has Grown More Progressive Over Time
100%
Percentage of Federal Tax Burden Financed by Income Quintile
Percentage of Federal Tax Burden
90%
80%
69%
Paid by Quintile
70%
Top 20%
60% 55%
50%
40%
30%
22% Second 20%
20% 14% 17%
Middle 20%
10% 7% Fourth 20% 9%
2% Bottom 20% 4%
0%
1%
1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Fiscal Year

Income and Federal Taxes” (2016) Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
The Highest-Earning 20 Percent of Taxpayers Pay
88 Percent of All Federal Individual Income Taxes
100%
Percentage of Federal Income Tax Burden Financed by Income Quintile 88%
Percentage of Income Tax Burden
90%
80%
Top 20%
70%
Paid by Quintile
60% 65%
50%
40%
30%
20% Second 20%
20%
11% Middle 20% 13%
10% 4% 4%
Fourth 20%
0% -1%
0% Bottom 20% -4%
-10%
1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Fiscal Year
Income and Federal Taxes“ (2016) Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Even Controlling for Income Inequality, Income Taxes Have
Become More Progressive, With the Highest-Earning 20
Percent Increasing Their Income Tax Share
Progressivity Ratio by Income Rank
3
Paid Divided by the Share of Income
Ratio of the Share of Income Taxes
Top 1% 2.55
2.07
2
1.45 Top 20% 1.67
0.92
1
Earned
Second 20% 0.66

0.68
0.28
0.37 Middle 20%
0 0.00 -0.13
Fourth 20%
Bottom 20%
-0.78
-1
-2
1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Fiscal Year
“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 figures reflect a negative tax burden.
Source: Calculations using CBO "Distribution of 79

Household Income and Federal Taxes” (2016) Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Even Controlling for Income Inequality, the U.S. Has the
Most Progressive Income/Payroll Tax Code in the OECD
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 Note: For the highest-earning
France 1.10 10% of taxpayers, these figures
Austria 1.10 refer to their share of the nation’s
Germany 1.07
taxes paid, divided by their share
Denmark 1.02
Japan 1.01 of the nation’s pre-tax income
Sweden 1.00 earned.
Norway 0.95
Belgium 0.94 So if the top decile pays 30% of
Iceland 0.90 the taxes and earns 20% of the
Poland 0.84 income, its ratio is 1.5.
Switzerland 0.80
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 80
that make many other OECD nations’ tax codes even less progressive. Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Chapter 8
Countering Tax, Spending, & Deficit Myths

of the 1980s Through 2008
81
The Reagan Tax Cuts Did Not Starve the Government –
Spending Worsened the 1980s Deficits
22% 21.6%
Red = Revenues
21%
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
82
Source: OMB Historical Table 1.3 Author: Brian Riedl, Manhattan Institute -- @Brian_Riedl
Why Did 1980s Budget Deficits Exceed the 1970s Deficits?
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% 5.8%
5.7% 5.6%
Federal Spending (Percentage of GDP)
1980s increase:
5% 60% - added debt
4.3% 4.4% 40% - higher
4.0% interest rates
4% 3.6% 3.6%
Fell during
3% 1970s, 2.7%
rose back
2% during 1980s
1.4%
1%
1970s 1980s 1970s 1980s 1970s 1980s 1970s 1980s 1970s 1980s
0%
Defense Non-Defense Social Other Interest on
Discretionary Security & Entitlement Debt
Medicare Programs
83
Source: OMB Historical Table 8.4, and interest rate calculations Manhattan Institute -
using the Economic Report of the President Table B-25. @Brian_Riedl
To the Extent it Contributed to the Soviet Collapse,
the 1980s Defense Buildup Eventually Paid for Itself
7%
Defense Spending (%GDP)
6%
Initial 1980 Baseline of 4.8% of GDP
5%
4% 1981-1991 Cold War Buildup:

Average of 5.5% of GDP
(0.7% above 1980 Baseline)
3%
1992-2001 Post-Cold War Wind Down:
2% Average of 3.5% of GDP
(1.3% below 1980 baseline)
1%
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
Source: OMB Soviets into an unaffordable arms race that contributed to its economic Author: Brian Riedl,
Historical Tables problems and ultimately a more accommodating posture towards the West, 84 Manhattan Institute
3.2, and 10.1 each of which contributed to Soviet destabilization and collapse. -- @Brian_Riedl
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
2.2%
Change in Percentage of GDP
2%
Economic Strong Economy
growth &
1% 0.7%
small tax
Reduced Grew faster than Various
changes
1993 Clinton unemployment Social Security small
tax hike costs benefits savings
0%
Defense Interest
cuts after savings -0.4% -0.4% -0.5%
-1% Cold War
-0.9%
ends
-1.7%
-2%
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;

85
and the CBO (1993) score of tax increases
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 S&P 500 94.0% / 6.0%
Employment (and
900 93.5% / 6.5%
Unemployment) Rate
800 93.0% / 7.0%
2001 2002 2003 May 2004 2005 2006
15% 7%
Business Investment Real GDP
6%
10% Growth Growth
5%
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 Author: Brian Riedl,
businesses, & investors. The less-successful 2001 tax cuts were more rebate-based. Manhattan Institute 86
The 2007 housing crash that ended this mini-boom was unrelated to these tax policies. @Brian_Riedl
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
2008 Economic Defense Discretionary
Stimulus Act, 2% Spending, 21% Spending, 8%
Note: When President Bush

took office, CBO forecast a
Other Entitlement
$5.9 trillion surplus over the
FY 2001-2011 period.
Reforms, 4%
"Bush Tax Cuts" - Medicare Prescription
When he left office in Earners Under Drug Program, 3%
January 2009, CBO was $250k, 16%
showing a $4.4 trillion deficit
over that same decade. TARP, 2%
This chart accounts for the
$10.3 trillion fiscal decline. Economic & Technical
Downgrades, 32%
"Bush Tax Cuts" - Green – Tax Legislation
Earners Over $250k, Blue – Spending Legislation
7% Red – Non-Legislative
Source: Calculations based on a CBO June 2012 report, and CBO baseline updates over Author: Brian Riedl,
2001-11 period. Tax distribution data was estimated using Treasury data accumulated by the Manhattan Institute
Tax Policy Center. Each category’s cost includes its resulting net interest expenses. @Brian_Riedl 87
President Bush Oversaw a $10.3 Trillion Decline from
the 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 Changes -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 Author: Brian Riedl,
savings. Ending 2090-2011 figures represent estimates on January 2009 when President Bush left office. Manhattan Institute 88
See “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl. @Brian_Riedl
Chapter 9
A Comprehensive Accounting of the

Obama Fiscal Record
89
President Obama Oversaw 2009-2019 Budget Deficits
$4.6 Trillion Beyond the Inherited Baseline
$0
2006 2008 2010 2012 2014 2016 2018
-$200
CBO Baseline Deficit, January 2009
-$400
Nominal $Billions
-$600 Note: The January 2009 CBO

Actual Budget Deficits baseline already incorporated the
10-year effects of the 2007-2009
-$800
recession, and the policies
inherited from President Bush.
-$1,000
The added Obama deficits consist
-$1,200 of $5 trillion in new legislation,
partially offset by $400 billion saved
by the sluggish recovery, as lower
-$1,400 interest rates and thus interest
costs offset the lower revenues
-$1,600
Fiscal Year
90

Source: CBO data. FY 2017-2019 "actuals" reflect CBO baseline as of January 2017, and thus reflect the Manhattan Institute
deterioration of the full ten-year budget picture. @Brian_Riedl
See “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl.
Under President Obama, the 2009-2019 Deficit Worsened
by $4.6 Trillion Relative to the Inherited
January 2009-19 Baseline
$3,000
$2,314
$2,000
$1,000 $820
Nominal $Billions
$397
$0
Revenue Faster Recovery Automatic Automatic
New
Downgrades of Financial Entitlement Interest Savings
-$1,000 Legislation
Signed by Bailout Costs Savings Due to Due Mostly to
(Weak Recovery Weak Economy Falling Interest
-$2,000 President
& Technical & Technical Rates from Weak
Obama
Re-estimates) Re-estimates 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. 91
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 - Techncial 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). Author: Brian Riedl,
Positive numbers add to deficit, negative numbers reduce deficit. Legislative changes include associated interest costs and savings. Ending Manhattan Institute
2017-2019 figures represent estimates as of January 2017 when President Obama left office. @Brian_Riedl 92
Tax Revenue Impact of CBO Economic Growth
Downgrades (and Upgrades) Under President Obama
$100
$27
$3
$0
-$17
Nominal $Billions
-$33
-$100
-$200 -$180
-$197
-$300 -$256
-$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.
93
Source: CBO budget baselines between March 2009 and January 2017. See “Obama's Fiscal Manhattan Institute
Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl. @Brian_Riedl
CBO Economic Downgrades Under President Obama
Have 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
94
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 Manhattan Institute
Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl. @Brian_Riedl
President Obama’s Eight Annual Budget Requests
Proposed Large Tax and Spending Increases
$2,000 $1,844
$1,500
Nominal $Billions
$988
$1,000 Proposed Tax
Increases & Proposed
Immigration Spending
$500 Revenues Program Net Interest
Increases Impact of
Proposals
$0
-$265
-$500
95
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 Author: Brian Riedl,
against. Also excludes current-policy extensions of long-time tax cuts and Medicare payment rates. Manhattan Institute
See “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl. @Brian_Riedl
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
Mandatory Spending Enacted (rolling 10-year score)
$600
$16 Yearly Discretionary Budget Authority Relative to
Nominal $Billions
$500 $314 January 2009 CBO Baseline

$400
$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 96
(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 Manhattan Institute
appropriations for OCO (which would otherwise show even larger 2011-2016 savings) and Hurricane Sandy. @Brian_Riedl
See “Obama's Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” by Brian Riedl.

Budget Chart Book 2019 - Brian Riedl

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Spending, Taxes, & Deficits:

Rising Budget Deficits and

Source: OMB Historical Table 1.2, and 6

Source: OMB Historical Table 1.1, and January 2019 CBO

recessions and continued low interest rates.

Historical Debt Levels

Source: OMB Historical Table 1.1, and January 2019 CBO

What is Driving the Debt?

Source: OMB Historical Table 1.2 (1930-2018), and

(1960-2018) Federal Spending

Source: CBO 2019 Long-Term Budget Outlook,

1960-2018 Average: 20.0%

Source: OMB Historical Table 1.2 (1930-2018), and

-$500 Deficit Driven

$-78 All Other Policies

-$1,000 General Revenue Transfers to Pay

-$2,000 Annual deficit is projected to rise

-163 -223 -262 -179 -251 -286 -309

General 2017 Tax Higher Discr..

Note: General revenue transfers to Social

$100 Spending on Net Interest

Historical and CBO Current-Policy Baseline Deficits

Source: Calculated using January 2019 CBO (current-policy) Baseline 20

Source: Calculations using the 2019 CBO Long-Term Baseline.

Source: CBO 2019 Long-Term Budget Outlook 22

Source: OMB Historical Table 1.1, January 2019 CBO

Source: OMB Historical Table 7.1, January 2019 CBO

Discretionary Spending is Not

Source: OMB Historical Table 8.4, and January

$400 $533 Defense: Up 25% $664

Source: OMB Historical Table 8.1, and CBO January

$1,400 Black – 2008-2012 Actuals & Original 2013-2021 CBO Baseline

*Other savings consist of mandatory

1983 Social Security Deal (Saved 0.52% of GDP)

Savings listed as scored at time of enactment. Many cuts

Mandatory Spending and Entitlement

2019 Outlays $Millions Per % 2019 Revenues $Million Per

Source: OMB Historical Tables 34

Source: OMB Historical Table 8.3 35

Source: OMB Historical

$1,000 $623 Non-Defense Discretionary (up $73 billion) $696

Source: January 2019 CBO (current-policy) 37

Author: Brian Riedl,

2019-2049 Projected Totals Author: Brian Riedl,

Author: Brian Riedl,

Author: Brian Riedl,

deficit projected by CBO over

Author: Brian Riedl,

Source: January 2019 CBO Baseline

Social Security (OASI) $2,500

Source: January 2019 CBO Baseline

Sources: Department of Agriculture and Census Bureau. The

Medicare Fee-for-Service $32

Other High-Risk Programs $35

$0 $10 $20 $30 $40 $50

2017 Improper Payments ($Billions)

Source: OMB Historical Table 3.2, 52

Source: Compiled by the Committee

Can’t We Just Raise Taxes, Cut Defense,

Author: Brian Riedl,

9.8% gross income (AGI)

Popular Spending Offsets

Source: January 2019 CBO (current-policy) budget

Combined Tax Increase*