lame ducks, grand bargains, punts and cliffs nasbo fall meeting friday, october 5, 2012 alexandria,...
TRANSCRIPT
Lame Ducks, Grand Bargains, Punts and Cliffs
NASBO Fall MeetingFriday, October 5, 2012Alexandria, VA
Federal Funds Information for States
Where we Left Off in August: What’s the Conventional Wisdom?
For appropriations, a CR until the election, BUT…
For BCA, agreeing to postpone the day of reckoning, BUT…
For expiring tax provisions, a bruising fight, possibly informed by the election.
For authorizations, probably nothing, BUT...
Six-Month Continuing Resolution
Through March 27, 2013FY 2012 + 0.612% for most discretionary
programs (not highways)Mandatory programs: current-law levelExtends SNAP, TANF, related programsAdditional funds for a few programs
The BCA and the Sequester
Absent a legislated alternative, a sequester will occur on January 2, 2013
Many mandatory and a few discretionary programs are exempt– OMB report sheds light on its interpretations
OMB estimates of ATB cuts: 8.2% (nondefense discretionary), 7.6% (nondefense mandatory), 9.4% (defense discretionary)
ATB reduction applied to FY 2013 funding in effect on January 2, 2013 (CR level)
Lame Duck Possibilities
Policy Grand Bargain Punt CliffFY 2013 Appropriations Unclear Leave for new Congress N/A
BCA Sequester Replace/modify Extend deadline Implement sequester
Expiring tax provisions:
2% payroll tax Probably extend Extend Expires
Bush-era rates Maintain for <$250K Extend Expire
AMT Permanent fix Extend Expire at their peril
Debt Limit Raise Small increase No agreement
Expiring legislation:
Farm bill (nutrition after March) Reauthorize or not Extend No agreement
TANF (after March) Reauthorize or not Extend No action
Medicaid QI, TMA Reauthorize or not Extend Expire?
UI EUC/EB Reauthorize or not Extend Expire
CBO Estimates the Fiscal Cliff
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
2011 2012 2013 2014 2015 2016 2017
$ in
bill
ions
Fiscal Year
The Fiscal Cliff
Revenues Expenditures
Sequester Coverage Status of FFIS VIP Series Programs
67% Covered
33% Exempt
Both2%
Sequester Coverage Status of FFIS VIP Series Funding
Covered18%
Exempt82%
Grand Bargain Revenue Options
Go after tax expenditures, including:– Itemized deduction for S/L taxes– Make S/L bond interest taxable– Curb or eliminate mortgage deduction– Curb or eliminate tax exclusion for employer-provided
health insurance Changes in tax brackets, capital gains, AMT, etc. Create federal sales tax or VAT
The “Other” Federal Spending: Tax Expenditures
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$ i
n m
illi
on
s
25 Largest Federal Tax Expenditures Cost $870 Billion in 2010
Grand Bargain Spending Options
Modify Medicaid’s financing structure; other changes to mandatory programs
Statutorily limit health spending growth More block grants (Medicaid and SNAP) Consolidate programs (job-training) Reduce/eliminate funding for select programs
(Pell grants, housing, abandoned mine payments) Move all S/L workers into Social Security
What’s the Conventional Wisdom?
There is none! For more information, visit:
www.ffis.org Or contact: Marcia Howard
Trinity [email protected]