Transcript Document
What We Face
Working Group Meeting of the Exploratory Project on Human Services and Social Change Prepared by Gary D. Bass OMB Watch 1742 Connecticut Ave., NW Washington, D.C. 20009 (202) 234-8494 http://www.ombwatch.org
The Budget & Tax Picture Today “We’ve got plenty of money in Washington, D.C., by the way.”
President Bush in Louisville, KY February 26, 2004 ---------------------------------
“The tension is money. There’s not enough money.”
Sen. Ted Stevens (R-AK), Chair Appropriations Committee March 3, 2004
6.0
4.0
2.0
0.0
-2.0
-4.0
Deficit as % of Economy Hits 2nd Highest Level Since End of World War II (Deficit excluding Social Security as % of GDP)
-6.0
-8.0
1983 -6.0% 2004 -5.9%
19471950195319561959196219651968197119741977198019831986198919921995199820012004
Revenue as % of Economy is Lowest Level Since 1950
18 17 16 15 14 22 21 20 19
1950 14.4% 2004 15.7%
1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004
Spending NOT Out of Control Outlays as % of GDP
21.5
21 20.5
20 19.5
19 18.5
21.3
1980-2000 1.8% of GDP = $207 Billion in 2004
19.5
2001-2004
The Longer-Term Budget & Tax Picture
“I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” Grover Norquist, Americans for Tax Reform June 25, 2003
21% "Which Federal Baseline Do We Use?" Baseline Receipts 20% 19% 18% 17% 2001 Tax Law Extended 2002 Tax Law Extended 2003 Tax Law Extended Other Tax Laws Extended Alternative Minimum Tax Growth Halted 16% 1970 1977 1984 1991 1998 2005 2012 2019 2026 2033 2040 2047 2054 2061 2068 2075
Source: Steuerle, Carasso, Bishop, based on data from Gale, Orszag, and the Tax Policy Center.
Lost Federal Revenue Compared to Philanthropic Giving
500 450 400 350 300 250 200
485.2
Assuming charitable giving keeps pace with the growth in the economy, giving in 2009 will be $341.4 billion. Charity would need to increase 142% to replace the lost federal revenue, assuming it continues to fund existing activities.
150 100
260.3
50
38.1
25.7
17.3
0
Lost Revenue Individual Giving Foundations Bequests Corp Giving
All figures in 2009 Dollars. Philanthropy source: American Association of Fundraising Counsel’s
Trust in Philanthropy/Giving USA 2003
.
As Baby Boomers Come of Age, the Deficit Explodes
Source: Derived from Chart 12-5, OMB, 2005 Budget, Analytical Perspectives, page 194
2001-03 Tax Cuts vs. Social Security: Present Value of Costs Over 75 Years 14 12 10 8 6 4 2 0
12.1
Tax Cuts if Made Permanent
3.8
75-Year Shortfall in Social Security
The Long-Term Problem
•
It’s a Revenue Problem.
The tax cuts since 2001 cause long-term systemic problems. Additionally, there is a need to develop a fairer tax system with more revenue.
•
Hard Choices Await Us.
Even with additional revenue, some hard choices about spending priorities may be necessary. For example, some note that current health care policies are not sustainable over the long-term.
OMB Watch Tax and Budget Internet Survey A Look At Service Providers
Troubling Tax & Policy Issues to Service Providers Budget Cuts Corporate Tax Avoidance Unfunded Mandates Tax Cuts Defense Spending Increases Devolution Privatization Taxes Too High
0
To what extent do the following current federal tax and budget policy issues trouble you?
19 18 28 22 21 28 24 20 19 52 59 45 39 39% 72 70 54 91% 88% 82% 63% 81% 73% 73%
20 40
%
60 Somewhat Troubled 80 Very Troubled 100
Strong Support for a Tax & Budget Campaign
Given limited time and resources and the fact that there are
Service
many other important issues, do you agree or
Providers
disagree that it is time to launch a long term offensive campaign around federal tax and budget issues?
Others
0 36 33 54 58 20 40 Somewhat Agree 60 80
%
Strongly Agree
90% 91%
100
Participation May Be a Challenge 90% of respondents say it is time to launch a campaign BUT 49% say they are unlikely to participate.
Launch Campaign 3 5 34 56 Participate 21 28 31 16 -50
NEGATIVE
0
POSITIVE % Somewhat Disagree/Unlikely Somewhat Agree/Likely
50
Disagree/No Strongly Agree/Very Likely
100
Even Though 49% say They Might Not Participate in a Campaign… 61% Say They Will Help Redistribute Information About the Campaign
Other Ways Groups Say They Would Participate
45 40 35 30
%
25 20 15 10 5 0
41 39 Town Hall Meetings 36 39 22 28 Lobby Activities
Service Providers
Editorial Board Meetings
Other
21 26 Be Part of Leadership
Getting Service Providers to Engage
% 50 40 30 How important are the following items to get you or 20 10 0 your organization engaged in a long-term campaign about federal tax and budget issues? 90 80 70 60
82% 45 37 79% 44 35 Info on State/Local Impacts Common Messages & Themes 79% 49 30
Somewhat Important
79% 39 40
Very Important
45% 21 24 Info on Issue Area Impact Current Info Funding for on Tax/Budget Tax/Budget Work
Service Providers Significantly Differ From Other Respondents On…
• • •
Funding for Tax/Budget Work.
Service providers find funding as less of an incentive to get involved than others.
Information about Effect of Federal Tax/Budget Policies on State/Local Funding.
Service providers find such information as more of an incentive for involvement than others.
Information about Effect of Federal Tax/Budget Decision on Substantive Issue Areas.
Service providers find such information as more of an incentive for involvement.
Summary of Survey
• •
Even though Service Providers are heavily dependent on government resources, they are less troubled by tax cuts or privatization of government services than other nonprofits.
Service Providers are similar to other nonprofits in levels of participation on tax and budget issues over the past year, as well as on objectives (with two exceptions) of what a long-term tax/ budget campaign should be.
•
Summary of Survey (Cont.)
Service Providers present a number of contradictions: (a) They are significantly more concerned about resources for unfunded mandates than other nonprofits; (b) They are very concerned about federal budget cuts; (c) But they are more supportive of spending cuts to reduce the deficit than other nonprofits; (d) And they are significantly less worried than other nonprofits about attacks on the role of government or the need to demonstrate the value of a strong federal government.
•
Summary of Survey (Cont.)
Service Providers differ from other nonprofits on incentives for engaging on federal tax/budget issues.
Service Providers place information about impacts of federal issue on state/local funding as the most important incentive. Other nonprofits place developing common messages, themes and principles as the top incentive.