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TBD TITLE SLIDE

The Economy, Jobs, and Fiscal ResponsibilityFrom Main Street to Wall Street to Washington

September 7th – October 9th

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24%

Federal Spending as a Percentage of GDP

Federal Spending$3.8 Trillion in 2012 Dollars

2012

The Federal Government has Grown Dramatically

2%

Federal Spending$16 Billion in 2012 Dollars

1912

Source: Historical Statistics of the United States, Millennial Edition On Line, Cambridge 2006; Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII

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We’ve Lost Control of the Budget

3% 97%

Controlled Yearly

1912

67% 33%

Auto Pilot

2012Source: Historical Statistics of the United States, Millennial Edition On Line, Table Ea636–643 Federal government expenditure, by major function: 1789–1970. Congressional Budget Office, Historical Tables. Compiled by TCAII.

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Where the Money Goes

National Defense18.7%

International Affairs & Foreign Aid1.5%

Other Discre-tionary14.6%

Social Securi-ty20.4%

Medicare12.6%

Medicaid6.7%

Other Mandato-ry19.7%

Net Interest 5.9%

Source: OMB, Historical Tables, 8.5, 8.8. Compiled by TCAII.

Social Security & Medicare Combined 33%

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Federal Spending and Revenue Trends

1912 1916 1920 1924 1928 1932 1936 1940 1944 1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

$3,000.0

$3,500.0

Republican President Democrat President Revenues

Fed

eral

Gov

ern

men

t S

pen

din

g In

Tri

llion

s of

Con

stan

t 20

12 D

olla

rs

Sources: Office of Management & Budget, Historical Tables; Bureau of Labor Statistics; Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII

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Federal Debt Levels

1900 1906 1912 1918 1924 1930 1936 1942 1948 1954 1960 1966 1972 1978 1984 1990 1996 2002 2008 2014 2020 2026 2032 20380%

50%

100%

150%

200%

250%

Actual Debt Projected Debt

Pu

blic

ly H

eld

Fed

eral

Deb

t as

a P

erce

nta

geo

of G

DP

Source: CBO, Long-Term Budget Outlook, 2009, 2012. Compiled by TCAII.

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Federal Financial Sink Hole

2000 2011$0

$10

$20

$30

$40

$50

$60

$70

$6.9

$17.4$0.5

$1.9

$3.8

$9.2

$9.2

$37.0

Explicit Liabilities Commitments & Contingencies Social Security MedicareT

rilli

ons

of P

rese

nt

Val

ue

Dol

lars

SOURCE: Data from the Department of Treasury, 2011 Financial Report of the United States Government. Compiled by TCAII.Note: Actuary’s alternative estimates are used for 2011 Medicare projected benefits cost.

$20.4 Trillion(Your Share $72,500)

$65.5 Trillion(Your Share $210,200)

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Comparative Government Debt Burdens

Germany Spain United Kingdom

France United States Portugal Italy Greece0%

20%

40%

60%

80%

100%

120%

140%

160%

78.9% 79.0%88.4% 89.0%

106.6%112.4%

123.4%

153.2%

0.312

Tot

al G

over

nm

ent

Deb

t A

s a

Per

cen

tage

of

the

Eco

nom

y

Source: IMF, World Economic Outlook, April 2012; U.S. Treasury, Debt to the Penny; OMB, Historical Tables. Compiled by TCAIINote: Additional data with dotted line represents intra-governmental holdings for the United States. All figures are estimates for 2012. .

Total U.S. Debt137.8%

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The Federal Public Debt

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$1

$2,001

$4,001

$6,001

$8,001

$10,001

U.S. Debt Held by The FED Other Domestically Held U.S. Debt All Other U.S. Debt Held by Foreigners U.S. Debt Held by China

Fed

eral

Pu

blic

Deb

t In

Tri

llion

s of

Dol

lars

Source: U.S. Department of the Treasury. Compiled by TCAII.Note: All data from September the end of the fiscal year.

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Our Fiscal Future

2012 2020 2030 20400%

5%

10%

15%

20%

25%

30%

35%

40%

1.4% 3.3%6.7%

10.8%5.0%

5.3%

6.0%

6.1%

4.8%

5.9%

7.8%

9.3%

11.7%

8.5%

10.2%

9.9%

Net Interest Social Security Medicare & Medicaid All Other Revenue

Per

cen

tage

of

GD

P

Source: Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII. Note: Alternative Fiscal Scenario used for all figures. Medicaid number are estimated and illustrative, they are derived from CBO’s LTBO June 2012 Data.

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Social Insurance Cash Flows

2012

2015

2018

2021

2024

2027

2030

2033

2036

2039

2042

2045

2048

2051

2054

2057

2060

2063

2066

2069

2072

2075

2078

2081

2084

($2,500.0)

($2,000.0)

($1,500.0)

($1,000.0)

($500.0)

$0.0

HI OASDI

Tri

llio

ns o

f 201

2 D

olla

rs

Source: Social Security, OASDI and HI Annual Non-interest Income, Cost, and Balance in Current Dollars, Calendar Years 2012-90, Table VI.F9. Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII.Note: Intermediate projections used.

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Social Insurance Payments vs. Benefits

Paid In Benefits Received $0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

U.S

. Dol

lars

Source: Urban Institute. Compiled by TCAII.Note: Two-earner couple with one spouse earning an average wage ($43,500 in 2011) and one earning a low wage ($19,500 in 2011). Turning 65 in 2011.

315% Difference

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Comparative Health Care Costs

OECD Average Canada France Germany Italy Sweden United Kingdom United States$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$3,361

$4,363$3,978

$4,218

$3,137$3,722 $3,487

$7,960

Per

Cap

ita

Hea

lth

Car

e C

osts

Source: OECD, Health Data, 2011. Compiled by TCAII.Note: Based on 2009 expenditures.

72.2% 70.6% 77.9% 76.9% 77.9% 81.5% 84.1% 47.7%

Public Health Expenditures as a Percentage of Total Health Expenditures

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Relative Defense Spending

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$690 Bil.

Turkey Australia Canada Korea, South Brazil Italy Germany India Saudi Arabia Japan UK France Russia China, P. R. USA

Bill

ion

s of

Con

stan

t 20

10 U

S D

olla

rs

$670 Bil.

Source: SIPRI Military Expenditure Database, Military Expenditure by Country, In Constant (2010) US$ millions. Compiled by TCAII.

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Comparative Tax Burden 2012

Mexico Japan United States Australia United Kingdom

Canada Germany Netherlands France0%

10%

20%

30%

40%

50%

Tot

al T

ax B

urd

en a

s a

Per

cen

tage

of

GD

P

Source: International Monetary Fund, World Economic Outlook Database, April 2012. Compiled by TCAII.

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Select Individual Tax Expenditures(2010-2014)

$0

$100

$200

$300

$400

$500

$600

$700

Bill

ion

s of

Dol

lars

Source: The Joint Committee on Taxation, Background Information on Tax Expenditure Analysis and Historical Survey of Tax Expenditure Estimates, JCX-15-11, February 28, 2011.Note: *This only includes income taxes, There are estimates that suggest that if an analysis included payroll taxes the total cost would be over $1 trillion for the same time period.

Total individual tax expenditures for the period 2010-2014 will begreater than $3 trillion dollars.

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Effective Federal Income Tax Rates

Less Than $10,000

$10,000 - $20,000

$20,000 - $30,000

$30,000 - $40,000

$40,000 - $50,000

$50,000 - $75,000

$75,000 - $100,000

$100,000 - $200,000

$200,000 - $500,000

$500,000 - $1,000,000

More Than $1,000,000

-10%

-5%

0%

5%

10%

15%

20%

25%

-6.7%-5.4%

-2.9%

0.8%

3.2%

5.7%7.2%

9.9%

14.7%

17.5%18.9%

Eff

ecti

ve I

nd

ivid

ual

Fed

eral

In

com

e T

ax R

ate

Source: Urban Institute and Brookings Institution, Tax Policy Center, Distribution tables by Dollar Income Class, T11-0315 - Effective Federal Tax Rates by Filing Status and Demographics, Under Current Law, by Cash Income Level, 2011. Compiled by TCAII. Note: About half of individuals who file federal tax returns pay no income tax.

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2013 2013-20222001/2003/2010 Tax Cuts $110 Billion $2.8 Trillion

Alternative Minimum Tax Patches $125 Billion $1.7 Trillion

Jobs Measures $115 Billion $150 Billion

Medicare Physician Payments $10 Billion $150 Billion

Budget Control Act Sequester $65 Billion $980 Billion

"Tax Extenders" $30 Billion $455 Billion

Health Care Reform Taxes $25 Billion $420 Billion

Net Interest N/A $1.2 Trillion

Total (Without Jobs Measures) ~$400 Billion $7.9 Trillion

Total (With Jobs Measures) ~$500 Billion $8.1 Trillion

The Year End Fiscal Cliff

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Source: 2010, Institute for Truth in Accounting. All information from State CAFRsNumbers in red denote burden per taxpayer, Numbers in black denote a surplus per taxpayer

Taxpayer’s Burden by State 2010(Thousands of Dollars)

1. Alaska 2. Wyoming 3. North Dakota 4. Utah 5. Nebraska 6. South Dakota 7. Montana 8. Iowa 9. Oregon 10. Tennessee 11. Arkansas 12. Idaho 13. Minnesota 14. Colorado15. Florida 16. Arizona 17. Virginia

$21.2 $20.2

$9.5 $2.6 $2.4 $1.4 $0.3 $0.5 $0.9 $1.1 $1.7 $2.6 $2.6 $2.9 $2.9 $3.3 $3.6

18. Nevada 19. Missouri 20. Georgia 21. Indiana 22. Kansas 23. Texas 24. Wisconsin 25. Ohio 26. New Hampshire 27. Vermont28. Washington 29. Pennsylvania 30. South Carolina 31. New Mexico 32. Oklahoma 33. Alabama 34. Louisiana

$3.7 $3.8 $3.9 $3.9 $4.6 $5.5 $5.7 $6.0 $8.2 $9.1 $9.8

$10.3 $10.5 $11.8 $12.6 $14.3 $14.7

35. North Carolina 36. Maine 37. Mississippi 38. Delaware 39. New York 40. Maryland 41. Rhode Island 42. West Virginia 43. Michigan 44. California 45. Massachusetts 46. Kentucky 47. Illinois48. Hawaii 49. New Jersey

50. Connecticut

$14.8 $15.0 $15.7 $16.3 $17.2 $17.3 $18.8 $20.5 $20.8 $21.4 $23.2 $23.5 $31.6 $32.7 $35.8

$49.0

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Protecting Their Future

1912

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1.Pro Growth

2.Socially Equitable

3.Culturally Acceptable

4.Mathematically Accurate

5.Politically Feasible

6.Bipartisan Support

6 Key Principles for Reform

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• Budgeting

• Social Security

• Health Care

• Medicare & Medicaid

• Defense

• Taxes

• Other

• Political

Areas of Reforms

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No Budget, No Pay

Recapture Control over the Budget

Reform Federal Budget Controls(Pay-Go Rules, Debt to GDP Targets)

Budgeting

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Raise The Taxable Wage Base Cap

Gradually Raise the Retirement Eligibility Ages

Revise Benefit Structure Based on Income

Supplemental Retirement Savings Account

Social Security

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Health Care

Basic Level of Health Coverage for all Citizens

Revise Payment Practices to be Evidence Based

Phase Out the Tax Exclusion for Employer Provided Health

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Impose an Annual Budget for Medicare & Medicaid Spending

Make Medicare Premiums Subsidies More

Needs Based

Rationalize Medicaid Minimum Standard

Medicare & Medicaid

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Require Cost Consideration in Defense Planning

Right-Size our Bases and Force Structure

Modernize Purchasing and Compensation Practices

Defense

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Reform Individual Federal Income Tax

Reform Corporate Federal Income Tax

Determine Income Level Where No Income Tax is Paid

Taxes

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Develop a Strategic Framework for the Federal Government

Create Government Transformation Task Force

Other

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Redistricting Reform

Integrated & Open Primaries

Campaign Finance Reform

Term Limits

Political

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• Committee for a Responsible Federal Budget-www.crfb.org (www.FixtheDebt.org)

• Committee for Economic Development - www.ced.org

• Common Sense Coalition - www.thecommonsensecoalition.com

• Concord Coalition - www.concordcoalition.org

• No Labels - www.nolabels.org

• Rebellious Truths - www.rebellioustruths.org

• The Can Kicks Back - www.thecankicksback.org

Partner Organizations

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• Educate yourself and others on the facts, tough choices and solutions (Participate in Live Online Town Hall on September 15 at www.KeepingAmericaGreat.org)

• Use the “Serious 7: Serious Questions for Serious Candidates”

• Make these issues the top priority on election day

• Hold our elected officials accountable

What You Can Do

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