Fiscal Policy | Business Roundtable

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What is Business Roundtable

Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies working to promote sound public policy and a thriving U.S. economy.

U.S. debt held by the public stood at just over $13.1 trillion, or roughly $41,000 per person, as of the third quarter of 2015.

Public debt as a share of GDP increased from 39 to 74 percent — the highest level since 1950 — between 2008 and 2014.

The Congressional Budget Office’s (CBO) baseline scenario1 projects that U.S. public debt as a share of GDP could reach 103 percent by 2040 — the highest level since it reached 106 percent in 1946. According to the CBO’s alternative fiscal scenario,2 public debt as a share of GDP could reach 175 percent by 2040.

Mandatory spending (e.g., major health care programs and Social Security payments) and interest payments accounted for roughly two-thirds of federal outlays in 2014, while discretionary spending (e.g., defense, infrastructure investments, skills training programs) accounted for roughly one-third. Over the next decade, mandatory spending and net interest payments are projected to account for 77 percent of all federal spending, while discretionary spending will shrink to 23 percent.

Non-defense discretionary spending declined from 3.8 percent of GDP to 3.2 percent of GDP in the past 50 years. Assuming that current spending caps are maintained, it is expected to fall to 2.5 percent of GDP by 2025.

Net interest costs on government debt could amount to 9 percent of GDP by 2050 — more than three times what the federal government has historically spent on R&D, infrastructure, and education combined (1965–2014) — according to the CBO’s alternative fiscal scenario.1

Social Security spending increased from 2.4 percent to an estimated 4.9 percent of GDP between 1965 and 2015 and is projected to reach 5.7 percent by 2025.

Government spending on major health care programs (e.g., Medicare and Medicaid) increased from 2.3 percent to an estimated 5.2 percent of GDP between 1990 and 2015 and is projected to reach more than 6 percent by 2025.

The number of workers per Social Security beneficiary declined from 3.7 to 2.9 between 1970 and 2010, and it is expected to decline to 2.2 by 2030.The number of workers per Social Security beneficiary declined from 3.7 to 2.9 between 1970 and 2010, and it is expected to decline to 2.2 by 2030.

The combined Social Security Old-Age and Survivors Insurance Trust Fund and the Social Security Disability Insurance Trust Fund will be depleted in 2035, according to projections by the Social Security Board of Trustees. Similarly, the Medicare Board of Trustees projects that the Medicare Hospital Insurance Trust Fund will be depleted in 2030.

Since 2011, not a single one of the 12 regular appropriations bills has been enacted by the start of the fiscal year, while Congress has enacted a total of 25 continuing resolutions during that time.

The 16-day government shutdown in 2013 delayed the distribution of nearly $4 billion in tax refunds to American taxpayers.

Congress has voted to raise, temporarily extend or revise the debt ceiling 78 times since 1960. Nearly half of these votes were for “clean” bills, which passed without the addition of any unrelated policy provisions.

The United States’ credit rating was downgraded for the first time in its history, and the government’s borrowing costs increased by an estimated $1.3 billion in FY 2011 following the 2011 episode of debt ceiling brinkmanship.