🚨𝗡𝗘𝗪 𝗔𝗡𝗔𝗟𝗬𝗦𝗜𝗦🚨 The President's FY 2024 Budget

We published our full analysis of President Biden's budget proposal, breaking down the policy proposals and their impacts on debt, deficits, spending and revenue over the coming decade: crfb.org/papers/analysi….

🧵⤵️ ➡️The budget proposes an estimated $𝟯 𝘁𝗿𝗶𝗹𝗹𝗶𝗼𝗻 𝗼𝗳 𝗱𝗲𝗳𝗶𝗰𝗶𝘁 𝗿𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻 through 2033 and projects 𝗱𝗲𝗯𝘁 𝘄𝗼𝘂𝗹𝗱 𝗴𝗿𝗼𝘄 from 98% of GDP at the end of this year to 110% by the end of 2033, compared to 117% of GDP under its baseline.

➡️Our team is working through the President's FY 2024 budget released a short while ago, and we will publish our full analysis of the spending and revenue plan later today.

In the meantime, we've published a top-line overview of the key findings.

Learn more 🧵⤵️

https://twitter.com/BudgetHawks/status/1633882532281483266

1️⃣First, #nationaldebt.

Under the President's budget, debt would rise at a slower rate than currently projected but still reach a new record share of the economy by 2027.

Debt will ⬆️ from 98% of GDP to a record 110% at the end of 20333 – compared to 117% under OMB's baseline.

🚨 Later today, @USCBO Director Phillip Swagel will brief members of the House of Representatives on the Budget and Economic Outlook released last month – an encouraging step shining light on our fiscal challenges.

➡️ The following is a statement from @MayaMacGuineas: "Today’s budget briefing for Members of Congress is an encouraging step toward educating lawmakers with a shared set of facts on our fiscal outlook." crfb.org/press-releases…

🚨 Today, President Biden previewed a new plan to improve the solvency of the #Medicare HI trust fund.

CRFB welcomes this plan to strengthen Medicare – though with some reservations.

The following is a statement from CRFB president @MayaMacGuineas: crfb.org/press-releases…. "We strongly support the Administration’s efforts to strengthen the Medicare trust fund. The HI trust fund is only 5 years from insolvency, and we are pleased that the President has put forward a plan to extend the life of this vital program." crfb.org/press-releases….

🚨NEW: With the latest $20 billion extension of the student loan repayment pause, the total cost of the pause through the end of this year will amount to $𝟭𝟱𝟱 𝗯𝗶𝗹𝗹𝗶𝗼𝗻.

These benefits have been highly uneven and extremely regressive ➡️crfb.org/blogs/latest-s…. 1️⃣ The repayment pause is highly regressive, benefitting high-degree, high-income borrowers.

A typical recent medical school graduate will effectively receive nearly $68,000 of forgiven debt through December. A recent bachelor’s degree recipient will get $6,500 of forgiven debt.

🚨Two days after announcing it would cancel large amounts of student debt, the @WhiteHouse has failed to produce either a cost estimate or a proposal for how it would be paid for. We've estimated the cost of the full plan to be ~$500 billion.

A statement from @MayaMacGuineas ⤵️ "This certainly could be one of the most expensive executive actions in history, and yet the White House can’t tell us what it will cost. Either the White House doesn’t know the cost of their debt cancellation proposal, or they know and won’t share it with the public..."

➡️Yesterday's headlines focused on the broad cancellation of student loan debt.

And at a cost of ~$360 billion, that's a big part of the Administration's proposed plan.

But a set of income-driven repayment changes costing ~$𝟭𝟮𝟬 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 also deserves attention.

🧵⤵️ 1️⃣ Among the proposed IDR plan changes:

➤ Raising the amount of income excluded from calculations from 150% of the federal poverty line to 225%.

This will lower the amount owed per month for all borrowers in IDR. It also reduces many lower-income borrowers’ payments to $0.

🚨NEW: @POTUS today announced student loan changes – including cancellation of up to $20k for some borrowers – that will cost $440–$600 billion over the next ten years.

That brings the total cost of pandemic-era student loan actions to ~$800 billion.

➡️crfb.org/blogs/new-stud…. Today’s announcement consisted of:
➡️Broad student debt cancellation (cost: ~$𝟯𝟲𝟬 𝗯𝗶𝗹𝗹𝗶𝗼𝗻); ➡️Changes to income-driven repayment plans (cost: ~$𝟭𝟮𝟬 𝗯𝗶𝗹𝗹𝗶𝗼𝗻);
➡️Final student loan repayments extension (cost: ~$𝟮𝟬 𝗯𝗶𝗹𝗹𝗶𝗼𝗻)
Read more on each in our blog.

🚨Today @POTUS announced his plan to cancel $10k/borrower of student debt by executive action for individuals making <$125k and up to $20k for Pell Grant recipients while extending the current repayment pause until December 31st.

A statement from @MayaMacGuineas: ⤵️ "This announcement is gallingly reckless – with the national debt approaching record levels and inflation surging, it will make both worse. Policymakers have already spent $300 billion on student debt relief—none of it paid for, and this would add another $400 to $600 billion..."

🚨NEW ANALYSIS🚨 The #Medicare Trustees' report shows that the Part A HI trust fund is only 6 years from insolvency, facing a large shortfall with rapidly-growing spending. The outlook is slightly improved, but substantial structural imbalances remain.

crfb.org/papers/analysi…. 1️⃣ The HI trust fund is only 𝟲 𝘆𝗲𝗮𝗿𝘀 from insolvency.

The Trustees project the trust fund will be insolvent by 2028, just six years from now but two years later than projected last year. At that point, provider + insurer payments would have to be cut by 10% (20% by 2046).

🚨NEW ANALYSIS🚨 The latest #SocialSecurity projections show that the program is only 13 years from insolvency and faces large & rising imbalances. Though finances have improved slightly, they remain perilous, and time is running out to save the program.

crfb.org/papers/analysi…. 1️⃣ #SocialSecurity is only 𝟭𝟯 𝘆𝗲𝗮𝗿𝘀 from insolvency.

The theoretical combined trust funds comprising #SocialSecurity (OASI+SSDI) will exhaust their reserves by 2035, when today's 54-year-olds reach full retirement age and today's youngest retirees turn 75. ⤵️

🚨NEW🚨 Today's trustees reports show that the #SocialSecurity and #Medicare Hospital Insurance (HI) #trustfunds are rapidly approaching insolvency; these funding imbalances will require #TrustFundSolutions to prevent broad benefit cuts.

More: crfb.org/blogs/trustees…. ➡️OASI depletion will occur by 2034, while SSDI will not deplete within the projection window.

On a theoretical combined basis, assuming revenue is allocated between the trust funds in the years between OASI and SSDI insolvency, #SocialSecurity will become insolvent by 2035. ⤵️

🚨The #SocialSecurity and #Medicare Trustees released their annual reports on the state of the trust funds today, finding that #Medicare HI will be insolvent by 2028 and theoretically combined #SocialSecurity by 2035.

The following is a statement from @MayaMacGuineas: "#SocialSecurity is only 13 years from insolvency and #Medicare is only 6 years. Policymakers need to get their heads out of the sand and stop pretending these vital programs’ funding issues will fix themselves." crfb.org/press-releases….

🚨NEW🚨 Under alternative, fiscally-irresponsible scenarios based on @USCBO's baseline – including likely policy extensions and more deficit-financed actions – #deficits could surpass $𝟯 𝘁𝗿𝗶𝗹𝗹𝗶𝗼𝗻 and #debt could reach 𝟭𝟮𝟱% of GDP by 2032.

➡️crfb.org/blogs/debt-cou…. ➡️Last week, @USCBO projected that debt will reach a record 110% of GDP and deficits will reach $2.3 trillion by 2032.⤵️

But the baseline is based on current law, and ignores future legislation, administrative actions and temporary policy extensions.

https://twitter.com/BudgetHawks/status/1529536568926543872?s=20&t=-FqXEBvmO2AfiBPHuK_IcA

Although the $1.9 trillion COVID relief bill under consideration addresses some key needs, some pieces could be better targeted. A redesigned plan could still provide the support necessary to fight the virus and support a strong economic recovery. The House #COVIDrelief package includes about $312B of policies developed long before the #COVID crisis, not in response to it. Many of these policies are worthwhile but should be paid for and made permanent parts of the tax code or budget.

NEW: The CBO update shows that the recent budget deal made a bad situation worse. From our statement: "The recent budget deal was a budget buster, and now we have further proof. Both parties took an already unsustainable situation and made it much worse." crfb.org/press-releases… "Debt is now going to grow to almost the size of the economy within the decade. If Congress keeps extending tax cuts, debt will likely exceed the size of the economy within the decade."