Federal Fiscal Outlook: Challenges and Opportunities

1. Federal Fiscal Outlook: Challenges and Opportunities National Association of Area Agencies on Aging Ellen Nissenbaum Senior Vice President for Government Affairs Center on Budget and Policy Priorities April 28, 2014

2. Federal Spending, FY 2013

3. Over $4 Trillion in Deficit Reduction Enacted Since 2010 (2015-2024, in billions)

4. Recent Policy Savings to Reduce Deficits Largely Come from Program Cuts

5. Non-Defense Discretionary Funding Still Constrained Even After Budget Agreement

6. Non-Defense Discretionary Spending Set to Fall Below Historical Low

7. Low-Income Expenditures Outside Healthcare Set to Fall Below Average of Last 40 Years

8. PRESIDENT’S BUDGET: Discretionary Programs • Base budget adheres to “Murray/Ryan” deal from December • Also proposes to increased discretionary program funding in 2015 by $56 billion – half for NDD • Opportunity, Growth, and Security Initiative • Examples of areas of additional investment: research, early childhood education, job training/community college initiative, VA and IHS health facilities

9. Non-Defense Discretionary Funding Still Constrained Even with President’s Proposal cbpp.org

10. Ryan Budget • Details are just emerging • Basic architecture remains the same as last year • Balances budget by 10th year • No new revenues • Modest Medicare cuts in first 10 years (premium support/voucher proposals later) • Increases defense • Large cuts in programs that help low and moderate income people • Deep cuts in SNAP + block grant • Repeals ACA & makes deep cuts in Medicaid + block grant • Increasing the number without insurance by about 40 million • Cuts Pell • Larger cuts in NDD than in prior year budget • Will mean cuts in many low-income programs such as Head Start as well as core public services/building blocks of economy

11. 69 Percent of Cuts in Ryan Plan From Programs for People with Low or Moderate Incomes

12. Ryan Budget Priorities

13. Safety Net Today Cuts Poverty Nearly in Half

14. Tax Expenditures Are Very Costly Notes: Tax expenditure estimates do not account for interaction effects; estimate does not include associated outlays ($129 billion) or the effects on excise and payroll receipts ($120 billion). Source: Office of Management and Budget, Historical Tables 8.5 and 8.7 and Analytical Perspectives Table 14-2.

15. EITC for Childless Adults • Who benefits? • Estimated 13.5 million workers total, including 5.8 million newly eligible • Older workers (1/3 of those who benefit are over age 45) • Low wage/less educated workers • Workers with disabilities • Estimated 1.5 million+ noncustodial parents • Proposal would lift estimated 500,000 people out of poverty and make 10.1 million people less poor • Expands EITC for “childless workers” • Increases maximum credit from about $500 to $1,000 • Lowers eligibility age to 21 & allows those 65 & 66 to qualify

16. HIGHLIGHTS: THE PRESIDENT’S PROPOSAL TO EXPAND THE EARNED INCOME TAX CREDIT