ATCA’s FAA Budget Briefing

1. ATCA’s FAA Budget Briefing How will the Nation’s Debt Impact future FAA funding?

4. Why is our debt growing? • Population aging • More Medicare, Medicaid, Social Security spending • In this GAO projection – 73% of every tax dollar would go to Medicare, Medicaid, Social Security and Interest payments

5. Discretionary Vs. Mandatory Funding • Source: CRS and OMB Mandatory Spending is Overwhelming the rest of the Budget

6. What have we done so far to reduce our Debt? Fiscal Commission’s Report released 12/10

7. Budget Control Act • Debt Ceiling debate Summer of 2011 • Budget Control Act passed Aug 2 • Created a Congressional Joint Select Committee on Deficit Reduction - “Super Committee” • Super Committee to propose further deficit reduction, with a stated goal of achieving at least $1.5 trillion over 10 years • BCA has Statutory Caps for 2012 to 2021 – Security and Non Security • If Congress spends above caps – OMB identifies sequestration levels • Cuts $1.2 trillion in spending

8. What is a Reasonable Debt level for a developed country? This Time is Different: Eight Centuries of Financial Folly By Carmen Reinhart and Kenneth Rogoff Spoiler Alert -- 60%

9. How Bad is our Debt? Need to Build on our Glossary of Terms Four Categories of Federal Debt • Gross Federal Debt – sum of debt held by the public and held by government accounts (intragovernmental debt). • Debt held by the Public – federal debt held by individuals, corporations, state or local governments, foreign governments and central banks. • Debt held by Government Accounts – debt owed by the federal government to itself – mostly by trust funding including Social Security and Medicare. • Debt subject to Statutory Debt Limit – debt guaranteed as to principal and interest by the US – for example, does not include TVA, Postal Service debt

10. In 2012 – our Gross Public Debt to GDP rose above 100%

12. Slide Title • Senate Budget Committee Point #1 Point #2 Point #3

13. Happy New Year AmericaWelcome to the 2013 “Fiscal Cliff” Ben Bernanke is calling the end of ‘12 beginning of ‘13 a Fiscal Cliff because of multiple financial events: • expiration of the 2001/03/10 tax cuts, • winding down of certain jobs provisions, • $1.2 trillion across-the-board “sequester,” • immediate and steep reduction in Medicare physician payments (Doc Fix failed), • the end of current AMT patches, and • the need to once again raise the country’s debt ceiling. “Together, these policies would reduce ten-year deficits by over $6.8 trillion relative to realistic current policy projections – enough to put the debt on a sharp downward path but in an extremely disruptive and unwise manner.” -- Committee for a Responsible Federal Budget