As I underscored in two recent charts, the Social Security Disability Insurance (SSDI) program is financially unsustainable, and to save it, policymakers need to rein in benefits, which have exploded in recent years. This week’s charts add two important points: first, that SSDI has turned into a quasi-unemployment program, and second, that the good intentions that prompt the creation of federal programs are not enough to prevent poor and costly outcomes.
The 2015 annual report from the Social Security Board of Trustees shows that the program’s disability component is in immediate trouble. Data from the latest report show that the disability fund will be depleted as soon as next year and unable to pay full benefits to beneficiaries. This week’s first chart uses that data to show total income, expenditures, and assets in the Social Security Disability Insurance (DI) trust fund going back to 1980.
Defenders of the US Export-Import Bank (Ex-Im Bank) cite its working capital programs as evidence that the agency plays a critical role in supporting small businesses. As one of four main components of Ex-Im’s export subsidies, the working capital programs represent a relatively small component of the agency’s overall portfolio. The agency as a whole mainly benefits large, politically connected firms, as I have previously demonstrated.
The following chart shows projected revenues and spending under the president’s proposal according to the new figures provided by the MSR. The first graph displays the data in dollar amounts while the second shows revenues and spending as a share of the economy (GDP).
Among its four principal financial products, the Export-Import Bank has provided “working capital” loans and loan guarantees that assure repayment to private lenders in the event a borrower defaults. According to bank officials, this form of subsidized financing “primarily” benefits small business. In a July 16 letter to Sen. Marco Rubio and others, Ex-Im president Fred Hochberg characterized the bank’s working capital financing as “issued to mostly small businesses.”…
To the put the Ex-Im Bank’s support of American businesses in perspective, we reproduced the White House table and replaced the nominal numbers with the share that each category represents. These shares show the impact of Ex-Im Bank financing on each state as a percentage of that state’s total exports but also small businesses and exporters over the same period.
The Congressional Budget Office (CBO) recently released its annual report on the federal government’s long-term budget outlook, which unsurprisingly remains bleak. Policymakers have known for years that the federal government’s long-term fiscal situation is unsustainable. Unfortunately, they have taken little action to address the situation. The longer Washington waits to get its financial house in order, the more difficult it will be to rectify the situation.
This week’s chart is a re-creation of a chart produced by the Richmond Fed. The share of financial sector liabilities subject to implicit or explicit government protection from losses grew from 45 percent in 1999 to 60 percent in 2013 and amounts to a staggering $26 trillion.
An uninformed listener hearing the debate over the reauthorization of the Export-Import Bank would think that, in most states, most exports are backed by financing from Ex-Im. Nothing could be farther from the truth.