Spending & Budget

Spending & Budget

Research

Casey B. Mulligan | Oct 07, 2014
The Affordable Care Act (ACA) imposes several types of incentives that will affect work schedules. The largest of them are (1) an explicit penalty on employers who do not offer coverage to their full-time employees; (2) an implicit tax on full-time employment, stemming from the fact that full-time employees at employers that offer affordable coverage are ineligible to receive subsidies on the law’s new health insurance exchanges; and (3) an implicit tax on earnings, stemming from the provisions of the law that give lower subsidies to those with higher incomes.
Jason J. Fichtner, Robert Greene | Sep 30, 2014
In this paper, we examine existing literature on the prevalence, consequences, wastefulness, and causes of year-end spending surges. We then report executive departments’ year-end obligated federal contract expenditure patterns using data obtained from USASpending.gov. We review literature on purported solutions to curb year-end spending surges, and conclude with a policy recommendation of our own.
Courtney A. Collins | Aug 25, 2014
Since its inception, the education system in the United States has been structured in a very decentralized way. The federal government has historically played a limited role in public schools, leaving the majority of decisions to be made at the state and local level. The extent of federal involvement began to widen, however, in 1965 with the passage of the Elementary and Secondary Education Act (ESEA).
Veronique de Rugy, Jason J. Fichtner | Aug 21, 2014
The recent decline in federal deficits should not create a false sense that the national debt is no longer a clear and present threat. While this improvement may be encouraging, it represents only a temporary respite from the government’s growing fiscal imbalances.
Veronique de Rugy, Andrea Castillo | Jul 16, 2014
This paper provides a brief overview of the history and operations of the Ex-Im Bank, followed by an examination of the key justifications for the bank’s continued authorization.
Cecil Bohanon | Jul 01, 2014
How have federal personal income tax obligations evolved over the past 60 years? A common perception is that the federal income tax burden on the poor has increased while the tax burden on the rich has declined. This study focuses on three archetypical households.

Testimony & Comments

Antony Davies | Jul 28, 2014
There are two important unintended consequences of raising the federal contractor minimum wage: first, it can adversely affect the most vulnerable workers; and second, the rule as currently stated could be enforced in a manner so that its impact would extend to far more businesses than originally intended.
David M. Primo | Jul 24, 2014
Constitutional rules, unlike statutory or internal rules, are difficult to change. If written to cover the entire budget, avoid loopholes, and make waivers difficult to obtain, Constitutional rules can provide the enforcement mechanism that will help ensure that specific reforms to entitlements, defense, and other spending areas will not be undone by future Congresses.
Veronique de Rugy | Jun 25, 2014
The Bank has long outlived its purpose and cannot manage to meet the standards of the new missions that have been developed to validate its existence. For policymakers who have the facts, the choice is clear: the Export-Import Bank must go.
Jason J. Fichtner | May 21, 2014
Social Security faces real financial challenges. Dismissing the real and current fiscal challenges facing the Social Security system and kicking the “reform can” further down the road will only increase the severity of the burden associated with reforms when they inevitably must take place.
Keith Hall | Jul 09, 2013
The biggest problem with the US labor is a lack of economic growth. And according to our biggest job creators, small business owners, government is playing a big role in holding back the economy.
Jason J. Fichtner | May 23, 2013
My testimony focuses on the Social Security program’s incentives—specifically, how the current structure provides disincentives to work and save. I will also discuss how Social Security reform, if done correctly, can increase US savings, labor force participation, economic growth, and federal revenues.

Research Summaries & Toolkits

Veronique de Rugy, Jason J. Fichtner | Oct 10, 2013
As federal government borrowing is set to exceed yet another debt limit, most are quick to recall—and wish to avoid a repeat of—the 2011 debt-limit showdown. If current rhetoric is any indication, it appears many of the last debate’s lessons have been forgotten. Regrettably, it seems many of the debate’s facts have been forgotten as well.
| Sep 24, 2013
The Mercatus State Policy Guide is intended to summarize and condense the best research available on the most relevant topics. It’s a starting point for discussion, not a comprehensive overview of economic policy. Each statement is supported by academic research, with links provided in the endnotes. Mercatus scholars are available to further explain the results of their studies. We hope the guide will prove to be a valuable tool in your economic policy research.
| Jul 23, 2013
The Mercatus Policy Guide is intended to summarize and condense the best research available on the most pressing topics. It serves as a starting point for discussion, not a comprehensive overview of economic policy. Anyone who wants to go deeper into these studies should consult the references listed at the back. Mercatus scholars are available to further explain the results of their studies. We hope the guide will prove to be a valuable tool in your evaluation of economic policy.
Jason J. Fichtner, Jacob Feldman, Jeremy Horpedahl, Brandon Pizzola, Bruce Yandle, Veronique de Rugy | Jul 15, 2013
The most basic goal of tax policy is to raise enough revenue to meet the government’s spending requirements, preferably with minimal impact on market behavior. The US tax code has long failed to achieve this goal; by severely distorting market decisions and the allocation of resources, it impedes both potential economic growth and potential tax revenue. The nation’s persistently sluggish economic growth and dire long-term fiscal outlook have increased the urgency to reform the federal revenue system. But what does successful, sustainable tax reform look like? What are its key elements? And what would it achieve?
Veronique de Rugy, Jason J. Fichtner, Charles Blahous, Matthew Mitchell | Mar 15, 2013
Despite years without a federal budget, trillion-dollar deficits, and ad hoc, crisis-driven fiscal and economic policies that failed to deal with the looming entitlement crisis, leaders on both sides in Washington are now touting seemingly miraculous progress toward a “fix” to our budgetary woes.
Jason J. Fichtner, Veronique de Rugy | Jan 25, 2013
The debt ceiling, or the legal limit the federal government may borrow, is set currently at $16.4 trillion.[1] In his latest report, Secretary of the Treasury Timothy Geithner predicts that the United States will need to increase the debt ceiling sometime between February 15, 2013, and early March 2013.[2] The Congressional Research Service estimates the federal government will have to issue an additional $700 billion in debt above the current statutory limit to finance obligations for the remainder of FY2013…

Expert Commentary

Nov 18, 2014

Last Friday, America’s four postal employee unions organized a mass protest against Postmaster General Patrick Donahoe’s plan to shut down 80 distribution centers in January 2015. The postal workers, quite understandably, see their livelihoods at stake. Many reformers, however, see the rising share of public sector unionization as a drain on our tax dollars and a likely source of government growth—which, as new research reveals, may not be the case.
e21
Nov 10, 2014

The ACA contains myriad problems; these and other provisions will come under increased scrutiny going forward. As lawmakers approach repairs, they will need to bear in mind what is politically achievable as well as what is fiscally responsible.
Nov 01, 2014

The bottom line is that Democrats have no reason to fear the federal empire will shrink after Republicans take control of the Senate. To be sure, Democrats might not be able to grow the state as much as they want in the near future. For that, they’ll just have to wait for another Republican to get to the White House or regain control of everything.
Oct 24, 2014

Obesity is a growing problem for Americans, and its social consequences cannot be ignored. But don't be tricked by the paternalistic costume worn by consumption-tax advocates; they offer no solution. Besides, do you really want to be the house on the block that hands out celery on Halloween?
Oct 20, 2014

Midterm elections are coming, and both parties are lobbing grenades over health care. Despite the furious rhetoric, the two sides are more alike than they realize. Both spent decades pursuing policies that obstruct health care's capacity to save lives, ease suffering and cut costs. The endless vitriol resembles World War I-style trench warfare. The Affordable Care Act moved the battle lines a little in one direction; the midterms that year moved them a little in the opposite direction. With divided government, the 2014 elections will move the lines even less.
Oct 20, 2014

The tax-exempt higher education sector is huge and growing, as government policies encourage demand and tuition prices continue to rise. There are many higher education tax benefits, on both the supply and demand sides, and estimated tax expenditures for the sector reached $50 billion, or about $2,400 per student, in 2012.

Charts

This week’s chart displays the annual amount of real (2014 $) federal supplemental funding since 1980. As the chart shows, supplemental spending exploded in 2000s during the administration of George W. Bush and a largely Republican-controlled Congress.

Experts

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. Her primary research interests include the US economy, the federal budget, homeland security, taxation, tax competition, and financial privacy. Her popular weekly charts, published by the Mercatus Center, address economic issues ranging from lessons on creating sustainable economic growth to the implications of government tax and fiscal policies. She has testified numerous times in front of Congress on the effects of fiscal stimulus, debt and deficits, and regulation on the economy.
Charles Blahous is the director of the Spending and Budget Initiative, a senior research fellow at the Mercatus Center at George Mason University and a public trustee for Social Security and Medicare. He specializes in domestic economic policy and retirement security (with an emphasis on Social Security), as well as federal fiscal policy, entitlements, demographic change, and health-care reform.
Tyler Cowen is Holbert L. Harris Chair of Economics at George Mason University and serves as chairman and general director of the Mercatus Center at George Mason University. With colleague Alex Tabarrok, Cowen is coauthor of the popular economics blog Marginal Revolution and cofounder of the online educational platform Marginal Revolution University.
Antony Davies is a Mercatus Center–affiliated senior scholar at George Mason University and associate professor of economics at Duquesne University. He also is a member of the Research Program on Forecasting at George Washington University. He specializes in econometrics, public policy, and economic psychology.
Jason J. Fichtner is a senior research fellow at the Mercatus Center at George Mason University. His research focuses on Social Security, federal tax policy, federal budget policy, retirement security, and policy proposals to increase saving and investment.

Podcasts

Robert Graboyes | October 24, 2014
Robert Graboyes Discusses the Affordable Care Act on John Batchelor

Recent Events

What do GDP reports really tell us? What does economic freedom have to do with job growth? For answers to these questions and more, the Mercatus Center at George Mason University invites you to join us for an exploration of the economic situation as Dr. Bruce Yandle presents his quarterly economic commentary.

Books

Joseph Antos, Charles Blahous, Darcy Nikol Bryan , James C. Capretta, Robert Graboyes, Jason J. Fichtner, June O’Neill , Nina Owcharenko , Thomas P. Miller | Apr 08, 2014
Top experts explain everything you wanted to know about Medicaid—from federal-state financing to potential reforms.

Media Clippings

Jason J. Fichtner | Jul 28, 2014
This excerpt originally appeared in The Daily Caller.
Jason J. Fichtner | Jul 24, 2014
This excerpt originally appeared in FOX Business.
Jason J. Fichtner | Jul 17, 2014
This excerpt originally appeared in FOX Business.
Charles Blahous | Jun 04, 2014
This excerpt originally appeared in CQ and also appeared Roll Call.
Veronique de Rugy | May 20, 2014
This excerpt originally appeared in Wall Street Journal.
' '