Spending & Budget

Spending & Budget

Research

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.
Jason J. Fichtner, Jacob Feldman | Jun 19, 2014
The $69 billion mortgage interest deduction (MID) is often viewed as an element of the tax code that promotes middle-class prosperity. However, 64 percent of the benefits, as measured by effective tax reduction, goes to households earning more than $100,000 per year. The large variation in nominal benefits is one of the reasons why many economists state that the MID is regressive.
Clifford Winston | Jun 17, 2014
Transportation infrastructure, including roads, bridges, airports, and the like, significantly contributes to America’s prosperity by facilitating access to the workplace, shopping, and leisure activities, as well as giving employers easy access to labor, capital, and potential consumers. However, current capacity for transport has become increasingly strained, and travelers and shippers have experienced more congestion and delays. The public sector’s “strategy” to increase infrastructure spending fails to generate the large promised benefits because its pricing and investment and operating policies are so inefficient.

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

Sep 12, 2014

Economists cannot pinpoint when the debt-to-GDP ratio will make borrowing impossible and force the United States into default, like Greece. However, each day that we ignore the debt, our risk of drowning in it becomes more likely. It is time for the debt deniers to face facts so we can work together to solve this problem—before it’s too late.
Sep 08, 2014

The Export-Import Bank is the epitome of corporatism. It is time to acknowledge the unseen victims of the Ex-Im Bank deals and stand up for them by shutting it down.
Aug 27, 2014

If the economy doesn't improve, reality will catch up with this generation. When that happens, let's hope they demand the same freedom in their economic lives that they have grown to expect in their social lives.
Aug 25, 2014

For millions of children across the country, August signals the traditional culmination of summer break and the start of the academic year. As the final days of August bleed into September, students trade swimsuits for school uniforms and flock toward the bus stop, swapping stories of summer vacation along the way. August is a month that has held its post as gatekeeper of summer and school year in America for more than a century.
Aug 21, 2014

The biggest Ex-Im Bank beneficiaries are giant corporations like Boeing, General Electric, Caterpillar and their very wealthy foreign buyers. These companies don’t need the bank, but they love it. It increases their profits and transfers onto taxpayers the risk that the companies should be shouldering since they pocket the benefits.
Aug 20, 2014

Subsidized businesses should not matter more than unsubsidized firms in the Grand Canyon State merely because they happen to have friends in Washington. Arizonans should ask their lawmakers why they support a program that exposes them to so much risk mostly for the benefit of Washington state.

Charts

These charts show that the federal government will not be able to provide the same level of services without significant reforms to entitlement programs that drive the bulk of spending and compound future interest payments on the federal debt.

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

Veronique de Rugy | September 02, 2014
Veronique de Rugy discusses the CBO report on the federal debt on the John Batchelor Show.

Upcoming Events

Recent Events

Please join us for breakfast on Tuesday, May 6, with one of Mercatus’ affiliated scholars, Dr. Antony Davies, Associate Professor of Economics at Duquesne University, to discuss intended and unintended consequences of the current U.S. debt and deficit.

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.
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