Spending and Budget Initiative

Spending and Budget Initiative

The Spending and Budget Initiative draws on a team of university economists and policy practitioners with diverse expertise in government spending and budget reform, assembled to provide policy makers an honest understanding of budgets, spending, deficits, and debt and how these issues relate to economic growth and progress. Mercatus scholars work alongside policy makers to identify fiscally responsible policies and actionable options for budget reform.


Brian Blase | Nov 19, 2015
A new study for the Mercatus Center at George Mason University examines the reasons behind the ACA exchanges’ failure to meet widespread expectations. The study explains the likely impact of this failure on health insurance prices and risk pool stability, bringing into question the law’s future prospects of survival without significant revisions.
Peter T. Calcagno, Edward López | Nov 12, 2015
A new study published by the Mercatus Center at George Mason University argues that, beginning late in the 19th century, the informal rules that govern fiscal policy began to reward policymakers for increasing spending—even for increasing it beyond the capacity of federal revenues, and therefore at the cost of chronic deficits. Despite numerous legislative attempts to constrain spending over the past 40 years, these informal rules have trumped formal constraints, and the deficit problem has marched steadily on.
James C. Capretta, Joseph Antos | Oct 27, 2015
Proponents of the Affordable Care Act (ACA) have frequently pointed to official cost estimates projecting that the law will reduce federal budget deficits. Much less attention has been paid to the primary reason for this favorable outlook: the law’s heavy reliance on indexing important provisions to restrain spending and increase revenue. These components of the ACA will automatically impose perpetual, across-the-board cuts on payments to certain institutional medical providers; increase premiums for lower-income households; and raise taxes on an ever-expanding segment of taxpayers.
Gopi Shah Goda, John B. Shoven, Sita Nataraj Slavov | Oct 21, 2015
A study published by the Mercatus Center at George Mason University offers a new and important perspective on how Social Security Disability Insurance (SSDI) creates work disincentives for older healthy workers. The study finds that the value of SSDI benefits, relative to taxes paid, declines as an individual grows older. In particular, SSDI discourages individuals from earning additional income starting around age 40 and from working at all beyond age 60. The paper also reviews a policy option that could reduce this disincentive for older workers. To read the study and learn more about its authors—Gopi Shah Goda of Stanford University, John B. Shoven of Stanford and the National Bureau of Economic Research (NBER), and Sita Nataraj Slavov of George Mason University and NBER—please see “Work Incentives in the Social Security Disability Benefit Formula.”…
Roger Feldman, Bryan Dowd, Robert Coulam | Oct 08, 2015
A new study published by the Mercatus Center at George Mason University assesses the numerous problems with Medicare’s price calculations and looks at how they affect prices in commercial insurance policies. The study proposes an arrangement of competitive bidding on bundles of services as a promising alternative to Medicare’s price-fixing regime.
David E. Bernstein | Sep 30, 2015
A new study published by the Mercatus Center at George Mason University describes how such an approach in Medicare Part B—which covers outpatient services such as office visits and preventive care—could enhance doctors’ participation in the program, expand choices for beneficiaries, boost innovation, and make prices more responsive to market forces. Below is a brief summary of this analysis. Please see “Restoring Freedom of Contract between Doctor and Patient in Medicare Part B” to read the entire study and to learn more about its author, David E. Bernstein, the George Mason University Foundation Professor at George Mason University School of Law.

Testimony & Comments

Jason J. Fichtner | Sep 30, 2015
Academic research and some anecdotal evidence suggests that the current budget rule of use it or lose it is not optimal and may be encouraging wasteful spending of taxpayer dollars. The question remains: If such spending is indeed wasteful, what can be done to reduce it?
David M. Primo | Jul 28, 2015
My three-part message today is this. First, Congress should treat the budget process as a means, not an end, and enact reforms accordingly. Second, given the fiscal challenges facing the country, now is not the time for minor tweaking. Instead, now is the time to think big and craft a process that drives legislators to produce credible and sustainable fiscal policy by constraining federal spending both today and tomorrow. Third, any reform should include effective enforcement mechanisms, preferably constitutional in nature, to prevent the new process from suffering the same fate as the current one.
Veronique de Rugy | Mar 24, 2015
Policymakers who are interested in supporting the entrepreneurs and companies that will deliver the next generation of energy supplies and products should focus their attention on correcting the federal government’s hostile tax climate and dispense with the futile hopes of outsmarting the marketplace.
Neil Meredith | Dec 22, 2014
This comment considers the potential impact of the Office of Personnel Management’s (OPM) proposed rule change to the Multi-State Plan Program (MSP) for the affordable insurance exchanges created through the Patient Protection and Affordable Care Act of 2010. The purpose of the proposed rule is to further explain OPM’s direction in meeting the statutory requirements of the MSP program concerning health issuers that establish an MSP option with OPM.
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.

Research Summaries & Toolkits


Veronique de Rugy | Nov 18, 2015
The Bipartisan Budget Act of 2015, freshly signed into law by President Obama, suspends the $18.1 trillion federal debt ceiling until March 2017. It also busts the 2011 Budget Control Act—which I previously discussed—for the second time. It does so by raising the caps on discretionary funding by $50 billion for fiscal year (FY) 2016 and $30 billion for FY 2017.



Douglas Holtz-Eakin | October 14, 2015
Douglas Holtz-Eakin discusses incentives for broader health insurance coverage for preexisting conditions on CSPAN’s Washington Journal.


Veronique de Rugy | November 02, 2015
Veronique de Rugy discusses the challenges that Paul Ryan will face as the new Speaker of the House as well as the current state of the budget deal on WITC radio (Connecticut).

Recent Events

| March 14, 2013
Please join us for a casual reception where you can take a break from March Madness and meet some of our scholars who can provide the kind of practical information you need to be most effective in your work.


| Sep 29, 2015
In a new set of essays commissioned by the Mercatus Center at George Mason University, seven leading policy experts share innovative ideas on how to solve the pre-existing condition challenge. While their approaches exhibit differences as well as similarities, they are unified in their pursuit of a humane, equitable, fiscally sustainable solution to a conundrum that has driven and strained the entire post–World War II healthcare debate.
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