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.

Research

The Hidden Costs of Tax Compliance Jason J. Fichtner, Jacob Feldman \| May 20, 2013 The tax code, far beyond simply collecting revenue to fund the operations of the federal government, attempts to perform policy and political functions as well. This paper does not examine the normative value of these provisions, but instead examines the hidden costs of today’s tax code: time and money spent submitting tax forms, foregone economic growth, lobbying expenditures, and gaps in revenue collection. These problems grow larger as the Internal Revenue Code becomes more complicated and temporary.[1] Based on the studies reviewed in this paper, we estimate that hidden costs range from $215 billion to $987 billion and that the tax code results in a $452 billion revenue gap in unreported taxes. The economic costs are substantial relative to the $2.45 trillion in revenues raised by the federal government in 2012.	Defense Spending and the Economy Robert J. Barro , Veronique de Rugy \| May 07, 2013 While the impact of across-the-board federal defense-spending cuts on national security may be up for debate, claims of these cuts’ dire impact on the economy and jobs are grossly overblown.
The Case for Across-the-Board Spending Cuts Jeff Bergner \| Mar 26, 2013 Across-the-board cuts are often referred to as using a “meat ax,” as opposed to more carefully targeted cuts, which are compared to using a “scalpel.” Interest group pressure will weigh in against targeted cuts, however, and especially in our current divided government, across-the-board cuts are the only realistic way to cut spending.	Welfare Block Grants as a Guide for Medicaid Reform Daniel Sutter \| Mar 21, 2013 Driven by the need to reform unsustainable entitlement programs, policymakers today are looking to the successful example of welfare reform—specifically, to its block grants to states. To inform this discussion, a new Mercatus Center at George Mason University study by Daniel Sutter reviews arguments in the debate over block grants versus matching grants for joint federal-state programs, examines the effects of shifting control of welfare programs to the states, and considers how the lessons from welfare reform can inform the current debate about Medicaid block grants.
Austerity: The Relative Effects of Tax Increases versus Spending Cuts Veronique de Rugy, Alberto Alesina \| Mar 07, 2013 There is still significant debate about the short-term economic impact of fiscal adjustments. However, as we will show in this paper, important lessons have emerged.	The Affordable Care Act's Optional Medicaid Expansion: Considerations Facing State Governments Charles Blahous \| Mar 05, 2013 In the wake of a 2012 Supreme Court ruling, states face complex decisions concerning whether to expand Medicaid coverage to the full extent envisioned in the Affordable Care Act (ACA, commonly referred to as Obamacare). With the federal government no longer able to coerce expansion, states must base their decisions on value judgments that incorporate each state’s unique budgetary circumstances, the needs of its uninsured population, and the incentives established by interactions among the ACA’s provisions.

More Research

Testimony & Comments

Reforming Social Security to Better Promote Retirement Security 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.	The Effect of Tax Increases and Spending Cuts on Economic Growth Veronique de Rugy \| May 22, 2013 Good morning, Chairman Murray, Ranking Member Sessions, and members of the committee. Thank you for the chance to discuss the effect of tax increases and spending cuts on economic growth. I appreciate the opportunity to testify today.
The Challenges of Producing Economic Data for the 21st Century Keith Hall \| Jun 19, 2012 In his testimony, Keith Hall discusses the economic statistics produced by the federal statistical system. He comments on some of the challenges that the current system is struggling to meet and a handful of specific inadequacies in data coverage.	Assessing the Department of Energy Loan Guarantee Program Veronique de Rugy \| Jun 19, 2012 For obvious reasons, more than any other recent events, the waste of taxpayers’ money due to Solyndra’s failure has attracted much attention. However, the problems with loan guarantees are much more fundamental than the cost of one or more failed projects.
What Can Government Do To Create Jobs? Matthew Mitchell \| Feb 01, 2012 Matthew Mitchell testified before the House Committee on Education and the Workforce on what the government can do to create more jobs.	Increasing America’s Competitiveness by Lowering the Corporate Tax Rate and Simplifying the Tax Code Jason J. Fichtner \| Jan 31, 2012 Jason Fichtner testified before the Senate Committee on Finance about ways to increase America's competitiveness through tax reform.

More Testimony & Comments

Research Summaries & Toolkits

Analysis of Legislation in Order to Reduce Spending

Veronique de Rugy, Jason J. Fichtner, Matthew Mitchell | Sep 12, 2011

This toolkit provides members and their staffs with tools to help them evaluate spending bills and start the process of reducing government spending.

Performance and Accountability

Jerry Ellig, Jason J. Fichtner, Maurice P. McTigue | Sep 12, 2011

Congress should conduct rigorous oversight of federal agencies and programs not just to prevent waste, fraud, and abuse, but also because current levels of spending are unsustainable, making spending cuts inevitable.

Charts

Renewable-Energy Subsidies and Electricity Generation

Veronique de Rugy | May 21, 2013

This chart uses data from the US Energy Information Administration to compare federal investments in green energy and the share of green energy in electricity generation.

More Charts

Experts

Thomas Stratmann

Mercatus Center Scholar

Professor of Economics, George Mason University

Thomas Stratmann is a scholar at the Mercatus Center and a professor of economics at George Mason University. His primary research interests are political economy, fiscal policy, law and economics, health economics, and experimental economics.

David M. Primo

Associate Professor of Political Science and Business Administration, University of Rochester

David M. Primo is a senior scholar at the Mercatus Center and an associate professor of political science and business administration at the University of Rochester. His current research focuses on the value of legislative “pork” for reelection, the politics of judicial appointments, and the connection between formal models and data analysis.

Garett Jones

Mercatus Center Senior Scholar

BB&T Professor for the Study of Capitalism, Mercatus Center

Associate Professor of Economics, George Mason University

Garett Jones is a senior scholar at the Mercatus Center at George Mason University. His primary research interests include macroeconomics, monetary economics, and the microfoundations of economic growth.

Donald J. Boudreaux

Martha and Nelson Getchell Chair for the Study of Free Market Capitalism

Senior Education Advisor

Professor of Economics, George Mason University

Donald J. Boudreaux is a professor of economics at George Mason University.

Steven Horwitz

Affiliated Senior Scholar

Charles A. Dana Professor of Economics, St. Lawrence University

Steven Horwitz is a Mercatus Center Affiliated Senior Scholar, the Charles A. Dana Professor of Economics and department chair at St. Lawrence University in Canton, NY. He completed his MA and PhD in economics at George Mason University and received his A.B. in economics and philosophy from The University of Michigan.

Charles Blahous

Senior Research Fellow

Public Trustee for Social Security and Medicare

Charles Blahous is a senior research fellow at the Mercatus Center and public trustee for Medicare and Social Security. His primary research interests include retirement security, with an emphasis on Social Security and employer-provided defined benefit pensions, as well as federal fiscal policy, entitlements, demographic change, economic stimulus, financial market regulation, and health care reform.

Todd Zywicki

Mercatus Center Senior Scholar

GMU Foundation Professor of Law, George Mason University School of Law

Senior Fellow at the F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics

Todd Zywicki is a senior scholar at the Mercatus Center and a George Mason University Foundation Professor of Law at George Mason University School of Law. His primary research interests are consumer credit regulation, bankruptcy, credit cards, and mortgages.

Andrea Castillo

Program Associate

Andrea Castillo is a program associate at the Mercatus Center at George Mason University.

Kelsey Pasquarell

Program Associate, SBI

Kelsey Pasquarell is a program associate for Spending and Budget Initiative at the Mercatus Center at George Mason University.

Bruce Yandle

Mercatus Center Distinguished Adjunct Professor of Economics

Dean Emeritus, Clemson College of Business and Behavioral Sciences

Bruce Yandle is a distinguished adjunct professor of economics with the Mercatus Center at George Mason University. His primary research interests are public choice, regulation, and free market environmentalism. He is dean emeritus of the Clemson College of Business and Behavioral Sciences.

Veronique de Rugy

Senior Research Fellow

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. Her primary research interests include the federal budget, homeland security, taxation, tax competition, and financial privacy issues.

Tyler Cowen

General Director

Professor of Economics, George Mason University

Tyler Cowen is the general director at the Mercatus Center and the Holbert C. Harris Professor of Economics at George Mason University.

Maurice P. McTigue

Vice President for Outreach

Distinguished Visiting Scholar

Maurice McTigue is vice president for outreach at the Mercatus Center at George Mason University. He is director of the Mercatus Center's Government Accountability Project and a member of its Spending and Budget Initiative and State and Local Policy Project.

Jerry Ellig

Senior Research Fellow

Jerry Ellig is a senior research fellow at the Mercatus Center at George Mason University. His primary research interests include the federal regulatory process, economic regulation, and telecommunications regulation.

Jason J. Fichtner

Senior Research Fellow

Jason J. Fichtner is a senior research fellow at the Mercatus Center. His primary research interests include Social Security, federal tax policy, federal budget policy, retirement security, and policy proposals to increase saving and investment.

Robin L. Walker

Associate Director of Outreach

Robin Walker is associate director of Outreach at the Mercatus Center at George Mason University. She is responsible for connecting Mercatus scholars and their research to federal policy makers, conveying new ideas to address current policy challenges.

Arnold Kling

Mercatus Center Affiliated Senior Scholar

Member, Financial Markets Working Group

Former Economist, Federal Reserve and Freddie Mac

Arnold Kling is an affiliated senior scholar at the Mercatus Center at George Mason University where he is also a member of the Financial Markets Working Group. He draws on his experience at Freddie Mac and the Federal Reserve to increase understanding of monetary policy, the regulation “anomaly,” and the inside workings of America's federal financial institutions.

Robert E. Raffety

Associate Director for Policy Research

Adjunct Professor, George Mason University School of Law and Department of International and Public Affairs

Rob Raffety is associate director of the Regulatory Studies Program and the Government Accountability Project at the Mercatus Center at George Mason University.

Jerry Brito

Senior Research Fellow

Adjunct Professor of Law, George Mason University

Jerry Brito is a senior research fellow at the Mercatus Center and directs the Technology Policy Program. His primary research interests are technology and telecommunications policy, government transparency and accountability, and the regulatory process.

Eileen Norcross

Senior Research Fellow

Eileen Norcross is a senior research fellow at the Mercatus Center at George Mason University. Her primary research interests include fiscal federalism and institutions, state and local governments, and economic development.

Matthew Mitchell

Senior Research Fellow

Adjunct Professor of Economics, George Mason University

Matthew Mitchell is a senior research fellow at the Mercatus Center at George Mason University and the lead scholar on the Project for the Study of American Capitalism. His primary research interests include economic freedom and economic growth, public choice economics, and the economics of government-granted privileges to businesses.

Videos

Veronique de Rugy Discusses the Internet, Taxing and "Fairness" on The Blaze

Veronique de Rugy | April 22, 2013

Veronique de Rugy Discusses the Internet, Taxing and "Fairness" on The Blaze…

Podcasts

Antony Davies Discusses the GDP Report on WBAL

Antony Davies | April 26, 2013

Antony Davies Discusses the GDP Report on WBAL

Download the MP3

Recent Events

March Madness Reception

| 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.

More Recent Events

The Hidden Costs of Tax Compliance Jason J. Fichtner, Jacob Feldman \| May 20, 2013 The tax code, far beyond simply collecting revenue to fund the operations of the federal government, attempts to perform policy and political functions as well. This paper does not examine the normative value of these provisions, but instead examines the hidden costs of today’s tax code: time and money spent submitting tax forms, foregone economic growth, lobbying expenditures, and gaps in revenue collection. These problems grow larger as the Internal Revenue Code becomes more complicated and temporary.[1] Based on the studies reviewed in this paper, we estimate that hidden costs range from $215 billion to $987 billion and that the tax code results in a $452 billion revenue gap in unreported taxes. The economic costs are substantial relative to the $2.45 trillion in revenues raised by the federal government in 2012.	Defense Spending and the Economy Robert J. Barro , Veronique de Rugy \| May 07, 2013 While the impact of across-the-board federal defense-spending cuts on national security may be up for debate, claims of these cuts’ dire impact on the economy and jobs are grossly overblown.
The Case for Across-the-Board Spending Cuts Jeff Bergner \| Mar 26, 2013 Across-the-board cuts are often referred to as using a “meat ax,” as opposed to more carefully targeted cuts, which are compared to using a “scalpel.” Interest group pressure will weigh in against targeted cuts, however, and especially in our current divided government, across-the-board cuts are the only realistic way to cut spending.	Welfare Block Grants as a Guide for Medicaid Reform Daniel Sutter \| Mar 21, 2013 Driven by the need to reform unsustainable entitlement programs, policymakers today are looking to the successful example of welfare reform—specifically, to its block grants to states. To inform this discussion, a new Mercatus Center at George Mason University study by Daniel Sutter reviews arguments in the debate over block grants versus matching grants for joint federal-state programs, examines the effects of shifting control of welfare programs to the states, and considers how the lessons from welfare reform can inform the current debate about Medicaid block grants.
Austerity: The Relative Effects of Tax Increases versus Spending Cuts Veronique de Rugy, Alberto Alesina \| Mar 07, 2013 There is still significant debate about the short-term economic impact of fiscal adjustments. However, as we will show in this paper, important lessons have emerged.	The Affordable Care Act's Optional Medicaid Expansion: Considerations Facing State Governments Charles Blahous \| Mar 05, 2013 In the wake of a 2012 Supreme Court ruling, states face complex decisions concerning whether to expand Medicaid coverage to the full extent envisioned in the Affordable Care Act (ACA, commonly referred to as Obamacare). With the federal government no longer able to coerce expansion, states must base their decisions on value judgments that incorporate each state’s unique budgetary circumstances, the needs of its uninsured population, and the incentives established by interactions among the ACA’s provisions.

Reforming Social Security to Better Promote Retirement Security 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.	The Effect of Tax Increases and Spending Cuts on Economic Growth Veronique de Rugy \| May 22, 2013 Good morning, Chairman Murray, Ranking Member Sessions, and members of the committee. Thank you for the chance to discuss the effect of tax increases and spending cuts on economic growth. I appreciate the opportunity to testify today.
The Challenges of Producing Economic Data for the 21st Century Keith Hall \| Jun 19, 2012 In his testimony, Keith Hall discusses the economic statistics produced by the federal statistical system. He comments on some of the challenges that the current system is struggling to meet and a handful of specific inadequacies in data coverage.	Assessing the Department of Energy Loan Guarantee Program Veronique de Rugy \| Jun 19, 2012 For obvious reasons, more than any other recent events, the waste of taxpayers’ money due to Solyndra’s failure has attracted much attention. However, the problems with loan guarantees are much more fundamental than the cost of one or more failed projects.
What Can Government Do To Create Jobs? Matthew Mitchell \| Feb 01, 2012 Matthew Mitchell testified before the House Committee on Education and the Workforce on what the government can do to create more jobs.	Increasing America’s Competitiveness by Lowering the Corporate Tax Rate and Simplifying the Tax Code Jason J. Fichtner \| Jan 31, 2012 Jason Fichtner testified before the Senate Committee on Finance about ways to increase America's competitiveness through tax reform.