Today, the Office of Management and Budget (OMB) released the 2017 Mid-Session Review (MSR), which updates the Administration’s estimates for outlays, receipts, and the deficit in light of economic, legislative, and other changes that have occurred since the President’s 2017 Budget was released in February.
Under the President’s leadership, Federal deficits have fallen by nearly three-quarters as a share of the economy since 2009—the most rapid sustained reduction since just after World War II. The 2016 deficit is now projected to be 3.3 percent of Gross Domestic Product (GDP), or $600 billion, which is $16 billion lower than the Administration projected in February. The President’s Budget builds on this fiscal progress, achieving $2.8 trillion of deficit reduction over the next decade, mainly from smart health, tax, and immigration reforms. The MSR estimates that the President’s policies will drive the deficit down to 2.3 percent of GDP in 2017 and keep it below 3 percent of GDP over the next ten years. The MSR demonstrates that the President’s Budget achieves the key goal of fiscal sustainability by stabilizing Federal debt as a share of the economy and putting it on a declining path for the next decade.
At the same time, thanks to the determination and resilience of the American people coupled with the Administration’s efforts, the U.S. economy continues to be an engine of job growth and economic expansion, outpacing other advanced economies in recovery from the Great Recession. American businesses have added 14.8 million new jobs since February 2010. The unemployment rate has been cut by more than half since 2009. America has made the largest investments in clean energy in our history, and we are less reliant on foreign oil than at any point in the previous four decades. Under the Affordable Care Act (ACA), health care prices have risen at the slowest pace in 50 years, while the rate of uninsured Americans has dropped to the lowest level on record.
The health care cost slowdown has been critical in putting the Nation on a sound fiscal path. Based on current budget estimates, aggregate projected Federal health care spending for 2020 has decreased by $224 billion, above and beyond the deficit reduction directly attributed to the ACA when it was passed in 2010. Also, since 2009, the estimate of the Medicare Hospital Insurance Trust Fund insolvency date published in the Trustees Report has been pushed back from 2017 to 2028, an 11 year improvement due in large part to Medicare payment reforms enacted in the ACA. The Center for Medicare and Medicaid Innovation, which was created by the ACA, will make further progress in reducing health costs in the years ahead as it tests and scales up additional alternative payment models that incentivize quality and efficiency, as will implementation of the bipartisan Medicare Access and CHIP Reauthorization Act reforms. But, even the progress made to date marks a significant achievement in implementing reforms to our health care system that contribute to slowing the growth in health care costs, while at the same time providing affordable, high-quality coverage to millions more Americans.
Over the last seven years, the Administration and the American people have worked to rebuild our economy and ensure that it is the strongest, most durable economy in the world. The President’s Budget builds on that progress. It makes critical investments in our domestic and national security priorities while adhering to the discretionary funding levels agreed to for 2017 in the Bipartisan Budget Act of 2015. The Budget also finishes the job the past two bipartisan agreements started by preventing the return of harmful sequestration funding levels in 2018 and beyond for both defense and non-defense spending, replacing the savings by closing tax loopholes and reforming tax expenditures, and with smart spending reforms.
The President’s Budget shows that investments in growth and opportunity are compatible with putting the Nation’s finances on a strong and sustainable path. It provides the resources to accelerate the pace of innovation; give everyone a fair shot at opportunity and economic security; and advance our national security and global leadership – meeting our greatest challenges not only for the year ahead, but for decades to come.
The Administration urges Congress to enact appropriations that advance these goals – appropriations that adhere to the bipartisan agreement reached last fall; fully support economic growth, opportunity, and our national security priorities; and are free of problematic ideological provisions that are beyond the scope of funding legislation. Congress also should swiftly pass a bipartisan bill that provides emergency supplemental funding to protect the American people from the Zika virus.