keep on referring to these documents and documents show the nda and up payment that is not in dispute this is jonathan turley. they are not on contribution that is no problem there is no problem here. the commission federal elected develop this years ago. there is no problem here. tim scott objective to keep them off the campaign trail here's the wereeading in every state

the five key states we are leading substantially i might add. sad for new york. at a you can possibly think of corrupt judge and highly conflicted me from campaigning he is. pointed. he is a corrupt judge he is a come he ought to let us go out cnn. they are saying there is no case here.

thank you very much. [inaudible] ♪ c-span awash in tissues and government, politics and public policy. first the country coming up tuesday morning nancy altman from social security works the ncato institute discuss the results of the most recent social security trustees report revised incumbency. then neil former chief technologist head of ai policy for the think tanks into talks about research of adrian c-span's "washington journal" joint in the conversation light and is in tuesday morning on c-span, see spent in our free

mobile.org. federal officials testify on the ongoing investor got key bridge house transportation einfrastructure committee earned see spent in our free mobile video app or online at c-span.org.ge these meant as your unfiltered view of government funded by these look like. >> the greatest count on earth is a place you right now we're all facing our greatest challenge that is why spartan working round-the-clock of yours. >> spark light support c-span as television providers. giving you a front receipt too democracy. >> coming up tonight on c-span2 cspan2congressional from former president trump x lawyer fiscal policy current and former government conference.th discussion on u.s. role in the military forces in q2 ai and brookings and to kent and susan

for arranging this. i am really grateful and thanks everyone for coming. don't think you should turn this into a fiscal a summit and solve the room. i have a couple slides which i can see them thereafter on the website. i'm going to go to the slide prettytyct quickly. to hit some of the highlights on thoughts then will hope to leave lots of time for discussion and questions. okay. there is a sense in which the usual slides this one shows the

deficit it's a percentage of gdp. there are some things that are known and familiar the deficit is wide the next slide will be debt and that will be familiar. i want to take on some highlights here. that's really what is unusual. the course but the emergency 2020 fiscal response is largely behind us yet the deficit is

still wide. this is a case before the pandemic as well you can see on the chart just before he deficit in 2019 we had a structural deficit. the economy was strong people throughout the income distribution were seeing rising income. and we had a structural deficit. that

briefly diverged into good news which is not always what people get these days so this is a

chart that shows the change in the deficit outlook from the baseline from the 2023 baseline through february of 2020 or so from may 23 to february of 24, and you can see that the deficit went down and there's a variety of changes. the biggest improvement in the fiscal responsibility act. s that reduced discretionary spending and subsequent legislation in the full year appropriations that essentially has embodied those caps with some adjustments. by statute they project forward discretionary spending so we make no assumption about what a futurebo congress will do and by statute this is projecting discretionary spending forward using that mechanical rule that

gives you the legislative changes. a large part of it is free estimated cost of the green tax provision in the reconciliation bill and then by the taxation and free estimates by the joint committee on taxation it looks like the costs are going to be much higher than was originally estimated. so it offsets some of the budgetary improvement but from baseline to baseline there's an improvement. now what'ss a not in here, i haa whole list of things that are not in the projection that you can see one already and that's we recently enacted a security supplemental of $95 billion to ukraine, taiwan and israel and

that was enacted after the february 24 numbers were locked down. so 95 billion added to the 24 deficit but by statute that is projected forward into the future so mechanically we know that the next baseline update that we published in june would show a wider deficit of two future congress is to turn that into actual spending. this is also fiscal good news. the labor force again preparing our may 23 baseline to february 24 baseline. themo demographic projection and economic projection at the

foundation of the budget baseline and this shows an important change thatpo we maden the demographic projections and there is a sense in which the change tonc the past so it's not what we thought it was because we realized doing the work on the demographic update towards the end of last year, we realize there is a disconnect between the numbers from dhs that the department of homeland security and the number of immigrants released into the interior of the united states. of those numbers seem to be disconnected from the populations that we get from the census. they do a great job and for sure they will get there so this is not a criticism but the demographic update has a huge impact on the economic

projections and therefore on the fiscal productions. this is just one of you a bit looking at the change in the labor force with over 5 million additional workers in the labor force over the budget horizon. and i should say in our projections we have the surge of immigration going from 2022 when it started through 2026. we don't know when it's going to end, so what's the basis of 2026 with a little bit of we aren't sure. there's conditions here and in the country's the regulatory decisions and policy decisions, social media, lots of things and it's something we are just going to have to keep watching and keep our eye on and see how long the immigration surge goes. now there's many impacts of

immigration and what we have in thes budget baseline is a relatively narrow view. our job is the federal budget. so there of course enormous impact from the surge of immigration and that's not in here, that's not in the chart, it's not i in our budgetary statistics. we are certainly aware of it and it's important if you are in denver and local government or civic groups, for example, i want to start by saying it's not in here. the other thing is the impact of immigration on the discretionary spending and things like the border patrol for i example is funded by discretionary

spending. so cvo doesn't have a view about what the future congress will do in terms of providing the resources to the agencies funded byby discretionary spending. so again, that is not in the budget baseline or if it resulted in mortgage discretionary spending in the future. let me tell you what we do have. first the macro is the surge of immigration means a larger labor force and that contributes to gdp. the initial tally for the baseline was at about a 7 trillion-dollar impact on gdp as a nominal gdp over the budget window and that translated according todi the model into about a trillion dollars of additional revenues again over the budget window.

some of the outlay impacts our already in the budget baseline and there's a delay in eligibility for many of the federal benefits, but thanks to the tax code, a new immigrant coming to the surge and humanitarian parole they generally have work authorization within a year. many of them in six months and others soon thereafter so someone who gets say a federal benefit through the tax code through employer-sponsored insurance or a tax credit, but that's in the baseline already. there's other things we are working on now for example many emigrants have a multi-year period before they are eligible for certain benefits. so for example medicaid there's generally a five-year waiting

period for many of these coming in through the surge before they are eligible for most medicaid benefits. there's certain ones that is reimbursement sooner but others there's a delay and that varies by the type of immigrant meaning which programs come in and then which benefit. so that is the work we are doing now and i'm hopeful we are going to have in the spring baseline and put out lots of material with that is the outlay implication of the surge of benefits. sorry, the surge of immigration. the outlay and to say a little bit about the process, if you think about it, what the cost of medicaid to an immigrant seven years from now or in immigrant that arrives in 2226 years after

so 2028. to know that, you have to know the income of that immigrant because medicaid is means tested and you have to know which state are they in because the eligibility varies by expansion and non-expansion states so that is the work we are doing is making projections from today going forward from 2022 going forward of the income impacts and the distributional impact of the surge of immigration and we are working on the productivity impacts where some will start companies and learn and contribute knowledge and have patents and there will be affects on long-term gdp. we are looking at that and the impact on the gdp and inflation and of course it affects both supply and demand. and it also affects demand. immigrants buy things. it helped loosen the tight labor

market but also contributed to the demand so we are looking at the balance between the two. just a few last remarks. at this slide is from our long-term budget outlook and shows changes in the composition of outlays over the next 30 years from 2054. at the top chart is a miracle of the first chart i showed on deficit that shows the right is rising importance and this shows the same thing but over 30 years and the federal outlay is projected to be. i said before more debt, higher interest rates.

calculations, it is an increase, not just here at the dollar increase over the ten year budget window is about two thirds from higher rate and one third from more debt. so that's the top. new is the rising share of the interest outlays after along periodst in which the interest rates were low and policymakers to didn't worry as much about the cost of the debt. then the bottom of the chart shows the rising spending and outlays. and again i think this is familiar but i it's still worthwhile to see, and you can see at the very bottom of the major healthcare programs a lot of that is medicare, medicaid and subsidies for the affordable care act and the aging of the populationpo and strong cost

growth in healthcare and then social security. of course the bulk of the increase as a shareas of gdp in the next ten years and then add moderates and that is why the increase their over the horizon is smaller. i have a couple other charts. i'm going to say one last word and then skip to the first chart and make general remarks. this will set the population growth and again this is the point i want to make is that you can see the immigration surge through 2026 and some 2040 on the population growth is projected to be entirely from immigrants and given the fertility rate, we projected 1.6

now and projected to go up somewhat but still to remain much lower than before the financial crisis. i'm going to skip over. my last chart is on the website about gdp. let me close withew a few broad points. the term f for the budget situation is daunting. there is a sense in which it is yetow more difficult than we shw in the budget of the projection and i was going to go through some of those quickly. certain provisions of the tax act expires next year. it's estimated that extending just the individual revisions that expire would increase the deficit by more than $3.8 trillion over the next ten years including the interest

cost on those provisions. keep in mind that is the budget window that goes through 2024. of course the legislation is enacted next year then the budget window will go to 2035 and in that cost it would be more because it would be one more year with a full cost and at the beginning that doesn't have the full, cost, so we are already at 3.8 trillion to extend the personal provisions and it's more than that and of those dollars, more than half of them are for households below $400,000, so even if they want to extend part, it's still very challenging. i mentioned before the projections by law show the inflation and at the discretionary spending in the baseline declines as a share of

gdp. there is no normative judgments. what the appropriate policy is or how much spending should there. be one border patrolling homeland security, education, housing, all caps things. all ofal that is for the future congress to decide and if it should keep pace with nominal gdp rather thancl declining that would increase the deficit by more than 1.3 over the next ten years. then the security supplemental is $95 billion this year and that will be inflated out with inflation. the monthly budget review released last week noted the administration announced that it will record the estimates in 2024 of more than $100 million, $74 billion for student loans and $33 billion for loans of the

small, business administration. that's $100 billion of additional deficits coming from a past about what a show this year that are not yet in the budget projections. we don't know what future will come.. that could be from policies that were previously announced, but not fullyll modeled. there could be changes from economic conditions, cost of future policies. the administration has begun purchasing to replenish the strategic petroleum reserve. those have not yet been recorded so we expect those outlays to be recorded over the next few years. we are not sure when but we will put them in the projections when they show up. the monthly budget review suggests that spending is running above what we had in our february outlooks of the. medicaid outlays from october to april the first part of the fiscal year are down by about 1% compared to the same period last

year but that means the spending is running at least for medicaid is running above the previous projections because we assess thee decline much more substantially than that as people left medicaid following the endh last march of the pandemic era continuous coverage requirement. we will have updates on medicaid and any other health related outlays in the spring update and we are also going to published an update on the health insurance coverage and this is at the high watermark off insurance coverage between the enhanced subsidies for policies on the exchanges and medicaid continuous coverage. then the social security trust fund exhausted within the budget window there's multiple hundreds of billions of dollars between the resources available in the system and of the benefits that have been promised.

medicare is not much further behind. the situation is a daunting for a variety of reasons that have gone through the numbers are yet more challenging than reflected in the most recent projections coming out in june. >> we will skip ahead. perhaps given the tenor of the comments, i am starting from the

base of information from what is produced and phil has covered a little bit of what i'm going to say because as he said at the end, things are daunting is probably an optimistic way of describing the situation, so i'm just going to highlight a few of these things in my comments. we hear everything he said but when we look at that picture that he had at the end of the debt rising smoothly, we sort of forget that the projections always are smooth, history never is smooth and that should tell us something about the future. this is from last week for the

document for the cost of extending the provisions of the tax cuts and jobs act. if you add it up, it's about $4.5 trillion and if you look at the national debt in the baseline through 2034, it would represent close to a 10% increase in the national debt relative to the baseline. so this is not a small difference. and we need to keep in mind the difference of opinion in washington in terms of what to do about the jobs act is should we have a taxax increase or extended a tax cuts what fraction of the tax cut is going to be extended, more than half were all. in recent history when there are

differences of opinion in washington, everybody can agree on a tax cut. so i think regardless of the configuration of government after the election, we should expect a substantial tax cut at least measured relative to the baseline. that's already going to putin yu well above the baseline. the second thing i want to focus on his immigration and i borrowed two of the slides, but the only difference between the version he showed you end of the version i'm showing as i is i highlighted some of the text having to do with immigration. the fact that there is a big surge unexpected that's been happening in we were wondering

for a while, the economy with 200 or 300,000 a month where is it coming from and now we have some idea. we have had a big surge in immigration. it's basically allowed the economy to continue growing much more quickly than we were anticipating a year or two ago and it's meant that even being in fullec employment we ended up having much more rapid growth than one would normally expect under this condition. the other aspect of this is again all of this going forward, all of this projected to the extent that the populations relatively stable all the growth we are going to get in the population is coming from immigration because given the low rate of fertility and of the aging population, we actually have negative population growth.

and i've highlighted here the period just before the pandemic to remind you of the circumstances regarding immigration were quite different through the end of the teams under the previous, the trump administration and it is pretty obvious that whatever the second biden administration would do regardless immigration is hard to predict they would have much lower immigration. that is not a secret. if we imagine immigration not simply getting over the surge as it is being forecast here in the baseline projection, but going back to where we were in 2018 and 19 ine terms of the rate of immigration, i think that's what you could predict and who knows

what, perhaps even in the second biden administration even in the current administration about the policies. and i think t that would have a verybig effects on the economy. it's really not going to have the kind of growth of that is being projected if we have a sharp clamp down on immigration. the fiscal implications are more complicated because there's costs and benefits, but i think largely in terms of economic activity to the extent that we have a big decline in immigration obviously depends on what happens. interest rates phil eluded to the fact that interest rates are

going up. the average nominal government interest rate is just based on looking at the projected interest that is sort of not the rate but given what they project the governments average interest rate will be on the debt over the next 30 years then you have the growth rate of gdp and as phil mentioned in the recent years it is a difference between the interest rate and growth rate and under this most recent baseline projection, cbo has many more with of the interest rate below the growth rate, which all other things being equal is a positive thing in terms of the way that the debt

accumulates. the high primary deficit is going to overcome this in terms of what happens to the debt but it would be even more if it is. in terms of where we are going, this is what has happened in the last year. phil talked about the good news between the spring of 2023 end of the spring of 2024 in terms of the forecast largely due to reductions in the projected to spending. this is the bad news which would be increases in the interest rate being projected going forward. this year relative to last year which is higher but the other thing to keep in mind and to look for in the next version of the cbo baseline is this is the market year on the ten year treasuries since the beginning of 2024 and it's really gone up

substantially. now of course only one component of o the interest of the debt service because of the structure of the national debt but this is obviously not going to be good news in terms of what the next forecast tells us about debt service. it's going to be a lot higher of course taking into account the fact that government spending will be higher because the baseliney is generally very optimistic about what is happening and as mentioned in the recent weeks we've got two major shocks upward in the defense bill and the student debt release. one has to assume more of the same is coming in both of those areas and that is going to make

discretionary spending over the nextxt several years much higher than it has been projected in the most recent baseline. the final point i want to make has to do with shocks and the smooth projection that you see here so there's historical debt to gdp and then the projections inin terms of the projected debt to gdp ratio. i want to make an observation which is if you were to describe sort of what shocks to the economic situation caused the data to move significantly, you would describe the path where one as in good times since the early 2,000 us, so you look at the last 22, 23 years the end of

the recession. in good times the debt to gdp ratio just doesn't move very much. you might hope that they would go down, and that would have been true in the 1950s, but since there's so much underlying push upward through the programs, it isn't gaining any ground so in good times it's so important to stay constant. knowing you have a recession, things really go badly. in the last two recessions, which admittedly were not variety recessions, neither of them. we have had a sharp increases in the debt to gdp ratio. and after each one, the debt to gdp ratioju stated constant aftr that. then you have a shock and it

stays constant. so you might think things can be worse than projected, things can be better than projected, and given that they would balance the trajectory that the baseline is showing of the debt to gdp ratio, it is a pretty good guess. but i think i that's wrong. the way to think about it is if things go well, and remember they don't predict recession, so thein rising debt to gdp ratio, that is good at times, that is i'm sort of average. that's good timest and so if tht happens, we are not even going to be c staying constant the way we have after recent recessions. the debt to gdp ratio is going to be going up. so it's either going to be going up or going up a lot and those are the two possibilities. and given that, still may need to rethink that ceiling of 250%

because otherwise you're going to have to have a footnote explaining why the end of the series is cropped from the picture. for the next nine minutes we have a hard stop at 9:50. back to the surplus under zero interest and to find a way to prove that he could find a trillion dollars where does all that interest come from. i have a lot of political --

>> sure. the budget arithmetic even the debt to gdp was going down in the second half of the '90s there's still debt and interest rates with outlays so it's still there it's just much smaller than the share of gdp. in terms of the more substantive response is has the scenario been played forward. has the deficit gone to zero even negative then the outlays of course would have gone even smaller and i suppose at any point there may have been some federal debt and some interest outlays but it would have been to zero. but it is an important point

just the difference in outlook. you skip the good years, the fiscal years before that. can you talk about the 250% problem what makes you latch onto that number and not somethinge smaller? is there other research that suggests that's the sort of tipping point and the people that also cited japan i think are above 250, 250 may not be a problem.nd if you could expand on that a little bit. >> at the very end when he

finishes that, whatever the footnote he suggested, we could put that in japanese. you're right, there is no hard and fast point at which our data becomes impossible and markets will look at and say that was the straw or the piece of legislation that made me give up. and of course the u.s. is in an enviable position is certainly compared to the rest of the world so the 250% is not a normative statement. it's just the idea that at some point we have to think about what the models are telling us as the debt rises and the cost of the debt rises and we haven't gotten there yet or thought it

through. at some point will you know we need to think about things differently. on the y-axis sometimes when people don't started with a zero is how theyo mislead with of the chartti and sometimes we do it d we always put these on the brakes but that's something we might think about in the future. >> two quick things. first of all, i think for japan a special you need to be careful about the difference between the growth. japan has all the numbers now that is publicly held debt and in japan i think an even larger share is held internally in the government. so it's still much higher than

in the u.s. but i don't think that it's quite as sometimes suggested. the other thing i want to say about all this in terms of where it ends i usually think of the quote by the famed international economist which is crises take longerom than you expect it to happen and then they happen faster than you expected. that's not veryy helpful in ters of talking about how far we can go. but i don't think one can be sanguine about things being calm. with that itll will take a while for them to unravel because i think once they start unraveling they can unravel pretty quickly. >> we could be in the other direction. some good news is if there is something that gives markets more confidence, i suppose we would have the opposite of the rate going down if they see some sort of a deficitt reduction. >> one of the things that is

causing interest rates to go up in the terminology it's probably higher than we were thinking years ago, the national rate of interest where the fed is going to be setting the federal funds rate to have a noninflationary position and we were thinking a few years ago we thought of the stagnation and the decline in the national rate of interest. i have a sense that there is a general consensus we probably overdid it thinking about the decline so certainly true the confidence in fiscal responsibility would help keep interest rates down, but i don't think we are going to get as much of a bonus from low interest rates as we got a few years ago.

>> [inaudible] is this a dynamic or constant chartch that shows the additionl revenues? >> thank you. i'm glad you asked that. in 2018, they published in an analysis of the tax act that included that a dynamic analysis and s that showed about 20% of e cost of the tax reductions was

sett by the positive dynamic feedback that improved incentives meantre stronger gdp growth that flowed back into revenues. so it didn't pay for it self but there was positive feedback. the initial impact seemed to match what was in the analysis of the business investment accelerated early in 2018. the challenge had been a series of trade policy options that had the opposite effect on the business investment and of course the pandemic and then the period of high inflation starting in 2021 so as we tax the nominal income basis to high inflation means the number of nominal dollars of revenue would be high. if that is the challenge we know

a lot of the interest in the and i was assigned we are working to be able to analyze that. we follow the house rules but we will do much more of this is there's legislative proposals to regarding the 2017 act. >> 20% of the tax cuts came back -- >> the analysis showed about 20% of the tax cut was offset by the stronger revenue generated at the time. that's right. what the effect of the economy was overall. >> that was based on the projection at the time of the