Federal Budget Citizens Guide

www.pgpf.org

July 2008

The State of the Union’s Finances ✯ A Citizen’s Guide to the Financial Condition of the United States Government

The Peter G. Peterson Foundation

A Citizen’s Guide

Executive Summary

Our Fellow Americans, This Citizen's Guide is intended to provide a clear and concise summary of where our nation stands financially and where it is headed fiscally. The facts are clear and compelling—the federal government’s financial condition is worse than advertised and we are on an imprudent, irresponsible and unfair path. Washington policy makers are mortgaging the future of our country, children and grandchildren. As the graph on this cover demonstrates, tough choices will be required sooner rather than later because time is not currently on our side. What do we as a country need to do? We need to: stop digging our fiscal hole; reform Social Security, Medicare and other entitlement programs to reflect Americans’ longer lifespans and economic realities; constrain other spending growth; reform our tax system while generating more revenue; engage in comprehensive health care reform; increase national saving; and elect responsible leaders.

✯ The State of the Union’s Finances Americans should only expect the federal government to do what they are willing to pay for it to do. During the last 50 years, we’ve balanced the federal budget only six times. Given our strong economy, lenders, both domestic and foreign, have thus far been willing to finance our national debt. However, in light of projected deficit and debt burdens, this may change. Federal Deficits (Percentage of GDP)1

This guide is intended is to help inform you of the nature and seriousness of our nation's fiscal challenge. On pages 21-24, you will find a description of what’s at stake, a proposed path forward, and a series of actions you can take. Only you, the voters, can hold current and prospective elected officials accountable for taking steps that will help to ensure that our collective future is better than our past.

Hon. Peter G. Peterson Chairman of the Board

Hon. David M. Walker President and CEO 1See the endnote for a description of the assumptions underlying the long-term projections

© Peter G. Peterson Foundation July 2008

used in the Guide. Gross domestic product, or GDP, is a measurement of all goods and services produced domestically each year.

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Total Federal Debt (Percentage of GDP)

A Citizen’s Guide

Without reform, federal deficits and debt will rise so high relative to gross domestic product (GDP) that they will threaten our economic strength, our international status, our standard of living, and eventually, our national security. Arguably, we are already getting a taste of what that future will be like. Since the middle of 2007, problems in the U.S. housing sector have illustrated what happens when lenders lose confidence in borrowers. If our ability to manage our nation’s fiscal affairs is called into question, we are likely to face even more severe economic challenges, including sharply higher interest rates, further downward pressure on the dollar, higher prices for oil, food and other necessities, and greater unemployment.

Most of the 77 million post-World War II baby boomers (representing one-fourth of the U.S. population) are still working, but some are beginning to retire. As boomers retire, federal spending for Social Security and especially Medicare, given rapidly rising health care costs, will grow dramatically. As they do, younger workers—our children and grandchildren—will ultimately have to foot the bills. To lighten their load, we must mend our fiscally irresponsible ways, change current federal programs and tax policies, and create a climate that is more favorable to future economic growth and good government. If we do nothing, in the coming years the budget will have little room to address emerging national priorities and real emergencies. 2

What needs to be done? Simply stated, our elected officials must start to close the gap between spending and revenues that results primarily from large and growing unfunded promises for Social Security and Medicare. Projections show that by 2027, if revenues stay at 18.3 percent of GDP—the level we are used to— they will not even cover net interest, Social Security, Medicare and Medicaid. The federal government will have to borrow to pay for all other activities including education, national defense and homeland security. Or, we will have to do without those other programs. We don’t really have a choice. Borrowing at the levels projected is not an option. The sooner we get started, the better because time is not currently in our favor. Acting sooner will lessen the degree of change required, allow more time for transition, and reduce the risk of a major economic crisis. We cannot afford to wait for a crisis. By then, some options will be foreclosed, the cost of adjustment will be more severe, and the ensuing hardship on Americans much greater than if we act now. See pages 21-24 to learn what you can do.

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✯ As deficits escalate and federal debt grows, interest costs increase and get added to the outstanding debt. The result? Absent reforms, within a little more than 25 years, interest will become the largest single expenditure in the federal budget. ✯ The federal government will be forced to forego investment opportunities that could strengthen the nation’s future social and economic well-being. ✯ The decisions will only get more difficult as the interests of aging baby boomers increasingly diverge from those of younger generations. We must work together now to develop fair solutions that will avoid a financial train wreck. Long-Term Projections of Federal Spending Relative to Historic Average Revenues (Percentage of GDP)

A Citizen’s Guide

The Federal Budget The federal budget is a key instrument in federal policy making. Through the budget process the Congress and the President determine national priorities and allocate resources among the many competing needs. They also decide how to finance those decisions, primarily through collecting resources from individuals and businesses through taxes and borrowing. ✯ Over the last 40 years, revenues have averaged 18.3 percent of GDP, while spending has averaged 20.6 percent of GDP, resulting in an average deficit of 2.3 percent of GDP. ✯ Over the next 40 years, projections of current policy show a sharply widening gap between projected spending and historical levels of revenue. Federal Spending and Revenues (Percentage of GDP)

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The Peter G. Peterson Foundation

✯ In 2007, the federal government spent over $2.7 trillion, collected almost $2.6 trillion in revenues, and ran a total deficit of $162 billion ($343 billion if Social Security’s surplus is excluded). ✯ In 2008, the Congressional Budget Office projects a deficit of $357 billion ($553 billion excluding the Social Security surplus). That estimate reflects the impact of the economic slowdown and legislated stimulus efforts, but not pending supplemental funding for operations in Iraq, Afghanistan and other purposes that could add more than $180 billion in deficit spending over the next two years. The Federal Budget in Fiscal Year 2007 (Billions of dollars)

Spending Federal spending is divided into five major components: net interest, Social Security, Medicare and Medicaid, national defense, and everything else. ✯ Since the 1960s, the decline in defense spending as a share of the budget and as a share of GDP has been offset by the growth in entitlements (e.g., Social Security, Medicare and Medicaid) and other mandatory spending (e.g., agriculture subsidies, unemployment benefits and civilian and military pensions and health benefits). Currently, defense is about 20 percent of the budget (4 percent of GDP), including the cost of operations in Iraq and Afghanistan and the war on terrorism. Composition of Federal Spending (Percentage of total spending)

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✯ Over the same period, non-defense discretionary spending has averaged about 20 percent of the budget. It includes many programs that directly affect our communities and our families: law enforcement and border protection, elementary and secondary school aid, national parks and museums, highways and other transportation programs, disaster assistance, science and medical research programs, and foreign aid.

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Composition of Federal Revenues (Percentage of total revenues)

Revenues On the revenue side of the budget, in 2007 the federal government collected almost 80 percent of its total receipts through individual income taxes (45 percent) and social insurance payroll taxes (34 percent). ✯ Income taxes are progressive: higher income earners are taxed at higher marginal rates. In 2005 (the latest year data are available) the top 20 percent of earners paid 86 percent of individual income taxes, while the bottom 20 percent received tax credits equal to 3 percent of total individual income taxes due. ✯ Payroll taxes, which are dedicated to Social Security, Medicare and unemployment insurance, are regressive. Everyone pays the same rate on wage income. Due to the annually-adjusted ceiling on taxable earnings for Social Security ($102,000 in 2008), highincome earners pay a lower share of their wage earnings in payroll taxes than do lower-wage earners. ✯ Consequently, households in the bottom 80 percent of the income distribution pay more in payroll taxes than they do in income taxes. ✯ Corporate income taxes and excise taxes, which are levied against specific goods and services including tobacco, alcohol, and motor fuels, have fallen as a share of total revenues. Directly or indirectly, individuals pay those taxes. 8

Hostage to Past Priorities Much of the pressure within the budget comes from past decisions to address past priorities. Although federal budgeting is an annual process, the decisions made each year by the Congress and the White House determine the budget’s course for years into the future. Decisions to run deficits result in additional interest spending. Decisions to enhance existing or to create new entitlements like Social Security, Medicare and Medicaid become embedded into the budget until policies are changed. Such spending is on “autopilot.” Consequently, the current budget lacks flexibility because most of the federal government’s resources are pre-committed. 9

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✯ By 2007, only 38 percent of the budget (including defense) was considered “discretionary” and funded through annual appropriation decisions, while 62 percent consisted of entitlement programs and other mandatory spending (including net interest). Of the major functions that the nation’s Founding Fathers envisioned for the federal government, a vast majority are in the shrinking discretionary portion of the budget. ✯ As entitlements and net interest grow, discretionary spending gets squeezed. Defense becomes a first priority when national security threats arise. But non-defense programs, which include activities related to children, transportation infrastructure, education, training and research that should promote future economic growth and prosperity, come under increasing funding pressure. They represent opportunities that could be pursued if there is more room in the budget. Major Categories of Federal Spending (Percentage of total spending)

A Citizen’s Guide

Shortcomings of the Budget and Budget Process The federal budget should serve as the fiscal roadmap for federal policy making. However, the budget and its related process have major weaknesses when it comes both to understanding and to managing the financial condition of the United States government. ✯ The annual budget process focuses on the immediate budget year and largely discounts the future implications of current decisions. Decision makers do not devote the same level of scrutiny to future impacts as they do to current costs. ✯ Children don’t vote, and younger people are less involved in the political process. As a result, the potential political gain from immediate increases in spending or reductions in taxes outweighs the eventual economic benefits of more politically costly but fiscally responsible choices. ✯ The budget is cash-based and thus ignores future costs that are likely to result from various activities of the federal government. Some of those costs reflect federal liabilities and legal obligations. Others are contingent upon future events. Still others relate to public expectations and current promises of future federal benefits, including Social Security and Medicare. ✯ There is no overarching blueprint that governs federal finances. The President proposes a budget. The Congress has its own budget process. However, the two branches of government do not formally agree to a single financial plan that sets joint priorities, identifies their fiscal policy goals and provides a plan to achieve those targets. As a result, voters lack adequate benchmarks against which to measure progress and hold elected officials accountable. ✯ Unlike most private businesses and state and local government, the federal government does not engage in a comprehensive effort to identify and manage its physical capital requirements separately from its operating costs.

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The Long-Term Outlook for Federal Finances Long-term projections for the federal budget start with current policies, then factor in expected changes in demographics and economic conditions. Under almost any scenario, the trajectory of current fiscal policy is cause for great concern. On average, more than 10,000 baby boomers will become eligible for Social Security benefits each day for the next two decades. As they do, there will be fewer workers supporting a growing number of retirees. This eventually will place an unfair burden on younger workers, who will end up bearing the brunt of future taxes. ✯ For every dollar that the federal government spends on children’s education, health care, income support, and other programs that help parents meet their children’s basic needs, it spends more than four dollars on behalf of older Americans.2 If current policies continue, that gap will grow, further shortchanging forward-looking activities that should benefit tomorrow’s workforce.

A Citizen’s Guide

✯ Public resistance to broad-based tax increases is likely to keep total revenue levels from rising high enough to match the projected growth in spending. Escalating deficits will add to the public debt, which will increase interest costs, and create a vicious cycle of deficits, rising interest costs and more debt. ✯ Few current policy makers and office seekers show any inclination to confront the nation’s deteriorating long-term fiscal outlook. As long as elected officials focus on short-term political considerations rather than our nation’s future, there will be no meaningful improvement in the government’s financial condition. Social Security Beneficiaries per 100 Covered Workers

✯ About 42 percent of the budget is devoted to Social Security, Medicare and Medicaid. Because these programs provide significant benefits to older people, that percentage will grow as the population ages. Moreover, not only will the retiree ranks swell as large numbers of baby boomers leave the workforce, but new retirees are also expected to live longer and collect more benefits than current retirees. ✯ Medicare, which provides health insurance to people ages 65 and older, and Medicaid, the largest third-party payer of longterm nursing home care, will also be subject to the high rates of growth. Absent solutions to our overall health care challenge, it will be very difficult to keep Medicare and Medicaid cost growth in check. 12

2 See The Urban Institute, Kid’s Share 2007: How Children Fare in the Federal Budget.

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Health Care and the Budget The federal government’s role in health care financing has been expanding. In the last 20 years, health care programs’ share of the budget has doubled, reaching 26 percent of total spending, or $717 billion, in 2007. ✯ About 80 million people, 27 percent of the population, were insured through Medicare, Medicaid and military health programs in 2006. ✯ The federal government pays for one-third of the nation’s medical bills. Since 1965, when Medicare began, the federal share has tripled. Over the last 40 years, many costs that individuals used to pay out-of-pocket have been transferred to the federal budget. ✯ In addition, the federal government subsidizes health care through the tax code. The largest provision exempts employer contributions towards health insurance coverage from income and payroll taxes. Tax subsidies for employment-based health insurance and other health care are worth over $260 billion a year and are growing rapidly as health care costs rise.

A Citizen’s Guide

programs; and it stimulates greater interest in further expansions of the federal government’s responsibility for paying for health care. We must do more to control costs since they represent the biggest single threat to our collective financial future. Politicians and the public may want the government to do more: however, the government has already promised more in health benefits than it can realistically afford to deliver. In addition, it is important to remember that transferring costs to the federal government does not make those costs disappear. When responsibilities are added to the budget without adequate financing (the recent enactment of the Medicare drug benefit, for example), it only serves to mortgage further the future of our country, children and grandchildren. Composition of National Health Expenditures by Payer (Percentage of GDP)

Health care costs are growing faster than the population, the prices of other goods and services and the nation’s overall economy. Health care as a share of GDP has doubled since 1975. While the budgets of households, businesses and government are all under pressure, health care cost growth affects the federal budget in two ways: it increases the cost of federal health

It’s up to you to demand that policy makers don’t just live for today, but also prepare for tomorrow. (See pages 21-24.)

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A Citizen’s Guide

The Peter G. Peterson Foundation

Major Fiscal Exposures The term “fiscal exposures” measures a range of responsibilities, programs and activities that may require federal resources at a future date. A full accounting of the current major fiscal exposures provides more perspective on the poor and deteriorating condition of federal finances. As the following table shows, the federal government was in an approximate $53 trillion fiscal hole as of September 30, 2007 and the hole gets deeper by $2-3 trillion per year. Some exposures are explicit and known liabilities that the federal government is legally obligated to fulfill. Commitments and contingencies represent contractual requirements that the federal government is expected to fulfill when or if specified conditions are met. The largest category of exposures contains the unfunded promises for Social Security and Medicare benefits for current and future beneficiaries. Although people rely on the promise of those benefits, the Congress and the President can—and do—change the programs in ways that increase or decrease the value of expected benefits, and thus alter the size of the implicit exposure. For example, in the past, policy makers have increased payroll tax contributions, changed cost-of-living adjustments, and increased beneficiary premiums. In addition, the U.S. Supreme Court has ruled that the benefits under these programs can be changed at any time through legislation. The total of these fiscal exposures can be viewed as the federal fiscal burden that, absent reforms, taxpayers must ultimately bear.

Major Fiscal Exposures (Trillions of dollars) 2000

2007

Change

Explicit Liabilities: • Publicly-held debt • Military & civilian pensions & retiree health benefits • Other

$6.9

$10.8

+57%

Commitments & Contingencies • Federal insurance, loan guarantees, leases, etc.

0.5

1.1

+97%

Implicit Exposures: Future Benefits • Social Security • Medicare Hospital Insurance • Medicare SMI (Outpatient) • Medicare Prescription Drug

13.0 3.8 2.7 6.5 ---

40.8 6.8 12.3 13.4 8.4

+213%

Total

$20.4

$52.7

+158%

SOURCE: U.S. Government Accountability Office analysis of 2000 and 2007 Financial Report of the United States Government. Note: Totals and percentage increases may not add due to rounding. Social Security and Medicare benefits are present values as of January 1 of each year. Other data as of September 30.

Assessing the Size of the Federal Fiscal Burden The dollar figures used when discussing the federal budget are almost too large to comprehend. To translate the estimated $52.7 trillion in major fiscal exposures—our federal fiscal hole— into more understandable numbers, the U.S. Government Accountability Office (GAO) calculated the burden as equivalent to: ✯ $175,000 per person living in the United States;3 ✯ $410,000 per full-time worker;3

See pages 21-24 for actions you can take to hold policy makers accountable for fiscal results.

✯ $455,000 per household.3 3 Burden per person as of October 1, 2007, per full-time worker as of August 1, 2007, and per

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household as of August 2007.

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Size of the Individual Burden Imposed by Major Fiscal Exposures in 2006 (Thousands of dollars)

A Citizen’s Guide

Medicare’s dedicated income from all sources, including general revenues, will not come close to meeting its expenses even under the optimistic assumptions contained in current law. By 2040, actuarial projections imply that general revenues will have to provide over two-thirds of Medicare’s financing (compared to 40 percent today) if the program is to meet its benefit promises.

Perspectives on the Federal Debt Total debt comprises intragovernmental debt—Treasury securities held by federal “trust funds” and other accounts—and debt held by the public (domestic and foreign lenders). ✯ Some federal programs, the largest of which is Social Security, have dedicated sources of income (e.g., payroll taxes). When earmarked receipts exceed program spending, the excess cash is normally used for other programs but the amount of surplus is credited to the program’s “trust fund” or other special bookkeeping account.

By comparison, the median price for houses sold in 2006 was $221,900.4 The median household income in 2006 (the most recent year available) was $48,201. Other measures of the fiscal burden can be found in the annual reports of the Social Security and Medicare Trustees. For example, the 2008 reports indicate that an immediate 14 percent increase in payroll taxes (from 12.4 to 14.1 percent of taxable earnings), a 12 percent cut in benefits, or a combination of the two would be required to bring Social Security into actuarial balance for the next 75 years.

• Most Social Security taxes have always been paid out immediately as benefits, not saved. • What fund balances remain are invested in nonmarketable Treasury securities that earn interest and are guaranteed by the full faith and credit of the U.S. government. Those investments represent future claims against federal taxpayers. • When the program’s receipts fall short of expenditures (i.e., in 2008 for Medicare Hospital Insurance and 2017 for the combined Social Security program), those Treasury I.O.U.s will come due. That means either reduced spending, higher taxes or borrowing from the public, probably foreign lenders.

4 The median is the point in the spectrum where half of all sales were at higher prices and half

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✯ The Treasury issues marketable securities to the public (e.g., state and local governments, banks, mutual funds and foreign investors) to finance deficits. Due in large part to America’s near-zero rate of saving, the federal government is increasingly dependent on foreign lenders. • In 2007, foreign investors owned about 45 percent of debt held by the public, up from about 19 percent in 1990 and from virtually zero in 1946. • Among our top foreign lenders are countries whose national interests can diverge from our own, including China, oil exporting countries (e.g., Venezuela, Saudi Arabia, Nigeria, Iran and Iraq), and Russia. Debt Held by the Public (Billions of dollars)

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What’s At Stake No matter what lens is used, the long-range outlook for the federal budget, the national economy and the burdens that are likely to be imposed on future generations is not good and is getting worse with the passage of time. ✯ Today’s policies lay claim to future resources. Absent reforms, tomorrow’s policy makers will find that they have little flexibility to address emerging needs. If resources are spread too thinly, government will become increasingly ineffective and unresponsive. ✯ Today’s deficits reduce national saving, displace potentially productive private investment and hamper economic growth. Our increasing indebtedness to foreign lenders, who cannot be counted on to be always willing to finance our deficits, over time may threaten our international standing and influence. Interest payments on such debt go abroad instead of providing income to U.S. residents and feeding into our economy. ✯ Absent meaningful and timely reforms of existing entitlement programs as well as spending and tax policies, by 2040, the federal government will spend more than twice as much as it raises in taxes. ✯ If we do not take corrective action soon, we will be admitting defeat and leaving it to our children and grandchildren to clean up our fiscal mess. They already face a more competitive and uncertain world. Our failure to make appropriate program and policy changes would be both irresponsible and unfair to them.

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A Citizen’s Guide

Moving Forward

What You Can Do As Citizens

We, as a nation, must wake up and take some challenging, yet necessary, steps to put our fiscal house in order. “We the People” must:

✯ Register to vote.

✯ Demand that Washington policy makers begin to address these issues and that candidates for federal office disclose their proposed solutions.

✯ Engage current and prospective elected officials by demanding specific solutions and challenging them to answer tough questions:

✯ Rethink our priorities. We should focus on critical societal needs and programs and policies that work. In addition, we should not assign responsibilities to the government that we personally are not willing to pay in taxes. ✯ Recognize that there are no easy answers. Economic growth is essential, but we cannot grow our way out of our problems. ✯ Build a consensus in favor of constructive and responsible change by building and sharing awareness of the fiscal challenge, the need for timely action and the cost of inaction. ✯ Face up to the fiscal policy tradeoffs by: • Re-instituting tough budget controls to stop digging our fiscal hole deeper; • Reforming entitlement and other programs to constrain the growth in costs and make them more efficient, effective and sustainable;

✯ Become informed about the key issues facing our country and society.

• Do they support balancing the budget over time, and, if so, do they support the strong statutory budget controls and other measures necessary to achieve it? • If proposing new programs and benefits, who will pay for them and how? • If proposing new or extended tax cuts, who will pay for them and how? • How do they propose to address the long-term growth in the major entitlements—Social Security, Medicare and Medicaid—and to create more flexibility in the budget? • How do they propose to reform our tax system? • How do they propose to reform what the government does and how it does business? ✯ Vote for candidates who are leaders and responsible stewards for our future.

• Eliminating low-priority and ineffective programs; • Reforming our tax system, making it simpler and fairer while generating additional revenues; and • Setting enforceable fiscal policy goals and holding elected leaders accountable for their related actions or inactions.

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✯ Hold elected officials accountable for acting on key issues and delivering on their promises. ✯ Join with other citizens to broaden public knowledge about our fiscal challenges and support civic groups that are working to address them. 23

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A Citizen’s Guide

What You Can Do As Individuals

Learn More and Get Involved

✯ Establish a personal budget and stick to it. ✯ Formulate a financial plan that considers the following questions: • What are my short- and long-term personal financial objectives? • What major milestones do I need to prepare for (e.g., education, family, retirement)? • When do I see myself retiring and how much do I need to save and invest in order to retire at a comfortable level that can be maintained over time? ✯ Put that personal financial plan into immediate action. ✯ Become more responsible in decisions to spend and use credit, save for the future and invest savings wisely. ✯ Teach children the importance of planning, saving, budgeting, investing, and making responsible use of credit.

Endnote The long-term total debt projections used in the Guide reflect data compiled from the Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2008-2018 (January 2008) and unpublished data from December 2007, and the U.S. Government Accountability Office (GAO) alternative simulation with feedback contained in Appendix I of The Nation’s Long-Term Fiscal Outlook: January 2008 Update (March 2008). Historical debt-to-GDP estimates were calculated based upon data from the U.S. Treasury, Bureau of Economic Analysis, and Office of Management and Budget. GDP estimates through 1928 were obtained from the Institute for the Measurement of Worth. The major assumptions underlying GAO's simulation include: (1) discretionary spending grows at the same rate as the economy after 2008; (2) the alternative minimum tax exemption amount is retained at the 2007 level through 2018, expiring tax cuts are extended through 2018, and after 2018 federal revenue returns to its historical level of 18.3 percent of GDP plus expected revenue from deferred taxes (i.e., taxes on withdrawals from retirement savings accounts); and (3) Medicare spending is based on the Trustees’ 2007 projections adjusted to reflect the assumption that physician payments are not reduced as specified under current law. 24

Federal Government Websites • • • • • • •

Congressional Budget Office: http://cbo.gov/ Government Accountability Office: http://www.gao.gov/ House Budget Committee: http://budget.house.gov/ Joint Committee on Taxation: http://www.jct.gov/ Office of Management & Budget: http://www.whitehouse.gov/omb/ Senate Budget Committee: http://www.senate.gov/~budget/ Treasury Office of Tax Policy: http://www.treas.gov/offices/tax-policy/

Other Organizations • • • • • • • • • • • • • • • • • • • • • • •

American Enterprise Institute: http://aei.org/ The Brookings Institution: http://www.brookings.edu/ CATO Institute: http://www.cato.org/ Center for American Progress: http://www.americanprogress.org/ Center on Budget and Policy Priorities: http://cbpp.org/ Center for Retirement Research: http://crr.bc.edu/ Choose to Save: http://www.choosetosave.org/ Citizens Against Government Waste: http://www.cagw.org/ The Committee for Economic Development: http://ced.org/ The Committee for a Responsible Federal Budget: http://crfb.org/ and its blog, US Budget Watch: http://usbudgetwatch.org/ Common Good: http://commongood.org/ The Concord Coalition: http://www.concordcoalition.org/ The Heritage Foundation: http://www.heritage.org/ National Academy for Public Administration: http://napawash.org/ National Academy of Social Insurance: http://nasi.org/ OMB Watch: http://www.ombwatch.org/ Perot Charts: http://perotcharts.com/ Peterson Institute for International Economics: http://www.iie.com/ Progressive Policy Institute: http://www.ppionline.org/ Public Agenda: http://www.publicagenda.org/ The Tax Policy Center: http://www.taxpolicycenter.org/ The Truth in Accounting Institute: http://www.truthinaccounting.org/ The Urban Institute: http://www.urban.org/

About the Peter G. Peterson Foundation The Peter G. Peterson Foundation is dedicated to increasing public awareness of the nature and urgency of several key challenges threatening America’s future, and to accelerating action on them. To address these challenges successfully, we will work to bring Americans together to find sensible, long-term solutions that transcend age, party lines and ideological divides in order to achieve real results. The Foundation will work to: address America's budget, savings and current account/trade deficits; reform the federal government's entitlement programs, heath care and tax systems; enhance education, including financial literacy and civic responsibility; encourage greater energy conservation; and promote non-proliferation of nuclear and other dangerous materials.

NOTE: Watch for the feature documentary I.O.U.S.A., which will be released August 2008. It will be the first major salvo in the campaign for our future.

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