Kaurna Acknowledgment

Transcription

1 Carnegie Mellon University (CMU) and Institute of Public Administration Australia (IPAA) presents Tackling Budget Crises, Implementing Reforms: Lessons from the US Experience 11 th February 2014

2 Kaurna Acknowledgment We would like to acknowledge this land that we meet on today is the traditional land of the Kaurna people and that we respect their spiritual relationship with their country. We also acknowledge the Kaurna people as the custodians of the Adelaide region and that their cultural and heritage beliefs are still as important to the living Kaurna people today.

3 Master Of Ceremonies Emil Bolongaita Deputy Executive Director and Professor of Public Policy & Management Carnegie Mellon University Australia Introductions Terry Buss Executive Director Carnegie Mellon University Australia G Edward DeSeve Former Special Advisor to President Barack Obama and Executive Director of the State Budget Crisis Task Force Terry Moran AC Institute of Public Administration Australia President

4 G Edward DeSeve Former Special Advisor to President Barack Obama & Executive Director of the State Budget Crisis Task Force

5 Is the Sun Raising or Setting?

6 G. Edward DeSeve Brookings Institution February 10, 2014

7 Fiscal Discipline- Australia as model? Federalism - Australia as leader?

8 The United States has continued its modest but steady recovery and, barring further adverse developments, is poised for stronger economic outcomes. In the short term, the recent fiscal impasse had only a minor impact on the recovery and the 10 December announced budget deal, while small in scale, will most likely avert another shutdown in Of more concern is the continued uncertainty around fiscal policy, which has raised questions about the ability of the United States political system to compromise to achieve workable solutions to longer-term fiscal challenges.

9 Should the U.S. scrap the Constitution and move to a parliamentary system to break the log jam in Congress? What size military does the U.S. really need to be the world s policeman? Should global economic stabilization impose a unique burden on the United States? Are US Taxes too high? What is a wise immigration policy for the U.S.? Your choice?

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11 Federal deficits and debt State deficits and rebound Municipal Bankruptcy

12 Federal Local State

13 Below is a chart of total government spending (federal, state and local) as a share of GDP, going all the way back to 1929, the first year for which Bureau of Economic Analysis Data are available. This chart shows that government spending in 2010 was as high as it s ever been as a share of the economy, 36.2 percent, slightly outstripping the previous high water mark of 35.3 percent reached in 1945, during World War II. (Forbes December, 2012) Based on Census of Governments Data the latest official data available

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20 State Budget Crisis Task Force Drivers Medicaid vs. Education Pension problems Transportation needs

21 Federal = 18% of GDP (Net) State and Local= 16% Total= 34%

22 Chaired by Paul Volcker and Richard Ravitch Advisory Committee- Joseph Califano, Nicholas Brady, George Schultz, Alice Rivlin Finding The conclusion of the Task Force is unambiguous. The existing trajectory of state spending, taxation, and administrative practices cannot be sustained. The basic problem is not cyclical. It is structural. The time to act is now.

23 Obligations are rising faster than states ability to meet them The Rising Costs of Unfunded Pensions Continue to Pressure State Budgets and Balance Sheets The Effect on the States of Federal Deficit Reduction is Unknown and Often Unconsidered Infrastructure Funding Remains Inadequate The Affordable Care Act s Impact is Uncertain

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27 Infrastructure Funding Gap and Economic Impact (2010, Dollars in billions) Funding Gap Negative Impact on GDP Through 2020 Through 2040 Through Total TRANSPORTATION BY MODE Surface Transportation 846 3, ,765 2,662 Airports Inland Waterways & Marine Ports ,209 1, ,278 3,975 Sub-Total 901 3,805 1,907 6,252 8,159 WATER AND WASTEWATER ,702 4,118

28 The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. [(10th Amendment U.S. Constitution

29 States and their localities largely finance and build public infrastructure, educate our children, maintain public safety, and implement the social safety net. State and local governments spend $2.5 trillion annually and employ over 19 million workers 15 percent of the national total and 6 times as many workers as the federal government. (State Budget Crisis Task Force)

30 The relationships that make up today s federalism are perhaps best described as fractured. Many states resent rules and regulations imposed by the federal government as a condition of federal aid, while many in the federal government fear that without such rules, states will enact laws and initiate programs that run counter to the national interest. (State Budget Crisis Task Force)

31 The role of COAG is to promote policy reforms that are of national significance, or which need co-ordinated action by all Australian governments.

32 Is it working? How might it be implemented in the U.S.?

33 G Edward DeSeve Former Special Advisor to President Barack Obama & Executive Director of the State Budget Crisis Task Force Terry Moran AC IPAA President

34 Q&A

35 Carnegie Mellon University (CMU) and Institute of Public Administration Australia (IPAA) presents Tackling Budget Crises, Implementing Reforms: Lessons from the US Experience 11 th February 2014