BREDESEN BALANCING THE BUDGET FACT SHEET

Background:
● If the Congress had the discipline to simply hold the expenditures of the federal government
(except Social Security) at their current level for about 6 years, we would no longer have a deficit.
● The estimated expenditures for FY 2018 are $3.316 trillion, while revenues for FY 2018 are $2.488
trillion, which makes the deficit of $828 billion
● The growth rate ​of on-budget revenues (not including the Social Security Trust Fund):
Next 5 years per OMB 2018 = $2.488 trillion
2023 = $3.284 trillion
Growth rate = 5.71%
Past 30 years per OMB 1987 = $641 billion
2017 = $2.466 trillion
Growth rate = 4.59%
● OMB projections for the next 5 years tend to be optimistic, the actual growth for the past 30 is
probably a little low (Great Recession, tax cuts). For this argument, let’s use for the average of the
two, 5.15%.

● The question becomes-- how long does it take to grow $2.488 billion into $3.316 billion at a growth
rate of 5.15%? Answer is 5.7 years.
○ 2.488 (1 + .0515)^X= 3.316
○ X= 5.7 years
● At the current OMB projected 5.71% it is ​5.2​ years, at the 30-year average of 4.6% it is ​6.4​ years

Summary of Bredesen Balance Budget proposal:

● If the Congress had the discipline to simply hold the expenditures of the federal government
(except Social Security) at their current level for about 6 years, we would no longer have a deficit.
● Set an overall spending number and let revenues catch up with it
○ Forget mandatory, discretionary, PAYGO
○ Not inflation adjusted (1.9%)
● E​stimated expenditures for FY 2018 are $3.316 trillion, so pin the spending to this number.
Revenues for FY 2018 are $2.488 trillion, which makes the deficit of $828 billion
● Assuming the growth rate of on-budget revenues is 5.15% every year
● The question becomes-- how long does it take to grow $2.488 billion into $3.316 billion at a growth
rate of 5.15%? Answer is 5.7 years.
○ 2.488 (1 + .0515)^X= 3.316
○ X= 5.7 years
● Congress must then assign a target to each department (and within the departments to each
section). Right now, there is a free for all the 16 Senate and 18 House committees.
● Congress and departments need to work together to determine the best ways to meet the overall
target. Not taking jurisdiction from all these committees, just giving them a number to work to.
This is what everyone in the else in the country has to do.
● During Congresswoman Blackburn’s 16 years in Congress, the national debt has soared more than
240% to $21 trillion and the annual federal deficit doubled to more than $800 billion.
● Governor Bredesen has a proven track record of rolling up his sleeves and tackling tough problems
to get things done for Tennessee. He balanced all eight budgets without an income tax or an
increase in the sales tax, closed corporate tax loopholes with overwhelming bipartisan support, and
is ready to help address the ballooning national debt as a member of the U.S. Senate.

Benefits of Proposal
● Focus is on expenses, not finding new revenues. New revenues don’t let you kick the can down the
road, but new revenues can shorten the time period to completion.
● Gentle phase-in. Not chop, but not back-load.
● Simple and clear, no gobbledygook. Public can follow. Each year, a simple question. Do the
budgets add up to $3.316 trillion or not?
● Resistant to the usual game-playing. Selling assets, overestimating revenues, etc.
● Not grand gestures, political theater. Lots of detailed choices proposed by people closest to the
front lines.
● Grown-up way to budget.