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Federal Budget Policy (January 2017)

Class Eleven-- January 18, 2017

With today's class, we will turn our attention to entitlement reform and related topics. We will begin our discussion with two Supreme Court cases involving Social Security. The first upholding the program's constitutionality and the second dealing with Congress's authority to make benefit changes (and whether taxpayers acquire a property interest in their future Social Security benefits). We will then discuss briefly Chapter 13 of Fiscal Challenges, in which John Harrison explores New Property, Entrenchment and the Fiscal Constitution. Next, please review the CFRB's Social Security "Reformer" website and devise your own solution to problems facing Social Security: As background to this exercise, you should consult the CBO's December 2016 report on Options for Reducing the Deficit, in the relevant pages of chapter two, which deals with mandatory spending programs. Prior to class, please come up with a solution to the Social Security exercise and be prepared to explain and defend your solution in class. As time permits, we may touch upon health care reform. In that regard, a briefing paper on Bending the Cost Curve is attached. This paper focuses on the role of cost estimates in the passage of the ACA and related matters. As further background, another chapter from Fiscal Challenges is included: this one on government accounting for entitlement programs and other activities.