Taxpayer's Tab: Net Interest on the Debt: Two Projections

Vol. 5 Issue 10, March 13, 2014

To learn about a proposal to limit Border Patrol Agent pay accountability, check out this week's Least Expensive Bill!

Net Interest on the Debt: Two Projections

In the President's message to Congress about his newly unveiled budget plan, he notes, "We have cut our deficits by more than half since I took office." Yet, the numbers his Administration released show that deficits will persist over the next ten years. Worse, the taxpayers' tab for Washington's chronic overspending will grow significantly.

The graph below shows two different projections of budget outlays for interest payments on the federal debt: the Administration's estimate and also the Congressional Budget Office's (CBO) forecast released in its Budget and Economic Outlook earlier this year.

  • CBO projects that payments to service the debt will grow from $221 billion last year to $880 billion in 2024, which rounds to a 4.0 percent increase. Over the next ten years, debt service payments will total $5.8 billion.
  • Under the Administration's budget plan, debt interest payments would grow at a slower rate, reaching $812 billion in 2024, a 3.7 percent increase. The total ten-year cost would be $5.6 billion.
  • Why the difference? CBO's projection shows what could result if current laws for spending and revenues remain unchanged for the next ten years, The Administration's figures includes its budget plan which would increase revenues from tax hikes and new fees.
  • As we noted last week in our release on the President's proposal, it includes very rosy revenues forecasts with unprecedented successive annual growth in tax revenues.

Although each estimate is based on different assumptions, they both project that debt payments will nearly quadruple over the next ten years. Net interest payments will also grow as a percentage of the economy: from 1.3 percent to 3.3 percent of GDP under CBO's projection, and to 3.0 percent under the Administration's.

Source: FY 2015 Budget Table S-5 and Table 1-2

Least Expensive Bill of the Week

The Bill: H.R. 3463/S. 1691, the Border Patrol Agent Pay Reform Act of 2013

Savings Per Year: $125 million ($625 million over five years)

Congressman Jason ChaffetzUnder current law, certain federal employees are eligible to receive administratively uncontrollable overtime (AUO) pay, which is awarded when a position requires irregular and/or unscheduled overtime work. Under this system, employees can earn up to 25 percent of their base annual salary. While the compensation is only supposed to apply in unusual circumstances, and must be approved by agency heads, a federal report released late last year shows that many employees within the Department of Homeland Security (DHS) regularly abused their AUO privileges.

In October, the Federal Office of Special Counsel (OSC) released a report to the White House and Congress that detailed at least $8.7 million in unearned AUO payments. OSC noted that the practice had become a "profound and entrenched problem" in the headquarters of several DHS agencies and, according to some whistleblowers, had even been used as a recruiting incentive. In fact, the problem first surfaced nearly five years ago, when Customs and Border Patrol (CBP) promised to investigate and resolve widespread abuse of wrongful overtime claims. Some accounts estimated that the abuses could have cost tens of millions of dollars every year.

Senator Jon Tester In response to the findings, Congressman Jason Chaffetz (R-UT) and Senator Jon Tester (D-MT) introduced S. 1691 and H.R. 3463 in their respective Chambers. The Border Patrol Agent Pay Reform Act of 2013 would restructure the CBP pay scale and give employees three options: work 100 hours every two weeks (20 hours of overtime), 90 hours (10 hours of overtime), or 80 hours (no overtime). Employees would be given compensatory time off for any hours worked beyond those thresholds.

Rep. Chaffetz addressed concerns that the bill could shortchange some agents, stating that "[w]e're not talking about people who are actually on the border. We're talking about desk jockeys at headquarters" who "milk the system and steal from Americans." Senator Tester said "this new pay schedule will make our borders more secure and save taxpayer dollars."

The sponsors claim that the legislation would save CBP $125 million each year, about $625 million over five years. According to the latest budget figures, CBP's total personnel compensation costs will be $5.7 billion this year and will rise to $6.3 billion next year.

The Bottom Line: The Border Patrol Agent Pay Reform Act would restructure the pay scale for Border Patrol Agents and reduce the likelihood of overtime compensation abuse. H.R. 3463 and S. 1691 would save $125 million per year.

To learn more or discuss this bill visit


Most Friended

The Bill: H.R. 3979/S. 1798, the Protecting Volunteer Firefighters and Emergency Responders Act of 2014

Cost Per Year: "No Cost" -- Regulation

Cosponsors: 106 House Members

Congressman Lou BarlettaUnder the provisions of the Affordable Care Act (ACA), employers with 50 or more full-time employees are required to offer health insurance to their workers -- otherwise, they are subject to a penalty assessed for each worker. The law required that this employer mandate would begin at the start of this year, but the Administration has already delayed it twice in the past year in order to give employers more time to prepare for the costs as well as the myriad regulatory and legal burdens that the law has placed on medium and large companies. But the original law also impacts other organizations.

One concern of some lawmakers is that the employer mandate could affect state and local firefighter and emergency response crews. Because of a lack of specificity in the law -- and initially from IRS officials -- it was unclear whether emergency crew volunteers would be classified as full-time equivalent employees. If so, then local governments would be mandated under the ACA to provide them with health insurance coverage, or pay the penalty.

The issue was especially problematic for those fire departments and first responder units comprised of a mixed full-time/volunteer crew. That requirement would have placed additional, significant financial burdens on local and city governments, which some feared would lead to fewer emergency services or budget cuts to other local services to pay for the coverage or penalties.

Senator Mark Warner In order to address those concerns, Congressman Lou Barletta (R-PA) and Senator Mark Warner (D-VA) introduced The Protecting Volunteer Firefighters and Emergency Responders Act earlier this year. H.R. 3979 and S. 1798 would clarify that bona fide emergency and medical volunteers would not be counted towards a firm's full-time employee calculation under the ACA.

On February 10, the IRS published final regulations that clarified the law's effect on volunteer emergency crews: these workers would, in fact, be exempt from the mandate. CBO estimated that the bill would have no net budgetary impact.

Cosponsors include 15 Democrats and 91 Republicans in the House.

The Bottom Line: The Protecting Volunteer Firefighters and Emergency Responders Act would exempt first responder volunteers from the Affordable Care Act employer mandate. H.R. 3979 and S. 1798 would reflect current IRS regulations and would not change spending.

To learn more or discuss this bill visit


The Wildcard

The Bill: H.R. 3492/S. 2018, the River Paddling Protection Act

Cost Per Year: $1 million ($4 million over five years)

Yellowstone and Grand Teton national parks contain some of the most striking landscapes in the country, and are popular destinations for outdoors enthusiasts from many states. However, current law prohibits the use of boats, kayaks, and canoes on some of the waters within those parks. Wyoming Representative-at-large Cynthia Lummis (R) and Senator John Barrasso (R-WY) introduced the River Paddling Protection Act to eliminate these restrictions.

Small vessels are allowed on some of the parks' rivers and streams, usually after visitors obtain a permit, but the paddling and boating ban in question applies to certain "wildlife sensitive" areas within the parks. The bill would lift the blanket ban on paddling on those waters and categorize paddling as a "wildlife dependent activity," a designation also used for hunting, fishing, photography, and wildlife observation within the parks. The goal in doing so would be to allow park managers more local control over how and whether to allow paddling through more sensitive rivers and streams.

In a hearing before the House Subcommittee on Public Lands and Environmental Regulation, Rep. Lummis said "[t]he intent of the bill is to remove a prohibition so paddlers can sit down with the superintendents of the parks and discuss where paddling makes sense, when it makes sense, and when it does not."

Upon our initial review, NTUF did not expect that the regulatory changes in this proposal would have any impact on spending. However, CBO's recent analysis determined that the legislation would increase spending by $4 million over the next five years. The costs would arise from environmental and feasibility studies that would be used to establish new regulations. There would also be administrative costs associated with managing additional boating activities on any newly opened rivers and streams.

The Bottom Line: The River Paddling Protection Act would lift regulations that prohibit watercraft on certain rivers within Yellowstone and Grand Teton national parks. H.R. 3492 and S. 2018 would cost $4 million over five years.

To learn more or discuss this bill visit


Welcome to The Taxpayer's Tab -- the weekly newsletter for up-to-the-minute research from the National Taxpayers Union Foundation's BillTally Project. For more information, check out NTUF's BillTally Project and our partner,!

 What Budget Florida's 13th District Elected 

On Tuesday, residents in Florida's 13th Congressional District elected Republican David Jolly to finish the late Congressman Bill Young's (R-FL) term. What changes to the federal budget will he persue? NTUF's Dan Barrett analyzed Jolly's campaign platform and found that he would decrease spending by $60 billion each year. But that's not the whole story. Check out his post on Government Bytes!

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Missed an Issue?

Issue 9 - Mar 6
Obama's Unfinished Budget Portrait Still Leaves Taxpayers Wondering, Worrying, Research Group’s Analysis Shows

Issue 8 - Feb 27
Line-By-Line Florida Special Election Analysis

Issue 7 - Feb 20
Five Years After Stimulus Enacted, Measures to Extend Spending

Issue 6 - Feb 13
Veterans’ Benefits Reform: One Bill, Billions of Dollars

Issue 5 - Feb 6
Warning to Washington: Stop Overspending

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