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abuses, and fearful of losing the insurance they have. And it has left tens ofmillions of Americans with no insurance coverage at all. The system alsodelivers too little benefit at too high a cost. Comparisons across countriesand, especially, across regions of the United States reveal large differencesin health care spending that are not associated with differences in healthoutcomes and that cannot be fully explained by factors such as differencesin demographics, health status, income, or medical care prices. These largedifferences in spending suggest that up to nearly 30 percent of health carespending could be saved without adverse health consequences. The unnecessarygrowth of health care costs is eroding the growth of take-home payand is central to our long-run fiscal challenges. These adverse effects willonly become more severe if cost growth is not slowed.To illustrate what could happen to workers’ earnings in the absenceof reform, Figure 1-6 shows the historical and projected paths of real totalcompensation per worker (which includes nonwage benefits such as healthinsurance) and total compensation net of health insurance premiums. Ashealth insurance premiums absorb a growing fraction of workers’ compensation,the remaining portion of compensation levels off and then startsto decline.Figure 1-6Total Compensation Including and Excluding Health Insurance2008 dollars per person120,000Actual110,000Projected100,000Estimated annual total compensation90,00080,00070,00060,00050,000Estimated annual total compensationnet of health insurance premiums40,00030,0001999 2003 2007 2011 2015 2019 2023 2027 2031 2035 2039Note: Health insurance premiums include the employee- and employer-paid portions.Sources: Actual data from Department of Labor (Bureau of Labor Statistics); Kaiser FamilyFoundation and Health Research and Educational Trust (2009); Department of Health andHuman Services (Agency for Healthcare Research and Quality, Center for Financing, Access,and Cost Trends), 2008 Medical Expenditure Panel Survey-Insurance Component. Projectionsbased on CEA calculations.34 | Chapter 1
Chapter 7 describes the actions the Administration and Congresstook in 2009 to begin the process of improvement, including an expansionof the Children’s Health Insurance Program to provide access to health carefor millions of children and important investments in the modernizationof the health care system through the Recovery Act. It also describes thekey elements of successful health insurance reform and discusses the progressthat has been made on reform legislation. Successful reform involvesmaking insurance more secure for those who have it and expanding coverageto those who lack it. It must include delivery system reforms, reductionsin waste and improper payments in the Medicare system, and changes inconsumer and firm incentives that will slow the growth rate of costs substantially,while maintaining and even improving quality. Slowing the growthrate of health care costs will have benefits throughout the economy: it willraise standards of living for families, help reduce the Federal budget deficitrelative to what it otherwise would be, benefit state and local governments,and encourage job growth and improved macroeconomic performance.Strengthening the American Labor ForceAmerican workers have suffered greatly in the current recession.As described in Chapter 8, long-term unemployment is at record levels.The unemployment rate, which was 10 percent for the country as awhole in December, is far higher for blacks, Hispanics, and other demographicgroups. The decline in house prices has eroded the nest eggsthat many Americans had been counting on for their retirement. TheAdministration has initiated many actions to help support workers andtheir families through the recession and beyond. These actions rangefrom extended and expanded unemployment insurance, to measuresto make health insurance more affordable, to initiatives to promoteretirement saving.American workers also face the persistent problem of stagnatingincomes. A key determinant of growth in standards of living is the rate ofincrease in the education and skills of our workforce. More and more jobsrequire education and training beyond the high school level, along with theability to complete tasks that are open-ended and interactive. But, as Figure1-7 shows, the years of education U.S. workers have brought to the labormarket have risen little in the past four decades. And, as is well known, U.S.students lag behind those from many other countries in their performanceon standardized tests.Chapter 8 describes the Administration’s initiatives to improve theskills of our workers. The Administration is pursuing reform to eliminatewasteful subsidies to student loan providers, the savings from which will fundTo Rescue, Rebalance, and Rebuild | 35
Page 1 and 2: e c o n o m i cr e p o r to f t h e
Page 4 and 5: C O N T E N T SECONOMIC REPORT OF T
Page 6 and 7: economic report of the presidentTo
Page 8 and 9: Because of these and other steps, w
Page 11 and 12: usinesses and farmers. And by harne
Page 13 and 14: the annual reportof thecouncil of e
Page 15 and 16: C O N T E N T SPageCHAPTER 1. TO RE
Page 17 and 18: Commercial Real Estate ............
Page 19 and 20: CHAPTER 8. STRENGTHENING THE AMERIC
Page 21 and 22: list of figures1-1. House Prices Ad
Page 23 and 24: 7-3. Child and Infant Mortality Acr
Page 25 and 26: C H A P T E R 1TO RESCUE, REBALANCE
Page 27 and 28: Figure 1-1House Prices Adjusted for
Page 29 and 30: emain in achieving a full recovery.
Page 31 and 32: esult of this rebalancing will be a
Page 33: Rebuilding a Stronger EconomyEven b
Page 37 and 38: slowing the emission of greenhouse
Page 39 and 40: C H A P T E R 2RESCUING THE ECONOMY
Page 41 and 42: The DownturnHouse prices began to d
Page 43 and 44: Figure 2-3TED Spread and Moody’s
Page 45 and 46: The basic reason for these policies
Page 47 and 48: Monetary PolicyThe first line of de
Page 49 and 50: The flip side of the large increase
Page 51 and 52: There were two other key components
Page 53 and 54: would be spent by the end of the th
Page 55 and 56: In November, the Worker, Homeowners
Page 57 and 58: stimulus. And both direct estimates
Page 59 and 60: the mortgage market. Another market
Page 61 and 62: composition of mortgage finance. In
Page 63 and 64: 105Figure 2-9FHFA and LoanPerforman
Page 65 and 66: Figure 2-11Real GDP: Actual and Sta
Page 67 and 68: market policies were surely importa
Page 69 and 70: One can again use the VAR described
Page 71 and 72: Initial unemployment insurance clai
Page 73 and 74: Table 2-2Forecast and Actual Macroe
Page 75 and 76: appears to have contracted somewhat
Page 77 and 78: Box 2-1, continuedThe normal or pot
Page 79 and 80: The Administration has also support
Page 81 and 82: C H A P T E R 3CRISIS AND RECOVERYI
Page 83 and 84: Figure 3-1Interbank Market RatesPer
Page 85 and 86:
avoid risky investments at the heig
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The Collapse of World TradeDespite
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strongly correlated with the extent
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strong and swift in most countries
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to be 5.5 percent over 2009 and is
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sheet on a similar scale. 5 While i
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were fully collateralized with fore
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appear to have adopted less discret
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The second G-20 leaders’ summit t
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downward through the winter and spr
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Figure 3-13Outperforming Expectatio
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losses in the level of output in th
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asset prices in those economies. Th
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former levels but rather that they
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This chapter lays out a picture of
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Indeed, some of the factors should
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Percent, seasonally adjusted14Figur
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saving rate will eventually stabili
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Figure 4-6Homeownership RatePercent
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new investment in this sector. Firs
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mortgage-backed securities (CMBS),
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Percent, seasonally adjusted6.5Figu
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and unemployment was low. In a boom
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The Current Account in the Recovery
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Figure 4-11Growth of U.S. Exports a
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C H A P T E R 5ADDRESSING THE LONG-
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The key message of the figure, howe
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Figure 5-3Budgetary Cost of Previou
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substantial assets in preparation.
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The Effects of Budget DeficitsTwo f
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grows. Thus, the key to a sustainab
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2 percent per year, nominal GDP gro
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ate of roughly 6 percent during the
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Figure 5-7Top Statutory Tax RatesPe
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with different incomes—the differ
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The Administration understands that
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a strategic plan. Throughout this p
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will decide to use the money for so
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Figure 6-3Share of Financial Sector
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These private mortgage pools issue
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or the failure of a major bank. The
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taking a macroprudential approach,
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Classic bank runs were commonplace
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Figure 6-6Coordination ContagionNEG
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economy if they failed. No regulato
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justifiable. In particular, the gro
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thrifts eventually followed suit, w
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The Current State of theU.S. Health
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with the growth eventually turning
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common sense suggest that purchasin
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When individuals are healthy, their
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compared with an average of 80.7 in
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Figure 7-4Insurance Rates of Non-El
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prohibitively high for them. Furthe
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Small Businesses. As described earl
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in private health insurance coverag
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Enrollment (millions)5251Figure 7-9
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legislation lays the groundwork for
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obtain and provide insurance, and w
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Senate bills, subsidies would be av
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Both bills also include measures th
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price competitively. And to the ext
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C H A P T E R 8STRENGTHENING THEAME
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ut have given up looking for work a
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years, backed by a union that barga
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Figure 8-4Share of Pre-Tax Income G
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Reform of the immigration system ca
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widespread expansion of state colle
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Box 8-1, continuedfunding is being
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Mean scale score out of 50032017-ye
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many aid-eligible students from eve
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Box 8-2, continued(GED) preparation
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Providing incentives for schools id
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C H A P T E R 9TRANSFORMING THE ENE
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to atmospheric concentrations. And
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typhoons is likely to grow, as are
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Box 9-1, continuedAlthough warmer t
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Jump-Starting the Transition to Cle
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keep it from entering the atmospher
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Other Domestic Actions toMitigate C
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emission allowances. These allowanc
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prices above certain thresholds tri
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Box 9-3, continuedfirms subject to
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International Action on Climate Cha
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analysis under clearly defined guid
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C H A P T E R 1 0FOSTERING PRODUCTI
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For too many years, our Nation has
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A more subtle message is that the a
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workers and capital are likely to b
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Box 10-1, continuedThe second is a
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Private Research and Experimentatio
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system of patents and copyrights th
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in governmental policymaking proces
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While the act of specializing shoul
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currently exports on net and instea
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use less advanced technology and pr
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Administration has continued pressi
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who do not benefit from these advan
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REFERENCESChapter 1To Rescue, Rebal
Page 283 and 284:
Sahm, Claudia R., Matthew D. Shapir
Page 285 and 286:
Benartzi, Shlomo, and Richard Thale
Page 287 and 288:
————. 2009g. A Preliminary
Page 289 and 290:
————. 2009b. Letter to the
Page 291 and 292:
Sisko, Andrea, et al. 2009. “Heal
Page 293 and 294:
Hair, Elizabeth, et al. 2006. “Ch
Page 295 and 296:
Rouse, Cecilia, et al. 2007. “Fee
Page 297 and 298:
Intergovernmental Panel on Climate
Page 299 and 300:
————. 2002. “Sources of U
Page 302 and 303:
letter of transmittalCouncil of Eco
Page 304:
Council Members and Their Dates of
Page 307 and 308:
The Members of the CouncilThe other
Page 309 and 310:
Many of the reports issued by the C
Page 311 and 312:
Christopher D. Carroll ............
Page 313 and 314:
Benjamin N. Dennis (Department of t
Page 315 and 316:
C O N T E N T SNATIONAL INCOME OR E
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PRODUCTION AND BUSINESS ACTIVITYB-5
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AGRICULTURE—ContinuedB-101. Agric
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National Income or ExpenditureTable
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Table B-2. Real gross domestic prod
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Table B-3. Quantity and price index
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Table B-5. Contributions to percent
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Table B-6. Chain-type quantity inde
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Table B-7. Chain-type price indexes
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Table B-8. Gross domestic product b
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Table B-10. Gross value added by se
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Table B-12. Gross domestic product
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Table B-13. Real gross domestic pro
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Table B-14. Gross value added of no
Page 343 and 344:
Table B-16. Personal consumption ex
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Table B-18. Private fixed investmen
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Table B-20. Government consumption
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QuarterTable B-22. Private inventor
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Table B-24. Foreign transactions in
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Table B-26. Relation of gross domes
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Table B-28. National income by type
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Year or quarterPersonalincomeTable
Page 359 and 360:
Table B-30. Disposition of personal
Page 361 and 362:
Table B-32. Gross saving and invest
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Table B-33. Median money income (in
Page 365 and 366:
Table B-35. Civilian population and
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Table B-36. Civilian employment and
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Table B-38. Unemployment by demogra
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Table B-40. Civilian labor force pa
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Table B-42. Civilian unemployment r
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Table B-44. Unemployment by duratio
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Table B-46. Employees on nonagricul
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Table B-47. Hours and earnings in p
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Table B-49. Productivity and relate
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Production and Business ActivityTab
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Table B-53. Industrial production i
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Table B-55. New construction activi
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Table B-57. Manufacturing and trade
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Table B-59. Manufacturers’ new an
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Table B-61. Consumer price indexes
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Table B-62. Consumer price indexes
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Table B-64. Changes in consumer pri
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Table B-65. Producer price indexes
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Table B-67. Producer price indexes
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Year ormonthTable B-68. Changes in
Page 405 and 406:
Table B-70. Components of money sto
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Table B-71. Aggregate reserves of d
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Table B-73. Bond yields and interes
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Table B-74. Credit market borrowing
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Table B-75. Mortgage debt outstandi
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Table B-77. Consumer credit outstan
Page 417 and 418:
Table B-79. Federal receipts, outla
Page 419 and 420:
Table B-81. Federal receipts, outla
Page 421 and 422:
Table B-83. Federal and State and l
Page 423 and 424:
Table B-85. State and local governm
Page 425 and 426:
Table B-87. U.S. Treasury securitie
Page 427 and 428:
Table B-89. Estimated ownership of
Page 429 and 430:
Table B-91. Corporate profits by in
Page 431 and 432:
Table B-93. Sales, profits, and sto
Page 433 and 434:
Table B-95. Historical stock prices
Page 435 and 436:
YearTotal 1AgricultureTable B-97. F
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Table B-99. Farm output and product
Page 439 and 440:
Table B-101. Agricultural price ind
Page 441 and 442:
Year or quarterExportsInternational
Page 443 and 444:
Table B-104. U.S. international tra
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Table B-106. U.S. international tra
Page 447 and 448:
Table B-108. Industrial production
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Period456 | Appendix BTable B-110.
Page 451:
Table B-112. Growth rates in real g
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