ECONOMIC REPORT OF THE PRESIDENT

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to student needs and improve test scores (Dobbie and Fryer 2011; Fryer 2014). Furthermore, by relying on data to inform daily instruction, researchers can compare what is and is not effective across districts and provide teachers with new insights on how to address the academic needs of their students. In addition, under this Administration, the Statewide Longitudinal Data Systems program has expanded support for states to create and link data systems across early learning, K-12, postsecondary, and labor systems so that states have better information on what works. Several states, such as Florida, North Carolina, and Texas, have collected and maintained extensive PreK-12 population-level data on public school students that have been used to study the long-term impact of schooling over time on post-secondary education, the labor market, and even the criminal justice system (Figlio, Karbownik, and Salvanes 2015). Finally, in an effort to better understand where educational inequities currently exist, through executive action in 2011–12, the Administration changed the Department of Education Civil Rights Data Collection (CRDC) from a sample to universe collection, requiring every U.S. public school and school district to participate. The CRDC provides data on leading civil rights indicators related to access and barriers to educational opportunity at the PreK-12 levels. Having access to a full set of data helps policymakers to make more informed decisions concerning how Federal resources should be expended and to what extent schools are making progress in closing achievement and opportunity gaps. families so they can skip questions that are not relevant to them. In addition, over 6 million students and parents took advantage of the ability to electronically retrieve their income information from the IRS when completing their 2014–15 FAFSA, an innovation that improves both speed and accuracy. These efforts have translated to a meaningfully simpler FAFSA for students. Additionally, in 2015, the Administration announced an earlier and easier process for applying for Federal financial aid, allowing students to apply to colleges and for financial aid in tandem. Beginning in 2016, FAFSA applicants have been able to complete the form on October 1 for the following academic year, three months earlier than the original January 1 start date, and use income information from two-years prior to fill out the form. This reform benefits students in two key ways: First, students and their families can now have a reliable understanding of their Federal aid eligibility as early as the fall—the same time that many high school students are searching for, applying to, and even selecting colleges. An earlier FAFSA helps clear an important hurdle in reducing Investing in Higher Education | 337
Figure 5-21 FAFSA Tax Filing Status during Initial Application, 2014–2015 Share 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 Tax Filing Status Unknown Already Filed Taxes: IRS Data Transferred Already Filed Taxes: IRS Data Not Transferred Will File but Have Not Yet Completed Taxes Not Going to File Taxes 0.1 0.0 Dependent Source: Department of Education Independent information barriers related to cost. Importantly, the Administration is also working with states and colleges to provide financial aid award information on this earlier timeline. Moreover, the earlier FAFSA cycle presents an opportunity to provide students with more timely information about the schools where they are applying. Starting with the 2018–19 application year, the Department of Education will present Scorecard data through the FAFSA so that students can make more informed decisions about the schools at which they plan on applying for admission and student aid based on both cost and student outcomes. Second, more students and families can complete their FAFSAs using information retrieved electronically directly from the IRS. In past years, a significant portion of FAFSA filers were unable to electronically retrieve their income and tax information from the IRS because they had not yet filed their tax returns before completing their FAFSA forms (Figure 5-21). For example, 34 percent of parents of dependent students had not yet filed their 2013 tax returns when they were initially completing their 2014-15 FAFSA. Such applicants had to manually input their estimated income and tax information into their FAFSA, or worse, did not submit a timely FAFSA because they erroneously believed that they were not allowed to do so unless then had filed their tax returns. By utilizing tax information from two years 338 | Chapter 5
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ECONOMIC REPORT OF THE PRESIDENT To
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C O N T E N T S ECONOMIC REPORT OF
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economic report of the president To
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eforms in history. Banks have sharp
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the annual report of the council of
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C O N T E N T S CHAPTER 1: EIGHT YE
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. THE ECONOMIC RATIONALE FOR FEDERA
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2.4. Government Purchases as Share
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4.iii. Premium for the Benchmark Pl
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6.18. Systemic Risk (SRISK) 2005-20
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C H A P T E R 1 EIGHT YEARS OF RECO
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Figure 1-1 Actual and Consensus For
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Figure 1-3 Real Hourly Wage Growth
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Figure 1-4 Real GDP per Capita: Eur
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Figure 1-6 Household Net Worth in t
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Figure 1-8 Global Trade Flows in th
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Subsequent revisions to fourth-quar
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Percent 6 Figure 1-9 Fiscal Expansi
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substantial costs to the Federal Go
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worked to promote innovation and in
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expansion, a period of low producti
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The 2017 Economic Report of the Pre
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Chapter 4: Reforming the Health Car
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to the ACA and other factors. The A
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than 98 percent of Americans should
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Figure 1-13 Borrowers in Income Dri
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success of the financial rescue and
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einforced U.S. leadership in the ru
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Partnership (OGP), a global partner
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Figure 1-16 Labor Productivity Grow
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Labor Force Participation Household
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number of steps to ensure that econ
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C H A P T E R 2 THE YEAR IN REVIEW
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Percent 11 Figure 2-1 Unemployment
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allowing for additional investments
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Percentage Point 0.6 0.4 Figure 2-3
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public, largely highway constructio
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The size of the Federal Reserve’s
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Figure 2-5 Private-Sector Payroll E
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fell 80 percent from September 2014
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Figure 2-8 Rates of Part-Time Work,
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Figure 2-v Prime-Age Male Labor For
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Output Real GDP grew 1.6 percent ov
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Figure 2-11 Compensation and Consum
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Table 2-i Optimal Weighting for Hou
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esults suggest that, to a first app
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Figure 2-viii Real GDP, Average and
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Figure 2-13 Consumer Sentiment and
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Figure 2-xi Household Debt Service,
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Ratio to Annual DPI 1.10 1.05 Figur
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Figure 2-17 National House Price In
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Index 220 Figure 2-19 Housing Affor
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Figure 2-21 Composition of Growth i
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Figure 2-23 Capital Services per Un
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Box 2-7: Explanations for the Recen
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Figure 2-xv Business Fixed Investme
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Figure 2-26 Foreign Real GDP and U.
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somewhat generalizable (Box 2-8), b
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prices weakened and the global econ
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inadequate demand has contributed t
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Figure 2-31 Nominal Wage Inflation
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Figure 2-33 Real Hourly Wage Growth
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Index 6 Figure 2-36 Financial Condi
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Percent 4.0 Figure 2-38 Nominal Lon
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Dollars per Barrel 80 Figure 2-40 B
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Figure 2-41 IMF World Real GDP Grow
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against the Mexican peso, the Chine
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United Kingdom It has been a turbul
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for example, Japan has grown almost
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Figure 2-45 Credit to Nonfinancial
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Meanwhile, core inflation (excludin
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kept rates low across a wide range
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Investments in surface transportati
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Table 2-2 Supply-Side Components of
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Conclusion The economy continued to
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not increased from 1973 to 2013, in
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developments; individual behavior;
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action affecting income inequality
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have occurred. In doing so, these p
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Percent 24 21 18 15 12 9 6 African
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without the policy response.5 These
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Box 3-2: Income Inequality and the
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unable to obtain insurance at any p
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Figure 3-7B Percent 50 Uninsured Ra
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and have not expanded Medicaid foun
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Box 3-3: Safety Net Policies as Ins
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Millions of People 18 Figure 3-8 Im
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Figure 3-9 Effective Tax Rates for
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Box 3-4: Additional Actions to Make
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$294 million in newly appropriated
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15 10 5 0 -5 -10 -15 Figure 3-12 Pe
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Administration with those of previo
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as a share of potential GDP by Pres
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Figure 3-17 Changes in the Distribu
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30 25 20 15 10 5 0 Single Source: C
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ate on capital gains and dividends
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C H A P T E R 4 REFORMING THE HEALT
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eneficiaries have received cumulati
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form of lower premium costs and ind
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Percent 25 20 Creation of Medicare
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Figure 4-3 Health Insurance Coverag
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90 80 70 60 50 40 30 20 10 0 25 55
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Percent Uninsured 25 CHIP Created 2
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Legislative actions subsequent to C
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Percent Uninsured 40 35 Figure 4-7
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ecause of the ACA’s provision all
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Box 4-2: Dynamics in the Individual
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projected during the debate over th
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whelming majority of Marketplace en
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Figure 4-v Change in Benchmark Prem
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20 Figure 4-10 Share of Workers in
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percent during the decade preceding
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Panel A: Share with a Personal Doct
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Box 4-3: Interpreting Results from
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Fortunately, the OHIE is not the on
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Figure 4-14 Uncompensated Care as a
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Figure 4-15 Uninsured Rate by Popul
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Figure 4-17 Monthly Gain in Private
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Change in Working-Age Employment to
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this cross-sectional relationship b
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ecent discussions of macroeconomic
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Figure 4-23 Life Expectancy at Birt
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Figure 4-24 Mortality Rate vs. Medi
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more to cover Medicare patients tha
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example, through CMMI, the Administ
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orient payment around the entirety
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Percent of Payments 60 Figure 4-26
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covered under ACO contracts at the
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Additional Steps to Reform the Heal
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legislation that overrides the reco
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Figure 4-28 Health Care Price Infla
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Figure 4-30 Trends in Real Prices f
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average growth rate of real per enr
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Figure 4-34 Growth in Real Costs fo
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made a large, readily quantifiable
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in states experiencing weaker and s
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distribution, holding fixed both sp
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individuals among individuals 65 an
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Figure 4-40 Average Real Deductible
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Figure 4-41 Real Per-Enrollee Presc
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educe the growth rate of Medicare s
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improvements will strengthen ACOs
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Page 294 and 295: Woolhandler 2015). These analysts a
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Page 298 and 299: Figure 4-46 Premiums and Cost Shari
Page 300 and 301: (KFF 2016). Another fifth of tradit
Page 302 and 303: 2030 2028 2026 2024 2022 2020 2018
Page 304 and 305: C H A P T E R 5 INVESTING IN HIGHER
Page 306 and 307: Gainful Employment regulations. To
Page 308 and 309: Thousands of 2015 Dollars 900 800 7
Page 310 and 311: externalities, credit constraints,
Page 312 and 313: Figure 5-4 Earnings by Age and Educ
Page 314 and 315: Figure 5-5 Variation in Earnings by
Page 316 and 317: Box 5-1: Anti-Poverty Efforts and E
Page 318 and 319: careers. Some of the effects of the
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Page 322 and 323: Box 5-2: Federal Investments in K-1
Page 324 and 325: Evaluations of early local Promise
Page 326 and 327: America’s College Promise Playboo
Page 328 and 329: Dollars 45,000 40,000 35,000 30,000
Page 330 and 331: pre-payment penalty. Second, by tyi
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Page 334 and 335: Figure 5-16 Size of Outstanding Loa
Page 336 and 337: Figure 5-17 Average Monthly Payment
Page 338 and 339: Figure 5-18 Distribution of Key Out
Page 340 and 341: Figure 5-20 Earnings by Family Inco
Page 344 and 345: Box 5-5: Making Sure Students Enter
Page 346 and 347: prior, the early FAFSA reform helps
Page 348 and 349: Figure 5-ii Number of Institutions
Page 350 and 351: Figure 5-23 Gainful Employment Earn
Page 352 and 353: Additionally, Pell Grants can be be
Page 354 and 355: C H A P T E R 6 STRENGTHENING THE F
Page 356 and 357: with no easy way to get the funds f
Page 358 and 359: public has limited information, run
Page 360 and 361: value added of the sector has gradu
Page 362 and 363: managers. Thus, after fees, savers
Page 364 and 365: Too Many Resources in Finance? Beyo
Page 366 and 367: of the firm after the purchase affe
Page 368 and 369: Percent 100 Figure 6-2 Mortgage Ori
Page 370 and 371: Figure 6-4 Case-Shiller Home Price
Page 372 and 373: Figure 6-7 Global OTC Derivative Ma
Page 374 and 375: consumer and investor protections.
Page 376 and 377: Figure 6-iv Top 5 Banks as Share of
Page 378 and 379: cult to replace with services from
Page 380 and 381: Are U.S. Banks Too Big? The questio
Page 382 and 383: The three federal banking agencies
Page 384 and 385: Risk Taking The Dodd-Frank Act took
Page 386 and 387: Box 6-3: The Performance of Communi
Page 388 and 389: Figure 6-ix Return on Assets of Ban
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Figure 6-13 Repo and Reverse Repo,
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Figure 6-15 Private Funds Reporting
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Days 60 Figure 6-16 Weighted-Averag
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Figure 6-18 Systemic Risk (SRISK),
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In the absence of another financial
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lower funding costs in 2007-09, “
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through the Dodd-Frank Act and othe
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Prior to the financial crisis, one
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asis.24 One of the advantages of ce
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findings from the NRSRO examination
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Prior to the crisis, enforcement of
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Box 6-5: Addressing the Problem of
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Table 6-i Sources of Investment Adv
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financial system and the systems of
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Box 6-6: The JOBS Act While it was
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Figure 6-23 S&P 500, 2003-2016 Inde
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Figure 6-27 Mortgage Delinquency an
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It created the FSOC to consider ris
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energy efficient and lower greenhou
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of domestic actions to reduce green
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people and vegetation (U.S. Global
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investment are much higher than the
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Delaying Action on Climate Change I
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uses and land management activities
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Carbon Pollution Standards for Powe
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a projected range of $16 billion to
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these resulted in insignificant cha
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Figure 7-4 Corporate Average Fuel E
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diesel fuel and jet fuel. The Vehic
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Box 7-3: Building Resilience to Cur
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sources in the oil and gas sector,
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emissions and total greenhouse gas
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Figure 7-7 Energy Intensity of Real
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Figure 7-10 U.S. Petroleum Consumpt
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Figure 7-12 Energy Intensity Transp
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Figure 7-14c Energy Intensity Comme
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Figure 7-16 U.S. Energy Consumption
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2008 to 7 percent in 2015. Figure 7
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Index, 2008 =0 0.1 0.0 -0.1 Figure
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Figure 7-23 Decomposition of Emissi
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three determinants of emissions? If
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Percent 100 80 Figure 7-26 Sectoral
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characteristics, and management tre
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oil and gas sector) were subsequent
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while creating new jobs and raising
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such as using similar methodologies
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Box 7-4: Supporting Increased Penet
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sector, the fee would incentivize p
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to be used to decompose emissions i
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Reinvestment Act.” NBER Working P
Page 493 and 494:
D’Amico, Stefania, et al. 2012.
Page 495 and 496:
______. 2016. “Chapter 3: Develop
Page 497 and 498:
Chetty, Raj, et al. 2014. “Where
Page 499 and 500:
NBER Working Paper 22170. Cambridge
Page 501 and 502:
American Hospital Association and H
Page 503 and 504:
Cantor, Joel C., et al. 2012. “Ea
Page 505 and 506:
______. 2012a. “Direct Spending a
Page 507 and 508:
Dranove, David, Craig Garthwaite, a
Page 509 and 510:
Wars: Global Solutions for Developi
Page 511 and 512:
Huang, Jidong, and Frank J. Chaloup
Page 513 and 514:
McWilliams, J. Michael. 2016. “Ch
Page 515 and 516:
Pinkovskiy, Maxim. 2014. “The Imp
Page 517 and 518:
______. 2016. “Certification of M
Page 519 and 520:
Arcidiacono, Peter, V. Joseph Hotz,
Page 521 and 522:
Bulman, George, and Caroline Hoxby.
Page 523 and 524:
______. 2015a. “Economic Costs of
Page 525 and 526:
Dobbie, Will, and Roland G. Fryer J
Page 527 and 528:
Committee on Health, Education, Lab
Page 529 and 530:
Jepsen, Christopher, Kenneth Troske
Page 531 and 532:
Marcotte, Dave E., et al. 2005. “
Page 533 and 534:
Reynolds, Arthur J., et al. 2011.
Page 535 and 536:
Chapter 6 Acharya, Viral. V., Deniz
Page 537 and 538:
Fama, Eugene F., and Kenneth R. Fre
Page 539 and 540:
Wheelock, David C., and Paul W. Wil
Page 541 and 542:
______. 2016a. “The Economics of
Page 543 and 544:
______. 2016c. Short Term Energy Ou
Page 545 and 546:
Interagency Working Group on the So
Page 547 and 548:
Office of Management and Budget (OM
Page 550:
A P P E N D I X A REPORT TO THE PRE
Page 553 and 554:
Council Members and Their Dates of
Page 556 and 557:
Report to the President on the Acti
Page 558 and 559:
consulting with a wide variety of o
Page 560 and 561:
In October, the Council released a
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Research Economists David Boddy . .
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A P P E N D I X B STATISTICAL TABLE
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GOVERNMENT FINANCE, INTEREST RATES,
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Year or quarter Table B-1. Percent
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Table B-2. Gross domestic product,
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Table B-3. Quantity and price index
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Table B-5. Real exports and imports
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Year Total Table B-7. Real farm inc
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Table B-9. Median money income (in
Page 581 and 582:
Labor Market Indicators Table B-11.
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Year or month Table B-12. Civilian
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Table B-14. Employees on nonagricul
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Year or month Table B-15. Hours and
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Government Finance, Interest Rates,
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Table B-19. Federal receipts and ou
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Table B-21. Federal and State and l
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Table B-23. U.S. Treasury securitie
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Year and month Bills (at auction) 1
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Year and month Table B-26. Money st
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