The immediacy of America's fiscal problems presents an opportunity to reform and renew one of the largest expenditures in the federal budget.

Over the past two decades, the share of working age Americans collecting disability insurance payments has doubled, from 2.3 to 4.6 percent of the population aged 25 to 64, with the largest increases coming among women.

Under current law, the U.S. Department of Defense automatically faces significant spending cuts over the next 10 years—cuts that america's civilian and military leaders have cadidly described as "devastating" and "very high risk."

Alan D. Viard, a resident scholar at AEI, reviews the budget outlook, the need for tax reform and the benefits of moving to a progressive consumption tax. He also discusses his forthcoming book, Progressive Consumption Taxation: The X Tax Revisited, which he coauthored with Robert Carroll of Ernst & Young. The book will be published by AEI Press in the Spring.

The conventional ways of cataloguing and reporting health spending significantly understate the government share of health spending.

Capping an individual's benefit from tax expenditures at 2 percent of adjusted gross income would reduce the federal deficit in 2011 by 1.7 percent, or one-third of the total deficit.

Americans have the highest health spending on the planet. Why? Because they can afford to do so. What few people realize is that the U.S. has increased its standard of living vis-à-vis its biggest competitors despite rising health expenditures (figure 1.6c).