The Bottom Line

October 17, 2011
A Weekly Update of Budget Developments and a Look Ahead

Leaves of Change – The colors of fall draw many sightseers to view nature’s beauty. Yet, it is important to recognize that behind the changing leaves are nature’s preparations for surviving the harshness of the approaching winter. From a budget standpoint, this winter could be harsher than usual, with fights over the budget and the Super Committee. What colors will Washington show this fall? Hopefully there will be less red and yellow. The House is out this week while the Senate tries to make progress on appropriations.

October 14, 2011

The CLASS Act, the new long-term care program enacted as part of the Affordable Care Act, has been dropped, as the Obama Administration has struggled to implement the program in an actuarially sound manner.

October 13, 2011

With only a day left for Committees to send recommendations to the Super Committee, the House Democrats decided to take an omnibus approach. Letters from ranking members of all 16 committees were sent in one package, with an overall letter from Minority Leader Nancy Pelosi (D-CA). These letters are more a laundry list of recommendations than a coherent fiscal plan, so providing a topline savings number would be difficult. Nonetheless, here are some of the highlights:

October 13, 2011

With federal budget news in a bit of a holding pattern until next month, we return to our Spotlight on the States blog series with a discussion of New Jersey’s FY 2012 budget battle.

October 13, 2011

On Wednesday, CRFB President Maya MacGuineas and CRFB board member Douglas Holtz-Eakin testified in front of the Senate Special Committee on Aging on Medicare reform. The hearing focused on the future of the vital program and ways it can be reformed to strengthen its finances going forward. The hearing examined a variety of possible reforms and what their effect would be, both fiscally and from a programmatic standpoint. 

 

October 12, 2011

Republican presidential candidate Herman Cain's economic plan received a lot of attention at Tuesday night's debate. Regardless of what one thinks about the plan itself, the fact that it generated so much discussion is a positive development. With so many voters justifiably concerned about the economy and yearning for their leaders to adopt sound policies that will spur growth in the short and long-run, the focus on Cain's plan underscores the dearth of concrete ideas from policymakers and the public's desire for action.

October 12, 2011

Two more recent recommendations have been added to our Super Committee submissions tracker, dealing with defense and health care.

October 12, 2011

CRFB President Maya MacGuineas and former CBO director and current CRFB board member Douglas Holtz-Eakin will be testifying in front the Senate Special Committee on Aging at a hearing entitled "A Time for Solutions: Finding Consensus in the Medicare Reform Debate." 

October 11, 2011

The Republican presidential contenders will be at it again tonight in yet another debate, but for those who are already suffering from debate fatigue, this evening's affair at Dartmouth University in the first primary state of New Hampshire promises to be different. First of all, the questions will focus on the economy, meaning that voters should hear more from the candidates on the two intertwined issues that polls indicate matter most to them - the economy/jobs and deficits/national debt.

October 10, 2011

In case you missed it last Wednesday, CRFB President Maya MacGuineas and CRFB board member Douglas Holtz-Eakin testified in front of the Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Economic Policy.

October 10, 2011
A Weekly Update on Fiscal Policy Developments and a Look Ahead

Happy Columbus Day – Today we celebrate the man who introduced Europe to the riches of the New World. Nowadays, Europe could use such a discovery to alleviate its debt crisis, but what the EU is discovering instead is that the U.S. likely won’t be able to bail them out this time. The New World we find ourselves in now involves an economy that can’t seem to pick up and a debt trajectory that won’t head down without considerable action.

October 7, 2011

CRFB has updated its table of submissions to the Super Committee with four new plans from September.

October 7, 2011

In a recent report, JP Morgan summed up a number of reasons, from a financial perspective, on why it is important for the Joint Select Committee on Deficit Reduction (or Super Committee) to "Go Big" and exceed their savings mandate of $1.5 trillion.  The report warns that markets will be closely watching the committee's work, as fears that stagnant economic growth may persist are mounting in the face of inaction on the nation's debt.

October 6, 2011

Two more submissions have recently been made to the Super Committee, adding to what is becoming an interesting list of ideas for them to draw inspiration from.

October 5, 2011

Budget process reform is back in vogue. Coming on the heels of yesterday’s hearings about budget process in both the House and Senate, Senators Jeff Sessions (R-AL) and Olympia Snowe (R-ME) have introduced a bill that would reform pieces of the budget process to avoid certain gimmicks and make other improvements.  Their "Honest Budget Act" would,

October 5, 2011

Congress is getting serious about considering reforms to the dysfunctional budget process.

October 5, 2011

The Senate Committee on Banking, Housing and Urban Affair's Subcommittee on Economic Policy is a holding hearing on the "Economic Implications of the Federal Budget Deficit" this morning and CRFB President Maya MacGuineas and CRFB Board Member Douglas Holtz-Eakin will be testifying. 

CRFB has been leading the call for the Super Committee to "Go Big." Maya's testimony will offer further economic justification for this approach. 

October 5, 2011

In a letter to Rep. Chris Van Hollen (D-MD), the ranking member of the House Budget Committee, CBO Director Douglas Elmendorf estimates the cyclical economic effects due to a slowed economy on the size of the federal deficit. He finds that cyclical effects will contribute $340 billion to the deficit this fiscal year, which is roughly one third of the $973 billion (or 6.2 percent of GDP) deficit projected for FY 2012.

October 4, 2011

CRFB president Maya MacGuineas was a guest last night on PBS' Nightly Business Report, where she commented on the Super Committee and the need for them to Go Big on deficit reduction. She talked about the difficulty of the task before the Committee, yet says that even if they succeed in finding the $1.5 trillion in savings they have been tasked with, it won't be enough.

October 4, 2011

Earlier today, the Committee for Economic Development (CED) released a set of six standards that they believe the Super Committee must follow in order to succeed.

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