The Bottom Line

January 18, 2011

Dr. Christina Romer, the former chairwoman of the President's Council of Economic Advisors, published an article in the New York Times this weekend calling for President Obama to use his January 25th State of the Union address as a means to outline a credible plan to lower future budget deficits.

Dr. Romer, who left the administration last August, is calling for the deficit to be given significant focus.

January 18, 2011

With much of Washington talking about how to address our fiscal situation, more specific budget areas are coming into focus. One area that some are holding as sacrosanct from any spending cuts is the defense budget.

January 14, 2011

Today, Vice President Joe Biden announced that Bruce Reed will be his next chief of staff. Bruce served as Executive Director of the President's Fiscal Commission which issued its final recommendations in December. He previously served as the top domestic policy advisor in the Clinton Administration.

January 13, 2011

The independent, non-partisan policy group Taxpayers for Common Sense (TCS) released their recommendations for how to reduce the deficit. They identify $148 billion in savings over the next five years, with savings coming from spending cuts and reductions in tax expenditures.

January 12, 2011

Economist Barry Eichengreen warned the U.S. over at VoxEU about the consequences of "economic mismanagement"--essentially, not taking steps to address the budget gap. Focusing on the international economy and the role of the dollar, Eichengreen says that a fiscal crisis in the U.S. would make the dollar "tank" and that "the impact on the international system would not be pretty." Here's what he had to say:

January 12, 2011

Congressman Kevin Brady (R-TX) has introduced legislation called the Cut Unsustainable and Top-Heavy Spending (CUTS) Act of 2011. It includes numerous cuts recommended by the President's Fiscal Commission as well as terminations requested by both the Bush and Obama administrations. All told, this bill includes over $40 billion in single-year cuts and $150 billion in deficit reduction over five years.

January 12, 2011

As a member of the awards committee for the Fiscys, we have been taking some hits (see Krugman here, Ezra Klein here, and Grep Ip here) for presenting one of the awards to the new Chairman of the House Budget Committee, Paul Ryan.

January 11, 2011

In a recent Roll Call Op-Ed, CRFB Board Member David Walker urges lawmakers to make bold fiscal policy steps to reduce the deficit. Walker challenges members of Congress to demonstrate accountability and fiscal leadership. 

My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the Committee.

 

January 11, 2011

Wall Street banks have been drastically cutting their holdings of U.S. Treasuries, according to Bloomberg News. According to most analysts, this is a reaction to expectations of a stronger economy, which is leading banks to invest more heavily in private equities as opposed to Government bonds. While this is certainly good news, it does highlight the risk that U.S.

January 11, 2011

Yesterday the Federal Reserve announced it would be paying a record $78.4 billion to the U.S. Treasury for 2010. It accumulated this large sum from interest on its holdings of risky assets, like mortgage-backed securities, that it acquired during the financial crisis. The Fed's policy dictates that it turn over this money to the Treasury at the end of each year.

January 10, 2011

Shooting Puts Legislative Business on Hold – The shooting of Congresswoman Gabrielle Giffords and 19 others in Tucson, Arizona has resulted in House leaders suspending legislative activity this week. The only vote now expected this week is one on a resolution honoring Giffords and the other victims of the attack. The House was going to vote this week on repealing the health reform law.

January 10, 2011

What do you pay in Medicare taxes? And what Medicare benefits can you expect? This issue—potent now that the first baby boomers are turning 65—was highlighted recently by Ricardo Alonso-Zaldivar in a widely read Associated Press story.

January 10, 2011

In her latest commentary on CNN Money,  CRFB President Maya MacGuineas says that despite the rhetoric on reducing the deficit, some of the high-profile priorities of the new Congress may make the fiscal situation worse.

My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the Committee.

January 10, 2011

On Friday, Austan Goolsbee, the Chairman of the President's Council of Economic Advisors, gave some preliminary remarks on the Administration's priorities for the coming year. He signaled that the focus will be on "recovery and [to] raise the growth rate" by spurring job creation. He also indicated that fiscal policy will be given increased attention in the coming months.

January 7, 2011

There has been an increasing amount of talk this week concerning calls for repeal of the health care reform legislation, as the 112th Congress convened for the first time this Wednesday. The House is scheduled to vote on a bill calling for a full repeal of the legislation this coming Wednesday.

January 7, 2011

Today, President Obama named Gene Sterling as the new director of the National Economic Council. Mr. Sperling, who will succeed outgoing director Larry Summers, held this same position under President Clinton's term from 1997 to 2000 and acted as deputy director from 1993 to 1996. Most recently, Mr. Sperling was a senior adviser to Secretary of the Treasury Tim Geithner.

January 7, 2011

The Senate Budget Committee heard testimony today from Ben Bernanke, chairman of the Federal Reserve. Opening remarks were made by committee chairman Sen. Kent Conrad (D-ND) – a member of the President’s Fiscal Policy Commission – and new ranking member Sen. Jeff Sessions (R-AL).

January 6, 2011

Defense Secretary Robert Gates announced today the specifics for how the Defense Department will reduce spending by $178 over the next five years compared to its 5-year defense plan released last year, above the original $100 billion target that Secretary Gates announced in June.

January 6, 2011

The 112th Congress has moved quickly to signal a new focus on fiscal responsibility and attention to our ballooning national debt. As Congress convened this week the new leadership of the House of Representatives used some of its first actions to implement some of the changes they promised in the election in an attempt to convince voters that they are, quite literally, getting their fiscal house in order.

January 6, 2011

In its annual report to Congress Wednesday, the National Taxpayer Advocate stated unequivocally that "the most serious problem facing taxpayers - and the IRS - is the complexity of the Internal Revenue Code". The report goes on to list the sources of the tax code's complexity, the consequences of such complexity, and obstacles to tax-code simplification.

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