The Bottom Line

September 26, 2011
A Weekly Update on Fiscal Policy Developments and a Look Ahead

Live Long and Prosper – The Star Trek franchise is celebrating its 45th anniversary this month. The original show and its various progeny have presaged many technological and societal advances, fueled our imagination and provided an optimistic vision of our future. That rosy future seems especially distant now in the midst of a weak economy, non-stop partisanship that is eroding public confidence in our political institutions, and mounting national debt that threatens our future standard of living.

September 23, 2011

At our "Urging the Super Committee to Go Big" event, we showed videos with a number of budget experts and former government officials, talking about our debt problem and the need for the Super Committee to exceed its savings mandate. So, for those who missed it or want to view them again, we have posted them below.

September 23, 2011

Earlier this week, the IMF released its latest World Economic Outlook (WEO), with a section devoted to the fiscal situation of the U.S. The IMF aptly reminds us that putting in place measures to gradually stabilize and reduce debt needs to be the "first priority" for U.S. lawmakers.

 

As the IMF said:

September 22, 2011

On Wednesday CRFB hosted a three-panel discussion made up of lawmakers and budget luminaries urging the Super Committee to “Go Big” and develop a large-scale debt reduction package sufficient to stabilize the debt as a share of the economy. All panelists supported the notion that the minimum amount of savings tasked to the super committee, between $1.2 and $1.5 trillion, is an insufficient target for putting the budget on a sustainable path. A video of the event will soon be available, so check back on our homepage.

September 22, 2011

Update: The House has passed a CR Friday morning by a 219-203 vote. The new CR garnered more Republican votes by including $100 million more in offsets. The Senate will most likely reject this version.

September 22, 2011

The Federal Reserve's much anticipated statement came yesterday after two days of FOMC meetings, the Fed's policymaking group. As expected, they decided to take new steps to try to boost the recovery, citing weakness in the housing sector and labor market, as well as the downside risks related to some instabilities in global financial markets. (To see the steps they have previously taken, see Stimulus.org).

September 21, 2011

In the past few weeks, CRFB and many others -- including 36 Senators from both sides of the aisle, the Blue Dogs, and more than 60 business leaders, former government officials, and other budget experts -- have been calling for the Super Committee to ‘Go Big’ and exceed their mandate of finding $1.5 t

September 20, 2011

Update: Over at "Off the Charts," CBPP argues that the President's proposed war spending cap -- regardless of how it is counted toward deficit reduction -- would be helpful in preventing the type of cheating we describe below.

September 20, 2011

In a Bloomberg Op-Ed today, Glenn Hubbard, a former Chair of the Council of Economic Advisors under former President George W. Bush, joined the Announcement Effect Club. In his Op-Ed, Hubbard says that in order for the economy to begin growing, a long-term plan addressing our major structural reforms has to be implemented.

September 19, 2011
A Weekly Update on Fiscal Policy Developments and a Look Ahead

Game Time – NASCAR has begun its chase for the championship, baseball’s pennant race is under way, the deficit super committee is deliberating and we now have a budget plan from the White House. Its “Game on!” Will it be like the playoffs and some will go big while others go home?

September 19, 2011

With President Obama's deficit reduction plan now officially out, it's worth comparing the debt path under this plan to other debt paths. For the comparison graph below, we have thrown in CBO's August baseline (excluding the trigger included in the Budget Control Act), the Fiscal Commission, and CRFB's Realistic baseline.

September 19, 2011
A Little Inflation Can be a Dangerous Thing

In today's New York Times, CRFB board member and former chairman of the Federal Reserve Paul Volcker has an op-ed on the dangers of inflation.

September 19, 2011

With the release of President Obama's deficit reduction plan this morning, CRFB has put out a press release commenting on the proposal.

September 16, 2011

With President Obama's deficit reduction plan set to be released on Monday, we already have some idea of what will be in it: reductions in tax expenditures for wealthy individuals and corporations, changes to health programs, and other mandatory savings. We also now know what won't be included in the plan: Social Security reform.

September 16, 2011

The parade of submissions to the Super Committee has started. Over the next few months the Super Committee is likely to be inundated by fiscal plans from all over--and outside--Washington, building on the long-list of 30+ existing fiscal plans already on the table. The first two came in from Sen.

September 15, 2011

Update: The Gang of 36 has grown to 45 --23 Republicans, 21 Democrats, and 1 Independent. See below for the full list of participating Senators.

September 15, 2011

Congress has a long checklist of things it has to do by the end of September. On Tuesday, it informally crossed one thing off when the House passed a "clean" extension of transportation programs through at least the end of the year. The Senate should pass it soon as well.

September 14, 2011

Today, Vice President Joe Biden convened the first cabinet-level meeting as part of the Administration's "Campaign to Cut Waste." He also announced a new Medicaid initiative designed at saving $2 billion over five years. According to OMB Director Jack Lew:  

September 14, 2011

Today, members of the Blue Dog Coalition—a group of fiscally conservative Democrats—sent a letter to the Super Committee urging it to exceed the committee’s mandate "and cut the deficit by $4 trillion over the next 10 years.”

September 13, 2011

Yesterday, we released a letter signed by over 60 leading budget experts from various fields urging the Joint Select Committee on Deficit Reduction (“Super Committee”) to Go Big in its mission to address the nation’s deficit and debt.

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