The Bottom Line

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.

October 4, 2011

The Senate Budget Committee is holding a hearing on budget process reform called "Improving the Budget Process: Strategies for More Effective Congressional Budgeting", and it will include such topics as biennial budgeting and multi-year budgeting.

October 3, 2011

The Washington Post had an editorial yesterday supporting efforts to restrict first-dollar coverage for Medigap. Medigap is a form of private, supplemental coverage that Medicare beneficiaries can purchase on top of traditional Medicare to help cover costs, and about one-sixth of Medicare recipients. It's encouraging to see continuing public debate on ways to go further on trying to control health care costs, and Medigap reforms can be a good place to look.

October 3, 2011
A Weekly Update on Fiscal Policy Developments and a Look Ahead

New Year, Old Story – Saturday was the first day of Fiscal Year 2012. CRFB rang out the old fiscal year with a look back at the relevant numbers, and they weren’t pretty. The new year is a time for renewal and resolutions to improve. However, it looks as if Congress is resolved to continuing along the path of budget dysfunction. Fittingly, the House will vote on a continuing resolution (CR) Tuesday that will temporarily fund federal government operations until November 18.

October 3, 2011
Our Advice to the Debt Supercommittee: Go Big, Be Bold, Be Smart

Sunday's Washington Post featured an op-ed written by Fiscal Commission and Moment of Truth project co-chairs (and CRFB board members!) Erskine Bowles and Alan Simpson. The authors draw on their experience as co-chairs of the fiscal commission to give advice to the Super Committee, which they say can be summed up in seven words: "Go big, be bold, and be smart".

September 30, 2011

With the end of September comes the end of the fiscal year, so it's time to look back on the year that was. We've had a whirlwind year of exciting developments in the world of fiscal policy, both good and bad.

September 29, 2011

Today, a collection of 155 business organizations representing a wide variety of interests joined the "Go Big" call. In doing so, they have joined 38 Senators and a whole host of other budget experts, former lawmakers, and business leaders who have also urged the Super Committee to exceed its savings mandate of $1.5 trillion.

September 29, 2011

In what was basically a formality, this morning the House of Representatives approved a super short-term continuing resolution (CR) to keep the government funded through October 4. This should clear the way for approval of a slightly less short-term CR that would fund the government through November 18.

September 29, 2011

The submissions keep on coming. Now, Senators Tom Coburn (R-OK) and Joe Lieberman (I-CT) have sent a letter to the Super Committee, pressing them to consider their Medicare proposal.

September 28, 2011

The usual story about the recent historical low in revenue we have seen over the past three years is due to the recession. After all, revenue was at 19 percent of GDP before the recession and is projected to rise back above its 40-year historical average later this decade (even with the 2001/2003 tax cuts extended).

September 27, 2011

Yesterday, we argued that to actually stabilize the debt as a share of the economy, you probably need to propose a plan with even more savings than what would stabilize the debt under current projections. The risks come from both the economic and political uncertainties:

September 27, 2011

The chained CPI, a policy option that has been endorsed by experts, organizations, and many others from across the political spectrum and has just received another loud endorsement, this time courtesy of Alan Viard at the American Enterprise Institute.

September 27, 2011

If you've ever wanted to design your own corporate tax reform, now you can with our new Interactive Tax Reform Calculator. There is no question that the U.S. corporate tax system is badly in need of reform, and leaders in both parties have been pursuing this goal.

September 26, 2011

Yes, it could! Okay, you’re probably itching for a more fleshed out response than “yes”, so let’s walk through the logic.

September 26, 2011

Last week, in our analysis of the President's submission, we noted how the President's submission to the Super Committee nearly stabilizes debt, but not fully, this decade and how much more will be needed to actually put debt on a clear downward path.

We stated that:

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:

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