The Bottom Line

May 12, 2014

As we explained last week, health care spending is growing more slowly, which is great news for the federal budget. Spending has been revised downward by $900 billion through 2021 since CBO's March 2011 budget outlook. Unfortunately, not all parts of the budget tell as positive a story.

May 9, 2014
"New Routes for Funding and Financing Highways and Transit"

The Senate Finance Committee held a hearing May 6th titled, “New Routes for Funding and Financing Highways and Transit.” During the hearing Senators and witnesses covered a range of topics including the consequences of the impending insolvency of the Highway Trust Fund (HTF), the Administration’s four-year transportation proposal, and other budgetary, economic, and administrative issues with transportation funding.

May 9, 2014
Will Congress Listen to the Military on Pay?

Maya MacGuineas, President of the Committee for a Responsible Budget, wrote a commentary that appeared in the Wall Street Journal Washington Wire. It is reposted here.

May 8, 2014

The Government Accountability Office (GAO) recently released the spring update to its long-term federal budget simulation series. In their report, GAO produces simulations from 2014-2088 under two sets of assumptions, a Baseline Extended and an Alternative Scenario. These simulations show fiscal conditions under different sets of policy options.

May 7, 2014

The recent slowdown in federal health care spending has certainly been good news for the budget, knocking hundreds of billions of dollars off projections over the next decade. A main debate in the health policy world lately has been to what extent this slowdown can continue both for public health spending and overall national spending.

May 7, 2014

The White House issued a Statement of Administration Policy (SAP) yesterday in opposition to the extension and expansion of the Research & Experimentation (R&E) tax credit recently passed by the House Ways and Means Committee. The Administration supports the R&E credit, the SAP explains, but opposes the $156 billion unoffset cost of the House proposal.

May 7, 2014

Today, Wonkblog published a “Know More” feature arguing that “You Should Tune Out Politicians Who Are Still Talking about Government Debt.” As evidence for this claim, they cite the recent Center on Budget and Policy Priorities (CBPP) report that shows the long-term debt situation has improved relative to its 2010 projections, and quote the report’s assertion that "no deficit or debt crisis looms, and the weak labor market remains the nation’s most immediate economic concern."

May 7, 2014

The Pentagon's budget faces serious constraints this year as a result of budget caps agreed to last year and rising personnel, healthcare, and retirement costs taking up an increasing share of military spending.

May 6, 2014

With April's updated projections from the Congressional Budget Office (CBO), spending on major federal health care programs (Medicare, Medicaid, and the Affordable Care Act's exchange subsidies) has now been revised downward by $900 billion, or 0.4 percent of GDP, cumulatively from 2011 through 2021, just since their March 2011 projections.

May 5, 2014

Congress is continuing to discuss this week the tax extenders, a set of tax breaks that expired at the end of last year which could have major fiscal implications if they were extended without being paid for. Below, we describe the extenders in a series of charts.

May 5, 2014

The Center on Budget and Policy Priorities (CBPP) released a new set of long-term debt projections today. They find that while the debt will remain stable at about 74 percent of GDP through 2020, it will rise significantly thereafter, reaching 89 percent of GDP by 2030 and exceeding 100 percent by 2040.

May 2, 2014

As Congress considers how to address the “tax extenders” that expired last year, it’s important to remember that many major proposals would allow these temporary tax breaks to expire or offset their cost. During the recent Ways and Means Committee mark-up of tax extenders legislation, it was suggested that the President’s budget did not pay for the temporary tax provisions that it extended.

May 1, 2014

The Administration recently submitted a $302 billion, four-year transit proposal to Congress to address the chronic challenges facing surface transportation spending. The GROW AMERICA Act would restructure the Highway Trust Fund (HTF), dedicate new revenue to the trust fund from corporate tax reform, and suggests new budgetary treatment for transit funding.

April 30, 2014

The first of the FY 2015 appropriations bills hit the House floor today, kicking off a five month timeline for lawmakers to avoid a government shutdown like the one last October. Overall spending levels will not be a problem to the extent they were last year, as overall levels were approved in last year's Bipartisan Budget Act (BBA), and both parties seem to be willing to stick to them.

April 29, 2014

The push among lawmakers to reform housing finance has picked up lately, as proposals have been emerging in recent weeks. The most prominent one in the Senate has been proposed by Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID).

April 29, 2014

This week, Congress will continue to deliberate if and how to continue the “tax extenders” which expired at the end of 2013.

April 28, 2014

The House and Senate appear to be taking different approaches to the "tax extenders" which expired at the end of 2013.

April 25, 2014

Caught up in the release of CBO's baseline and its analysis of the President's budget last week was another CBO update of their estimate of the Troubled Asset Relief Program (TARP). The subsidy estimate for the entire program is in line with analyses of previous years, showing a total net cost of $27 billion. The estimates have been much less than the $356 billion peak cost estimate CBO had in April 2009 and the $700 billion of total funds approved.

April 25, 2014

With the U.S.'s involvement in Afghanistan set to wind down at the end of the year, there is some uncertainty about the military presence in 2015 and beyond. Until a security accord is reached, it is difficult to say whether the U.S. will leave a small residual force in the country or whether the U.S. will withdraw entirely. Because of the uncertainty, the Pentagon provided a placeholder request of $79.4 billion (most of the $85 billion war spending total) for FY 2015 without specifying how the money will be spent.

April 24, 2014

Every year when the President releases his budget, CBO re-estimates the budget using a baseline set of economic assumptions – the same as it uses for measuring Congressional legislation. This year, they found that the President's budget would reduce deficits by about $500 billion less than the budget itself indicated, because CBO scored some provisions as saving less or costing more than the President claimed.

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