The Bottom Line

November 30, 2010

As the Fiscal Commission discusses its final proposal for deficit reduction, CRFB issued a press release today urging the Commission’s members to come together and agree on a bipartisan, comprehensive deficit reduction plan.

November 30, 2010

CBO has issued new numbers for the total costs of the Troubled Asset Relief Program (TARP). CBO now estimates that TARP will cost $25 billion over the life of the program. This is down $41 billion from CBO's previous estimate of $66 billion in their August 2010 Budget and Economic Outlook, $84 billion less than CBO's March 2010 estimate, and $88 billion less than OMB's most recent analysis (which relies on data up to May 31, 2010).

CBO gives the reasoning as to why the cost estimate has gone down over the past year:

November 29, 2010

You might have missed it last week if you were preparing to chow down on some turkey, but Our Fiscal Security (OFS)--a joint project of the Economic Policy Institute, Demos, and the Century Foundation--became another in a long list of groups/experts to put out a specific proposal for our long-term fiscal situation.

November 29, 2010

Pete Davis over at Capital Gains and Games joined the Announcement Effect Club over the weekend and FDIC head Sheila Bair came very close.

In a blog post at CG&G, Davis called for a fiscal plan to put our debt on a sustainable trajectory. But how soon?

November 29, 2010

President Obama announced today that he is freezing federal pay for the next two years. This action will save $60 billion over the next ten years, and about $2 billion for the remainder of FY 2011.

November 29, 2010

Martin Feldstein has an interesting op-ed in today's Washington Post on tax expenditures. Tax expenditures -- the list of special tax credits, deductions, and exemptions written into the tax code -- constitute over $1 trillion in lost revenues every year and distort economic activity.

November 29, 2010

Washington Still Has a Full Plate -- Congress returns this week from its Thanksgiving break as fiscal issues will jolt policymakers from their turkey-induced comas. A Tuesday meeting between President Obama and congressional leaders may shed some light on how Congress will proceed on matters such as the 2001/2003 tax cuts and fiscal year 2011 spending bills. And Wednesday may bring a proposal from the White House fiscal commission that will drive debate over the direction of U.S. fiscal policy.

November 24, 2010

As Thanksgiving approaches, we at CRFB wanted to take a moment to reflect on what we are thankful for. We are most thankful for the Simpson-Bowles preliminary debt reduction plan, which has set a new bar in Washington for what serious fiscal plans should acheive, and led to a flurry of other plans.

November 23, 2010

We at CRFB have been calling for people to Get Specific on ways to deal with our long-term fiscal crisis for quite some time.  Well, since that has finally started to happen and deficit reduction plans seem to be in vogue (which couldn’t make CRFB happier), the second stage of the process, seeing where the plans intersect, is now beginning. And to start this process, we have a new paper that will help.

November 22, 2010

Talking Turkey – Congress takes a break this week for Thanksgiving. Lawmakers can be thankful for the brief respite, but the time is quickly coming when they can no longer speak in sound bites and generalities on fiscal matters and must get down to business. When they return next week they will have to face up to some deadlines, promises, and reality.

November 22, 2010

The Economist joined the Announcement Effect Club last week in an article calling for leadership on the deficit. Following many other plans put out over the past few weeks, they offered some of their own preferred policies for putting the budget back on a sustainable path.

November 19, 2010
Global Economy Edition

Of particular interest for us, Fed Chairman Bernanke noted the following in his speech today on “Rebalancing the Global Economy” at the European Central Bank’s conference in Germany:

“For their part, deficit countries need to do more over time to narrow the gap between investment and national saving. In the United States, putting fiscal policy on a sustainable path is a critical step toward increasing national saving in the longer term.” 

November 19, 2010

The Senate late Thursday passed another short-term “doc fix” that spares physicians from a 23 percent Medicare payment reduction through the sustainable growth rate formula. The cost of the one month extension will be $1 billion over ten years, which will be paid for by reducing payments for multiple therapy services provided to patients in one day by 20 percent.

November 19, 2010
GM, China, the Fed – and Munis
November 18, 2010

Ireland, under attack by financial markets for its economic, financial and fiscal problems, may be getting assistance from the international community. Top IMF and EU experts have been dispatched to Dublin and are expected to offer a “very substantial” support package of “tens of billions” of euros to the Irish government, according to the head of Ireland’s central bank. Ireland, it appears, is on the verge of being given additional resources by the International Monetary Fund and EU institutions so that it can continue to get its fiscal house in order.

November 18, 2010

Many of the recent debt reduction plans—including, the fiscal commission's Co-Chairs' recent proposal, the Galston-MacGuineas plan, and the Debt Reduction Task Force plan have included the important idea that health care cannot continue to grow without constraints.

November 17, 2010

For about a week now, we've been telling critics of the Co-Chairs' Plan to throw ideas, not stones. So, good for Jan Schakowsky.

November 17, 2010

The drumbeat for action to reduce our long-term debt continues. Today the Debt Reduction Task Force of the Bipartisan Policy Center issued its recommendations on ways to put the United States on a sound fiscal course. The bipartisan panel was chaired by former Senator Pete V. Domenici and former CBO and OMB director Alice Rivlin. CRFB President Maya MacGuineas also served on the task force.

November 16, 2010

CRFB co-chair Bill Frenzel says "three cheers for Bowles and Simpson" as he and fellow Brookings experts talk about reducing the federal budget deficit. See the discussion here.

 

"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.

November 16, 2010

Earmarks have long been a favorite bogeyman here in D.C. – as examples of wasteful government spending and back-door deal making. The recent election results have only increased the scrutiny they receive. Promising not to seek earmarks is one way for members to earn anti-establishment bona fides, and many newcomers in particular are demanding an end to the practice.

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