The Bottom Line

February 28, 2014

The Tax Reform Act of 2014, House Ways and Means Chairman Dave Camp's (R-MI) discussion draft, is a sizeable document touching almost all parts of the tax code. However, one fiscally concerning piece of the legislation that we brought up in our analysis of the draft has to do with transportation spending: the transfer of general revenue to the Highway Trust Fund (HTF).

February 28, 2014

On Wednesday, House Ways & Means Chairman Dave Camp released a detailed tax reform discussion draft, which we summarize and analyze here. On its own, the draft is an impressive piece of legislation: it is nearly 1000 pages of legislative text and addresses tax rates and preferences in both the individual and corporate tax code. But how does it stand up to other major tax reform proposals?

February 27, 2014

To understand Rep. Dave Camp's (R-MI) tax reform discussion draft, you could read the 194-page section-by-section summary of the bill. Or you could read the 5-page summary that we have just published, detailing the provisions, budgetary impact, and potential economic effects.

February 27, 2014

A few weeks ago, we talked about the Senate veterans bill proposed by Senator Bernie Sanders, which would increase spending on veterans and pay for it by extending some expiring savings provisions and by using the war gimmick. That bill is now set to move forward in the Senate this week.

February 27, 2014

Yesterday, House Ways & Means Chairman Dave Camp released a tax reform discussion draft, and we commended him for the level of detail and consideration provided. We'll continue to cover the interesting aspects of the draft throughout the week.

February 26, 2014

Earlier today, House Ways and Means Chairman Dave Camp (R-MI) released the Tax Reform Act of 2014, which would drastically restructure the U.S. tax code. We took an initial look at the draft and will follow-up with an in-depth paper later this week.

February 26, 2014

In a widely anticipated move in the tax world, House Ways and Means Chairman Dave Camp (R-MI) has released a comprehensive tax reform discussion draft after both tax-writing committees had released a number of discussion drafts dealing with specific sections of the tax code. There is a lot to analyze in the bill: a quick summary of the bill's major reforms is below, and a more detailed analysis will follow later in the week.

February 26, 2014

In a somewhat atypical move, Defense Secretary Chuck Hagel previewed in a speech yesterday the Department of Defense's (DoD's) budget request for FY2015, which will be a part of the President's Budget submitted to Congress next week. The budget shows the types of cuts necessary to comply with congressionally mandated budget cuts that transition DoD from an era of wars in Iraq and Afghanistan and real growth in the defense budget to a new era of discretionary spending restraint.

February 26, 2014

In a new and informative series on Reforming the Budget, the Brookings Institution looked at challenges facing the budget process and proposed strategies to improve its shortfalls. Given the frequent breakdown and tardiness in the process and the limitations of federal budget data, there are a number of ways to improve budget process and accounting in order to facilitate better decision making.

February 25, 2014

Tomorrow, House Ways and Means Chairman Dave Camp (R-MI) is expected to release his comprehensive tax reform proposal after a series of discussion drafts. The tax code is in significant need of an overhaul, and reform can to improve fairness and simplicity, make U.S. businesses more competitive, and reduce the deficit. Over the years, CRFB has produced extensive analysis of previous proposals and the need for tax reform.

February 24, 2014
Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Closing the Ceremony – The Winter Olympics ended in Sochi, Russia on Sunday with the closing ceremony. The eye-catching spectacle put an exclamation point on two weeks of intense drama and competition. Another ceremonial closing occurred back in Washington as it was reported that the president’s forthcoming budget would not include any offers of compromise as last year’s budget did.

February 24, 2014

CBO's recent budget projections show a much deteriorated budget outlook, with debt now rising faster over the coming decade than previously anticipated. Their projections, of course, are based a number of assumptions, including assumptions about future policy. Were Congress to make different policy choices than CBO assumes, debt numbers could change significantly.

February 21, 2014

Next week, House Ways & Means Chairman Dave Camp is set to release a draft of a bill to revamp the U.S. tax code, according to press reports. It was unclear whether Camp would release a tax reform draft at all, as House Republican leadership remains skeptical of tax reform, and Camp's Senate taxwriting counterpart Max Baucus was recently confirmed as Ambassador to China.

February 20, 2014

Today, the White House announced that the President will not propose adopting the “chained CPI” in the President’s Budget this year, as he did last year (though the White House commented today that they are open to the provision as part of a bipartisan deficit reduction deal).

February 19, 2014

At the beginning of the month, the Congressional Budget Office released its annual report on the federal budget, which showed that the deficit is expected to fall by $166 billion from last year to this year, but increase by $1.7 trillion over the next ten years compared to previous projections.

February 19, 2014

Last Friday, 16 Senate Democrats sent a letter to President Obama, but it wasn't for Valentine's Day. Rather, the letter warned the President against including cuts to Social Security, Medicare, or Medicaid benefits in his FY 2014 budget, due out in two weeks. Although it did not specifically mention any policies, it was clearly addressed at the inclusion of the chained CPI in last year's budget and certain modest Medicare cost-sharing reforms.

February 18, 2014

Last week, the relevant Congressional committees released a bipartisan, bicameral proposal to replace the Sustainable Growth Rate (SGR) formula for Medicare physician payments, which has repeatedly been modified or delayed before taking effect since 2003. Despite this agreement, much less work has been done concerning how to pay for the cost of the replacement.

February 18, 2014
Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Cold Reality – The Winter Olympics are in full swing in Sochi, Russia, but Washington saw its own share of winter games before Congress adjourned for yet another break. Lawmakers played with the debt limit and considered virtually every idea under the sun before agreeing to put it off for another year. Legislators also fooled around with various budget gimmicks as they seek to game the system. There are a lot of issues that Americans want their representatives to tackle, but there isn’t much hope of that happening in this political climate.

February 14, 2014

Earlier this week, Congress moved quickly on a bill to repeal the military cost-of-living adjustment (COLA) reduction for working age retirees that was included in the Ryan-Murray budget deal. The bill repeals the reduction for all service members who started before 2014, effectively delaying any part of the reform for 20 years and delaying its full phase in until 2058.

February 12, 2014
Good Economic Policy Would Call for the Opposite

In May of last year, CBO expected the 2014 deficit to fall to $560 billion from 2013's total of $680 billion. Now, CBO is estimating a deficit of $514 billion this year, a reduction of $46 billion compared to May.

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