The Bottom Line

December 24, 2013

Best wishes to all our readers. We look forward to bringing you coverage and analysis of important fiscal policy issues throughout next year.

From all of us at CRFB, happy holidays and a joyful new year. 
December 20, 2013

Recently, many policymakers and commentators have called for expanding Social Security benefits rather than slowing the program’s costs, suggesting that the program’s current shortfalls are modest and easily addressed. Below, we answer some questions about Social Security to help explain why many of these calls are misguided.

December 20, 2013
Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

That’s a Wrap – The House wrapped up its work for 2013 last week, passing the budget agreement worked out by Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI) and extending the “doc fix” into next year to buy some more time for negotiations on that front. The Senate is trying to finish up this week and also approved of the budget deal, sending it to the president who has promised to sign it. The budget deal is one of the few things Congress was able to leave under the tree after a year marked by partisanship, brinksmanship and general dysfunction.

December 19, 2013

Senate Democratic leadership is reportedly considering a last minute effort to extend 55 expiring tax provisions for another year, including a large number of so-called “tax extenders” as well as the supposedly-temporary bonus depreciation. This package could cost $40 to $50 billion and includes no offsets.

December 19, 2013

The Murray-Ryan budget deal would mitigate some of the 2014 and 2015 sequester, but it actually still leaves the sequester’s cuts to mandatory programs entirely in place, including those to parts of the Affordable Care Act (ACA). While the subsidies to help people afford health insurance premiums at the core of the law are exempt from sequestration because they are structured as individual tax credits, little has been written about the other important aspects of the ACA that are still set to be sequestered.

December 18, 2013

In a move that has been discussed and anticipated for months, the Federal Reserve's Federal Open Market Committee announced that it would slightly scale back its current quantitative easing program (QE3). Specifically, it would slow its purchases of longer-term Treasury and mortgage-backed securities by $5 billion per month each, reducing the total monthly purchase from $85 billion to $75 billion.

December 18, 2013

CBO's Long-Term Budget Outlook contains significant amounts of helpful data on Social Security. However, a lot of the data focus on just the outlays of the program; by contrast, reformers tend to focus more on its overall finances and the state of the trust fund. Today, CBO published some additional information on Social Security, showing both the program's full finances and, importantly, the ranges of uncertainty in their projections.

December 17, 2013

While the Final Four for the NCAA tournament is still almost four months away, another Final Four is taking place right now. Although it won't be held in a football stadium, voting for the 2013 SAVE Award is happening on the White House's website.

December 17, 2013

For years, Senator Tom Coburn (R-OK) resisted the temptation to talk in broad generalities about "wasteful government spending" and has instead been willing to call out specific examples. Today, his office has published the fifth edition of his annual Wastebook, detailing 100 examples of what he describes as "wasteful and low-priority spending," totaling almost $30 billion.

December 17, 2013
The Real Value of the Budget Deal

It has been one week since Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI) announced they had reached a bipartisan budget agreement, which is now being considered in the Senate. CRFB board member Bill Hoagland, a longtime expert on the federal budget process and former staff director of the Senate Budget Committee, weighed in on the deal in an op-ed today.

December 16, 2013

As CRFB has explained in a recent analysis, the Bipartisan Budget Act under consideration in the Senate would replace a portion of the mindless sequester cuts with more targeted reforms. One controversial proposal in the bill would reduce cost-of-living adjustments for working-age military retirees. This blog explains that provision.

December 16, 2013

This is the fifteenth post in our blog series, The Tax Break-Down, which will analyze and review tax breaks under discussion as part of tax reform. Previously, we wrote about the Low-Income Housing Tax Credit, which provides credits to state-run housing agencies, which are then distributed to developers and investors to build low-income rental housing.

December 16, 2013
Budget Deal is Just a Start

The budget agreement reached by the Senate and the House last week both has some good elements and bad elements. In particular, it replaces some of the sequester in 2014 and 2015 with targeted and permanent savings policies like reforming military and civilian retirement and improving the Pension Benefit Guaranty Corporation but does not do enough to make the long-term debt sustainable.

December 13, 2013

As we've said before, paying for temporary costs with savings that grow over the long term is very helpful for the long-term budget outlook, as it provides deficit reduction when it is most needed and after the costs have been incurred. In addition, doing so can provide up-front help for the economy. There are several policies in the Bipartisan Budget Act (BBA) that achieve this objective, saving relatively little in the first ten years but whose savings grow over time.

December 13, 2013

On Wednesday, we published an analysis of the Bipartisan Budget Act, which would replace a portion of the FY2014 and FY2015 sequester with mandatory cuts and user fees. Based on our analysis, the legislation would increase the deficit in the short run, modestly reduce it over ten years, and save about $100 billion in the second decade.

December 13, 2013

Today, Kiplinger's Personal Finance published a new interview with Fiscal Commission co-chair and CRFB board member Erskine Bowles. In a discussion with editor Janet Bodnar, Bowles argues that despite modest improvements in our country's fiscal outlook, we still face a crisis unless lawmakers deal with the long-term drivers of the national debt.

December 12, 2013

On Tuesday, Sen. Patty Murray and Rep. Paul Ryan announced a budget deal that set discretionary spending levels for the next two years, removed some of sequestration's cuts, imposed targeted spending cuts and fee increases, and modestly reduced deficits over the next decade (see our full analysis of the deal).

December 12, 2013

So far, reactions to the budget agreement have been mixed. As we said in our report yesterday, Understanding the Bipartisan Budget Act, the deal replaces short-term savings in sequestration with smarter, permanent savings from mandatory savings and user fees, a positive development. But it largely pushes the big decisions down the road.

December 12, 2013

With the details on the agreement reached by Budget Committee chairs Paul Ryan (R-WI) and Patty Murray (D-WA) made fully available yesterday, CRFB has gone deeper into the Balanced Budget Act in a new paper and breaks down the sequester relief, the offsets, and finally the overall effect on the budget this decade and over the long term.

December 11, 2013
Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

We Have a Deal – Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA) announced a budget deal late Tuesday after weeks of negotiation and a few days ahead of the December 13 deadline for their conference committee to report an agreement. The deal sets topline spending numbers for the next two years, $1.012 trillion for fiscal year 2014 and $1.014 trillion for fiscal year 2015.

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