The Bottom Line

November 13, 2013

As the budget conference committee works to develop a plan to offset some of the sequester, they may be tempted to use budget gimmicks in place of hard choices (last week we warned against use of the war gimmick). One such gimmick would be to repeal most or all of the sequester now and pay for it by increasing the sequester later.

November 13, 2013

At the second meeting of the budget conference committee earlier today, CBO director Doug Elmendorf was on hand to present the budget and economic outlook and to answer (as it turned out many, many) questions from the conferees.

November 13, 2013

We may have had to wait a little longer due to the government shutdown, but CBO's new budget options report is finally here. Today, CBO released its updated Revenue and Spending Options report, containing over 100 policy options and new budgetary scores for the current ten-year window.

November 13, 2013
With Order Restored, Let’s Act

The budget conference committee is holding its second hearing this morning as the conferees continue to try and work out a compromise between the House and Senate budgets. Today, CRFB board member and former Senator Kent Conrad (D-ND) and former Senator Judd Gregg, both who served as Chairman of the Senate Budget Committee, stress in an article in The Hill the importance of using this opportunity to act and resolve our open budget questions.

November 13, 2013

The second meeting of the budget conference committee will happen today at 10 AM Eastern time. The conferees do not have a lot of time, as their deadline of December 13 is now exactly a month away and government funding will expire a month later on January 15. Testifying at the meeting is a familiar face in the budget world, CBO director Doug Elmendorf, whose agency will also be releasing an updated Budget Options report at noon today.

November 12, 2013

What to do about sequestration remains one of the most important questions before the budget conference, and while replacing at least part of the sequester is popular among lawmakers, it is not clear what policies should offset that cost. Today, Nicole Woo of the Center for Economic and Policy Research (CEPR) made the case for an offset that could replace one-third of the sequester for 2014 - increasing Wall Street user fees.

November 12, 2013

Replacing the sequester will be an important item on the conference committee's agenda, and it may also be the most difficult. Right now, the two parties differ as to how to replace it, with Republicans advocating for only spending cuts as offsets and Democrats seeking a mix of revenue and spending cuts. When it comes to the defense sequester, which is slated to reduce the defense budget by $490 billion over the next ten years, Democrats may be particularly wary of replacing defense cuts with cuts to non-defense programs.

November 12, 2013

Last week, at a breakfast with David Wessel and Gerald Seib of The Wall Street Journal, Council of Economic Advisers chair Jason Furman made the case that not only had short-term deficits been coming down, but also that the long-term situation has improved dramatically.

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

Saluting Service – Today we salute those who have served the United States in the military with a federal holiday. While many have a day off, lawmakers are taking an extended break from Washington ahead of some bruising budget battles. The House returns to work tomorrow from over a week of recess as the Senate enjoys its own respite this week. But policymakers can’t get away from dealing with unresolved fiscal issues. Several deadlines loom and the U.S.

November 11, 2013

When talking about the debt, it is hard to avoid also talking about generational inequity. Many groups, especially the Can Kicks Back, have worked to highlight how our unsustainable debt path will especially hurt younger generations if lawmakers do not take action.

November 8, 2013

It has been one week since the budget conference committee's first meeting, and many are speculating that the committee could realistically come up with a plan to replace some of the sequester's temporary cuts with permanent deficit reduction. The budget conference committee has a December 13 deadline to produce a compromise budget.

November 8, 2013

The Government Accountability Office, the investigative arm of Congress, posted a short educational video explaining the national debt today. In a short time period, it explains the difference between gross debt and debt held by the public, why debt is measured as a percent of GDP, and why the long-term debt situation is troubling.

The video is a good educational resource for the basics of federal debt.

November 7, 2013

It's no secret that a significant portion of the federal budget is devoted to our national defense and insurance programs like Social Security, Medicare, and Medicaid. As Ezra Klein wrote almost three years ago, the federal government can be thought of as essentially "an insurance conglomerate protected by a large, standing army." But the army's getting smaller too.

November 7, 2013

This is the fourteenth post in our blog series, The Tax Break-Down, which will analyze and review tax breaks under discussion as part of tax reform. Last week, we wrote about the FICA Tip Credit.

November 7, 2013
Conference Committee Could Jumpstart Reform

All eyes are on the budget conference committee, which has a myriad of options available to consider as it negotiates this year's budget resolution. Some advocates and lawmakers have been discussing Social Security reform as an area that might be able to get bipartisan consensus.

November 6, 2013

The Treasury Department released its final estimate of the budget figures for FY 2013 last week, with a final deficit figure of $680 billion. Today, CBO followed up with a breakdown of the differences between their May estimate and the actual totals.

November 6, 2013
Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Sugar Crash – Another Halloween has come and gone. Many kids (and adults) have been quickly going through their sugar-filled loot. Eventually, the candy always runs out and everyone is left with a severe letdown and an empty bag. The thrill of trick-or-treating and the subsequent sugar rush are gone. It feels that way in Washington now. There are no more treats left, though there is still potential for tricks. The budget conference committee has begun deliberations on the right foot, but lots of obstacles remain.

November 6, 2013

Yesterday was the 5th of November, also known Guy Fawkes Day in the UK. But in the US, this date also has special significance for being the day upon which President Bush signed the bipartisan Omnibus Budget Reconciliation Act (OBRA) of 1990 into law, the largest deficit reduction package (in real dollars) ever achieved through reconciliation. The reconciliation legislation contained nearly $750 billion (in 2013 dollars) of deficit reduction over 5 years, through a combination of revenue increases and spending cuts.

November 5, 2013

The Senate Finance and House Ways & Means Committees, last week, released a bipartisan, bicameral discussion draft of a proposal to permanently replace Medicare’s sustainable growth rate (SGR) formula, which is set to cut physician payments by nearly 25 percent next year.

November 4, 2013

With conference committee meetings underway, many are weighing in with their take on what should be accomplished. On Friday, Fareed Zakaria at CNN compiled a wishlist for Congress, with the help of commentators, analysts, and policy makers. The 12 contributors all had different takes on what the conference committee should address.

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