The Bottom Line

October 23, 2013

Citizens for Tax Justice has released a new tax reform plan which eliminates some tax breaks and uses some of the revenue to cut the top rate and simplify some tax provisions. In total, they estimate the package would raise $2.4 trillion in revenue over the next ten years, or $2 trillion in permanent revenue when temporary effects of a few policies (like accelerated depreciation) are excluded.

October 23, 2013

Years of failed budget negotiations have illustrated the political difficulties of a big budget deal. Neither political party is willing to touch their preferred part of the budget without significant concessions from the other side. However, there may be a way forward. In a blog post featured in the Hill, Jim Kessler and Gabe Horwitz suggest that tackling Social Security reform may be a way to break the logjam.

October 23, 2013
Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Shutdown Smackdown – The shutdown ended and a default was averted last week, but the fallout continues as voters express their displeasure with lawmakers through record-low approval ratings. A new poll says that 64 percent of Americans are pessimistic about Congress’ ability to deal with issues down the road because of the shutdown and debt ceiling fiasco.

October 22, 2013

On this day 27 years ago, President Ronald Reagan signed into the law the Tax Reform Act of 1986, which stands as the last major overhaul of the US tax system. The law serves as the ultimate example in this country of tax base-broadening and tax rate-lowering reform and is often cited as the inspiration for many tax reform plans today. The Act consolidated individual income tax brackets from 15 to 2, reducing the top individual rate from 50 to 28 percent and the top corporate rate from 46 to 34 percent.

October 22, 2013

The Campaign to Fix the Debt has recently released the results of a new national telephone poll that found broad support for a comprehensive deficit reduction plan that includes tax reform, sequester replacement, and structural changes to Social Security and Medicare. The bipartisan poll was conducted by Anzalone-Liszt-Grove Research and Voter Consumer Research with 800 likely voters.

October 22, 2013

Yesterday, the Campaign to Fix the Debt unveiled its Citizens' Plan for lawmakers to consider over these next two months of budgetary debates. Lawmakers should take three steps: Stop the madness and end the crisis-to-crisis approach, start working together, and solve our debt problem by developing a comprehensive plan that would include entitlement and tax reform.

October 21, 2013

As the dust begins to clear from this month's political battle over the debt ceiling and government shutdown, there have many reports of businesses waiting to make key investments until political stability returns. Today, in a new op-ed in the Financial Times, BlackRock CEO and Chairman Larry Fink notes the partisan wrangling in Washington may been doing real, lasting damage by weakening investor confidence in the stability of our political system.

October 21, 2013

Now that the government shutdown and debt default threat are in the rearview mirror (for now), analysts have been taking time to survey the economic damage, in particular the more quantifiable effects of the shutdown on the economy and the budget deficit. The results, of course, are not good and highlight the need to avoid confrontations like this in the future and not wait until the eleventh hour to find a solution. Since we will back in a similar position again at the beginning of next year, we will see soon if policymakers have learned their lesson.

October 18, 2013
Hey Congress: Use This Moment

The shutdown may be over and fears of a default adverted for now, but the reality remains that we still haven't made any progress on our debt problem. CRFB President Maya MacGuineas writes in zpolitics that with a few months before we approach the next fiscal hurdles, lawmakers should get busy and begin to work toward a permanent solution.

October 18, 2013

Recent reports have suggested the new budget conference committee may focus its attention of a deal to replace sequestration.

October 18, 2013

With President Obama's signature on Thursday morning, the nation went from the brink of default to having a least a little elbow room on the debt ceiling for a few months. The actual date on which the nation would default (the "X date") is uncertain given the question of whether extraordinary measures will be available, but the bill will at least prevent a breach of the debt ceiling through February 7.

October 17, 2013

In additional to reopening the government and suspending the debt ceiling, last night, both the House and Senate agreed to go to Budget Conference.

October 17, 2013

This is the eleventh post in our blog series, The Tax Break-Down, which will analyze and review tax breaks under discussion as part of tax reform. Our last post was on the American Opportunity Tax Credit, which provides a credit for undergraduate tuition. 

October 17, 2013

Yesterday, former Defense Secretary and CRFB board member Leon Panetta headlined a press conference at the National Press Club on the need for our lawmakers to come together and work toward a comprehensive debt deal.

October 16, 2013
Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Ending the Shutdown and Cranking Up the Debt Limit – It’s been an up-and-down past couple of weeks. The federal government has been shut down since October 1 and the U.S. loses its borrowing authority on October 17 absent a deal to increase the statutory debt ceiling. Several times there have been hopeful signs of an end only to fizzle out. But on Wednesday a deal was announced to end the short-term crises, albeit temporarily.

October 16, 2013

After a few weeks of government shutdown and a nerve-wracking lead-up to hitting the debt ceiling, the Senate leadership announced today it had come to an agreement to resolve the current crisis. Under this deal the government would be funded through January 15 at the FY 2013 level of $986 billion and the debt ceiling would be suspended through February 7 (though extraordinary measures would extend the default date past then). The leaders have also agreed to set up a budget conference committee that would be instructed to report recommendations by December 13.

October 16, 2013

The prolonged government shutdown and debt ceiling debate are a clear indication that our government is not functioning as it should. Furloughed workers, closed national parks, and shuttered government offices are the byproduct of an unwillingness to compromise by our elected officials.

October 15, 2013

Yesterday, Former Treasury Secretary and director of the National Economic Council Larry Summers argued that “budget deficits are now a second-order problem” and the focus should instead be on economic growth. Although the piece is in many ways insightful, it could perpetuate the myth in Washington that our debt problems are either solved or are no longer a pressing concern.

October 14, 2013

Bipartisan discussions over how to end the partial government shutdown and raise the debt ceiling are coming down to the wire as this week begins, with only three days left until October 17 -- the date that Treasury Secretary Jack Lew says the U.S. government would be left with a dangerously low amount of cash on hand and default could potentially be imminent.

October 14, 2013

Today begins week three of the government shutdown, and we are now just days away from when the Treasury will exhaust its borrowing authority and risk a default. So far, lawmakers have yet to agree on a fiscally responsible way out of this dilemma. However, former chairman of the Council of Economic Advisors Michael Boskin chimes in today with several suggestions.

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