The Bottom Line

June 12, 2014

The Senate voted 93-3 yesterday on new legislation to expand veterans' benefits by allowing beneficiaries to seek out private (non-VA) health care paid for by the Department of Veterans Affairs (VA).

June 12, 2014

The House passed today two bills permanently reinstating three tax provisions that expired at the end of 2013. Extending these provisions would cost about $75 billion. Because they approved these tax cuts without offsetting savings, the two bills would add about $95 billion to the deficit, including interest.

June 11, 2014

The International Monetary Fund recently published a study on budget institutions in G-20 countries. The study takes stock of these countries' progress in reforming their budget institutions and examines whether having strong budget institutions has helped countries tackle their budget challenges in the aftermath of the financial crisis. While it is difficult to measure the impact of institutional arrangements on budgetary outcomes, the IMF's verdict is that they do matter.

June 10, 2014

With the Highway Trust Fund (HTF) running low and the threat of disrupting highway construction later this summer, lawmakers are scrambling to come up with a short-term solution to add more money to the fund. However, a new Joint Committee on Taxation analysis shows that one popular idea to "pay" for the transfer – a tax holiday for corporations returning cash held overseas, or "repatriation tax holiday" – actually adds to the debt and therefore cannot be used as an offset.

June 10, 2014

Despite the noted acceleration in broader health care spending this year (likely due in large part to coverage expansions), Medicare continues to grow at an astoundingly slow pace.

June 9, 2014

For several years, the Department of Defense (DoD) has been suggesting ways to trim parts of the Defense budget to make room for other military spending. These recommendations have included modest cuts in benefits for active-duty servicemembers and veterans.  However, Congress has repeatedly rejected cost savings that rein in the benefits for servicemembers.

June 9, 2014

The individual mandate penalty is arguably the most controversial piece of the Affordable Care Act. It was the centerpiece of the legal challenge to the ACA, a challenge that made it to the Supreme Court, and it has been the subject of frequent debate in recent years. Yet, CBO's latest analysis of the mandate shows that the number of Americans actually expected to pay the penalty is small, even compared to the number of people remaining uninsured after the ACA's implementation.

June 6, 2014

The House Affordable Medicines Caucus recently launched by Reps. Peter Welch (D-VT) and Keith Rothfus (R-PA) already has plenty of ideas to reform our nation's drug policies and produce cost savings for both the federal government and beneficiaries. The latest edition of Health Affairs (subscription required), though, adds a couple more ideas to encourage more efficient use of prescription drugs.

June 5, 2014

In response to the recent VA scandal and hospital backlogs, Senate Veterans Affairs Committee Chairman Bernie Sanders (I-VT) has proposed legislation that would address the situation and authorize additional funding for the Department of Veterans' Affairs (VA). Congressional Quarterly's (subscription required) Alan Ota explains:

June 5, 2014
How to shrink America’s debt? Start small

Alice Rivlin is a former Director of the Congressional Budget Office and Office of Management and Budget. She has served as a member of the National Commission on Fiscal Responsibility (Simpson-Bowles) and a co-chair of Domenci-Rivlin Debt Reduction Task Force. She currently is on the board of the Committee for a Responsible Federal Budget and is the Director of the Engelberg Center on Health Care Reform at the Brookings Institution.

June 4, 2014

President Obama yesterday announced $1 billion for a European Reassurance Initiative to step up U.S. presence and planning in Central and Eastern Europe partially in response to Russia's actions in Ukraine. The idea itself may have merit, but what certainly does not is the source of the funding: war spending.

June 3, 2014

Bloomberg Businessweek reported last week that House Republicans are considering a plan that would utilize savings from U.S. Postal Service (USPS) reforms to pay for general fund transfer to the Highway Trust Fund (HTF). Bloomberg’s Angela Keane and Derek Wallbank wrote:

June 2, 2014

The Ways and Means Committee voted on a number of tax bills last week, including legislation that would restore and expand bonus depreciation at a cost of $360 billion over the next decade (including interest). Although there are reasonable arguments for and against this measure, permanent changes to depreciation schedules should be dealt with in the context of comprehensive tax reform and fully offset so as not to add to long-term deficits.

May 30, 2014

Reps. John Delaney (D-MD) and Tom Cole (R-OK) introduced the Social Security Commission Act of 2014 today, which would establish a statutory commission with a mandate to recommend ways to make Social Security solvent for at least 75 years. The policy prescriptions would then be subject to an up-or-down vote in Congress.

May 29, 2014

Reps. Peter Welch (D-VT) and Keith Rothfus (R-PA) have officially re-launched a bipartisan caucus in the House looking to promote the use of high-quality, low-cost drugs.

May 29, 2014

The Ways and Means Committee is continuing to work through the set of over 50 tax breaks that expired at the end of 2013, choosing certain provisions to extend permanently. While scrutinizing which tax extenders are worth keeping would normally be commendable, the Committee ignores the cost of making these tax breaks permanent, which would add to the debt.

May 28, 2014

President Obama announced yesterday the number of troops that would be remaining in Afghanistan beyond the end of the year. While these levels are not final until the Afghan government agrees, they show the most likely way forward for U.S. military involvement in the country.

May 23, 2014

Credit programs involving loans and loan guarantees are accounted for differently than most other programs in the federal budget. Whereas other programs record outlays and revenue as cash goes out and comes in, the cost of credit programs are calculated by recording the lifetime cost of the loan/guarantee in the year it is originated. However, a new report from the Congressional Budget Office (CBO) raises questions as to whether we are measuring these programs appropriately.

May 22, 2014
302(b) Allocations Approved for FY2015

Today the Senate Appropriations Committee approved 302(b) spending allocations for FY2015 appropriations at the beginning of a markup for the Military Construction-Veterans' Affairs and Agriculture bills. These spending levels determine how much the appropriations subcommittees have to distribute within their respective bills.

May 22, 2014
What’s Missing in the Earmark Debate

Maya MacGuineas, President of the Committee for a Responsible Federal Budget, wrote a commentary that appeared in the Wall Street Journal Washington Wire. It is reposted here.

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