The Bottom Line

November 21, 2012

Over the past few weeks we've heard some misleading things about the fiscal cliff and the possible bipartisan plans that could replace the cliff. CRFB President Maya MacGuineas referenced many of these myths in her recent Washington Post piece, but a few of these, and additional misconceptions, are worth addressing in detail. Next week we will dive more in depth into each of the three misconceptions listed below.

November 21, 2012

In recent weeks, we’ve heard a lot of talk about the fiscal cliff, but little of it has focused on one piece that has caused headaches for lawmakers for almost a decade – the Sustainable Growth Rate (SGR) formula. In January, the SGR formula calls for an unrealistic 27 percent cut to Medicare provider payments if Congress does not act to prevent them from going into effect. We’ve discussed before how the SGR is a flawed formula and that any “doc fix” enacted by Congress should be paid for in full.

November 20, 2012

In an address to the New York Economic Club today, Federal Reserve Chairman Ben Bernanke commented on the state of the economic recovery and the challenges faced by the U.S.--namely, a weak housing market, slow global growth, and of course, the fiscal cliff. But this third headwind to economic growth is entirely within the control of lawmakers, and Bernanke urged Washington to take on the challenge.

November 20, 2012

Sen. Tom Coburn (R-OK) is known for going after government inefficiencies, whether it's lauching the GAO's comprehensive review of federal agencies for duplicative programs or his yearly "Wastebook." Now Coburn has turned to the Department of Defense in his latest report "Department of Everything," an in-depth look which finds $67.9 billion in spending unrelated to DoD's national security goals--spending that is often duplicative or wasteful.

November 20, 2012

In a recent blog post, Jason Delisle and Alex Holt, colleagues at the New America's Foundation Education Budget Project, argue for the elimination of the interest-free benefit on Subsidized Stafford student loans.

November 20, 2012
Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Racing to the Cliff – The NASCAR season ended on Sunday with Brad Keselowski claiming his first Sprint Cup championship. But fans of seeing things going around in circles can get their fix by watching the action in Washington. Congress is not in session this week for a Thanksgiving pit stop, but the posturing for position continues regarding the looming fiscal cliff. The thing about this race is that it isn’t clear how many laps it will go.

November 19, 2012

A new report by CRFB and Moment of Truth Project consultant Paul Weinstein provides some guidance on how we could handle both our infrastructure deficit without affecting our federal deficit. How does he propose to do this? Weinstein recommends using a commission to identify wasteful spending to help pay for infrastructure investment along with deficit reduction.

November 19, 2012
Five myths about the 'fiscal cliff'

Not long after her appeal to national leaders to work towards a bipartisan compromise, CRFB president Maya MacGuineas dispels 5 common misconceptions about the looming fiscal cliff in a Washington Post op-ed published last Friday. MacGuineas identifies the myths as follows:

November 19, 2012

President Obama met with Congressional leaders last Friday to begin working toward a deal to avoid the fiscal cliff. Reportedly, the talks had an optimistic tone, and leaders seem to be willing to reconcile their differences in the coming months. However, this was not the only development that took place at the end of last week.

November 19, 2012
Going Off the Fiscal Cliff Is Good Policy­—If You Like Unemployment

Former Congressman and CRFB Board Member Bill Frenzel has some advice for the so-called "fiscal cliff divers": don't even think about it! Going off the fiscal cliff would be terrible policy, with the sudden and blunt spending cuts and tax increases likely sending the U.S. into another recession.

November 16, 2012

Today, the Peter G. Peterson Foundation held a follow-up event to its 2011 Solutions Initiative, in which policy organizations presented plans to deal with the debt. Many of those same organizations updated their plans for this year to deal with replacing the fiscal cliff with a comprehensive plan.

November 16, 2012

In a new paper yesterday, we showed how policymakers could raise revenue exclusively from higher earners without increasing rates. Specifically, we showed three models which would phase in different types of tax expenditures caps on income above $200,000 ($250,000 for households) in a way that raised revenue similar to what would be generated by allowing the upper-income tax cuts to expire.

November 16, 2012

As was the case two years ago, the 2001/2003 tax cuts will be a hot topic in the lame duck session. Democrats would like to extend the full tax cuts only for people making less than $250,000, while Republicans would prefer to extend them fully for most everyone (leaving out refundable tax credit expansions from 2009).

November 15, 2012

Yesterday's The Hill reported on a letter that acting IRS commissioner Steven Miller sent to the heads of the House Ways and Means and Senate Finance Committees. The main message: not patching the Alternative Minimum Tax (AMT) would be a nightmare.

November 15, 2012

A couple of months ago, The United States Conference of Mayors, through a letter signed by a bipartisan group of 149 mayors across the country, called on Congress to reach a comprehensive bipartisan debt deal.

November 14, 2012
Now that the Election is over, Let’s Fix the Country’s Debt Woes

Today, CRFB President Maya MacGuineas writes in The Hill that with the election now over, politicians can and should turn their attention to what voters are demanding: a resolution to the fiscal cliff and a comprehensive debt deal.

November 13, 2012

As the President, Congress, business, labor, and other civic leaders meet this week to discuss a "Grand Bargain" on the fiscal cliff and our unsustainable fiscal path, some commentators have been advising their sides not to compromise.

November 13, 2012

Last week, a letter from six organizations--the AARP, the American Academy of Family Physicians, the American College of Physicians, the American Geriatrics Society, the Center for Medicare Advocacy, and the Medicare Rights Center--urged Congress to override the Sustainable Growth Rate (SGR) formula that is set to cut Medicare physician payments by 27 percent starting January 1.

November 12, 2012

The generational burden of debt is one of the best arguments for millennials to get involved with the issue of deficits and debt. We've noticed many younger voters have begin to speak in favor for a bipartisan plan to resolve our debt problem. In that vein, a grassroots campaign called The Can Kicks Back will formally launch today at 6 PM at The George Washington University.

November 12, 2012

On Friday, President Obama spoke on the need to replace the "fiscal cliff" with a comprehensive plan to address the nation's unsustainable fiscal path. Most importantly, President Obama announced that the White House would invite leaders from both parties, business groups, labor and civic groups from across the country for a meeting this week to begin working toward a compromise.

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