The Bottom Line

February 10, 2012

Just when you thought you've seen it all, here's Clint Eastwood on CNBC's "Squawkbox" this morning touting the Fiscal Commission plan. Given the large deficits we face, he supports the idea of bringing it back up for consideration. See the full video below.

 

February 9, 2012

Expedited rescission authority, a cousin of the line-item veto, has been considered countless times by Congress since the line item veto was declared unconstitutional in 1998. In fact, CRFB president Maya MacGuineas recently testified on this proposal, which can be found here. Yesterday, it has passed the House by a 254-173 vote.

February 8, 2012

With less than a week before the President's budget comes out The Wall Street Journal has reported that it will be similar to the September submission to the Super Committee.

February 8, 2012

Harvard Law School professor Howell Jackson has an interesting idea in a Reuters op-ed: if fiscal issues are going to be extremely important in the coming years, why not create a process that would encourage Presidential candidates to come up with a fiscal plan?

February 7, 2012

Military pensions for high-ranking officers are going up significantly, according to a USA Today article. Due to a change in the Defense Authorization Act of 2007 that was intended to dispel concerns about losing too much of the top brass during wartime, pensions increased by as much as 63 percent for some officers.

February 6, 2012

The McKinsey Global Institute recently released a report assessing the efforts of the world’s ten largest mature economies (United States, Japan, Germany, France, United Kingdom, Italy, Canada, Spain, Australia, and South Korea) in deleveraging (essentially, reducing debt) in the aftermath of the great recession.

February 6, 2012
A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Baseline Instinct – The Congressional Budget Office (CBO) on Tuesday released its much-awaited 2012 Budget and Economic Outlook. According to CBO, if current law is maintained, deficits will decrease significantly in the period from 2013-2022; but that is a big if. Under the current law baseline, a major reason that deficits will shrink is due to major revenue boosts because the 2001/2003 tax cuts will expire and the Alternative Minimum Tax (AMT) will hit more middle-income families.

February 3, 2012

Over the course of this week, we have been discussing CBO's recent Budget and Economic Outlook. On Tuesday, we summarized the report and released a paper that walked through the details.

February 3, 2012

Supporters of enacting a comprehensive deficit reduction plan got a boost yesterday from Federal Reserve Chairman Ben Bernanke. At a hearing with the House Budget Committee on the economic outlook, Bernanke responded to a question from Rep. Mike Simpson (R-ID) about the need for a large fiscal plan. He said the following (at the 58:45 mark of the video):

February 2, 2012

We noted earlier this week that CBO's current law economic assumptions in the near-term do not look very stellar, especially in 2013 when the economy is scheduled to absorb a large fiscal shock as a large number of tax cuts expire and the "sequester" resulting from the failure of the Super Committee cuts spending automatically across-the-board.

February 2, 2012

The good folks at the Tax Policy Center have written yet another enlightening report on tax expenditures. This one, titled, "Curbing Tax Expenditures" analyzes the current mess that is the tax expenditure "budget". Tax expenditures -- the various credits, deductions and loopholes that are littered throughout our tax code -- tend to be expensive, regressive, and economically distortionary. Their existence comes at the expense of less debt and lower marginal tax rates.

February 2, 2012

CRFB board member Rudolph Penner recently co-authored a paper that is essentially a retrospective on the 2011 deficit debate. He and Urban Institute colleague John Palmer compared the President's Framework and the House Budget Resolution while also discussing the Budget Control Act that passed in August.

They describe the premise of the paper below:

February 2, 2012

The conference committee that is tasked with extending various provisions that are set to expire at the end of this month will meet for the third time. They will be taking up the payroll tax cut, the doc fix, extended unemployment benefits, and possibly various expiring tax provisions that expired at the end of last year.

You can watch the video on C-SPAN.org here.

February 1, 2012

Yesterday, CRFB released its analysis of the latest budget projections from CBO, discussing debt, deficits, spending, and revenues. We also updated the CRFB Realistic Baseline in our analysis to give a more realistic view of where the country is headed. Not surprisingly, it shows much higher debt and deficits than CBO's current law projections.

February 1, 2012

A claim that has been popping up in some news circles over the past day is that the doc fix -- which freezes Medicare payments to physicians, instead of allowing them to be cut by 27 percent starting in March -- has become more expensive in light of CBO's new budget and economic outlook.

For example, an article in the National Journal states:

January 31, 2012

CBO released its new budget and economic outlook, showing slightly higher ten-year deficit and debt projections from 2012-2021 than the last ten-year projections CBO produced this past August.

January 30, 2012

CBO has a new report out, comparing federal and private-sector compensation for employees. The report shows that, on average, federal employees are compensated more than private-sector employees with similar educational backgrounds and other characteristics; however, the story is not as simple as it would appear.

January 30, 2012
A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Super Not So Duper – The word “super” has lost its luster lately. The failure of the Super Committee and the need for a super majority in the Senate to pass virtually anything have contributed to record-low approval ratings for Congress. Meanwhile, Super PACs are pouring unlimited funds into campaigns, resulting in even more negative advertising than usual and rising concerns that the political process is being distorted.

January 27, 2012

The report by the Inspector General of TARP drew some attention for showing that some of its programs would not end until 2017. That in itself is no surprise; in fact, some programs do not have specific end dates and could go on longer than that. Still, the report is useful to see where we are on TARP.

January 27, 2012

Yesterday, Secretary of Defense Leon Panetta fleshed out the widely-anticipated FY 2013 defense budget. The budget showed to some extent how the Obama Administration plans on meeting the defense reductions that are necessary because of the discretionary spending caps in the Budget Control Act.

While Panetta's briefing was not as detailed as next month's budget, it included more details than we had heard in previous speeches and laid down the topline defense numbers the Administration will propose over the next five years.

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