The Bottom Line

April 10, 2012

Tax Policy Center president Donald Marron has a brief in Tax Notes that shows that spending on tax expenditures are higher than the commonly reported $1.1 trillion figure. As Treasury does not release the figures of the cost of all tax expenditures, they are often estimated by summing the individual and corporate tax preferences. However, this method excludes other provisions that reduce total tax revenues such as payroll or excise tax expenditures.

April 10, 2012

In the latest post in his ongoing "The Government We Deserve" series, CRFB board member Eugene Steuerle stated that regardless of how the Supreme Court rules on the constitutionality of the individual mandate, we would still have a problem with health care costs and a "math-less debate" on the issue.

Below is an excerpt from the post:

April 10, 2012
A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

What the Bunny Left Behind – We’ve given up on giving things up for Lent, Passover will be passing, and the Easter Bunny has hopped into the pastel sunset. Yet, plenty of tasty goodies have been left behind. Likewise, legislators left plenty in their wake as they rushed home for the holidays, though nothing very sweet. Congress was out last week and remains in recess this week. Lawmakers will then return to some unfinished fiscal business. Easter eggs are wondrous things – colorful and full of surprises. They can be found in unexpected places.

April 9, 2012

CBO's latest Monthly Budget Review for March gives us a look at how the federal budget looks compared to last year halfway through the fiscal year. This year's deficit through six months is $777 billion, compared to $829 billion through the same period last year. The smaller deficit is the result of revenue being $46 billion higher and outlays actually being $7 billion lower compared to FY 2011.

April 6, 2012

As readers of The Bottom Line and our releases will know, CRFB strives to compare as many plans as possible on a similar basis so that policymakers, experts, and the public can truly see the differences between competing proposals. We do this because it's all too easy for people to get confused about various baselines and actual new savings from proposals.

April 6, 2012

The IMF has a new report out called "Accounting Devices and Fiscal Illusions," a handy guide to different types of fiscal trickery that have been employed by European countries and the US. Mainly, these gimmicks have to do with increasing revenue or decreasing spending in the short term but creating new liabilities or lowering revenue over the longer term. In the case of Europe, these tricks move money around to meet present fiscal targets.

April 5, 2012

Via Wonkblog, Sarah Kliff reports on an initiative by nine medical specialty groups to identify procedures that they find to be either unnecessary or unlikely to improve patient outcomes. The initiative, called "Choosing Wisely" tasked these nine groups to come up with five procedures each, for a total of 45 (the list is here). 

April 5, 2012

Following up on a project they did last year, the White House has released its 2011 Federal Taxpayer Receipt. This tool allows you to put in how much you paid in Social Security, Medicare, and income taxes last year and see how much of your tax dollars went to various areas of the budget. You can see how much of your money pays for defense, health care, income security, veterans benefits, international affairs, and, yes, also interest on the debt.

April 4, 2012

With a number of budget resolutions coming out, honest budgeting might be too much to ask for. As we took a look at the Republican (Ryan) and Democratic (Van Hollen) budgets, in fact, we found a number of gimmicks. Some of the major ones include:

April 4, 2012

The USA Today has joined us in the praise of the 38 Congressmen that had the courage to support the Cooper-LaTourette budget last week. With an editorial today, they commended those who supported the only bipartisan budget resolution under consideration last week. While the plan may not be either party's ideal solution, the USA Today argued that a bill similar to Bowles-Simpson was the only realistic opportunity to stabilize the debt.

April 4, 2012

Richard Haass, the President of the Council on Foreign Relations, argues that the biggest threat to U.S. national security might not be a continent away, but right here in Washington. In an interview with the Daily Ticker, Haass said that domestic issues, including the failure to address rising federal debt, might hinder our international standing in the future. Specifically, he said:

April 3, 2012

Just in case the whirlwind of plans out last week gave you a headache, the Bipartisan Policy Center has a number of comparisons for all the alternative budgets that have been presented for FY 2013.

April 2, 2012

The Government Accountability Office (GAO) has released its Long Term Outlook for the federal budget, showing an ever-climbing debt path as a percentage of GDP over the long term. Under both its Baseline Extended and Alternative scenarios, debt rises rapidly as increasing health care spending, among other things, overtakes revenue. This is especially true of the Alternative, which assumes that expiring tax policies are extended and that revenue and discretionary spending are held to their historic averages over the long term.

April 2, 2012

Via Twitter, Tax Policy Center director Donald Marron (@dmarron) makes a good point after reading our analysis last week of the "fiscal cliff" at the end of the year: that various revenue measures from health care reform will also take effect in 2013.

March 30, 2012

The Simpson-Bowles alternative budget resolution put forward this week by Representatives Cooper, LaTourette, Schrader, Bass, Quigley, Dold and Costa has come under fire for a number of reasons, but one of the seemingly more confusing points is what it does to war spending.

March 30, 2012

CRFB's Senior Policy Director Marc Goldwein was the subject of a CNN piece (audio here) on the goal of deficit reduction (and the life of a budget wonk). Marc said that the focus of fiscal policy should be to stabilize the debt as a percent of GDP and get it on a downward path.

March 30, 2012
Why I'm Optimistic About Cutting the Deficit

Despite all the political gridlock and other developments that have people worried about our fiscal future, Fiscal Commission co-chair Erskine Bowles sees reason to be optimistic. In an op-ed in The Wall Street Journal, he said that the result of last year's debt ceiling brinkmanship and the resulting law (the Budget Control Act), "deficit reduction now has the upper hand."

March 29, 2012

On CNBC's Squawk Box this morning, CRFB president Maya MacGuineas talks about the National Debt Tour and other developments in fiscal policy recently, including the vote on the Simpson-Bowles alternative budget resolution.

March 29, 2012

Yesterday, 38 members of the House cast votes for the bipartisan budget resolution that is modeled after Simpson-Bowles. 22 Democrats and 16 Republicans cast a vote that would buck each of their respective parties' orthodoxy on the budget: significant tax increases for Republicans and significant entitlement cuts for Democrats.

March 29, 2012

With a large number of policies set to expire or kick in at the end of the year, with serious fiscal impacts, CRFB has released a paper laying out the optimal path for policymakers to take to avoid both a short-term economic hit from the fiscal cliff and the long-term economic consequences of not dealing with our rising debt. The solution? You guessed it -- making smart, gradual, and targeted reforms to the key drivers of our debt.

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