The Bottom Line

August 2, 2012

Stephen Colbert covered the fiscal cliff and Grover Norquist in last night's Colbert Report. As usual Colbert is absolutely hilarious, but he also gives a good introduction to those who may have not heard much about the fiscal cliff. Watch the video below:

 

 

August 1, 2012

The United States Postal Service (USPS) is slated to default on a $5.5 billion dollar payment to the United States Treasury tonight at midnight, underscoring the continued financial turmoil and budgetary insolvency of government-managed programs.

August 1, 2012
Paring Down Extenders is One Step Forward, but Not Offsetting Their Cost is Two Steps Back

The Senate Finance Committee will hold a mark-up of the Family and Business Tax Cut Certainty Act tomorrow at 10 am. The Act would retroactively extend the Alternative Minimum Tax patch and many temporary "tax extenders" through 2012 and extend just the extenders through 2013.

August 1, 2012

Over the past few days, the Office of Management and Budget is getting to work preparing for the sequester hitting on January 2 of next year. OMB so far has notified Congress that it intends to exempt military personnel accounts from the defense sequester, an authority that is granted by the Balanced Budget and Emergency Deficit Control Act of 1985.

July 31, 2012

After some speculation last week about a compromise being made on appropriations, a deal has tentatively agreed upon between House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV).

July 31, 2012

OMB's Mid-Session Review, which was released on Friday, showed lower debt and deficits over ten years than did the President's budget. Our paper on the MSR also went into (mostly) economic and technical reasons why the MSR estimate differed from the February estimate of the President's budget.

July 31, 2012

The Announcement Effect Club has a new member after this weekend—Fiscal Commission Co-Chair Alan Simpson. Simpson discussed the dangers of the fiscal cliff and the need for deficit reduction in an interview with Neil Cavuto. In particular, Simpson focused on the need for having a long-term plan: the direction and certainty it would provide the country would be very beneficial.

July 30, 2012

The Council on Foreign Relations has joined in on those warning of the dangers of the fiscal cliff due to hit early January and unsustainable rising levels of debt. The helpful "backgrounder" piece explains both the domestic, national security, and economic consequences of the cliff as well as some context to how we got to this point.

July 30, 2012

Today is the 47th anniversary of the Medicare program, reminding us of the great challenge we face from our growing entitlement spending. If you've seen our long-term projections, it is pretty clear than any long-term debt reduction plan will have to address Social Security, and even more importantly the rising health care costs of Medicare and Medicaid. The population of the United States will be aging rapidly in the next couple decades, with baby boom generation already begining to retire.

July 27, 2012

The OMB has released its Mid-Session Review (MSR), essentially a re-estimate of the President's budget taking into new legislative, economic, and technical factors since February. We also put out a paper breaking down the MSR.

July 27, 2012

According to POLITICO's Jake Sherman and John Bresnahan, lawmakers are nearing a deal that would fund the government for the first six months of FY 2013 (through the end of March). That deal would set the level of discretionary spending at the level specified in the Budget Control Act, $1.047 trillion, in a continuing resolution. Apparently, neither side wants to alter last year's deal until after the election.

July 26, 2012

In light of the Commission on Presidential Debates announcing the debate format for this year's presidential cycle, CRFB once again called for a debate where the two presidential candidates present detailed plans for reducing the debt. The three debates will have one focused on foreign policy, one on domestic policy, and one "town hall-style" debate.

July 26, 2012

The Concord Coalition has just unveiled a new paper, authored by Edmund Andrews, Joe Minarik, and Diane Lim Rodgers, called "Not Just Their Problem: The Euro Debt Crisis and U.S. Fiscal Policy," shedding some light on our fiscal outlook in an international context.

July 26, 2012

Yesterday the Senate voted on two highly polarized tax plans, with a Democratic version passing 51-48 while the Republican supported bill failing to pass 45-54. Neither were paid for—the Republican plan cost $405 billion and the Democratic plan cost $250 billion ($368 billion including excluded elements)—nor took any initiative on long-term deficit reduction.

July 25, 2012

Last week, our "Spotlight on the States" blog post highlighted structural challenges for the states, one of them being an eroding sales tax base. The inability of states to collect sales taxes on online sales, which we also have previously discussed, is one factor in that erosion (in addition to the growth of service consumption). In Quill Corp. v.

July 25, 2012

The Senate is set to vote in the coming days on dueling one-year extensions of the 2001/2003/2010 tax cuts and Alternative Minimum Tax patch, with neither likely to go anywhere for now. Nonetheless, the Tax Policy Center has provided a helpful analysis of both plans in terms of both the distribution of tax cuts and a detailed breakdown of the Joint Committee on Taxation revenue estimates.

July 24, 2012

Today, the Congressional Budget Office released two reports revising estimates for the Affordable Care Act (ACA). The first report provides updated estimates specifically for the coverage provisions in the ACA, to reflect the impact of the recent Supreme Court ruling on the ACA’s Medicaid expansion.

July 24, 2012

Paul Krugman and other advocates of more federal stimulus spending cite today’s extremely low real interest rates, near zero or negative, as reason to borrow and spend this "free money." As Jared Bernstein, another stimulus advocate, points out, though, the notion of free federal debt is a fallacy.

July 24, 2012

The American Association of Retired Persons (AARP) hosted an event entitled "Work, Retirement Age, and Fiscal Sustainability in an Aging World." Two professionals in the field of pension public policy and fiscal sustainability led the discussion, providing an international perspective on the difficulty that population aging is posing for budgets across the world.

July 23, 2012

With the debt ceiling projected to come back in play sometime in December or January, it is helpful to be reminded of the cost of the last debt ceiling debate. For a discussion and backgrounder on the federal debt ceiling, see CRFB's primer from last summer.

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