The Bottom Line

March 15, 2012

In what was surprising news to many when, yesterday, freshman Rep. Rick Crawford (R-AR) announced that he would introduce legislation that would apply a tax to those with annual incomes exceeding $1 million. The concept has held pretty much exclusively Democratic support, until now that is. Crawford touted the move as a necessary compromise for a path towards reducing the county’s deficits and sky-rocketing debt.

An aide described it as analogous to other bipartisan efforts to reaching a deal, stating:

March 15, 2012

Yesterday, the Senate passed a two-year $109 billion transportation bill by a 74-22 vote. Since 2009, when the last five-year transportation bill expired, Congress has used short-term extensions to dole out transportation funds.

March 14, 2012

An interesting article by Eduardo Porter in today’s New York Times, A Nation With Too Many Tax Breaks, takes a look at the role of tax expenditures in the federal budget, and how they don't always fit with traditional assumptions about how the government uses its resources.

March 14, 2012

In its March baseline, CBO made a number of changes in its projections for health care spending. Given the significance of health spending to the budget in both the near-term and long-term, it's useful to take a look at what has changed.

Overall, CBO has increased its estimate of health care spending by $25 billion through 2022 compared to the January projections, with some programs increasing costs and others projected to spend less.

March 13, 2012

Comparing fiscal plans can often be a difficult task. The plans may use different baselines, use different ten-year windows, have different estimates for the same policy, or use some magic asterisks to try to make everything add up. Seeing how the plans stack up on the same basis often requires digging through a lot of numbers and cutting through a lot of claims. But no more!

March 13, 2012

Although CBO's analysis of the President's budget is the newsmaker in March in the budget world, CBO also updates its current law baseline, which shows slightly lower deficits from 2013-2022 than it projected in January. Compared to January, ten-year deficits have shrunk by $186 billion from $3.1 trillion to $2.9 trillion.

March 12, 2012

Spring in Their Step? – As part of the annual spring ritual, we moved the clocks forward an hour. While time marches on, Washington seems stuck in place with no movement on a budget or a plan to deal with our long-term debt problem. Spring is a time of renewal, to make a fresh start. Especially in this leap year, when lawmakers have an extra day, let’s hope they will take the big leap and spring into action to address our fiscal challenges.

March 12, 2012

Yesterday, in POLITICO David Rogers had an article about an effort in the House to temporarily delay the sequester scheduled to hit at year's end. As a reminder, this sequester was originally put in place in order to force the Super Committee to identify $1.2 trillion in deficit reduction. Due to the Super Committee's failure, the sequester is now scheduled to go off on January 1, 2013.

March 9, 2012

The Citizens for Tax Justice (CTJ) just released a new report detailing their own estimates of a  number of options for raising revenue through eliminating or reducing tax preferences or enacting new taxes. The CTJ argued that many of these tax expenditures were inefficient and revenues could be spent elsewhere in recovery measures or to reduce the federal deficit. They proposed a wide scope of policies, ranging from changes with large revenue impacts to small-change loophole-closers.

As they explain:

March 9, 2012

In an op-ed in Roll Call, David Walker lamented the lack of a "feasible" debt plan among the Presidential candidates, including President Obama. While fiscal policy has been a focus during the 2012 presidential campaign, the plans put forward concern Walker on questions of specificity, sufficiency, and political practicality.

March 8, 2012

As the Treasury Department continues its winding down of TARP programs, it will sell off $6 billion of AIG shares, likely bringing its ownership stake in the company down seven percentage points to 70 percent. 

March 7, 2012

If there's anything people can agree on in Washington, it is that the current budget process is broken. Congress has not passed a budget resolution since 2009, and even when they use the process, they are often late in doing so.

March 7, 2012

One of the wonkier discussions that arise inside the Washington beltway from time to time is what accounting method to use for federal credit programs. In a new issue brief, CBO weighs in on the argument for and against using "fair value" accounting versus the current method. We provide a brief overview here, but be sure to check out the full report for more details.

March 6, 2012

In an op-ed in the Washington Post, Sen. Bob Corker (R-TN) disapproves of the current debate on the transportation bill that is being considered. He feels that Congress must at the very least be fiscally responsible in dealing with the transportation bill, seeing it as a critical test of lawmakers' ability to budget and tackle our larger fiscal issues.

March 5, 2012
A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Deficit Secondary in Primary – The presidential primary campaign hits a key point this week as "Super Tuesday" contests in several states may go a long ways in determining who will face off against President Obama in November. Although voters constantly rank the economy and federal budget deficit as the top two issues, they seem to have taken a back seat to social issues in the campaign right now. However, CRFB’s U.S. Budget Watch project seeks to elevate fiscal policy in the election.

March 5, 2012

For those of you who have had trouble keeping track of the many premium support proposals that have come out over the past year, the Kaiser Family Foundation has a handy comparison chart of the most prominent ones.

March 2, 2012

The Tax Reform Act of 1986 is often hailed as a major bipartisan achievement, a reform that simplified the tax code and lowered marginal tax rates. Of course, more holes were opened up, more tax brackets were added, and significant complexity was introduced to the tax code thereafter. 

March 2, 2012

Tax Policy Center has a new paper out showing what tax rates would have to be in order to stabilize the debt at 60 percent of GDP in 2020, 2025, and 2035. The paper is similar to one they did two years ago, although that one had different fiscal targets.

March 1, 2012

With CBO recently having scored President Obama's 2013 Budget Request, included within the total score is a score of a policy known as capping Overseas Contingency Spending. While this is a good policy, this policy, when coupled with counting it is deficit reducing or using it to offset other spending, which President Obama, like many others before him, have done, is quite simply a gimmick.

March 1, 2012

Update: CBO has estimated that the IPAB repeal bill (HR 452) would increase spending and deficits by $3 billion from 2013-2022.

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