The Bottom Line

October 19, 2012

This blog has been cross-posted at FixTheDebt.org.

It may not be as popular as Justin Bieber, but the fiscal cliff is getting plenty of notice as of late.

October 18, 2012

With Congress in recess until after the elections, a plan to replace the fiscal cliff with a comprehensive debt deal will have to get done during the lame duck session. With less than five weeks to work with, Congress might look to the Bipartisan Policy Center's new Framework for a Grand Bargain for recommendations on how Congress could avoid the fiscal cliff, while ensuring it is committed to a debt deal in a limited time frame.

October 18, 2012

After we analyzed a part of it two weeks ago, Governor Mitt Romney's tax plan is back in the news, with a proposed deduction cap as the subject of a new Tax Policy Center study. He had mentioned a $25,000 dollar cap on deductions as a possibility in his tax plan during the debate Tuesday night and has previously proposed a $17,000 cap.

October 18, 2012
Governing After Over-Promising

Urban Institute Fellow and CRFB board member Gene Steuerle laments the presidential candidates' overpromising this election season, particularly on fiscal policy. According to Steuerle, neither President Obama or Governor Romney has laid out enough details to back their promises or reduce the deficit. In fact, sometimes the details seem to make promise of fiscal responsiblity harder to keep.

October 17, 2012

As with the previous two debates (one presidential and one vice presidential), we will take an opportunity to go back and fact check some statements we missed or expand on the things we got to that deserve more than a 140 character explanation.

October 17, 2012

Senator Tom Coburn (R-OK) yesterday released his "Wastebook" for 2012, a laundry list of government waste and inefficiency. Coburn finds 100 examples of government spending clearly not serving its designed purpose.  

Wastebook's examples include:

October 16, 2012

Tonight at 9 PM on the grounds of Hofstra University is the second presidential debate and the only debate with a town hall format. This will allow questions from audience members, and with such a broad consensus that something needs to be done about the national debt, we expect at least a few questions on fiscal policy in tonight's debate. As before, we will be live fact checking from Twitter (@BudgetHawks) and our live feed will appear below.

October 16, 2012
Agreeing on the Debt

Former Congressman and CRFB Board Member Tim Penny (D-MN) writes in today's The Hill that even with both parties laying out different plans this election, they need to come together and agree on doing something about our unsustainable fiscal path.

October 16, 2012

Our colleagues Jason Delisle and Alex Holt of the New America Foundation's Federal Education Budget Project have released a new paper "Safety Net or Windfall?" on the 2010 changes to federal student loan program's Income-Based Repayment (IBR) plan. The IBR plan was designed to help with student's loan repayment by limiting payments to 15 percent of their income and forgiving the remaining balance after 25 years.

October 16, 2012

With the release of September inflation numbers from the Bureau of Labor Statistics, the Social Security Administration also announced its cost-of-living adjustments (COLA) and change to the maximum amount of income to which the payroll tax is applied. The COLA for Social Security benefits next year will be a 1.7 percent increase, while the taxable maximum will rise from $110,100 to $113,700.

October 15, 2012

The Mercatus Center has released a new paper by Social Security Trustee Charles Blahous entitled "The End of Social Security Self-Financing." In the paper and an accompanying article, Blahous writes of the challenges faced by Social Security in continuing to finance its benefits with revenues from the payroll tax.

October 15, 2012

Today, CRFB released a paper on individual income tax reform, showing how comprehensive reforms could lower both deficits and tax rates. The paper explains why a recent Joint Committee on Taxation experiment showing a top rate of 38 percent is not comparable to the Simpson-Bowles plan, the Domenici-Rivlin plan, or any other tax reform plan out there.

October 15, 2012

After live fact-checking the vice presidential debate on Twitter, we will take some time to go back and expand on some of our fact-checking and include some things we may have missed.

October 12, 2012

Today, a report from the Joint Committee on Taxation was released that some claim to show the near-impossibility of deficit-reducing, rate-reducing tax reform. The JCT report shows an exercise in which the elimination of itemized deductions allows for a top rate of only 38 percent. Comparisons between this report and the various tax reform plans out there are highly misleading.

October 11, 2012

Vice President Joe Biden and Representive Paul Ryan (R-WI) will take the stage in Kentucky tonight at 9:00 PM E.T. in the Vice Presidential Debate. In the last debate, President Obama and Governor Romney spent a good deal of time in the last debate discussing fiscal policy -- though we hope each candidate gets more into the details tonight.

October 11, 2012

The CBO has released its newest estimate of the Troubled Asset Relief Program (TARP), showing that it would cost taxpayers a total of $24 billion. This is $8 billion lower than their last estimate done in March.

October 11, 2012

Tonight at 9 PM in Kentucky will be the first and only vice presidential debate between Vice President Joe Biden and candidate Paul Ryan. If this debate is anything like the first presidential debate, fiscal policy should be given a solid amount of attention, especially given Congressman Ryan's position as chairman of the House Budget Committee and Vice President Biden's involvement in debt ceiling negotiations last year.

October 10, 2012

Over the past few years, bipartisan agreement has begun to form around approaches to tax reform that take a broad approach to reducing or eliminating many tax expenditures and using those savings to both reduce tax rates and the deficit. Proposals from the Domenici-Rivlin Task Force and the Simpson-Bowles Commission were able to bridge the gap between both sides of the aisle on tax reform by following this approach. While everyone may have their own ideal way to solve our fiscal challenges, it's also important to consider what can actually generate bipartisan support and become law.

October 10, 2012

The use of dynamic scoring is one of the most contested issues in the budget world. We highlighted the pros and cons of using it and the issues associated with incorporating it into the budget process in a paper earlier this year.

October 10, 2012

Over at TaxVox, Roberton Williams writes about what will happen to tax rates under the fiscal cliff. Many economists believe that marginal tax rates (the tax rate on the next dollar earned) matter more than average tax rates (total taxes paid as a percent of income) in terms of the effect on economic growth.

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