The Bottom Line

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.

July 23, 2012

A new working paper by four authors at the International Monetary Fund takes a look at fiscal rules around the world. The Peterson-Pew Commission on Budget Reform put out a more general discussion of fiscal rules in December, but the IMF specifically looks at similiarities and differences between specific regimes.

July 20, 2012

With the roll out of the Campaign to Fix the Debt on Tuesday, there has been plenty of statements of support, as our newest release shows. Some of these statments have come from the co-founders, co-chairs, and Steering Committee members of the Campaign, but there are also plenty of supporters outside the campaign.

July 19, 2012

Federal Reserve Chairman Ben Bernanke addressed Senate Finance Committee on Tuesday and the House Finance Committee yesterday with more warnings about the fiscal cliff at the end of the year.

July 19, 2012

The Urban Institute held an event today (video here) on children and the federal budget, which involved CRFB Senior Policy Director Marc Goldwein and board members Eugene Steuerle and Dan Crippen. The centerpiece of the event was Urban's newest "Kids' Share" report and what it means for policies related to children going forward.

July 18, 2012

Yesterday, the Campaign to Fix the Debt officially launched with a press conference at that National Press Club. The Campaign is intended to drum up support from people across the country for a bipartisan fiscal plan that prevents the exponential rise in debt that is projected to happen. It will also provide resources and ideas for lawmakers who want to be a part of this solution.

July 18, 2012

Since our last Appropriations Update last month, there has not been much action on appropriations bills. On the House side, the full House has passed the Transportation-House and Urban Development bill, the Appropriations Committee has passed the Interior-Environment bill, and the Labor-Health and Human Services-Education bill has been released and is the final bill to make its way through the process.

July 18, 2012

The State Budget Crisis Task Force -- a group of budget experts including the likes of former CBO and OMB director Alice Rivlin, former Federal Reserve chairman Paul Volcker, and former Treasury secretary George Shultz -- released a report yesterday detailing the six biggest threats facing states in terms of long-term fiscal sustainability. They looked at six of the more heavily populated states -- California, Illinois, New Jersey, New York, Texas, and Virginia -- but their prognosis is easily applicable to other states.

July 17, 2012

Update: C-SPAN has uploaded a video of the event. You can view it here.

Today, CRFB is helping to launch the Campaign to Fix the Debt at the National Press Club.

July 16, 2012

We have said before that the Disability Insurance (DI) portion of Social Security is too often overlooked, even though it has a more immediate funding problem than the Old Age and Survivors Insurance (OASI) portion. The Chief Actuary of the Social Security Administration estimates that the DI trust fund will run out in just four years.

July 16, 2012

After the report we released in March, the topic of the fiscal cliff has risen in prominence as CBO and others have attempted to estimate the size of the cliff. In addition, uncertainty over how it will be handled has started to make many different sectors of the economy anxious.

July 16, 2012

In an op-ed in The Hill, former Sen. Judd Gregg (R-NH) argues that whoever is President next year should eschew the standard President's budget--with its detailed line-by-line policies and numbers--and instead issue a budget submission with a few big policies. As he says:

July 13, 2012

In evaluating the fiscal cliff, it is interesting to see how it compares to past cases where the federal government has rapidly reduced deficits. The OMB has historical data on deficits as a percent of GDP going back to 1930, so we can evaluate based on this time period. For simplicity's sake, we will compare "cliffs" by the change in deficits from the previous year.

July 13, 2012

The Hill points to a press release by Senator (and former OMB director) Rob Portman (R-OH) that claims the upper-income portion of the 2001/2003/2010 tax cuts accounted for only 4 percent of the swing from surpluses to deficits starting in the early 2000s.

July 12, 2012

Erskine Bowles and Alan Simpson appeared alongside Warren Buffett on CNBC's Squawk Box this morning, discussing the need for Congress to pass a comprehensive and sizeable deficit reduction plan. 

July 12, 2012
The Fiscal Cliff: A Hard Landing Becomes More Likely

Today on the Brookings Institution website, CRFB co-chair and former Congressman Bill Frenzel (R-MN) wrote an op-ed about the looming fiscal cliff. In it, Rep. Frenzel argues that there may not be enough time to avert the fiscal cliff during the "lame-duck" session of Congress. He believes that there is hope for a solution, but both parties will need to compromise.

July 12, 2012

The defense portion of the sequester that will hit on January 2 of next year has garnered a lot of attention, but it is not the only part of the automatic cuts. The sequester will also make cuts to non-defense discretionary spending and and certain other mandatory programs (many low-income programs are exempted). Recently, other parts of the sequester have started to receive attention.

July 11, 2012

Today, CBO has released yearly estimates of the long-term budget projections for the Department of Defense. The DoD provides a plan to Congress called the Future Years Defense Program (FYDP), in which DoD lays out its plans and the needed appropriations for the next five years. CBO uses this report to project future defense spending through 2030, using their own assumptions for variables like health care costs and weapons system prices that affect the defense budget.

July 11, 2012

As Senator Mark Warner pointed out last week in the Christian Science Monitor, the United States is still in a position where long-term debt reduction is much easier than in several European countries now in fiscal crisis.

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