The Bottom Line

September 25, 2012

Last week, we featured a piece by CRFB Senior Policy Director Marc Goldwein discussing one option to reduce tax rates while maintaining progressitivity and raising $1 trillion in revenue: eliminating the special rates for capital gains along with other deductions. In theory, a lower tax on capital gains might be preferred in order to incentivize savings.

September 24, 2012

Late last week, the Senate passed a continuing resolution (CR) by a 62-30 vote to keep the government funded for the next six months with only a week to spare before the start of the fiscal year. The government will be funded at a $1.047 trillion annual rate through March 27 of next year, representing a 0.6 percent increase for each of the 12 appropriations bills over last year.

September 24, 2012

The United States Conference of Mayors has written a letter signed by 149 mayors across the country, a bipartisan collection including the likes of Philadelphia Mayor Michael Nutter, New York Mayor Michael Bloomberg, and Sacramento Mayor Kevin Johnson. The letter urges Congress to replace the sequester with a bipartisan, comprehensive deal that gradually stabilizes debt and puts it on a downward path as a share of the economy.

September 21, 2012
Debt Solution Must Be Bipartisan

In today's USA Today, Fix the Debt co-founders and Simpson-Bowles co-chairs Erskine Bowles and Al Simpson write that each party can't just have its wish list in a debt deal—a solution must be bipartisan. The national debt will threaten our economy, our

September 21, 2012

POLITICO reported earlier in the week that the estate tax debate is re-emerging as the expiration of the 2001/2003/2010 tax cuts looms. The estate tax is only one small part of the extension of the 2010 tax cut, yet it appears to be one where the debate is the most jumbled. The two-year extension of the expiring tax cuts back in 2010 set the estate tax exemption at $5 million for 2011, indexed it for inflation (in 2012, it is $5.12 million), and set the top tax rate at 35 percent.

September 21, 2012

Yesterday, the House Ways and Means Committee and the Senate Finance Committee held a joint hearing on tax reform and the tax treatment of capital gains. Base broadening tax reform with the payoff of lower rates is one of the key components of both the Simpson-Bowles and Domenici-Rivlin plans. But in order to get the lower rates in a fiscally responsible way, everything must be on the table, and that includes capital gains. 

September 21, 2012

On Bloomberg Government's "Capitol Gains" show, Sen. John McCain (R-AZ) endorsed at least the Simpson-Bowles outline as the starting point for negotiations. He is quoted as saying "Everybody knows what the solution is, and that’s Simpson-Bowles...We are prepared to support it as an outline."

September 20, 2012

Today on Bloomberg, Edward Lazear -- the former chairman of the Council of Economic Advisors under former President George W. Bush -- talked about the revenue impact of Simpson-Bowles when comparing it to Governor Romney's plan.

September 20, 2012

Today, NPR's Planet Money featured a helpful "three and a half graphic" breakdown of the fiscal cliff, relying on CRFB's figures. The piece breaks down the size of the tax increases and spending cuts (about $380 billion and $100 billion, respectively), and also details the source of each.

September 20, 2012

Tonight, the Concord Coalition will present their annual Paul E. Tsongas Patriot Award to the Brave 38—the 22 Democratic and the 16 Republican Congressman that voted for the bipartisan Cooper-LaTourette budget resolution.

September 19, 2012

The United States is not the only country in the world who has, or is, facing fiscal problems. Our neighbor to the north faced some severe fiscal problems during the mid-1990s when they had high budget deficits and when the Mexican peso crisis seemed to make Canada the next focus of international worries.

September 19, 2012

We have seen many lawmakers and business leaders claim that the fiscal cliff is holding back the recovery and leading to higher unemployment, and in today's The Wall Street Journal, a Bank of America survey shows that in the mind of investors it is the top risk for the U.S. economy.

September 18, 2012

A column in The Wall Street Journal today asks "Should the Eligibility Age for Medicare Be Raised?" Taking the "yes" side is CRFB president Maya MacGuineas, arguing it is a fair and effective way to lower Medicare spending. MacGuineas says that because life expectancy at age 65 has increased significantly since Medicare was first enacted, the eligibility age should reflect this increase.

September 18, 2012
Congress Leaving on a Debt Plane

CRFB President Maya MacGuineas writes in today's The Hill that as Congress returns home for another recess, there is plenty of evidence that continuing to kick the can down the road will no longer work.

September 18, 2012

Today, the Concord Coalition and Next 10 released a new budget simulator that allows participants to choose for themselves how to reduce our unsustainable budget deficit. The simulator presents a wide range of options on both the spending and revenue sides, and calculates with interest what the budget deficit or surplus would be over the next 10 years.

September 18, 2012

In today's Financial Times, former chair of the Council of Economic Advisors durign President Clinton's Administration and CRFB board member Laura Tyson writes that tax reform represents a deficit reduction opportunity that both parties can agree on.

September 17, 2012

The second of four Strengthening of America—Our Children's Future forums was held today on national security and the national debt. The event featured two panels, the first discussing the national security threat excessive debt poses, while the second panel presented the possible solutions of Bowles Simpson and Domenici-Rivlin.  

September 17, 2012
Bill Clinton’s Call for Bipartisan Cooperation Worth Heeding

Former Senator and CRFB board member Judd Gregg (R-NH) writes in today's The Hill that former President Bill Clinton's call for bipartisanship may be one of the most important messages for this election and the next Congress. Gregg says that the country's tremendous fiscal problem represents so many difficult choices that it will be highly unlikely for one party to be able to impose their will in passing a solution.

September 14, 2012

CRFB Board Members, Fix the Debt Campaign Co-Founders and Fiscal Commission Co-Chairs Erskine Bowles and Alan Simpson recently appeared on Meet The Press to discuss the nation's fiscal situation and the plan that bears their name, Simpson-Bowles

September 14, 2012

This afternoon, the OMB released its legally required report on the $1.2 trillion sequester, detailing how and where the cuts would fall on the various programs that would take a hit. The nearly 400 page report goes account by account showing what and how much programs are cut and what is exempt, but the overview for FY 2013 comes early on in the report.

Overall, the sequester will reduce budget authority in FY 2013 by $109 billion. Here's how it falls:

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