The Bottom Line

February 3, 2012

Over the course of this week, we have been discussing CBO's recent Budget and Economic Outlook. On Tuesday, we summarized the report and released a paper that walked through the details.

February 3, 2012

Supporters of enacting a comprehensive deficit reduction plan got a boost yesterday from Federal Reserve Chairman Ben Bernanke. At a hearing with the House Budget Committee on the economic outlook, Bernanke responded to a question from Rep. Mike Simpson (R-ID) about the need for a large fiscal plan. He said the following (at the 58:45 mark of the video):

February 2, 2012

We noted earlier this week that CBO's current law economic assumptions in the near-term do not look very stellar, especially in 2013 when the economy is scheduled to absorb a large fiscal shock as a large number of tax cuts expire and the "sequester" resulting from the failure of the Super Committee cuts spending automatically across-the-board.

February 2, 2012

The good folks at the Tax Policy Center have written yet another enlightening report on tax expenditures. This one, titled, "Curbing Tax Expenditures" analyzes the current mess that is the tax expenditure "budget". Tax expenditures -- the various credits, deductions and loopholes that are littered throughout our tax code -- tend to be expensive, regressive, and economically distortionary. Their existence comes at the expense of less debt and lower marginal tax rates.

February 2, 2012

CRFB board member Rudolph Penner recently co-authored a paper that is essentially a retrospective on the 2011 deficit debate. He and Urban Institute colleague John Palmer compared the President's Framework and the House Budget Resolution while also discussing the Budget Control Act that passed in August.

They describe the premise of the paper below:

February 2, 2012

The conference committee that is tasked with extending various provisions that are set to expire at the end of this month will meet for the third time. They will be taking up the payroll tax cut, the doc fix, extended unemployment benefits, and possibly various expiring tax provisions that expired at the end of last year.

You can watch the video on C-SPAN.org here.

February 1, 2012

Yesterday, CRFB released its analysis of the latest budget projections from CBO, discussing debt, deficits, spending, and revenues. We also updated the CRFB Realistic Baseline in our analysis to give a more realistic view of where the country is headed. Not surprisingly, it shows much higher debt and deficits than CBO's current law projections.

February 1, 2012

A claim that has been popping up in some news circles over the past day is that the doc fix -- which freezes Medicare payments to physicians, instead of allowing them to be cut by 27 percent starting in March -- has become more expensive in light of CBO's new budget and economic outlook.

For example, an article in the National Journal states:

January 31, 2012

CBO released its new budget and economic outlook, showing slightly higher ten-year deficit and debt projections from 2012-2021 than the last ten-year projections CBO produced this past August.

January 30, 2012

CBO has a new report out, comparing federal and private-sector compensation for employees. The report shows that, on average, federal employees are compensated more than private-sector employees with similar educational backgrounds and other characteristics; however, the story is not as simple as it would appear.

January 30, 2012
A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Super Not So Duper – The word “super” has lost its luster lately. The failure of the Super Committee and the need for a super majority in the Senate to pass virtually anything have contributed to record-low approval ratings for Congress. Meanwhile, Super PACs are pouring unlimited funds into campaigns, resulting in even more negative advertising than usual and rising concerns that the political process is being distorted.

January 27, 2012

The report by the Inspector General of TARP drew some attention for showing that some of its programs would not end until 2017. That in itself is no surprise; in fact, some programs do not have specific end dates and could go on longer than that. Still, the report is useful to see where we are on TARP.

January 27, 2012

Yesterday, Secretary of Defense Leon Panetta fleshed out the widely-anticipated FY 2013 defense budget. The budget showed to some extent how the Obama Administration plans on meeting the defense reductions that are necessary because of the discretionary spending caps in the Budget Control Act.

While Panetta's briefing was not as detailed as next month's budget, it included more details than we had heard in previous speeches and laid down the topline defense numbers the Administration will propose over the next five years.

January 26, 2012

As we mentioned in our press release earlier this week, the House Budget Committee has been working on legislation to reform the current budget process. Three legislative proposals were advanced by the Committee on Tuesday, in addition to another on the budget resolution that will be brought up soon.

They are:

January 26, 2012

Update: The American College of Physicians has also called for eliminating the SGR and the sequester and partially paying for them with war savings. To their credit, though, they propose a number of other scoreable savings options like having uniform cost-sharing for Parts A and B of Medicare, allowing Medicare to negotiate drug prices, accelerating the health insurance excise tax or limiting the health exclusion, and enacting tort reform.

January 25, 2012

With Congress back in session this week, there is a renewed focus on several provisions that lawmakers extended for two-months in December and which are set to expire again at the end of February. As we commented on at the time, lawmakers extended the payroll tax cut, expanded unemployment insurance benefits, the doc fix, and various health care provisions for two months at a total cost of about $33 billion.

January 25, 2012

President Obama gave his annual State of the Union address Tuesday night. The election-year speech contained a laundry list of proposals aimed to create jobs and promote economic growth. As is all-too-often the case in the midst of campaigns, the ideas put forth where aimed to appeal to certain constituencies with little discussion of their budgetary impact or if limited resources could be used more prudently.

January 24, 2012

President Obama's State of the Union address next Tuesday is now only a couple days away. In anticipation of the President's speech, we at CRFB have decided to bring back our awesome State of the Union fiscal bingo game, DEBT-O!

Play with your friends and keep track of budget-related words and terms used by the President. Needless to say, we hope our country's fiscal problems are a main focus of his speech.

January 24, 2012

Today, CRFB president Maya MacGuineas testified to the House Rules subcommittee on Legislative and Budget Process on HR 114, a biennial budgeting proposal, which would have the budget and appropriations determined on two-year cycles instead of annually. HR 114, the Biennial Budgeting and Appropriations Act, is not part of the package of process reform bills that the House is marking up this week.

January 24, 2012

President Obama will be addressing the nation at 9 pm ET tonight for the annual State of the Union address, and CRFB will be active as well, live-tweeting throughout the event (@BudgetHawks). We will also chime in on any statements related to the budget that the President makes, so tune in for a view of the State of the Union from a fiscal perspective.

Be sure to check CRFB.org after the address for our statement reacting to President Obama's speech.

 

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