The Bottom Line

June 25, 2012

An article today in POLITICO games out four possible scenarios for how the fiscal cliff could be resolved (or not). They discuss the benefits and drawbacks of each scenario for the budget and the economy. These scenarios are:

June 25, 2012
Congress, Obama Should Tear Up "Rule of Missing Government"

In an op-ed in The Hill, former Sen. Judd Gregg (R-NH) urged Congress to begin to take action on the budget before the election. He says that rather than trying to fix all of our fiscal problems immediately, they could tackle one aspect while leaving broader solutions until after the election. He explains:

[Congress] should not try and pass a comprehensive bill addressing all the causes of our impending fiscal meltdown.  

June 22, 2012

Although a bit under the radar, the appropriations process in both the House and Senate is moving forward in a relatively timely manner (OK, maybe the standards are low). Of course, as with the past few years, disputes between the two chambers on a few issues are likely to make the process another grind-it-out affair with solutions only coming at the eleventh hour.

June 21, 2012

The Senate passed the Agriculture Reform, Food, and Jobs Act (i.e. the 2012 Farm Bill) today on a 64-35 vote. The bill included $969 billion of spending over the next ten years, mostly for nutrition programs, but makes some changes to both farm and nutrition programs that would result in $24 billion of savings relative to CBO's baseline.

June 21, 2012

On Monday, we presented a budgetary analysis of the effect the Supreme Court decision on the Affordable Care Act could have on the budget. Naturally, we relied on CBO for the estimates, but in the case of eliminating the individual mandate alone, there have been a variety of estimates about what could happen.

June 20, 2012

The Hill has an informative article today on how former chair of the Senate Budget committee, former Senator Judd Gregg (R-NH) is increasingly involved in helping sway Republicans to go for a comprehensive, bipartisan deficit reduction plan. Gregg, a member of the Simpson-Bowles Fiscal Commission, and someone who voted in favor of the plan, told The Hill that he hopes to "offer any assistance to reinvigorate" the Simpson-Bowles plan. 

June 20, 2012

We're seeing more stories, in recent days, floating the idea that policymakers might waive the entire fiscal cliff, at least temporarily. One piece in Reuters suggests that there could be a bipartisan agreement in Congress to couple a short term extention of the 2001/2003 tax cuts with a process to reform the tax code.

June 19, 2012

Former Director of the CBO Alice Rivlin and Former Sen. Pete Domenici testified today to the Senate Finance Committee on the long-term debt problem, the “fiscal cliff”, and the Domenici-Rivlin plan to address these challenges.

June 19, 2012

It is no secret to those following the news that the Supreme Court will soon make a decision on the constitutionality of pieces of the Affordable Care Act. There have been many discussions of the health policy implications of the decision, which are obviously very important. However, given the name of our organization, we'll discuss the budgetary implications of the possible rulings.

June 19, 2012
A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Playing Dead – Lawmakers face several deadlines in coming weeks as the number of days that Congress will be in session dwindles. Deadlines loom at the end of the month for highway funding and student loans.

June 18, 2012

The AARP has just released a helpful new paper considering the pros and cons of different options to reform Social Security. Our fiscal outlook in the long run shows that the Social Security program is in need of change, but how to best address the issue remains up for debate.

June 18, 2012
Lawmakers Haven’t Run Out of Time to Craft a Bipartisan Deficit Deal

Former Senator Judd Gregg (R-NH) has an op-ed in The Hill this morning titled, "Lawmakers Haven't Run Out of Time to Craft a Bipartisan Deficit Deal." In it, Senator Gregg points out the need for a bipartisan deal, and notes that "Simpson-Bowles, was, and is the only bipartisan, substantive vehicle that actually reduces the deficit and the debt and makes viable our tax code and programs like Social Security."

June 15, 2012

The Urban Institute has a new report on the charitable deduction (co-authored by CRFB board member Eugene Steuerle) that details some options for reforming it. The charitable deduction, which has existed since 1917, is one of the largest tax expenditures in the code. The Joint Committee on Taxation estimates that from 2011 to 2015, it will result in about $245 billion of foregone revenue.

June 15, 2012

The Medicare Payment Advisory Commission (MedPAC) has released its June 2012 report, detailing ways in which Congress can improve Medicare to better control costs and improve care.

June 14, 2012

A POLITICO article reports on an effort underway at the Senate Finance Committee to negotiate an extension of the "tax extenders," narrow temporary tax provisions that are routinely extended. The article states that an agreement on an extension "could send a signal to financial markets that the two parties can find some common ground ahead of the looming fiscal cliff facing Washington at year’s end." Here's POLITICO's description of what happened:

June 14, 2012

CBO's latest report details the full effects on the federal budget of raising the federal excise tax on cigarettes. As they would when analyzing any tax policy, CBO estimates the revenue effect of this tax increase by looking both at how an increase in taxes would increase revenue, and how the subsequent reduction in cigarette purchases would reduce revenue.

June 13, 2012

Although budget projections had already been showing this, we now have more definitive numbers from the Treasury Department that this year's deficit will be smaller than last year's. At this time last year, the deficit through the first eight months equaled $927.4 billion compared to $844.5 billion this year.

June 13, 2012

Actuaries at the Center for Medicare and Medicaid Services have published a new report detailing their projections for health care spending growth from 2011 to 2021. The growth rates they project may be good news for the economy and the budget as well if they pan out.

June 12, 2012
A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead

Undead Ends – Recent reports of disturbing behavior have raised the specter of a zombie apocalypse, where the undead overrun civilization. Flesh/brain-eating creatures aren’t the only things that don’t want to die. Political gridlock also keeps coming back and threatens to make a wasteland out of the political system. Policymakers cannot agree on a budget blueprint at a time when we most need a fiscal plan that shows the way out of the depths of debt. The appropriations process lingers on; a slowly moving, virtually-lifeless corpse.

June 12, 2012

Today, the consulting firm Deloitte released a report on the scope and consequences of our federal debt. Deloitte, like the majority of researchers, has found that our debt is not sustainable and on its current path, will cause economic harm. Deloitte has five different arguments in the paper, all with their own implications for both the public and private sectors of the economy.

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