‘Line’ Items: Playoff Edition A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead
Playoffs in Full Swing – The Packers packed it in; the Broncos got busted; the Saints went marching out; and Houston had a problem as the NFL Playoffs eliminated more contenders in the annual march towards crowning a champion. Challengers were eliminated in the presidential contest as well as former Utah Governor Jon Huntsman backed out and more may fall away after Saturday’s South Carolina primary. Meanwhile, in Washington both parties continue to play off against each other as they vie for field position in the upcoming fiscal battles that will be pivotal in this election year. The House returns Tuesday to begin the 2nd Session of the 112th Congress and the Senate is back in town next week. The White House is busy preparing its FY 2013 budget request and State of the Union address. Will we see some touchdowns, or just more punts? Who will be Tom Brady and step up in crunch time to carry the day?
Payroll Playoff Time – The drama at the end of last year that resulted in a two-month extension of the payroll tax holiday, expanded unemployment benefits and the doc fix was only a warm-up. The real action begins next week when conferees meet to begin hammering out longer-term extensions. Paying for the extensions remains the biggest sticking point, and both sides will present a variety of ideas. We’ll see how this team produces in the red zone as negotiators will have about a month to work out a deal with the current extension expiring at the end of February. CRFB has offered its own ideas on how to proceed in a fiscally responsible manner.
The Other Tax Extenders – Like the Baltimore Ravens, extensions of other tax provisions like the AMT patch have taken a back seat as others have grabbed the headlines. But Congress must contend with those other tax extenders as well, and just like the Ravens, they pack a wallop.
Lining Up for Another Debt Ceiling Increase – Like Tim Tebow, the debt limit just keeps coming back. On Thursday, President Obama formally requested a $1.2 trillion increase in the debt ceiling. As set forth by last year’s Budget Control Act, the increase will occur unless Congress blocks it through legislation, but the president can veto the bill, requiring a two-thirds supermajority to override him. The House will vote on a resolution of disapproval on Wednesday. The Bottom Line is keeping up with the developments though its ongoing Debt Ceiling Watch. Just like with Tebow, it will take a bunch of Patriots to dispatch of the debt ceiling issue through a ‘Go Big’ comprehensive fiscal plan. Refresh your memory on the debt limit here.
Opening at OMB – The Office of Management and Budget is in need of a new quarterback as current chief Jacob Lew has been tapped to be the new White House Chief of Staff. Lew will stay on at OMB through the release of the White House budget request next month.
Looking at the Budget Playbook – The White House is set to release its FY 2013 budget request on February 6, but we are already getting an idea of some of the things that will be in it. President Obama’s submission to the Super Committee in September offers some possible proposals, and we know that "insourcing", Pentagon cuts and a raise for federal workers will be in the budget as well.
European Downgrades – Europe took another sack last week as Standard & Poor’s downgraded the credit ratings of nine nations including France, Austria, Italy, Spain and Portugal. France’s loss of its AAA rating was the biggest blow and could complicate efforts to end the European debt crisis.
Defense Cuts to be Announced – The Pentagon will try to emulate the San Francisco 49ers in implementing a stingy defense. Defense Secretary Leon Panetta on January 26 will announce the results of a months-long review as he aims to reduce defense spending by $450 billion over ten years.
President Looks to Consolidate – Just as the New York Giants turned things around through reshuffling, President Obama is asking Congress for fast-tack authority to reorganize the government to make it more efficient and to find some budget savings. In particular, he wants to consolidate six commerce and trade agencies into one unit. Obama seeks to get a vote in Congress within 90 days on any reorganization proposal that saves money.
Jobs Council Proposes Tax Reform – One of the recommendations made Tuesday by the jobs and competitiveness council formed by President Obama is to reform the corporate tax code. Tax reform promises to be a big issue this year.
Key Upcoming Dates (all times ET)
January 17, 2012
- The House of Representatives commences the Second Session of the 112th Congress.
- House Rules Committee will hold a hearing on the resolution of disapproval of the debt ceiling increase
January 18, 2012
- The House will vote on a resolution of disapproval of a debt ceiling increase.
- House Ways and Means Committee will hold a hearing on the Fiscal Responsibility and Retirement Security Act, which repeals the CLASS Act
January 19, 2012
- South Carolina GOP debate sponsored by CNN.
- Dept. of Labor's Bureau of Labor Statistics releases December 2011 Consumer Price Index data.
January 21, 2012
- South Carolina Primary.
January 23, 2012
- The Senate convenes for the Second Session of the 112th Congress.
- Florida GOP debate sponsored by The St. Petersburg Times, NBC News, and The National Journal.
January 24, 2012
- President Obama will give the State of the Union Address.
January 26, 2012
- Dept. of Defense unveils budget cuts.
- Florida GOP debate sponsored by CNN.
January 27, 2012
- Dept. of Commerce releases 2011 fourth quarter GDP data.
January 31, 2012
- Congressional Budget Office (CBO) releases its 2012 Budget and Economic Outlook at 10 am.
- Florida Primary.
February 3, 2012
- Dept. of Labor's Bureau of Labor Statistics releases January 2012 employment data.
February 4, 2012
- Nevada Caucus.
February 6, 2012
- The President must submit his FY 2013 budget request to Congress by this date.
February 7, 2012
- GOP presidential contests in Colorado, Minnesota and Missouri.
February 17, 2012
- Dept. of Labor's Bureau of Labor Statistics releases January 2012 Consumer Price Index (CPI) data.
February 22, 2012
- Arizona GOP debate sponsored by CNN at 8 pm.
February 28, 2012
- GOP presidential contests in Arizona and Michigan.
February 29, 2012
- The temporary payroll tax cut, unemployment insurance, and doc fix extensions will expire.
- US Dept. of Commerce's Bureau of Economic Analysis releases its second estimate of 2011 fourth quarter GDP.