House Set to Pass New Rules

Last night, the House Republican conference approved a new set of rules -- making some big changes to several budgetary rules currently in place. The rules package will go before the full House of Representatives this afternoon, and is expected to be easily adopted.

Most notably, the new rules would replace the current "pay-as-you-go" requirements with a new "cut-as-you-go" approach. The new rules would not apply to new tax cuts and would require any new mandatory spending to be completely offset by spending cuts alone, as opposed to the current PAYGO rules that also allow tax increases to pay for increased spending. We examined some of these proposed rules in an earlier blog.

There are many more rule changes that will impact the budget over the coming year, so make sure to check back soon as CRFB will be providing a more in-depth analysis shortly.

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Student Loans Cost $340 Billion More than Expected

Based in part on new data from the Congressional Budget Office, this piece shows: The estimated federal cost of student loans issued between 2015 and 2024 has increased by $340 billion – from a projected gain of $135 billion in the 2014 baseline to an expected loss of $205 billion in the 2024 baseline. Much of the cost increase can be explained by the expansion and increased enrollment in income-driven repayment (IDR). In forward projections, graduate school loans are now nearly as subsidized as undergraduate loans and make up half of the cost of newly issued student loans. Reforming graduate loans to be cost-neutral would generate over $100 billion in deficit reduction over the next decade.

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