Line Items: Bloom and Gloom Edition A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead
Bloom and Gloom – Washington’s famous Cherry Blossoms bloomed just ahead of the festival in their honor, and most promptly disappeared due to stormy weather in DC. Now, we can look forward to five weeks of celebrations with the namesakes mostly absent. A similar situation is playing out with the federal budget. There have been weeks of hearings, which will culminate this week as the House votes on the FY 2013 budget resolution. Yet, it is clear that there will be no budget coming out of Congress, again. So, there will be lots of pomp and circumstance, but in the end there will be nothing to celebrate.
Health Care Reform Turns Two – The Affordable Care Act had its two-year anniversary last week. To stroll down memory lane and recall the craziness at the time, read this blast from ‘Line’ Items’ past. As it enters its terrible twos, we will find out who it will be terrible for, as the U.S. Supreme Court is hearing arguments in a legal challenge. Meanwhile, the House last week voted to repeal the main cost-control element of the law, the Independent Payment Advisory Board (IPAB). The bill coupled IPAB repeal with limiting noneconomic damages in medical liability cases. We like medical malpractice reform, but not the IPAB repeal. Lost in the talk about IPAB repeal and the health law before the Supreme Court, CRFB noted that the President’s budget and the House GOP budget both agree on limiting Medicare growth, but they differ drastically on how to do it.
Nipping the Budget in the Bud – The House will vote on a budget resolution this week. In addition to the resolution drafted by House Budget Committee Chairman Paul Ryan (R-WI), which passed the Budget Committee last week by one vote, budget proposals are also coming forth from House Democrats, the Republican Study Committee, the Congressional Progressive Caucus, and possibly others. The House Rules Committee will meet Tuesday afternoon to decide which alternatives will get votes. No matter what the House does, the Senate has already made it clear it will not vote on a budget resolution this year, opting instead to instruct appropriators to craft spending bills based on the $1.047 trillion spending cap for 2013 in the Budget Control Act. If the House adopts the Ryan proposal with a $1.028 trillion topline spending limit, then we could be exposed to more temporary spending measures and threats of government shutdowns as the two chambers reconcile their differences. More budget dysfunction will spawn more calls for budget process reform. Ironically, the Ryan budget has some budget reform ideas of its own. See many more budget process reform recommendations here.
Will Tax Reform Blossom? – The House Ways and Means Committee will unveil a corporate and individual tax reform proposal this week. The Ryan budget had some specific tax reform proposals that we will likely see in the Ways and Means plan since Ryan worked with Ways and Means Committee Chairman Dave Camp (R-MI). This comes as the Congressional Research Service identified some of the impediments to simplifying the tax code and broadening the base through eliminating or limiting tax breaks known as tax expenditures because they are essentially spending through the tax code. To drive this point home, the Tax Policy Center illustrated how much bigger the government would be if tax expenditures were counted as spending. See ideas for dealing with tax expenditures here, here and here. Meanwhile, a poll of members of the National Association of Business Economics (NABE) shows that an overwhelming majority feel that increased revenues through tax reform should be a part of reducing the federal budget deficit, along with cutting spending.
Key Upcoming Dates (all times ET)
- House Rules Committee meets to decide on a rule for considering the FY 2013 budge resolution and what amendments will be in order at 2:30 pm.
- House begins consideration of FY 2013 budget resolution.
- Senate Homeland Security and Governmental Affairs subcommittee hearing on combating waste and fraud in government programs at 2:30 pm.
- House concludes consideration of FY 2013 budget resolution.
- US Dept. of Commerce's Bureau of Economic Analysis releases its third and final estimate of 2011 fourth quarter GDP growth.
- Presidential contests in DC, Maryland, Wisconsin, and Texas
- Dept. of Labor's Bureau of Labor Statistics releases March 2012 employment data.
- Dept. of Labor's Bureau of Labor Statistics releases March 2012 Consumer Price Index (CPI) data.
- Tax Day! Federal income tax returns are due.
- Presidential contests in Connecticut, Delaware, New York, Pennsylvania, and Rhode Island
- US Dept. of Commerce's Bureau of Economic Analysis releases its advance estimate of 2012 first quarter GDP growth.