Line Items: Halloween Edition A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead
Happy Halloween – Anyone with kids, or anyone who enjoys scaring kids, knows that today is Halloween; the day of the year it is acceptable to wear hideous outfits and ask strangers for candy. Anyone who truly wants to scare people should dress up as the national debt. The numbers are frightening and the really spooky thing is that they are growing. With the deadline fast approaching, people are wondering if the Super Committee will have a treat, as in a deal that addresses the debt in a substantive manner, or a trick, such as no deal or one with gimmicks.
Super Committee Haunted by Partisanship – Each party unveiled deficit reduction plans in the Super Committee last week, but each side saw the other’s proposal as a trick, not a treat. Neither plan in its entirety has been made public, but some details leaked out. The Democratic plan calls for $3 trillion in deficit savings over a decade by allowing the 2001/2003/2010 to expire for upper-income earners and cutting health care spending, among other things. The Republican proposal saves just over $2 trillion, raising some revenue through additional “fees” but not taxes, and cuts spending. Both parties apparently are open to switching to an alternative measure of inflation, the chained CPI, which will produce significant savings. [Read more in about how switching to chained CPI can reduce the deficit in this paper from the Moment of Truth project.] Each side quickly rejected the other’s offer. While it is encouraging that both plans exceed the Committee’s $1.2 - $1.5 trillion mandate and there is some overlap, it is time for both parties to work together for a comprehensive plan that can achieve broad support. The Committee will no doubt hear such a message on Tuesday when it holds a public hearing with the co-chairs of two prominent commissions that produced comprehensive plans with bipartisan support. Erskine Bowles and Alan Simpson will discuss the work of their White House Fiscal Commission and Alice Rivlin and Pete Domenici will discuss their Debt Reduction Task Force.
Go Big Gets Bigger – When more and more experts and organizations reach out their trick-or-treat bag, they are asking the Super Committee to put in a full-sized candy bar, not the mini ones that are often given. Support for the Super Committee to ‘Go Big’ and go beyond its mandate is gaining momentum. The corporate community is getting behind the effort. Letters last week from several business groups urged the Committee to not only reach an agreement, but to go beyond its mandate. Support is also growing within Congress. A bipartisan group of at least 80 members in the House is circulating a letter asking the Super Committee to find $4 trillion in cumulative deficit savings. And a smaller group of House members sent a letter Friday also recommending a $4 trillion solution for our debt challenges. The $4 trillion figure is in line with what CRFB said it hopes to see from the Super Committee. For further information, read our analysis on why going big will actually make it easier for the Committee to reach a deal compared to a small-scale approach. And see our Go Big page to see who else supports the concept.
Will the Minibus Leave the Depot? – The Senate is back from recess this week and will get back to considering the FY 2012 Agriculture, Commerce-Justice-Science, and Transportation-Housing and Urban Development spending bills in one package. Several amendments must be voted on before a vote on final passage of the bill. If successful, expect more minibus bills. Regardless, another continuing resolution likely will be needed to keep the government operating after the current CR expires on November 18. Like the monster in a bad horror movie, the threat of a government shutdown keeps coming back.
Key Upcoming Dates (all times ET)
- Joint Select Committee on Deficit Reduction (Super Committee) holds a hearing with Erskine Bowles, Alan Simpson, Alice Rivlin and Peter Domenici at 1 pm.
- European Affairs Subcommittee of the Senate Foreign Relations Committee hearing on the European Debt Crisis at 9:30 am.
- GOP presidential debate in Rochester, MI sponsored by CNBC exclusively on the nation's economic challenges including the national debt, jobs and taxes at 8 pm.
- GOP presidential debate in Spartanburg, SC sponsored by CBS News and the National Journal at 8 pm.
- GOP presidential debate in Washington, DC sponsored by CNN, the Heritage Foundation and the American Enterprise Institute at 8 pm.
- Continuing resolution (CR) currently funding federal government operations expires.
- The Super Committee is required to vote on a report and legislative language recommending deficit reduction policies by this date.
- GOP presidential debate in Arizona sponsored by CNN at 8 pm.
- The Super Committee report and legislative language must be transmitted to the President and Congressional leaders by this date.
- Any Congressional committee that gets a referral of the Super Committee bill must report the bill out with any recommendation, but no amendments, by this date.
- GOP presidential debate in Des Moines, IA sponsored by ABC News at 9 pm.
- GOP presidential debate in Sioux City, IA sponsored by Fox News at 9 pm.
- GOP presidential debate in Johnston, IA sponsored by PBS NewsHour, Google and YouTube at 4 pm.
- Congress must vote on the bill recommended by the Super Committee by this date. No amendments are allowed.
January 3, 2012
- Iowa Caucuses.
January 10, 2012
- New Hampshire Primary.
January 21, 2012
- South Carolina Primary.
January 31, 2012
- Florida Primary.