Line Items: Presidential Edition A Weekly Update on Budget and Fiscal Policy Developments and a Look Ahead
Happy Presidents Day – As we honor those who have led this country, the race to become the next in that line is becoming more heated. And federal budget and fiscal issues are at the heart of the campaign. Voters consistently rank deficits/debt as the second most important issue, and it is closely tied to the top issue – economy/jobs. The decisions made now towards aiding the recovery could have a significant effect on the long-term budget outlook, and fiscal decisions will impact the economy. Yet, election-year pressures threaten to delay much congressional action until the end of the year at the earliest. Will current policymakers be able to summon the courage of leaders that we honor today like Washington and Lincoln and act now in a substantive way?
Assessing the True Costs of the Presidential Campaign – This Thursday, February 23, CRFB’s US Budget Watch project will unveil its assessment of the budgetary impact of the campaign promises of the Republican presidential candidates at an event in Washington, DC. There has been a lot of talk about how much candidates for the White House are spending on their campaigns. However, there has been little discussion regarding the price tag taxpayers will face when one of the contenders takes office next year. On Thursday, that will change. This will be the first objective analysis of how candidates’ proposals will affect the national debt. President Obama will be included in a forthcoming round. The big event will also include a discussion of how this election can promote a constructive debate on the fiscal challenges facing the country and how to overcome them. US Budget Watch offered a framework for this discussion in 12 Principles of Fiscal Responsibility for the 2012 Campaign.
“Go Big” Goes on the Road – The movement pushing for a "Go Big" comprehensive deficit reduction plan this year goes nation-wide this week with The National Debt Tour. The first stop will be Tuesday in Boston at the Institute of Politics at Harvard University. Sen. Mark Warner (D-VA); former Rep. Vin Weber (R-MN); Honeywell International Chairman and CEO Dave Cote; and CRFB’s Maya MacGuineas will be among those participating and Nina Easton of Fortune magazine will moderate.
President’s Budget Released – The White House released its FY 2013 budget request last week. Derided by some as purely a campaign document, it calls for nearly $1.6 trillion in net new revenue, over $360 billion in health savings, and about $270 billion in other mandatory savings through 2022, along with $350 billion of jobs measures. In an initial statement, CRFB lauded the President for presenting specific policies to replace the mindless cuts of the sequester and for seeking to stabilize the debt as a share of the economy, but warned that the budget does not go far enough. The debt would be stabilized at 76 percent of GDP in 2022 but then rise again outside the ten year window due to the costs of an aging society. CRFB recommends stabilizing the debt at 60 percent of GDP and putting it on a path to decrease further. We also criticized the use of “war savings” to pay for some infrastructure spending, which we consider a budget gimmick. We further analyzed the budget in a paper and through a blog series.
Payrolling Off a Cliff – Facing a deadline at the end of the month to extend the 2 percent payroll tax cut, doc fix and expanded unemployment benefits, Congress last week reached an agreement that leaves the cost of the extension of the payroll tax holiday for the rest of the year unpaid for. CRFB sees this as fiscally irresponsible, as we pointed out in a statement and also here. As we said, “We cannot afford any more holidays from fiscal responsibility.”
Key Upcoming Dates (all times ET)
- National Debt Tour kicks-off in Boston at 6 pm.
- Arizona GOP debate sponsored by CNN at 8 pm.
- CRFB's US Budget Watch project releases an assessment of the budgetary impact of the campaign proposals of the GOP presidential candidates at 9:30 am.
- GOP presidential contests in Arizona and Michigan.
- US Dept. of Commerce's Bureau of Economic Analysis releases its second estimate of 2011 fourth quarter GDP.
- Washington Caucus
- Super Tuesday - presidential contests in Alaska, Georgia, Idaho, Massachusetts, North Dakota, Ohio, Oklahoma, Tennessee, Vermont and Virginia.
- Wyoming Caucus
- Dept. of Labor's Bureau of Labor Statistics releases February 2012 employment data.
- Presidential contests in Kansas and the Virgin Islands
- Presidential contests in Alabama, Mississippi, and Hawaii
- Dept. of Labor's Bureau of Labor Statistics releases February 2012 Consumer Price Index (CPI) data.
- Missouri Caucus
- Puerto Rico primary
- Oregon GOP Debate sponsored by PBS at 9 pm.
- Illinois primary
- Louisiana primary
- US Dept. of Commerce's Bureau of Economic Analysis releases its third and final estimate of 2011 fourth quarter GDP.