Budget Process and Rules
Tax Reform Cometh…Eventually – Today is Tax Day, when federal tax returns are due. Procrastinators have DC Emancipation Day, a holiday in the District of Columbia celebrating the day President Lincoln freed the slaves there, to thank for the extra day to file. The law prohibits Tax Day from falling on a weekend or federal or state holiday. Congress returns from a two-week hiatus just in time for lawmakers to take advantage of the tax filing deadline to promote their favorite tax reforms.
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.
Mad, Mad World – There’s enough madness in DC to go around. Lawmakers from opposite parties seem perpetually angry at each other, yet they are moving in lockstep towards what Federal Reserve Chairman Ben Bernanke recently called a “fiscal cliff” at the end of the year. And expecting Congress to adopt a budget has become akin to picking a 16th seed to win. Unlike the big tourney, there doesn’t seem to be an end in sight to this madness. Think you can do better?
In what was surprising news to many when, yesterday, freshman Rep. Rick Crawford (R-AR) announced that he would introduce legislation that would apply a tax to those with annual incomes exceeding $1 million. The concept has held pretty much exclusively Democratic support, until now that is. Crawford touted the move as a necessary compromise for a path towards reducing the county’s deficits and sky-rocketing debt.
An aide described it as analogous to other bipartisan efforts to reaching a deal, stating:
If there's anything people can agree on in Washington, it is that the current budget process is broken. Congress has not passed a budget resolution since 2009, and even when they use the process, they are often late in doing so.
One of the wonkier discussions that arise inside the Washington beltway from time to time is what accounting method to use for federal credit programs. In a new issue brief, CBO weighs in on the argument for and against using "fair value" accounting versus the current method. We provide a brief overview here, but be sure to check out the full report for more details.
Big Day – Today is the big day in budget world. The White House released its fiscal year 2013 budget request. As you can imagine, CRFB has been busy going through the numbers and proposals. CRFB issued a statement earlier today with initial analysis and a paper examining the request is forthcoming. The budget would stabilize the debt at 76% of GDP in 2022.
Expedited rescission authority, a cousin of the line-item veto, has been considered countless times by Congress since the line item veto was declared unconstitutional in 1998. In fact, CRFB president Maya MacGuineas recently testified on this proposal, which can be found here. Yesterday, it has passed the House by a 254-173 vote.