Budget Process and Rules
What Will Bloom This Month? – In April we were showered with fiscal policy developments: namely, a last-minute FY 2011 budget deal; a deluge of budget plans from across the political spectrum (see here, here, here and here ); House passage of a FY 2012 budget resolution; a major fiscal policy speech from President Obama along with a new fiscal framework; and a steady stream of budget process ideas.
Wedding Vows and Vows Kept – Last week the royal wedding in England between William and Kate garnered a great deal of attention on this side of the pond. Meanwhile another union seemed to blossom in this country – the pairing of a debt limit increase with some type of trigger mechanism. Now, the word that Osama Bin Laden has been killed and buried at sea puts an end to the quest for the man most responsible for the 9/11 attacks and finally fulfills a promise to bring him to justice that spanned two administrations.
“Trigger” has become the term du jour in the budget world as of late, particularly as it relates to the debt limit, and it doesn’t refer to shooting ourselves in the foot. On the contrary, agreement on a debt or deficit trigger could be just the thing to help us come together on raising the statutory debt ceiling and avoid facing the firing squad.
Yesterday, Senate Majority Leader Harry Reid (D-NV), proposed adding a "deficit cap" to forthcoming legislation to increase the debt ceiling. While the details of this deficit cap are as of yet unknown, in theory, it sounds like a mechanism similar to the "debt failsafe" that President Obama proposed within his Budget Framework. A deficit trigger would presumably require deficits to be at or below a
Yesterday, CRFB released an analysis of President Obama's new deficit reduction framework meant to save $4 trillion dollars over 12 years. Using CBO's economic and technical assumptions and looking at a standard 10-year period, we find the plan would save $2.5 trillion and would result in a slightly increasing debt-to-GDP ratio toward the end of the decade.
Just in time for Tax Day on Monday, the White House website has launched a taxpayer receipt. By entering what one has paid in federal taxes, the new tool allows users to view where their tax dollars go, with results broken down by category.
The House and Senate today approved of legislation funding the federal government for the rest of the fiscal year, ratifying the agreement reached late last week that averted a government shutdown. For good measure, lawmakers flirted with one more deadline as the “bridge CR” that has been financing government operations since last Friday night’s last-minute deal was set to expire tomorrow.
House GOP Budget Unveiled – On Tuesday, House Budget Committee Chairman Paul Ryan (R-WI) unveiled his fiscal year 2012 budget proposal, titled “The Path to Prosperity.” It is the Republican response to the White House budget released last month. The House Budget Committee will mark-up the bill today in an all-day session with the goal of voting on the House floor next week.