Temporary Tax Extensions Avoid “The Hurt Locker” – The Senate passed H.R. 4691, a 30-day extension of several expired tax breaks and unemployment and health-care benefits, last week after reaching a deal with Senator Jim Bunning (R-KY). He had blocked the vote because the $10 billion measure was not paid for. Under the deal the Senate considered a Bunning amendment to offset the cost; the proposal was voted down.

This afternoon CBO released its preliminary analysis of the President’s Budget, projecting a significantly worse fiscal situation than the Administration does.  It will release a more detailed report later this month that outlines the effect of the President’s Budget on the economy.  We will release a more detailed analysis next week and when CBO releases its final report, likely at the end of March. But here's a quick preview: 

The Congressional Budget Office issued its Monthly Budget Review yesterday. It estimates that the federal government incurred a deficit of $655 billion for the first five months of fiscal year 2010.

The CBO released an updated cost estimate* of the Senate jobs bill yesterday. This larger bill calls for further increased funding for unemployment insurance and COBRA along with new proposals for increased Medicaid matches, Medicare physician payments, tax extenders, and other spending provisions.

Here at CRFB, we love constructing baselines. Whenever CBO constructs its own budget baseline, in fact, we rush to adjust it. CBO's projections, as our readers know, are constrained by a combination of "current law" (they can't assume legislative action, even when there is a near certainty it will occur) and budget convention.

 A number of very interesting and relevant government reports came out this week. Check them out: 

According to CBO Director Doug Elmendorf:

CBO is celebrating its 35th birthday! The agency was created by the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344) and officially opened for business on February 24, 1975, when [CRFB Board Member] Alice Rivlin became its first director.

Today, Senate Majority leader Harry Reid introduced a second jobs bill, following the first $16 billion jobs bill (-$1.1 billion 11-year deficit impact) that passed the Senate on Wednesday. According to the CBO, this bill would provide about $10 billion for temporary extensions in existing measures, including unemployment insurance benefits, COBRA health subsidies, and Medicare physician payments.

 An editorial yesterday in the Wall Street Journal called on the Administration to support the reform of the two housing financing enterprises originally sponsored and now owned by the federal government, Fannie Mae and Freddie Mac, and at a minimum, to show the full cost of those organizations in its budget. 

The CBO has released its cost estimate of the Senate Jobs bill, the Hiring Incentives to Restore Employment Act, as introduced by Senator Harry Reid last week (compare it to the House jobs bill here). The bill would provide about $15.6 billion in funds directed toward job creation.