Update: This blog has been updated to include numbers from the CBO score of the House farm bill.
Sometimes, the timing of things can really work out in Washington. Yesterday, President Obama nominated Rep. Mel Watt (D-NC) to be the head of the Federal Housing Finance Agency (FHFA), the agency in charge of Fannie Mae and Freddie Mac. If confirmed, he would replace current chief Ed DeMarco in a move that could signal a policy shift at the FHFA.
Opponents of the chained CPI often propose an alternative index for cost-of-living adjustments, the experimental CPI for Americans 62 years of age and older (CPI-E), which BLS has developed as a possible measure of inflation for the elderly subgroup. On Friday, CBO examined the CPI-E in a blog post, showing the goals of developing the CPI-E as well as some of the flaws of the measure.
CBO's latest Monthly Budget Review (MBR) for March means that we now have budget data for the first six months of FY 2013. The six-month deficit stands at $601 billion, down from $779 billion over the same period last year. For context, CBO previously projected that the deficit for FY 2013 would be $845 billion, compared to the actual FY 2012 deficit of $1.089 trillion.
The Congressional Budget Office has been busy on its blog lately, posting both snapshots of federal programs and also publishing responses to questions they have received from Members of Congress at hearings. Their latest post from director Doug Elmendorf is the latter variety, showing the sensitivity of budget projections to changes in interest rates.
It is a well-known fact that the U.S. spends a sizeable amount on defense, more than the next 15 countries combined, including China and Russia. But the Budget Control Act (BCA) discretionary spending caps will require the Pentagon to rein in spending levels, even if sequestration is replaced.
Last Friday, the CBO released a report showing how much the business cycle has affected budget deficits since 1960. The report shows the effect that automatic stabilizers -- features of the budget that tend to automatically push up/down spending and revenue based on cyclical economic effects -- have had and what the budget would look like assuming that the economy is operating exactly at its potential.
The last Congress attempted to work out a new farm bill but could never reach an agreement. The American Taxpayer Relief Act, the agreement reached after the fiscal cliff negotiations, only extended the 2008 farm bill for another year. With another expiration of the farm bill at the end of FY 2013, it remains and bipartisan priority to restructure the way government provides farm support.
Analyses of the CBO budget baseline generally focus on the current law baseline, the one that CBO presents in most detail. In the past, we constructed a CRFB Realistic baseline to account for many policies scheduled to expire/happen in current law that we thought were unrealistic. The Realistic baseline showed a much worse fiscal outlook than the current law baseline.