In today’s hearing before the full House Appropriations Committee, the troika (OMB Director Peter Orszag, Treasury Secretary Geithner, and Dr. Christina Romer, Chair of the Council of Economic Advisors) faced tough questions for 3.5 hours on the fiscal commission, unemployment figures, and the deficit.
For the first time since Gallup has started asking the question, the federal deficit tops the list of problems Americans say the nation will face 25 years from now. In a poll of 1,014 adults conducted March 4-17, 14 percent identified the federal budget deficit as the largest problem the country will face. Gallup said that this marks the first time that more than 5 percent surveyed chose the deficit. Another 11 percent chose the economy and the same number chose the environment.
Congressional GOP leaders have just named three Senators and three Congressman to sit on the National Commission on Fiscal Responsibility and Reform, established by the President in mid-February to reduce the deficit to a sustainable level by 2015 (see CRFB's previous discussion of the Commission here).
Today a new bipartisan caucus was announced to support passage of H.J. Res.1, a balanced budget constitutional amendment. The co-chairs are Representatives Mike Coffman (R-CO) and Jim Marshall (D-GA) and founding members are Representatives Bob Goodlatte (R-VA) and Mike McIntyre (D-NC).
Ireland, like other European Union nations including Spain, Portugal, and Greece, risked losing the confidence of its creditors when it did not have a strategy to get its fiscal house in order after taking on massive debt to rescue its economy and financial system over the past few years.
On March 5, the Congressional Budget Office (CBO) gave us a preview of its take on the President’s budget proposals for Fiscal Year 2011 (starting October 1st this year) in a letter to Senate Appropriations Committee Chairman Inouye. CRFB blogged on key features of the preliminary analysis here and here.
In last week's backgrounder blog post on budget reconciliation, we said that the process has been used 22 times in the past, with the President having vetoed three of the bills. That leaves 19 bills that have become law through this special process since 1980. In the graph below, we show the net effect on the deficit of all these bills over the years defined by that year's budget resolution rules.
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.
Given the present economic and political climate, many are eying Constitutional changes to help improve the budget situation.
In yesterday’s Wall Street Journal, Representatives Jeb Hensarling (R-TX) and Mike Pence (R-IN) proposed a Spending Limit Amendment to the Constitution. The amendment would limit federal spending to one-fifth of the economy. The limit could only be waived by a two-thirds vote in Congress or a declaration of war.
