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.
Over the past few years, lawmakers have made the most progress in discretionary spending in the deficit reduction effort. Additional opportunities for finding efficiencies in the discretionary budget exist for defense and nondefense, but right now cuts are being done through sequestration, which imposes blunt, across-the-board reductions instead of targeting areas where resources could be allocated better.
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.
There has been a lot of talk about the sequester in recent weeks as the latest in a long line of fiscal stand-offs ensues in Washington. In FY 2013, the sequester will hit defense budget authority by $43 billion, non-defense discretionary budget authority by $26 billion, Medicare spending by $11 billion, and other mandatory spending by $5 billion.
Update: This post has been updated as of February 27, 2013 to reflect new proposals from the Senate Republicans
In a report released today, the New America Foundation’s Education Policy Program offers a proposal to overhaul the federal financial aid system with over 30 specific policy options. The authors argue that the current poorly targeted and complicated system, combined with rising tuition costs, is no longer meeting today’s demand.
Today, The Wall Street Journal (subscription required) reported that the U.S. Postal Service will again raise the price on first-class postage stamps from 45 cents to 46 cents, consistent with its announcement in November. USPS will introduce a new first class global Forever stamp, which will cost $1.10 and allow mail to anywhere in the world, still valid with future rate increases.
Along with a two month delay until March 1, the fiscal cliff deal reduced the across-the-board cuts under sequestration for 2013 by $24 billion. Reducing the cuts from $109.3 billion to $85.3 billion was paid for with a reduction in discretionary caps in 2013 and 2014 and a tax gimmick to allow for more conversions to Roth IRAs. As a result, the remaining cuts under sequestration are now slightly smaller.