Fiscal Policy in the News
Super Not So Duper – The word “super” has lost its luster lately. The failure of the Super Committee and the need for a super majority in the Senate to pass virtually anything have contributed to record-low approval ratings for Congress. Meanwhile, Super PACs are pouring unlimited funds into campaigns, resulting in even more negative advertising than usual and rising concerns that the political process is being distorted.
Stating the Obvious – President Obama delivers the State of the Union address Tuesday evening. The SOTU is the annual rite where presidents attempt to hit the “reset” button and lay out their agenda for the coming year.
Playoffs in Full Swing – The Packers packed it in; the Broncos got busted; the Saints went marching out; and Houston had a problem as the NFL Playoffs eliminated more contenders in the annual march towards crowning a champion. Challengers were eliminated in the presidential contest as well as former Utah Governor Jon Huntsman backed out and more may fall away after Saturday’s South Carolina primary.
With the year wrapping up, our friends Ezra Klein over at the Washington Post and Derek Thompson at The Atlantic asked a variety of noted economists and other important individuals ranging from Larry Summers and Jared Bernstein to Rep. Paul Ryan (R-WI) and Sen. Kent Conrad (D-ND) to list their favorite chart of the year.
This Saturday in Des Moines, Iowa, the Republican presidential candidates will debate for one of the last times before the Iowa caucuses on January 3. The Committee for a Responsible Federal Budget has several questions we would like to see the candidates answer.
Europe's worsening debt crisis--notably Italy's--should serve as a warning to the United States of what can happen to an otherwise steady, solvent economy whose debt is too high. In short, when debt gets so precariously high that interest payments become a very large budget line, debt markets can expand a slight decrease of confidence into a significant increase in interest rates. From there, the crisis can quickly descend into a national failure to refinance expiring bonds, and then possibly into national bankruptcy and default.
In the wake of the Super Committee being unable to recommend a package of savings, many other lawmakers have been stepping in to fill the void on debt reduction efforts, the trigger, and what to do about expiring provisions at the end of December. The reactions have been diverse, with some productive and some disturbing reactions.
Today at an event hosted by the Center for American Progress and the American Action Forum, New York City Mayor Michael Bloomberg called on the federal government and Super Committee to go way beyond the $1.2 trillion in mandated savings to enact real reform. In his speech, he presented his own plan for how to control debt and to eventually balance the budget by 2021.
If the Super Committee fails, an automatic cut of $1.2 trillion over ten years (or whatever the difference is between the agreed upon cuts and $1.2 trillion) will be put into place starting in 2013. These cuts would be more or less across-the-board with non-interest savings stemming from defense and non-defense, though with notable exceptions.