House of Representatives
Chairman Bernanke's testimony today underscored the fundamental lack of sustainability of the growing federal budget deficit, while simultaneously defending the large increases in deficit spending that were necessary to support economic recovery. Bernanke predicts real GDP to grow at 3.5% over the course of 2010, yet he acknowledged that this must be tempered by latent problems in the housing market.
The establishment of a fiscal commission either in Congress or by the President was attacked from both sides of the political spectrum. Liberals thought that the group would be cover for cutting entitlement programs, while conservatives thought the commission would be a cover to raise taxes. When President Obama's National Commission on Fiscal Responsibility and Reform came to be, both sides wanted to fence off different options for consideration. And it continues to happen.
Lawmakers have railed against the inability to stop the leaking of oil into the Gulf of Mexico, yet they are having no better success in staunching the flow of red ink. Congress needs its own containment cap to suppress spending and tax cuts that are deficit-financed.
Making the Pitch – With much of Washington eagerly anticipating the debut of Stephen Strasburg on the mound tomorrow, the return of Congress this week is an afterthought to many. But Pelosi, Reid and the rest of the Congressional rotation will need to have some pretty good stuff when they take the mound on Capitol Hill and face an opposing legislative line-up. They will have to show a lot of range as they pitch both economic stimulus and fiscal responsibility.
Yesterday, Donald Marron asked the question: "How Blurry is the Line between Monetary and Fiscal Policy?" As our readers know, we have been tracking the actions of the Federal Reserve, as well as those from the rest of the government, at Stimulus.org. The Federal Reserve, since the crisis, has engaged in a number of extraordinary actions (as we explain in our paper,
Lots of Assignments Due After Recess – Lawmakers are home this week for the Memorial Day recess. When they come back next week they will have a lot of unfinished business. Congress was unable to enact a war supplemental or “tax extenders” legislation before adjourning. Disagreement over paying for the huge costs of the bills has delayed their passage.
In a publicly released letter to the co-chairs of President Obama’s fiscal commission, Rep.
We at CRFB believe in the Wizard of Oz theory of deficit reduction. Passing the right package of spending cuts and tax increases requires a brain – so that we stabilize our debt in the most economically efficient way; a heart – so that we are focused on the real human consequences of our decisions; and most importantly, courage (“the nerve”).
The House today passed a one-year extension of various tax breaks as well as expanded unemployment benefits until November on a 215-204 vote. In a separate 245-171 vote it approved a patch to the Medicare “doc fix” through 2011. However, the Senate adjourned without considering the legislation, meaning that the unemployment benefits, doc fix and COBRA subsidies will expire while Congress is in recess. Marking the second time this year Congress has left town without extending these provisions.
Two massive spending bills that congressional leaders wanted to dispose of before hitting the road for Memorial Day have hit potholes as lawmakers grow more uneasy about deficit spending. However, proposals to assert some degree of fiscal responsibility have yet to leave the driveway.