In her latest commentary on CNN Money, CRFB President Maya MacGuineas discusses the challenges ahead with the recent deal on tax cuts and how lawmakers must come up with the specific spending changes and tax reforms that will improve the economy. Read it here.
"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the Committee.
Markets this week have been dominated by the White House announcement of a fiscal package deal with Republican Congressional leaders that would add over $800 billion in new measures over the next two years – mainly on the tax side – to support the economy.
Financial markets have reacted to the new tax cut deal between the White House and Congressional leaders which would add some $800-900 billion to our national debt.
In the past two trading days since the deal was announced, we have seen the largest bond sell-off this year and so interest rates have gone up fairly dramatically. So far, yields on the benchmark 10 year Treasury bond have jumped by over 35 basis points (considered a sizeable rise), to the highest point since June. Money has shifted to the stock market, and the dollar is higher.
It appears that President Obama and Republican lawmakers have reached a deal to extend the tax cuts enacted from 2001 to 2003.
Today, the Center for American Progress released a plan to get specific on our growing deficits and debt. Or, rather, they've released five illustrative plans, specifically endorsing one--the 50/50 plan--as a balanced compromise.
Commission Can’t Quite Commit – The President’s Fiscal Commission was able to produce a fiscal plan last week that garnered a bipartisan majority of votes within the panel (11 out of 18 members), but not the 14 vote supermajority required to compel Congress to act. The question now is: will the Commission’s work go the way of many other commissions and be shelved, or can it still prompt action in Washington.
In a Heritage Foundation analysis of the President's Fiscal Commission's final plan, Brian Riedl argues that the recommendations have "too much taxes, not enough spending cuts." Riedl takes issue with the Fiscal Commission's claim that the primary (before interest) savings are split between 65 percent spending cuts and 35 percent tax increases.
In the wake of the release of the Fiscal Commission’s deficit reduction plan, it’s interesting to note the dichotomy between the focus on deficit reduction and the debate over the extension of the Bush-era tax cuts. Both of these issues are at the forefront of public debate right now. The Fiscal Commission should be applauded for its hard work in trying to draft a coherent and credible plan that will address our medium and long-term fiscal challenges.