‘Line’ Items: Budget Day Edition

Big Day – Today is the big day in budget world. The White House released its fiscal year 2013 budget request. As you can imagine, CRFB has been busy going through the numbers and proposals. CRFB issued a statement earlier today with initial analysis and a paper examining the request is forthcoming. The budget would stabilize the debt at 76% of GDP in 2022. While stabilizing the debt as a percentage of the economy is a worthy goal, 76% is too high, and it would start climbing back up outside of the 10-year window. CRFB recommends a goal of stabilizing the debt at 60% of GDP and then putting it on a path to decrease further. There are lots of good ideas concerning controlling health care costs and tax reform in the budget, but more needs to be done. We see this budget as a good start in the right direction. We will have more analysis throughout the week on the Bottom Line blog.

Oh, No…OCO – One area of the budget that gives us pause is where the administration proposes to shift a portion of the so-called “war savings” from Overseas Contingency Operations (OCO) – the Iraq and Afghanistan conflicts that are winding down – to fund infrastructure proposals. CRFB considers this a gimmick. As we explain in our statement – “Drawing down spending on wars that were already set to wind down and that were deficit financed in the first place should not be considered savings. When you finish college, you don’t suddenly have thousands of dollars a year to spend elsewhere – in fact, you have to find a way to pay back your loans.”

Budget Reform Continues – Congress is not likely to adopt the White House budget and is equally unlikely to agree on its own. As Congress seems poised to go another year without a budget, ideas to revamp the budget process continue. Last week the House passed legislation to give the president an effective line-item veto through enhanced power to rescind items in spending bills. The House also passed a bill to require fair value accounting for federal credit programs and to put Fannie Mae and Freddie Mac on the budget. See more budget process reform ideas here.

That’s How We Payroll – After frantic negotiations over the weekend to strike a deal extending the payroll tax holiday and other items, policymakers remain divided over how to offset the extensions. Now there is word that the House may vote on a payroll tax cut without any offsets. This is clearly not what we would like to see out of the conference committee. Let’s hope Congress gets this right.

Ending in Sight for Greek Debt Tragedy? – Greek lawmakers approved of painful austerity measures over the weekend, qualifying for international loans needed to stave off a default. The country still faces deep turmoil over the cuts and some doubts that it will continue on this path.

Dirty Harry Wades into the Debt Pool – The Bowles-Simpson Fiscal Commission plan got an unlikely endorsement last week as actor/director Clint Eastwood gave it a thumbs up. Will lawmakers dare go against Dirty Harry? Congress, do you feel lucky?

Key Upcoming Dates (all times ET)

February 13

• The President will submit his FY 2013 budget request to Congress.

February 14

• Senate Budget Committee hearing on the President’s FY 2013 budget with Acting OMB Director Jeffrey Zients at 10 am.
• Senate Finance Committee hearing on the President’s FY 2013 budget with Treasury Secretary Tim Geithner at 10 am.

February 15

• House Budget Committee hearing on the President’s FY 2013 budget with Acting OMB Director Jeffrey Zients at 10 am.
• House Ways and Means Committee hearing on the President’s FY 2013 budget with Treasury Secretary Tim Geithner at 10 am.
• Senate Budget Committee hearing on the President’s FY 2013 budget request for transportation with Transportation Secretary Ray LaHood at 10 am.
• House Appropriations Committee hearing on the President’s FY 2013 budget for Homeland Security with Homeland Security Secretary Janet Napolitano at 10 am.
• Senate Finance Committee hearing on the President’s FY 2013 budget with Health & Human Services Secretary Kathleen Sebelius at 10 am.

February 16

• Senate Energy and Natural Resources Committee hearing on the President’s FY 2013 budget request for the Energy Department at 9:30 am.
• Senate Budget Committee hearing on the President’s FY 2013 budget with Treasury Secretary Timothy Geithner at 10 am.
• House Appropriations Committee hearing on the President’s FY 2013 Defense budget with Defense Secretary Leon Panetta at 10 am.
• Senate Banking, Housing and Urban Affairs Committee hearing on the European debt crisis and its implications at 10 am.
• House Budget Committee hearing on the President’s FY 2013 budget with Treasury Secretary Timothy Geithner at 2 pm.

February 17

• Dept. of Labor's Bureau of Labor Statistics releases January 2012 Consumer Price Index (CPI) data.

February 22

• Arizona GOP debate sponsored by CNN at 8 pm.

February 28

• GOP presidential contests in Arizona and Michigan.

February 29

• The temporary payroll tax cut, unemployment insurance, and doc fix extensions will expire.
• US Dept. of Commerce's Bureau of Economic Analysis releases its second estimate of 2011 fourth quarter GDP.

March 3

• Washington Caucus

March 6

• Super Tuesday - presidential contests in Alaska, Georgia, Idaho, Massachusetts, North Dakota, Ohio, Oklahoma, Tennessee, Vermont and Virginia.

March 6-10

• Wyoming Caucus

March 9

• Dept. of Labor's Bureau of Labor Statistics releases February 2012 employment data.

March 10

• Presidential contests in Kansas and the Virgin Islands

March 13

• Presidential contests in Alabama, Mississippi, and Hawaii

March 16

• Dept. of Labor's Bureau of Labor Statistics releases February 2012 Consumer Price Index (CPI) data.

March 17

• Missouri Caucus

March 18

• Puerto Rico primary

March 19

• Oregon GOP Debate sponsored by PBS at 9 pm.

March 20

• Illinois primary

March 24

• Louisiana primary

March 29

• US Dept. of Commerce's Bureau of Economic Analysis releases its third and final estimate of 2011 fourth quarter GDP.