May 25, 2017

Posts on federal budget

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Friday, February 17, 2017 - 12:45 PM

President Trump and many lawmakers in both parties have promised to attack waste and substantially improve government efficiency. The Government Accountability Office (GAO) has just handed them a long list of opportunities to do so in its latest “High Risk List.”

With a large and growing federal debt, elected officials should vigorously pursue these opportunities to reduce unnecessary spending and collect hundreds of billions of dollars in unpaid taxes. In addition, Congress and the president should heed the GAO’s renewed warnings about the long-term fiscal challenges facing important but costly entitlement programs.

The High Risk List, which GAO updates at the start of each new Congress, spotlights 34 government activities or areas that the agency considers “vulnerable to waste, fraud, abuse and mismanagement or needing broad-based transformation.”

GAO, a nonpartisan investigative arm of Congress, reports that the government made “considerable progress” on problems highlighted in the 2015 list. The agency removed one area from the High Risk List: the sharing and managing of information related to terrorism, which U.S. Comptroller General Gene Dodaro called “a particularly...

Tuesday, February 7, 2017 - 11:43 AM

With interest rates in recent years far below traditional levels, it has been easy for American taxpayers and their political leaders to overlook one of the chief drawbacks of the federal debt: the borrowing costs.

But as Congressional Budget Office (CBO) officials have made clear recently, there is good reason for elected officials and the public to start paying more attention to what the government pays in interest -- and how rapidly these payments will rise in the coming years unless big changes are made in the federal budget.

In testimony last week on Capitol Hill, CBO Director Keith Hall said that net interest payments this year would be the fastest-growing component of the projected increase in federal spending.

If interest payments rise as projected over the next decade, they will make it even more difficult to put the federal budget on a responsible and sustainable path.

Two factors are driving the current and projected growth in federal interest costs:

  • Interest rates are on their way up. As explained in a CBO blog post last week, the budget office expects rates to rise...

Monday, January 30, 2017 - 12:24 PM

In an interview on Fox News last week, President Trump said that he would like to have a balanced budget “eventually,” but not at the expense of higher spending for the military.

“So a balanced budget is fine,” Trump said. “But sometimes you have to fuel the well in order to really get the economy going. And we have to take care of our military. Our military is more important to me than a balanced budget because we’ll get there with a balanced budget.”

This brief window into the president’s thinking on budget policy is troubling because it indicates that he does not feel constrained by the need to make trade-offs in pursuit of his policy goals. It is an invitation to pit any worthy initiative against the goal of a balanced budget regardless of the cost.

That is a false choice and one that has potentially harmful consequences for budget discipline.

As new projections by the nonpartisan Congressional Budget office (CBO) show, current policy is already on track to add another $9.4 trillion of borrowing to the nation’s growing debt over the next 10 years.

With that sobering outlook in mind, Trump’s...

Monday, January 23, 2017 - 11:15 AM

Last week marked a sad anniversary at The Concord Coalition. On Jan. 18, 1997, former U.S. senator and Concord Coalition co-founder Paul E. Tsongas passed away.

Twenty years later, his example and vision continue to guide us.

Upon his death, The Concord Coalition issued a statement about him and his legacy that we republish below.

"The death of Paul Tsongas will be deeply felt by every member of The Concord Coalition family. His leadership inspired many of us first in his 1992 presidential campaign, and later as co-founder of The Concord Coalition. He represented the best qualities in leadership - integrity, courage, commitment, compassion, and the good grace to take himself less seriously than the policies he advocated.

"With his death, some will inevitably wonder whether the work of The Concord Coalition will go on. But no one who had the privilege of knowing Paul Tsongas could have any doubt as to the answer. Of course it will.

"Paul Tsongas often spoke of legacies. To him, the work of The Concord Coalition went well beyond the tactical goal of balancing the federal budget. He was much more...

Thursday, January 19, 2017 - 12:12 PM

With a new administration coming into office, a report on the nation’s fiscal health provides a timely and emphatic reminder of the need for the new president and Congress to pursue sweeping long-term changes in the federal budget.

Released this week by the Government Accountability Office (GAO), the report provides a good look at the nation’s unsustainable fiscal path and deserves close scrutiny by elected officials in both parties.

Although our nation’s leaders face an array of serious short-term challenges and difficult policy choices, the new report reminds them -- and the American public -- that the federal government is already “highly leveraged in debt by historical norms.”

So in addition to the near-term financing decisions that must be made, the GAO says, “a broader plan is needed to put the government on a more sustainable long-term path.”

The report draws on the work of the GAO itself as well as Congressional Budget Office (CBO) projections and the recently issued Fiscal Year 2016 Financial Report of the United States Government.

Their projections, the GAO says, “all show that, absent policy changes...

Tuesday, January 17, 2017 - 10:34 AM

An amazing thing happened in Washington recently. With the total national debt about to top $20 trillion and on an unsustainable long-term path, 376 members of the House of Representatives voted for one of two Fiscal Year 2017 budget resolutions that would add another $9.1 trillion to the debt over next 10 years.

One version was passed by the House with 227 Republican votes. Nine Republicans voted in opposition. The other version was a Democratic amendment that was defeated with 37 Democrats voting in opposition.

That means only 46 members of the House (9 Republicans and 37 Democrats) voted against adding $9.1 trillion to the debt.

Both budget resolutions contained roughly the same recommended levels of spending, revenues and debt. The main difference was that the Republican version contained a fast-track procedure (“reconciliation”) to begin the process of repealing the Affordable Care Act (“Obamacare”).

Earlier in the week, the Senate also approved a version of the budget resolution that would add $9.1 trillion to the debt with only one Republican, Rand Paul of Kentucky, voting in opposition.

It is not easy to vote against a budget resolution or amendment put forward by the party leadership, no matter how fiscally responsible that vote may be.

...
Monday, December 19, 2016 - 1:07 PM

In selecting Rep. Mick Mulvaney (R-S.C.) as his budget director, President-elect Donald Trump has chosen a strong advocate of balanced budgets accomplished through deep spending cuts. It will be Mulvaney’s difficult task to craft a budget that adheres to this goal while accommodating Trump’s many campaign promises to increase spending and cut taxes.  

As a co-founder and leader of the House Freedom Caucus Mulvaney has advocated deeper spending cuts than House Republican leaders have agreed to, even if that meant shutting down the government. In his quest to reduce spending he has not spared the Pentagon budget from scrutiny, particularly the gimmick of using the Overseas Contingencies Operations fund (OCO) to avoid spending caps.

He has also opposed raising the nation’s statutory debt limit without spending cuts and has downplayed the likelihood of a government default.

Some of these hard-line positions might prove difficult to maintain as budget director where his job will require negotiations with his former colleagues in Congress to push through the administration’s fiscal agenda. This will include decisions on Fiscal Year 2018 spending caps, replacement costs of repealing the Affordable Care Act, and an inevitable need to raise the statutory debt limit.

Mulvaney may also find...

Friday, December 16, 2016 - 4:50 PM

Senate Majority Leader Mitch McConnell (R-Ky.) made headlines this week when he suggested that the GOP must pay for its campaign promises, stating his preference for “deficit-neutral” tax cuts and offsets for new spending.

“I think this level of national debt is dangerous and unacceptable,” McConnell told the press at a recent briefing. His comments come at an important time.

As a candidate, Donald Trump frequently made mention of the size of the debt, but some of his more popular proposals threaten to grow it even larger. Analyses of Trump’s proposed tax cuts put the cost between $3 trillion and $6 trillion. Incoming White House Senior Advisor Steve Bannon says he is “pushing a trillion dollar infrastructure plan” and many observers are waiting to see the size of Trump’s actual proposal.

The size of possible proposals is leading many Republicans, including McConnell and even the incoming White House chief of staff, Reince Priebus, to call for offsets. On “The Hugh Hewitt Show” on Wednesday,...

Tuesday, December 13, 2016 - 11:31 AM

Three former congressmen and a retired U.S. ambassador warned of the difficult fiscal policy challenges facing the incoming Trump administration and congressional leaders at a forum last week in Concord, N.H.

The bipartisan panel discussed issues such as the growing debt and deficit, tax reform, affordable health care, Social Security and infrastructure investment. It was hosted by The Concord Coalition and the Warren B. Rudman Center at the University of New Hampshire School of Law.
 
Panel members were retired ambassador George Bruno and former congressmen Charles Bass, Paul Hodes and William H. Zeliff. Bruno and Hodes are Democrats; Bass and Zeliff are Republicans. Robert L. Bixby, Concord’s executive director, moderated the conversation. A video is available here.
 
Bass said that both Republicans and Democrats are to blame for the nation’s debt and deficit issues, and that both parties must shoulder the responsibility of reform.
 
He called upon Congress -- which has struggled to complete appropriations legislation in recent years -- to consider systemic reforms that could...
Tuesday, December 6, 2016 - 10:17 AM

Budget experts urged the incoming Trump administration and congressional leaders to address the country’s long-term fiscal challenges at two events in Washington last week. 

The first event, hosted by the Bipartisan Policy Center (BPC), featured the authors of a new report titled Fixing Fiscal Myopia. The report presents five chapters, each by a different budget expert, covering topics such as the framing of long-term budget projections, other countries’ experiences with long-term budgeting, and goals for reforming the budget process.

“Given the documented long-term fiscal challenges facing the country, budgeting with our heads in the sand is no longer a viable strategy,” writes Bill Hoagland of BPC and Phil Joyce of the University of Maryland in the report’s final chapter. “If the budget process is to focus more effectively on the long term, a fiscal goal should be agreed to by the president and Congress.”

The second event, hosted by the Committee for a Responsible Federal Budget, centered around the publication of a memo to President-elect Trump about the fiscal challenges he will...