May 27, 2015

Posts on federal budget

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Wednesday, October 31, 2012 - 9:31 AM

This is Part I of a two-part series of posts on the presidential candidates' fiscal policies. Part II examines President Obama's plans.

As election day approaches, it is appropriate to look at what we know and what we don’t know about the two candidates’ fiscal policy proposals -- especially since it is unlikely we will get any more details prior to election day.

In many respects, the crucial differences between the two candidates are defined by their fiscal policies, and it is almost certain that the winning candidate’s fiscal policy choices will be as immediately consequential as any president’s in history.

In this blog post, I will review Governor Romney’s proposals and in Part II, I will cover the President’s proposals looking at three key areas: The overall budget goal, tax policy and health care.

It is difficult to overstate how little we know about where Governor Romney’s policies will lead. The basic problem is that he has...

Monday, October 15, 2012 - 10:36 AM

Watching the recent Strengthening of America forums online from my office in Wyoming, I was encouraged by how former Democratic and Republican members of Congress, Cabinet secretaries and other national experts could find such so much common ground on a course for fixing the national debt.

As the western states regional director for The Concord Coalition, I was struck by how this matches what Concord has found working with local leaders and the public here in the West and across America.

It also matches recent statements by national associations of mayors and state officials. While there remain some differences on details, it became evident that there is a much more bipartisan agreement than one sees from watching the 2012 political campaigns.

Four public forums were presented in Washington and New York City between September 12 and October 1 by Strengthening of America – Our Children’s Future, a bipartisan initiative co-sponsored by The Concord Coalition.

These forums featured a diverse collection of business leaders, former members of Congress and former government officials. They identified the key components to a comprehensive fiscal solution: tax reform that generates more revenue for deficit reduction, slower growth in health care costs, sustainable Social Security and Medicare programs,...

Monday, October 1, 2012 - 11:15 PM

As part of the Strengthening of America -- Our Children's Future project that The Concord Coalition is co-sponsoring, a forum was held last week in New York on the topic of pro-growth tax reform.  The video of the full event is available here.  In the first part of the forum Martin Feldstein, a former chairman of the Council of Economic Advisors and a Romney adviser, joined Lawrence Summers, former Treasury secretary and an Obama adviser, to discuss what they considered pro-growth tax policy. 

At the event, Feldstein and Summers made it clear that when it comes to this subject, there is a lot of common ground between Republican economists and Democratic economists.  Here’s what I heard as some of the main points of agreement between Feldstein and Summers (what Summers referred to as the "structure that Marty and I have converged on"):

1.      Pro-growth tax reform means structuring the tax system to encourage longer-term expansion in the productive capacity (or "supply side") of the economy.

2.      This...

Monday, October 1, 2012 - 10:04 PM

The latest version of our budget game, the Federal Budget Challenge, has been online for only two weeks, yet has been played by over 5,000 people from almost half of the states in the nation. The Challenge lets players examine over 50 different policy choices, along with their budgetary impacts over 10 years, and decide for themselves whether and how they would reduce the nation’s budget deficits.

The new version, built with our partners from the California-based non-profit Next 10, is now touch-screen playable and has built-in integration with Twitter and Facebook. Like the previous version, as well as the group exercises it was based on -- Principles and Priorities and Debt Busters -- the Challenge offers the opportunity to learn about many of the public policy options being debated in Washington, along with arguments for and against each choice.

The choices already being made by players are quite interesting in that the least and most popular selections are deeply intertwined with the political brinksmanship threatening to push the nation into economic turmoil with the looming “fiscal cliff” at the end of December. 

The most unpopular choice is the policy...

Friday, September 14, 2012 - 11:45 AM

This week The Concord Coalition and several other organizations kicked off an initiative called Strengthening of America – Our Children’s Future focused on the nation's worsening fiscal situation. Former Senators Sam Nunn (D-Ga.), Pete Domenici (R-N.M.), Warren Rudman (R-N.H.) and Evan Bayh (D-Ind.) have convened a bipartisan group of former members of Congress for a series of forums in the weeks leading up to the presidential debates. Nunn and Rudman are Concord’s co-chairs.

Speakers at the first forum emphasized that the most difficult problems are more political than economic.

The country has the strength and capacity to deal with its budget challenges, they said. It is the political will to act that is in question, with many elected officials reluctant to make difficult choices and seek bipartisan cooperation.

James A. Baker III, a former Treasury secretary, said in the forum on Wednesday that a grand bargain to put the country on a more responsible path would require “something that’s become a dirty word” in Washington: “Compromise.” He called for a “heroic effort” to achieve such a deal for the sake of the country’s future.

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Saturday, August 11, 2012 - 4:30 PM

Here are links to some previously published material by The Concord Coalition on proposals by House Budget Chairman Paul Ryan, who was named Saturday as Republican presidential candidate Mitt Romney's running mate.

Politico Op-Ed by Robert L. Bixby (April 17, 2012)

Concord Coalition Analysis of Ryan Budget Plan (March 20, 2012)

Blog Post by Robert L. Bixby on Wyden-Ryan Medicare Plan (Dec. 20, 2011)

Blog Post by Robert L. Bixby on Medicare Proposals (May 31, 2011)

Blog Post by Robert L. Bixby Comparing Obama and Ryan Budget Proposals (April 12, 2011)

 

 

Friday, August 10, 2012 - 2:05 PM

Congressional procrastination could lead to chaotic decision-making on the federal budget after the November elections, but many economists believe this procrastination is already harming the economy.

The damage stems from widespread uncertainty over what elected officials will do, if anything, about the “fiscal cliff” – a combination of sharp “automatic” spending cuts and the scheduled expiration of tax cuts at year’s end.

The Wall Street Journal reported today on its survey of 47 economists, noting their widespread concern about the growing economic cost of congressional inaction. This “adds insult to injury to an economy already flirting with a stall rate,” said Diane Swonk of Mesirow Financial. Another analyst, Julia Coronado of BNP Paribas, said: “We are already feeling the effects in hiring and investment.”

The general expectation in Washington is that elected officials will not take action on the fiscal cliff until after the elections, despite encouragement throughout much of this year from The Concord Coalition and many other analysts and groups to work out a bipartisan action plan as soon as possible.

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Thursday, August 9, 2012 - 9:10 AM

Beginning in January, approximately $109 billion in across-the-board spending cuts are scheduled to automatically take effect. Known in budget policy circles as a “sequester,” these cuts are unusual in that the executive branch directs how the spending cuts occur, as opposed to the traditional locus for such cuts -- the congressional Appropriations Committees.

Because this sequester could have such a dramatic impact on many federal programs and the economy in general, Congress is eagerly awaiting specifics about how the administration plans to implement the cuts. On Tuesday President Obama signed the Sequestration Transparency Act, which requires him and the Office of Management and Budget to put forth a report in 30 days on how a sequester would be implemented. An overwhelming House majority passed the legislation last month, and the Senate approved it unanimously.

Sequesters have been part of the budget process for decades. Were this sequester to go into effect, however, it would be among the few that have ever actually taken place in this country’s history, and would certainly have the greatest budgetary effect.

The sequester was initially intended as a “Sword of Damocles” over the “super committee” created by the August 2011 deal to raise the debt limit. It was not actually designed to take effect;...

Tuesday, July 17, 2012 - 12:52 PM

Today Concord Coalition Co-Chair Sam Nunn, a former U.S. senator from Georgia, helped launch the Campaign to Fix the Debt.  This project is a non-partisan initiative to put America on a better fiscal and economic path.  Nunn is a member of the campaign's steering committee.  

In advance of the campaign's launch, Nunn said:

"On fiscal matters, neither political party can impose its will on the other, and that it is not likely to change after the election.  Successfully tackling our fiscal challenges requires Members of Congress to come together across party lines with a balanced plan that will strengthen the economy, reassure markets, and save future generations from an unbearable debt burden.  There are good people across the political spectrum who recognize this in putting together the Simpson  – Bowles and the Domenici  – Rivlin plans.  There are many Members of Congress who are willing to work together, but they get hit hard from both sides and need a foundation of citizen support.  The Campaign to Fix the Debt hopes to give these folks in Washington, DC and across the country the support they need to work together to put our nation's interest above political parties and to strengthen America to protect our children's...

Friday, May 25, 2012 - 10:06 AM

The Congressional Budget Office (CBO) has released an excellent analysis on the "Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013."  The CBO term “fiscal restraint” has been more popularly referred to as “the fiscal cliff.” That is because there are so many large, sudden fiscal policy changes awaiting us at the turn of the year that if we think of the U.S. economy as a train, it is heading straight for a dramatic fall-off in consumer demand (and hence in overall activity in an economy still constrained by inadequate demand) as these policy changes all happen at once.

Some of the main changes we will face are the expiration of the 2001 and 2003 tax cuts, the expiration of the payroll tax cut, and the beginning of automatic spending cuts required by the debt limit law passed last August. The concern is that taking so much money out of the economy at one time, through either tax increases or a reduction in government spending on goods and services, would slow consumer spending. That would reduce businesses’ desire to increase hiring, which would lead to continued high unemployment. 

And yes, the worry is that the rapid deficit reduction will be harmful. As I explained...