May 24, 2016

Posts on budget process

Subscribe to this feed Subscribe to this feed

 

Monday, May 4, 2009 - 3:36 PM

Now that the Congressional Budget Resolution has passed, there has been a lot of talk about how the reconciliation instructions included in the resolution will make it easier for a health care reform effort to pass.  Particularly since the mechanics of reconciliation provide for a simple majority vote for approval -- instead of the 60 votes that might be needed to overcome a filibusterer in the Senate.

Ironically, considering political motivations, it might be easier to round up 60 votes for a fiscally irresponsible health care reform bill, than to attain the 51 votes for a fiscally responsible bill -- which would be needed to utilize the reconciliation fast track procedure. 

Let me explain. When the modern budget process was established, the idea behind including a lower procedural bar under reconciliation was to facilitate legislation that contained difficult choices resulting in deficit reduction. Only in recent years have legislators deviated from this intention, most notably by the usage of reconciliation to pass large, deficit-increasing tax cuts.

The guidelines put in place by the budget resolution for reconciliation -- in a sense -- navigate this budget procedure closer to its original purpose. Specifically, for Congress to consider any health care reform bill, it must contain...

Tuesday, April 28, 2009 - 12:50 PM

Listening to President Obama’s weekly address on Saturday was a rollercoaster experience for me. At times, I was lifted by his message of fiscal discipline. At other times, I was depressed by his unwillingness to connect fiscal discipline with politically difficult choices.

It started out well with the President’s observation that “the cost of confronting our economic crisis is high. But we cannot settle for a future of rising deficits and debt that our children cannot pay.”

Then came the first downward plunge when the President proclaimed, “we have identified two trillion dollars in deficit reductions over the next decade.” 

This statistic is based on savings achieved from a contrived “baseline.” If you assume that war spending remains at the current level adjusted for inflation over the next 10 years, you can get a lot of “deficit reduction” by reducing that commitment -- as even the Bush Administration was planning to do. And, if you assume that all of the Bush tax cuts are permanent, which they are not, you can get more “deficit reduction” by assuming that a portion of them will not be extended, which is what would happen anyway under current law. So there isn’t really a lot of deficit reduction in the $2 trillion figure the President cited, and no hard choices.

...
Friday, April 3, 2009 - 10:40 AM

As we previously noted, President Obama released the outline of his first budget at the end of February.  Those details have been scored by the Congressional Budget Office and included in the March update to their Budget and Economic Outlook. Now, the proverbial "budget ball" now rests in Congress as they work towards agreeing on a unified budget resolution.   

Both the Senate and House held votes last evening after marking up their respective resolutions last week. The House approved its resolution by a vote of 233-196 while the Senate's resolution passed by a vote of 55-43.

The two resolutions are not that different on the surface: they both follow the administration's leads on attempting to cut the deficit in half over four years, establishing health care reserve funds, and addressing...

Wednesday, March 18, 2009 - 2:40 PM

As you recover from what was hopefully a fun-filled St. Patrick's Day, it might be helpful if I were able to convert our latest issue brief into a fun, bite-sized and easily digestible, bullet list of the most interesting things we found in President Obama's first budget submission to Congress.

First some background: in general, every presidential budget is significant because it establishes the priorities and issues which the administration perceives to be most important and how they plan to address and resolve them. The first budget of a new administration is even more important in that it sets expectations for the coming years and how these policies reconcile with the promises made during the campaign. The submission the Obama Administration made at the end of February was just an outline of the larger budget they will present later in the year, but with enough information that Congress can turn towards creating the Congressional budget resolution in the next month or two.

Unlike the iconic shamrock used on St. Patrick's Day, our issue brief contains more than "three leafs" of knowledge [and you should still read the issue brief!]:

  • The...
Wednesday, January 28, 2009 - 9:30 PM

The House of Representatives voted today to pass an $819 billion stimulus package. Attention now turns to the Senate debate and vote, and then to reconciling the two chambers' versions.

To illuminate the competing interests in the bill: between short-term stimulus and long-term investment; and to provide 10 policy principles to guide the debate, The Concord Coalition today released an issue brief entitled "Designing a Framework for Economic Recovery and Fiscal Sustainability."

There is little question that the economy is in dire shape and that deficit spending is an appropriate policy response. The tricky part is making sure that the deficit spending is for effective short-term stimulus. Long-term investments, which are also funded in the "recovery" bill, are important for long-run economic growth, however it is unclear that the current rushed effort at a short-term economic jolt is the appropriate place for initiating those investments. The more discerning annual budget process provides a better opportunity to plan for those investments and judge the...

Friday, January 16, 2009 - 12:57 PM

Today’s Washington Post contains a very welcome front-page headline, “Obama Pledges Entitlement Reform.” The article explains that President-elect Obama plans to convene a fiscal responsibility summit in February. According to the Post story:

President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare "bargain" with the American people, saying that the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.

That discussion will begin next month, Obama said, when he convenes a "fiscal responsibility summit" before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.

"What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further," he said. "We have to signal seriousness in this by making sure...

Wednesday, January 7, 2009 - 3:17 PM

The big story today is that the non-partisan Congressional Budget Office updated their baseline estimate for the federal budget's ten-year outlook. Our analysis, based on their most recent data, shows that current policy trends could add $10.295 trillion to the national debt from 2010-2019. Note that the current national debt is $10.6 trillion, so this would double that in just 10 years!

The other big news from the CBO baseline release today is that they project this year's budget deficit (Fiscal Year 2009) will be $1.186 trillion (more than double the prior single year dollar record) or 8.3% of GDP--a post World War II high.

For over a decade, the Concord Coalition has taken CBO's estimates and made changes in order to produce a more "plausible" estimate based on current policy trends. These baselines are important tools on which to evaluate how proposed legislation effects the budget. Our press release today about the new CBO report and our analysis can be found here. For more information on Concord's plausible baseline...