The Tabulation is The Concord's Coalition's blog featuring posts from Concord's policy staff, grassroots field directors, and special guest bloggers. For more about the blog click here.
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Below are several developments we have been following since the last edition of the Washington Budget Report (sign up here) was published.
2011 APPROPRIATIONS PROCESS MOVES FORWARD AS TIME STANDS STILL FOR THE 2010 SUPPLEMENTAL: Last week the House Appropriations Committee continued to make progress on the FY 2011 bills. House subcommittees reported the Military Construction and Veterans Affairs; Energy and Water; and...
As Congress returns from its July 4th recess, below are some of the budget stories we have been following since the last edition of the Washington Budget Report (sign up here) was published.
Imagine if Congress held a vote in the next few months on a bill that cut nearly $3.7 trillion in income taxes, added $350 billion worth of loopholes and deductions to the tax code, and increased Medicare spending by $236 billion.
There might be quite an uproar. After all, we are experiencing the largest deficits in history with increasing awareness of our clearly unsustainable long-term outlook.
Yet, this bill is effectively being passed by Congress, sometimes in decisions made on a month-to-month basis and sometimes annually, through multiple bills that contain Medicare doctor payment "fixes," extenders, Alternative Minimum Tax (AMT) patches, and through the big upcoming push to extend some or all of the Bush tax cuts. Members from both parties have voted time and again over the last 10 years for this bill.
Today's release of the Congessional Budget Office (CBO) long-term outlook highlights the deleterious effect of these decisions on the budget outlook both over the short term and the long term. In it, CBO constructs a baseline of where current law would take us and a baseline of...
Last week congressional leaders confirmed what many have long suspected: Congress will not meet its obligation to pass a budget resolution for FY 2011. At a public forum, House Majority Leader Steny Hoyer said "It isn’t possible to debate and pass a realistic, long-term budget until we’ve considered the bipartisan commission’s deficit-reduction plan, which is expected in December." According to Hoyer, Congress will instead consider a resolution which could include allocations to the Appropriations Committees that are below the President's request, adjustments to the PAYGO rule, instructions to committees to identify waste, language supporting the goals of the President's fiscal commission, and a commitment to vote on the commission's recommendations.
For many years, similar procedural measures have been referred to as "deeming resolutions." As we have written before, deeming resolutions are procedural shortcuts Congress resorts to when it has been unable to pass a budget resolution. Deeming resolutions have been primarily used to move appropriations bills forward...
A Washington Post editorial today sums up a bunch of different strands of thinking about the federal budget that Concord has been writing about and talking about a lot recently. One is that the country can "walk and chew gum" at the same time when it comes to short-term actions to help the economy that may involve increased deficits and long-term planning to confront the nation's real fiscal challenges. Another is that the current debate in Congress over the cost of tax-extenders is failing to focus on their merits while the overall fiscal challenge continues to go unexamined. A third is that we generally do know what actions need to be taken to reform federal programs over the long run -- but that members of Congress lack the political courage to act, and hopefully the President's fiscal commission can begin to...
Last month I participated in a conference of mostly military officials and national security experts at the Naval War College in Newport, RI. The conference title was “Economics and Security: Resourcing National Priorities.”
Since then the debates over economic stimulus versus deficit reduction got pretty hot and heavy, and a funny thing happened. I began to recognize quite a few parallels between the other fiscal policy issues I always write about, and this particular angle that I really have never written about: the role of defense and national security spending in achieving fiscal sustainability.
First, I think most Americans (regardless of what they think of our wars and military activity more generally) assume that cuts in the national security budget would weaken our defense capabilities -- that a trade-off exists between deficit reduction and a strong defense. But what surprised me the most at the Naval War College conference was learning that most of the national security officials and experts there, who all advocate for a strong defense, believed that if the defense budget were tightened, the quality of defense spending would actually improve.
All seemed to recognize that given...
Debate on the so-called “extenders” bill has focused on the size and duration of unemployment benefits, health insurance assistance for those who recently lost their jobs, Medicare physician payments, state aid for health care and various offsets to mitigate the overall effect on the deficit.
Conspicuously missing from the debate is any scrutiny of the extenders themselves. It’s a missed opportunity to raise needed revenue while simplifying the tax code and broadening the tax base -- goals that economists of all ideological stripes have long advocated.
Both the House and Senate versions of the extenders bill contain more than 60 narrowly targeted tax breaks that expired last year. Extending them just through this year will cost about $32 billion. The long-term cost runs to over $350 billion. That cost will add to the debt unless it is offset by corresponding tax increases or spending cuts that may prove more harmful to the economy than failing to renew some, or all, of the extenders.
At a time when the President is commendably urging all federal agencies to identify their lowest priority and least effective items, Congress should devote the same level of scrutiny to the tax code. The extenders would be a good place to...
If the Obama administration follows through on its newly announced effort to identify and weed out unproductive federal programs, it could build public confidence and support for more sweeping fiscal reforms in the future.
The White House has asked federal agencies to submit lists of the programs that are “least critical” to their missions. These programs should total at least 5 percent of each agency’s budget, according to a memo issued by Rahm Emanuel, the President’s chief of staff, and Peter Orszag, the White House budget director.
It would be easy to dismiss the administration’s announcement of this effort as simply a public relations exercise. But two points are worth noting:
The Obama administration has announced a very small effort to reduce deficit spending, and yet liberal groups are attacking them for promoting a policy that will kill the economy – or at least prolong the recession. And conservatives continue to argue that any “stimulus” spending is by definition “wasteful” – especially if they don’t get how a less-idle economy might benefit themselves personally.
But “fiscal hawks” can walk and chew gum at the same time. It’s possible to argue for more and better stimulus at the same time that you call for greater fiscal responsibility. Here are two prime examples, starting with Concord's executive director, Bob Bixby. He was quoted in a CQ Weekly story by Clea Benson (subscription required):
Robert Bixby, the executive director of the Concord Coalition, is at the forefront of the effort to publicize the dangers of uncontrolled federal spending. But even he worries that the economy is not yet at a point where it makes sense to forgo extending...
How large is the federal debt? That's something of a trick question in economic circles, and some analysts believe it may have already tripped up the President's fiscal commission.
Some commission members think the panel, charged with recommending solutions to the nation’s fiscal problems, should focus on the total federal debt. That figure, which just hit $13 trillion, is most familiar to the general public because it is widely cited by the news media and politicians.
Many budget experts and economists, however, say the real number to watch is “publicly held debt,” meaning what the government owes to investors. This figure, now approaching $8.6 trillion, does not include money that the government owes to various trust funds, notably for Social Security.
Beyond this issue is the question of how much more debt the government can safely take on. Fiscal commission members tussled over that at their second full meeting late last month on Capitol Hill, with some arguing that the economy was still too weak for the government to start focusing on deficit reduction.
“It’s very important that we don’t in our zeal focus on deficit reduction right now,” said Rep. Jan Schakowsky, an Illinois Democrat.
Regardless of which figure the commission focuses on, federal debt is...
