Obama, New Congress Must Face Fiscal Challenges

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Tonight’s State of the Union address will kick off a new season of discussion and debate over the nation’s fiscal situation and possible budget reforms to curb the rising federal debt while still supporting economic growth.

Ideally, the President will remind the country tonight that such reforms remain necessary. His detailed budget proposals for Fiscal 2016 are scheduled for release Feb. 2.

While the odds are stacked against a “grand bargain” on comprehensive fiscal reform in the next two years, elected officials will still need to reach agreements in a number of areas. These range from appropriations for Fiscal 2016 to urgently needed repairs to Social Security’s Disability Insurance program.

Such work will present opportunities for the far-sighted thinking and bipartisan cooperation that will be necessary to move the government onto a more responsible and sustainable course.

There also appears to be substantial interest in both parties in making significant improvements to the confusing and inefficient tax code. Last week the administration released a set of proposals that it said would make the tax code fairer and simpler. Republicans, of course, have their own tax proposals. But perhaps some common ground can be found.

Lawmakers must also wrap up some unfinished business from last year: Legislation to fund the Department of Homeland Security (DHS) for the rest of Fiscal 2015. The House approved DHS legislation last week but included immigration-related provisions that raise doubts about Senate passage in its current form.

External links:
Experts Outline Possibilities for Bipartisan Reform (Concord Coalition)
White House Fact Sheet on President’s Tax Proposals
Obama’s Tax Proposals Get Cool Reception From GOP Lawmakers (Associated Press)
Social Security Public Trustee: Disability Insurance ‘Hitting The Wall’ (Economics 21)
Rule Change Could Start a Critical Conversation on Social Security (Concord Coalition)
CBO To Release Budget and Economic Outlook Jan. 26

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