October 30, 2014

Posts on federal budget

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Monday, October 27, 2014 - 10:36 AM

An interesting poll this month in the Des Moines Register shows that Democrats and Republicans have very different opinions on the relative importance of the federal deficit versus unemployment and jobs as campaign issues. It might be, however, that the two sides just have different ways of expressing concern over the same issue: our nation’s economic future.

Almost one-quarter of Republicans in the poll of likely Iowa caucus-goers ranked the deficit as the top issue (23 percent). Only 11 percent of Republicans ranked unemployment/jobs as the top issue.

On the Democratic side, the numbers were nearly the reverse with 21 percent of likely caucus-goers ranking jobs as their top priority and 9 percent ranking the deficit first.

Taken together, roughly one-third of likely caucus-goers in both parties ranked these two issues at the top. 

The Register poll, though limited to Iowans, suggests that there could be a path to consensus if Democrats and Republicans reject the premise that concern about the deficit implies indifference to unemployment and jobs, and vice versa.

It is possible, and indeed it is perfectly...

Friday, October 17, 2014 - 9:02 AM

The administration trecently confirmed a bit of good news about the last fiscal year: the government borrowed substantially less than it did the year before.

But this drop, in line with a previous projection by the Congressional Budget Office (CBO), is no reason for complacency. The additional borrowing has still pushed the federal debt to well over $17.8 trillion, and the government remains on track to boost that by $7.2 trillion or more in the coming decade.

The final budget figures for Fiscal 2014, which ended Sept. 30, show the deficit at $483 billion, according to a joint statement by Treasury Secretary Jacob Lew and Office of Management and Budget Director Shaun Donovan. That figure compares to a $680 billion deficit in Fiscal 2013.

Lew and Donovan attribute the difference to higher government receipts and stable outlays. Receipts rose to 17.5 percent of GDP, up from 16.7 percent in 2013. Spending, while higher in absolute dollar terms, fell to 20.3 percent of GDP in Fiscal 2014. That is down from 20.8 percent the previous year.

The joint statement says spending “was lower than the previous year for many agencies and programs,” including the...

Tuesday, October 7, 2014 - 10:11 AM

On a recent day in Florida, hundreds of people gathered to examine federal budget issues, question former members of Congress and push for sustainable fiscal policy. For me, that sparked hope for our nation’s future, even in the face of mounting federal debt and changing demographics.  

The Concord Coalition and Fix the Debt partnered with two universities and eight former congressmen on Sept. 23 to present the programs and to help give members of the Millennial generation a larger voice on fiscal issues.

About 200 people -- mostly high school students -- attended a  program during the day that was part of the Lou Frey Institute’s fall symposium at the University of Central Florida in Orlando. That evening about 50 people attended a fiscal forum on the University of South Florida’s Tampa campus.

The Orlando program featured a panel that included Reverend John Allen Newman and former U.S. House members Bill Zeliff, Jason Altmire, Allen Boyd, Cliff Stearns and Tom Tauke.

“No political issue is more critical than the federal debt and deficit,” Altmire said. Boyd echoed that sentiment, saying today’s fiscal issues will determine what kind of America we and the next generation will live in.

Added Tauke: “The longer we wait to...

Tuesday, August 26, 2014 - 11:05 AM

Our nation’s reliance on a 24-hour news cycle has bred an environment focused on quick stories with tag lines to keep us engaged. Listening to a recent panel discussion, I realized that the emphasis on sound bites needs to change if we are to have any hope of improving the nation’s fiscal footing. Enacting sustainable fiscal policy will take far more than a superficial exchange of partisan one-liners.

The panel discussion, which took place earlier this month at Dartmouth College in Hanover, New Hampshire, focused on the federal budget, the national debt and the political roadblocks to fiscal reform. The panelists were Robert Bixby, executive director of The Concord Coalition; Richard Swett, a former ambassador to Denmark who also served in Congress, and Charles Arlinghaus, president of The Josiah Bartlett Center for Public Policy.

The event was co-sponsored by Concord, the Bartlett Center, the Campaign to Fix the Debt, the Millennial Action Coalition and the Nelson A. Rockefeller Center for Public Policy.

Arlinghaus said that fiscal issues are “difficult to deal with, and do not easily fit in a 10-second sound bite.” He noted that human nature itself is an obstacle to fiscal reform because people will need to give up something they currently have. Politicians are reluctant to press difficult changes on the...

Monday, July 14, 2014 - 11:18 AM

With the economy continuing its slow recovery, the administration’s Mid-Session Review budget projections released on Friday show little change in the overall outlook. Under the President’s policies, the Office of Management and Budget (OMB) anticipates a deficit for the current fiscal year of $583 billion, down $66 billion from the administration’s March projection and far below the trillion-dollar-plus deficits that came with the Great Recession.

It is important to remember, however, that the federal debt -- high by historical standards, at nearly $17.6 trillion -- remains a deep concern, even with quite favorable economic and political assumptions.

Under its proposed budget, the administration says, the 10 annual deficits over the next decade would add another $5.5 trillion to that total. That is up by nearly $600 billion over the March budget.

While the deficit is lower than the earlier projection for 2014-16, it is higher in all subsequent years. The biggest change is that revenues are now projected to be $760 billion lower over the coming decade.

As a result of higher deficits in the out years, debt held by the public is now projected to be slightly higher (72 percent of GDP) in 2024 than projected in the March...

Saturday, June 28, 2014 - 9:58 AM

Short-term improvements in the federal government’s finances have led to widespread complacency in Washington about fiscal reform.

But a panel discussion this week highlighted the continuing need for such reform, with former members of Congress lamenting the sharp political divisions within the two major parties as well as between them that hinder constructive change.

“We have a fiscal challenge which is really a political challenge which really is a societal challenge. . . .the two parties are more polarized than ever before,” said Evan Bayh, a former senator (D-Ind.). “The Democratic Party has moved further left, the Republican Party has moved even further right.”

Mike Castle, a former congressman (R-Del.), sounded a similar theme, noting the pressures faced by moderates in both parties. “The Congress of the United States today,” he said, “is a difficult place.”

The panel discussion took place in Washington on Wednesday night, when The Concord Coalition honored Senators Dick Durbin and Tom Coburn with the 2014 Paul E. Tsongas Economic Patriot Award.

Joining Bayh and Castle for the panel discussion were former senator Judd Gregg (R-N.H.), former House member John Tanner (D-Tenn.) and Concord Coalition Executive Director Robert L. Bixby.

Castle and Tanner are Concord’s co-...

Tuesday, June 24, 2014 - 10:00 AM

Following last year’s bipartisan budget agreement, this was supposed to be the year of a harmless fiscal ceasefire on Capitol Hill. Unfortunately, the ceasefire is becoming a retreat for fiscal responsibility.

On issues ranging from tax and entitlement reform to highways and veterans health, Congress has backtracked, ducked and gimmicked its way around hard choices. This pattern does not bode well for any attempt to put the budget on a sustainable track after the fall elections.

Backing away from military retirement reforms. The first sound of retreat came in February with overwhelming votes in the House and Senate to repeal a provision included as part of their budget agreement just a month earlier that limited cost-of-living adjustments for working-age military retirees.

The minor change supported by the Pentagon would not have saved a huge amount of money (roughly $7 billion over 10 years) but represented the type of difficult choice necessary to reduce defense spending. However, in the face of complaints from veterans groups, Congress quickly backed down. To save face, lawmakers replaced the savings on paper with unspecified automatic cuts 10 years from now, but it was still a clear case of kicking the can down the road.

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Tuesday, June 17, 2014 - 9:19 AM

The Congressional Budget Office (CBO) cost estimate for the Senate’s expansion of veterans’ health care has been getting a lot of attention from budget groups and members of Congress. As illustrated by the Committee for a Responsible Federal Budget, when fully implemented, the part of the legislation that provides broad access to care providers outside the VA system might cost up to $50 billion a year -- more than doubling what is currently spent for veterans’ health. This new “mandatory appropriation” would increase the deficit by more than the prescription drug benefit under Medicare Part D.

While there has been a lot of misplaced consternation among members of Congress about CBO’s scoring accuracy, there has also been some constructive discussion about the need to find offsets for the new spending. However, there has not been nearly enough discussion about whether the entire congressional strategy and this rushed “fix” are misguided.

The first problem is that Congress, in trying to rapidly...

Monday, May 5, 2014 - 4:00 PM

A book titled “Dead Men Ruling” is not the place you would expect to find an optimistic message about our nation’s future. That is the case, however, with a new book from budget expert Eugene Steuerle of the Urban Institute. The critical connection he draws between renewed fiscal freedom and generational fairness casts the budget debate in a far more important context than deficit reduction for its own sake. This larger theme is one that The Concord Coalition has long embraced.

Despite the dismal fiscal outlook, which portends rising deficits and debt in perpetuity, Steuerle argues that “we no more live in an age of austerity than did Americans at the turn of the twentieth century.... Conditions are ripe to advance opportunity in ways never before possible, including doing for the young in this century what the twentieth did for senior citizens, yet without abandoning those earlier gains.”

The key to realizing these opportunities, he says, is “breaking the political logjam that…was created largely by now dead (and retired) men.”

As Steuerle puts it, “both parties have conspired to create and expand a series of public programs that automatically grow so fast...

Monday, March 17, 2014 - 12:46 PM

House Ways and Means Chair Dave Camp (R-Mich.) remarked recently that there are some similar ideas in the tax reform proposals that he and President Obama have suggested. Normally overlap between Republican and Democrat ideas is a welcome occurrence.

But at least one feature in the Camp and Obama tax reform plans is an exception: Their plans to shore up the Highway Trust Fund by using one-time revenue from changes to the corporate tax system.

Unless lawmakers do something, later this year the largest part of the Highway Trust Fund -- the Highway Account -- will be unable to meet all of its obligations. The Congressional Budget Office recently projected that the entire trust fund will become insolvent in 2015.

While lawmakers need to come up with a solution, using short-term revenues from tax changes on unrelated corporate profits earned abroad is not a good approach and would only delay...