October 21, 2014

Posts on federal budget

Subscribe to this feed Subscribe to this feed

 

Monday, June 7, 2010 - 4:45 PM

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...

Thursday, June 3, 2010 - 4:35 PM

Below are a few budget items we have been following, since the last edition of the Washington Budget Report (sign up here) was published.

  • Last week, the House Appropriations Committee postponed its mark-up of the FY 2010 war supplemental.  The committee's chairman, David Obey, released a proposal including $84 billion in supplemental funding.  In addition to funding the President's request for war funding, the proposal would...
Wednesday, May 26, 2010 - 4:56 PM

While we publish a weekly Washington Budget Report (sign up here), we wanted to direct your attention to some other budget items we are watching this week.

  • The Senate is considering a McCaskill/ Sessions (amendment text here) that would institute statutory discretionary spending caps for three years.
Monday, May 24, 2010 - 5:27 PM

Today the Senate began considering the $59 billion supplemental spending bill (HR 4899) that the Senate Appropriations Committee approved last week. The bill includes emergency funding for priorities such as military operations in Iraq/Afghanistan, disaster assistance and veterans disability payments.  (For more details on the legislation, please see last week’s Washington Budget Report).

During the course of the week, amendments will likely be proposed to add extraneous items to the bill.  The Concord Coalition urges policymakers to resist adding non-emergency spending that will add to deficits that are already fiscally unsustainable. If these items are added, they should be paid for without emergency designations that exempt them from budget allocations.

Another potential addition to the bill is a procedural device called a “deeming resolution.”  Deeming resolutions are procedural shortcuts that Congress resorts to when its members have not lived up to their responsibility to pass a budget resolution.  Deeming resolutions have...

Monday, May 24, 2010 - 5:25 PM

The extenders bill that the House will consider this week is a timely reminder of why it is important for Congress to complete action on a budget resolution.  A budget resolution continues to elude Congress, but there has been considerably less trouble reaching agreement on a bill that the Congressional Budget Office estimates will add a staggering $167 billion to the deficit over 2010-2014 and a net increase of $134 billion over 2010-2020. 


Last Thursday, leaders of the Senate...

Sunday, April 25, 2010 - 9:53 PM

President Obama’s bipartisan fiscal commission will hold its first meeting on April 27. It has two very ambitious assignments -- find a way to balance the budget excluding interest on the debt by 2015 and “meaningfully improve” the long-term fiscal outlook. All of this is supposed to be done by December 1, 2010.

That’s quite a task. It may even be too much to ask. So here is a simple suggestion for the commission: Leave the short-term goal to the regular budget process and focus on the more important long-term goal.

Finding long-term solutions to the nation’s unsustainable fiscal outlook is what originally motivated members of Congress to propose a statutory commission. Only when that effort failed did the President step in by establishing an executive commission with the added goal of filling a gap in his budget.

The short-term budget goal could easily distract the commission from its long-term mission. Senate Budget Committee Chairman Kent Conrad, a commission member, had it right when he told POLITICO last week, “I don’t think a commission should be absorbed with the short-term budget. We need them to focus on long-term structural problems.”

Simply determining which baseline to use in assessing the required deficit reduction in 2015 would get the commission bogged down. They can’t know what it...

Sunday, April 11, 2010 - 9:45 PM

I have never been a fan of the Bush tax cuts. I’ve always felt they were too costly, too skewed to the rich, and did too little to make the tax system more efficient. Concord also warned about the 2001 and 2003 tax cuts before they were enacted and has since continuously said they should not be extended without a plan to address the nation's unsustainable fiscal outlook.

The expiration of the cuts, at the end of this year, is fast approaching and policymakers in Washington are struggling to decide what to do with them. President Obama has promised to continue most of the same tax cuts that he himself has criticized for being fiscally irresponsible. Not only has he promised to extend the tax cuts for all households with incomes below $250,000 (at a budgetary cost of $2.2 trillion over ten years), but he also promised to never raise any taxes on households below that income.

However, President Obama has also promised to get the deficit down to a "sustainable" level of around 3 percent of GDP in five years. But the President's own budget, which includes the deficit-financed extension of those "middle-class" Bush tax cuts (that $2.2 trillion worth), isn't consistent with such a low deficit. CBO says that under the...

Wednesday, February 17, 2010 - 9:39 PM

With today being the one-year anniversary of the American Recovery and Reinvestment Act of 2009 (more commonly referred to as “the stimulus”), and President Obama expected tomorrow to announce his Presidential commission for deficit reduction, I’m hearing a lot of claims and rhetoric about what has “worked” versus what has not, and what has to be done going forward versus what should remain “off limits.”

In all these arguments and politically-colored “evaluations”, I hear misplaced focus on (the stark and easy-to-talk-about) absolutes, averages, and aggregates, when what matters economically are relatives, marginals, and individuals.

Let me elaborate a bit with the two issues at hand…

On the Stimulus: Republican critics of the stimulus argue that the “proof” that the stimulus hasn’t worked lies in the still-bad numbers of the unemployed–-that since ARRA’s passage last year, total jobs in the economy have decreased, not increased.  As the New York Times’...

Monday, February 1, 2010 - 6:04 PM

Following up on our press release about the President's Fiscal Year 2011 budget proposal, here are a few more thoughts:

Annual discretionary spending:

  • A major element of the Obama administration’s 2015 deficit reduction goal is a three-year freeze on non-security discretionary spending (FY 2011-2013). While the portion of the budget covered by the freeze is less than 20 percent, it would still save an estimated $29 billion in 2015 alone, and $249 billion over 10 years.
  • Clearly, more must be done and even doing this will prove difficult. Nevertheless, The Concord Coalition supports the proposed freeze and, given current economic circumstances, agrees that it is appropriate to begin implementation in 2011. Concord also agrees that the freeze should not be across-the-board. Some programs may merit an increase while others can be cut. An aggregate freeze, as proposed, would help to set priorities and reduce waste.
  • War costs in the budget are likely underestimated. In keeping with last year’s budget, the administration has included annual placeholder sums of $50 billion for war costs beyond 2012. While it is...
Thursday, January 28, 2010 - 10:52 PM

If fiscal responsibility calls for significant changes in the big federal entitlement programs, shouldn’t the defense budget face scrutiny and reductions as well?

That question comes up a lot when The Concord Coalition emphasizes the need for entitlement reform. The answer is, “Yes.”

About a fifth of the federal budget goes to the Pentagon, and it is clear that there are many opportunities to achieve significant savings without jeopardizing national security.

Petty turf wars, bureaucratic bloat, poor planning, lax bookkeeping, no-bid contracts, illogical personnel policies and simple extravagance all inflate the defense budget in ways that knowledgeable taxpayers understandably resent.

In addition, short-sighted members of Congress often champion unnecessary defense spending -- or at least turn a blind eye to it -- in deference to the special interests that stand to profit.

All of this adds to the nation’s fiscal imbalances and massive borrowing. That’s why The Concord Coalition supports careful review of the defense budget to identify reasonable reforms and spending cuts.

In calling for a bipartisan fiscal commission that would submit recommendations to Congress, for example, we have stressed the importance of giving the panel a broad mandate that puts everything on the table. That...