December 17, 2014

The (Tab)ulation

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Friday, July 17, 2009 - 2:39 PM

From my previous post, it might be clear that there's finally some serious discussion on the Hill about cost control within the health care reform debate. 

Today, the Administration weighed in with an important proposal that might provide the best shot at making sure health care reform legislation has a lasting legacy of reducing costs. (See a summary of the proposal here).

As CBO director Orszag explains, they are looking to create an independent council which will be able to set payment rates and alter payment systems in Medicare, and these recommendations will be done regularly and will take effect unless the President and then Congress explicitly decide to ignore them.  

In this proposal, the body of experts would be called the Independent Medicare Advisory Council or IMAC. The idea for such...

Thursday, July 16, 2009 - 1:25 PM

Health Care reform is moving quite quickly on the Hill and it is almost impossible to keep up with all of the developments in Congress and all of the great reporting in the media on what is needed for fiscally responsible health care reform. So, over the next 90 days as health care dominates the political agenda, we are going to try to briefly highlight developments as they occur by linking to other sources and throwing in Concord material as it is published.

The links brought to you today cover the fundamental cost control issues being discussed (or unfortunately not discussed) as legislation makes its way through the House and Senate Committees.

  • The big news today, as reported in The Washington Post, CNN and elsewhere, is that CBO director Elmendorf testified in front of the Senate Budget Committee and proclaimed that the legislative developments he has seen (the House bill and the Senate's HELP committee bill) seem to "significantly expand the...
Thursday, July 16, 2009 - 9:20 AM

The Tabulation and The Concord Coalition would like to congratulate our own Diane Lim Rogers for her blog EconomistMom.com being named as one of the Wall Street Journal's “Top 25" economics blogs.

In addition to being Concord's Chief Economist and the mother of four, Diane finds spare time to do her own blogging about sometimes complicated fiscal issues in an easily digestable, accesible and fun way -- and that skill is one of the many things that the Wall Street Journal recognized today.

Well done Diane!

Tuesday, June 30, 2009 - 11:15 AM

It has almost become axiomatic that growing health care costs, rather than population aging, is the overwhelming cause of a projected spike in federal spending. That notion was dispelled in CBO’s Long-Term Budget Outlook published last week. As explained in the report:

“Federal spending on Medicare, Medicaid, and Social Security will grow relative to the economy both because health care spending per beneficiary is projected to increase and because the population is aging. Spending on Medicare and Medicaid will be driven by both factors, while Social Security spending will rise because of the population’s aging. Between now and 2035, aging is projected to make the larger contribution to the growth of spending for those three programs as a share of GDP. After 2035, continued increases in health care spending per beneficiary are projected to dominate the growth in spending for the three programs.”

 

Later in the report, CBO quantifies the relative effects of aging and health care growth on projected...

Thursday, June 25, 2009 - 8:30 AM

After reading this post, hopefully all of our loyal readers will finally understand the simplicity and beauty of the Pay-As-You-Go (PAYGO) concept. 

First, I should mention that today we published an issue brief on the new statutory PAYGO law proposed by President Obama and introduced in the House of Representatives to coincide with today's PAYGO hearing in the House Budget Committee, featuring OMB Director Orszag. This proposal puts in place a law that requires any new spending or tax cut legislation to be offset so that it does not increase the deficit. If it did, the law forces automatic spending cuts designed to balance out the difference.

The Concord Coalition supports enactment of statutory PAYGO. The basic message in our brief is that PAYGO can be, and has been in the past, an important budget enforcement tool that helps promote fiscal responsibility. However, PAYGO shouldn't be thought of as more than that, and certainly not as a silver bullet that can somehow solve the nation's long-term fiscal...

Monday, June 22, 2009 - 9:05 AM

On June 15 and June 16, leaders from various youth organizations traveled to Washington, D.C. for a youth conference hosted by The Concord Coalition and the Youth Entitlements Summit (YES), and underwritten by The Peter G. Peterson Foundation. The event aimed to encourage public discourse among the "Millennial generation" about the nation's fiscal challenges and to generate a collective plan of action for grassroots efforts to do the same. 

Last month, at an event for young activists, I found myself on the spot once I mentioned The Concord Coalition’s work on fiscal awareness. A fellow attendant replied, “Look, I’m not trying to be rude, but I just don’t think the debt matters.” Such indifference concerned me until I watched America’s future leaders passionately discussing the need to fix this imbalance to save our economic futures.

On the first day of the conference, we heard from politicians and scholars who are heavily involved in the fiscal policy arena, including the...

Tuesday, June 9, 2009 - 6:31 PM

Today, President Obama held a press conference with Congressional leaders to announce his support for enactment of a statutory pay-as-you-go (PAYGO) budgeting rule.

The Obama administration’s proposal looks to build off the PAYGO rules put in place during the 1990s. Similar to them in design, the Office of Management and Budget (OMB) would keep a running scorecard for the costs associated with enacted legislation for each year through 2014 and compare those costs to the established baseline. If the scorecard found the cumulative effect of enacted legislation to increase the deficit, OMB would be required to reduce spending in certain non-exempt mandatory programs to balance the difference -- a process called sequestration. Although sequestration under PAYGO was never actually ordered in the 1990's, the existence of this automatic trigger provides some incentive for members of Congress to be fiscally disciplined.

While PAYGO has recently been in place for a few years, it has only existed as a congressional rule which has often been waived or ignored for legislation requiring politically difficult trade-offs. The proposal that President Obama put forward, and that the...

Friday, June 5, 2009 - 12:30 PM

I looked at the Treasury Department’s “green book” on the Administration’s revenue proposals only a few days ago, curious to see how the Bush (soon-to-be Obama) tax cuts would be described, considering that they comprise the single most costly policy in President Obama’s proposed budget (about $2 trillion over ten years according to CBO). Seems like a pretty significant “revenue proposal” to describe, right? The Treasury green book is 131 pages long, with each tax proposal described fairly thoroughly, over the course of 1 to a few pages each, in terms of current-law treatment, reason for change, and the specifics on the President’s proposal. Yet the extension of the 2001 and 2003 tax cuts is described in exactly two places–first, as a footnote in the table of contents (note, through the emphasis added, how...

Thursday, June 4, 2009 - 11:30 AM

Both Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner have been vocal this week regarding the need to rein in our growing federal budget deficits as the economy begins to recover and work to confront the structural fiscal imbalances projected over the coming decades.

Yesterday, Chairman Bernanke testified before the House Budget Committee and spent a portion of his testimony focusing on fiscal policy. He emphasized that it is necessary for policymakers to confront these challenges now more than ever. A failure to act, Bernanke noted, will result in economic consequences which will impede growth:

Addressing the country’s fiscal problems will require a willingness to make difficult choices. In the end, the fundamental decision that the Congress, the Administration, and the American people must confront is how large a share of the nation’s economic resources to devote to federal government programs, including entitlement programs. Crucially, whatever size of government is chosen, tax rates must ultimately be set at a level sufficient to achieve an appropriate balance of spending and revenues in the long run. In particular, over the longer term, achieving fiscal...

Tuesday, May 26, 2009 - 2:29 PM

In Nobel-prize winning economist and New York Times columnist Paul Krugman's column Monday, he makes an interesting point about California's budget woes that supports much of what The Concord Coalition's message has been for the last three years traveling the country on the Fiscal Wake-Up Tour. The irony is that he often protests much of what we stand for.

In writing about the political barriers to sound fiscal policy and governance in California, he expresses concern that it "foreshadows the future of the nation as a whole." He continues:

"Last week Bill Gross of Pimco, the giant bond fund, warned that the U.S. government may lose its AAA debt rating in a few years, thanks to the trillions it’s spending to rescue the economy and the banks. Is that a real possibility?

Well, in a rational world Mr. Gross’s warning would make no sense. America’s projected deficits may sound large, yet it would take only a modest tax increase to cover the expected rise in interest payments — and right now American taxes are well below those in most other wealthy countries. The fiscal consequences of the...