September 1, 2014

Washington Budget Report: Sept. 25, 2012

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“The Challenge of Pro-Growth Tax Reform,” the third public forum in the Strengthening of America -- Our Children’s Future initiative, will be held this Thursday in New York City. More information is here.

 

Congress Leaves ‘Fiscal Cliff’ Decisions Until After the Election

Fulfilling pessimistic expectations, Congress has decided to leave many of this year’s big fiscal decisions to be made in a few short weeks after the November elections.

Both the House and Senate have adjourned until after the elections. At that point lawmakers will face a long list of unfinished business, including what to do about the “fiscal cliff” -- the large automatic spending reductions and expiring tax cuts that are scheduled to begin going into effect in January.

Many economists have warned that allowing all of the elements of the fiscal cliff to happen at once could derail the economic recovery, and lawmakers in both parties say they want to find a way to delay or avoid at least some of those elements.

The automatic spending cuts -- also known as “sequestration” -- are required by last year’s Budget Control Act. They were designed as a draconian alternative to encourage congressional action to curb projected federal deficits, but lawmakers over the past year have failed to reach an agreement.

The Concord Coalition has urged elected officials to deal with the fiscal cliff in the context of a broader, bipartisan agreement on fiscal reform.

On Monday a bipartisan group of senators sent a letter to Senate leaders expressing concern about sequestration and saying they were “committed to working together to help forge a balanced bipartisan deficit reduction package to avoid damage to our national security, important domestic priorities, and our economy. “

Senate Passes Continuing Resolution

In a 62-30 vote early Saturday morning, the Senate approved a continuing resolution to fund the government through March 27 at a level that is consistent with the $1.047 trillion cap included in the Budget Control Act.

Earlier this month the House approved the measure with a 329-91 vote. The administration has expressed support for the CR, and the President is expected to sign it before the fiscal year ends on Sunday.

If signed into law before the end of the fiscal year, the CR will avert a government shutdown and delay difficult decisions on spending until after the election. The resolution is necessary because Congress unfortunately failed to complete any of the 12 appropriations bills to fund the government in the next fiscal year.

Concord Honors ‘Great 38’ for Supporting Bipartisan Deficit Reduction

The Concord Coalition last week honored 38 “economic patriots” in the U.S. House for their votes in favor of a broad, bipartisan deficit-reduction plan earlier this year.
 
Former U.S. Senator Sam Nunn, a Concord co-chairman, presented the organization’s 2012 Paul E. Tsongas Economic Patriot Award to the House members -- both Democrats and Republicans -- at a dinner in Washington marking the 20th anniversary of Concord’s founding.

Nunn praised the “Great 38” for standing up to pressure from colleagues and special interests. They did so in supporting fiscal reform legislation that had been introduced by Rep. Jim Cooper (D-Tenn.) and Steven LaTourette (R-Ohio).

“They point the way, very courageously, that must be followed by our nation,” Nunn said of the 38 lawmakers. He lauded them for “putting their country before their party” and for embodying a “spirit of bipartisanship and fiscal stewardship.”

The Cooper-LaTourette legislation was based on the recommendations of a bipartisan majority of the National Commission on Fiscal Responsibility and Reform (the Simpson-Bowles commission). Cooper and LaTourette accepted the award on behalf of all of the honorees -- most of whom attended the dinner -- and praised them for their political courage.

“It was a tough vote for everybody,” said LaTourette, who noted the heavy special-interest pressure that supporters of the legislation in both parties faced.

“This was not an easy thing to do,” Cooper said. “And yet they did it. They did it for the good of the country.”

 

Four Perspectives on Pitfalls, Opportunities for Reform

Reviewing the dismal state of federal finances last week, two current members of Congress and two former lawmakers emphasized both the urgency of reform and some of the obstacles that must be overcome.

They offered their thoughts during a panel discussion at The Concord Coalition’s annual dinner in Washington. The panel members were Rep. Jim Cooper (D-Tenn.) and Rep. Steven LaTourette (R-Ohio) – who were among the 38 lawmakers honored at the dinner for supporting bipartisan fiscal reform – and two former House members, John Tanner (D-Tenn.) and  Michael Castle (R-Del.). Tanner and Castle currently serve on Concord’s Board of Directors.

Castle opened the discussion on an upbeat note, saying he thought the country was on the verge of change because “the American public has had enough of the unbalanced budgets.” He stressed the need for strong presidential leadership, whoever wins the race in November. Among his concerns, however, are the strong attacks by some in the media on lawmakers who take responsible positions that challenge traditional thinking in their parties.

Tanner worried about political polarization that he attributed in part to the fact that many congressional contests are decided in party primaries rather than in general elections. Lawmakers who try to do things for the good of the country, he said, are “bombarded in the next party primary.” He described the country’s fiscal situation as a test of whether the current generation of Americans is “capable of governing ourselves.”

Cooper stressed the need for immediate action, noting that every day of delay costs the country another 8 to 12 billion dollars. “It makes it hard to take a nap,” he added. Among the hurdles Cooper identified: a “war zone” atmosphere in the House, public confusion over the government’s role in programs like Medicare, and the fact that there are dozens of lobbyists for every elected official – lobbyists whose message “is basically to increase the deficit.”

LaTourette lamented the heavy spending from outside groups in congressional races and the defeat of “sensible people” in party primaries. He also said he found it “really startling” to hear some lawmakers suggest shutting down the government, defaulting on the federal debt or dismissing the need for entitlement reform. He predicted that voters would strongly support a presidential candidate who embraced the bipartisan fiscal reforms suggested by the Simpson-Bowles commission.