Budget

The Congressional Budget Office (CBO) released its updated budget and economic projections today, showing the appearance of a sustainable debt trajectory over the next ten years. However, these projections do not incorporate the costs of policies lawmakers are very likely to continue, nor do they show the long-term costs of an aging population and growing health care costs beyond the ten year window.

Among our major findings based on the report:

The Pentagon revealed a bit more of its defense budget today, and, really, the proposed cuts in spending amount to no big deal. It would be hard to justify not making these cuts. If Congress winds up wanting to cut deeper, there’s plenty of room for more hacking.

First, a word of caution: There are many ways to calculate a “cut,” and some will no doubt invoke a few to claim that the Obama administration’s cuts are severe. Let’s go to the numbers.

Good morning, Mr. Chairman and members of the Committee. Thank you for the opportunity to testify today on the important topic of fixing the budget process. It is a privilege to appear before the Committee.

At the end of last year, lawmakers enacted a temporary two-month extension of several policies set to expire, including the temporary payroll tax holiday, expanded unemployment insurance, the doc fix, and various health provisions. Encouragingly, the $33 billion cost of the extensions was fully offset over a ten-year period and a Conference Committee was appointed to determine how any further extensions would be treated.

It looks like something seriously different is about to happen with the defense budget—and not just the budget, but the way the Pentagon does business and the military fights wars.

1. Make Deficit Reduction a Top Priority.
2. Propose Specific Fiscal Targets.
3. Recommend Specific Policies to Achieve the Targets.
4. Do No Harm.
5. Use Honest Numbers and Avoid Budget Gimmicks.
6. Do Not Perpetuate Budget Myths.
7. Do Not Attack Someone Else's Plan Without Putting Forward an Alternative.
8. Refrain From Pledges That Take Policies Off the Table.
9. Propose Specific Solutions for Social Sec

At the end of this month, over 80 tax and spending policies are set to expire. How lawmakers deal with any extensions of these policies has important implications for the federal budget and could represent either a step forward for fiscal sustainability or else a step backward.

It's become a Christmas tradition for Congress to end the year by extending all the policies which expire at year's end. There is the Alternative Minimum Tax, which has to be "patched" every year so that it reaches only four million taxpayers instead of thirty million. There is the looming 27% cut in Medicare payments to doctors which policymakers will need to protect with a "Doc Fix." And on top of that, this year, we're dealing with the expiration of a payroll tax holiday and extended unemployment benefits meant to help boost a weak economy.

On November 22^nd, the Asset Building Program hosted a panel of experts to discuss how Americans are faring in the years since the Great Recession according to different measures. (Video from the event is available here.) Speakers from Wider Opportunities for Women, the Half in Ten Campaign, Center on Budget and Policy Priorities, and Pew’s Economic Mobility Project joined moderator, Rachel Black, for a discussion of current data and indicators, who’s falling short according to these measures and by how much, and policy ideas for  making progress.

The Committee for a Responsible Federal Budget – along with many other lawmakers, business leaders, former government officials, and policy experts – has called on the Joint Select Committee on Deficit Reduction (“Super Committee”) to go beyond its current mandate of finding $1.5 trillion in savings to recommend two to three times as much in order to stabilize the federal debt and reduce it as a share of the economy.