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Budget

If Washington Worked, Here's How We'd Fix the Budget

  • By
  • Marc Goldwein,
  • New America Foundation
July 8, 2011 |
This might have been the front-page story of a national newspaper today. But that's in a parallel universe. Instead of announcing a plan which would begin to reduce our medium-term debt and bring entitlement growth under control, much of Washington is participating in a dangerous game of chicken with the debt ceiling -- a game where failure would destroy our credit rating, rather than preserve it.

There's plenty of blame to go around. Most Democrats came late to the deficit reduction game and have been playing from behind ever since. Rather than using the Fiscal Commission's recommendations as a starting point for negotiations, President Obama mostly ignored it, omitting the lion's share of its recommendations from both his budget and State of the Union address. Only in April, after the administration had already conceded substantial domestic spending cuts, did the President come around and endorse a framework similar to the commission's. Even then, he excluded the commission's proposed changes to Social Security and Medicare benefits, and many Democrats appear to remain unwilling to make the hard choices on entitlement programs necessary to put our long-term trajectory back on track, even if those concessions might spare important programs today or bring Republicans closer to accepting tax increases.

Republicans, meanwhile, have let the perfect be the enemy of the good. The party continues to allow tax orthodoxies to blind them from an opportunity to cut spending. Some have come to the understanding that tax expenditures -- such as the ethanol credit or the employer health exclusion -- are really just spending in the tax code, and that giving them up in exchange for holding traditional spending down to controllable levels is a good deal. But most of the party has called for a spending cut-only solution and has made it clear that they would rather solve only part of the problem and have no revenue (even if entirely from tax expenditures) than solve the entire problem while accepting some revenue.

The Army's Next Big Fight

  • By
  • Fred Kaplan,
  • New America Foundation
July 6, 2011 |

It's a fair bet that when Leon Panetta took the helm of the Pentagon last week, one of his marching orders was to find more ways to cut the defense budget, and not just around the edges.

One result of this is that the Army will very likely take a whacking.

Budget Path: How Feds Can Avert the Fiscal Crisis

  • By
  • Marc Goldwein,
  • New America Foundation
June 24, 2011 |

In the wake of the recent financial meltdown from which we are still recovering, the United States faces the prospect of yet another crisis—a federal debt crisis. Averting crisis will require tough choices and painful sacrifice, including those from federal workers. This crisis can be averted, however. And the sooner we act, the better. The National Commission on Fiscal Responsibility and Reform (“Fiscal Commission”), on which I served as associate director, has shown a way forward.

CRFB's Long-Term Realistic Baseline

June 30, 2011

The Committee for a Responsible Federal Budget has updated its “Realistic Baseline” using projections from the Congressional Budget Office’s most recent Long-Term Budget Outlook.

Financial Regulators: Economic Inclusion and a Healthy Economy Go Together Like Peas and Carrots

June 30, 2011

Or, such is the distillation of the comments made yesterday at the event "Rebuilding the Road to Financial Stability" (co-sponsored by the Congressional Savings and Ownership Caucus and the Center for Financial Security at the University of Wisconsin-Madison) made by Federal Reserve Governor Sarah Bloom Raskin.

CBO's Long-Term Budget Outlook

June 22, 2011

Today, the Congressional Budget Office (CBO) released its Long-Term Budget Outlook, which yet again illustrates this country's unsustainable fiscal trajectory. Under the Extended-Baseline Scenario, CBO projects debt to rise from 69 percent of GDP today to 75 percent by 2020 and 84 percent by 2035. Under the Alternative Fiscal Scenario, which makes more realistic assumptions about which policies lawmakers might extend, CBO projects debt to grow to 97 percent by 2020, 187 percent by 2035, and then to spiral out of control thereafter.

What Needs to Come Out of the Debt Ceiling Negotiations

June 21, 2011

Policymakers from both parties are engaged in intense negotiations over how to raise the nation's debt ceiling as well as how to begin addressing our burgeoning debt.

If the debt ceiling is not raised by the beginning of August, we risk a default. In recent weeks, rating agencies have warned that failure to meet interest payments could result in a downgrade of U.S. debt -- a signal to markets that could lead to rising interest rates and possibly a fiscal crisis.

Jerry Brown’s Budget Disaster

  • By
  • Joe Mathews,
  • New America Foundation
June 20, 2011 |

Jerry Brown's argument for his return to the California governorship was that as a 73-year-old politician, too old to worry about his political future, he would throw caution to wind, force partisans of left and right to negotiate, and tame this state’s famously out-of-control budget.

The War of All vs. All Began Long Ago

June 14, 2011

(cross posted at Fox and Hounds Daily)
Old men are warning us about a war that has already started.

Across the spectrum, people from Gov. Jerry Brown to Mr. Fox, proprietor of this web site, say that if there is no budget deal, we will see a "war of all against all" in this state.

Hasn't that war been going on for at least a generation?

Ryan's Unintended Consequences

  • By
  • Shannon Brownlee,
  • New America Foundation
  • and Eric Schultz, New America Health Policy Intern
June 7, 2011 |

House Budget Committee Chairman Paul Ryan, R-Wis., probably did not anticipate the kind of trouble his plan for privatizing Medicare would cause members of his own party. Ever since Democrats scored an upset in a New York state special congressional election that turned on the Republican candidates support for the Ryan plan, GOP presidential hopefuls and lawmakers have been stumbling around the negative reaction the "Path to Prosperity" has drawn from many voters.

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