CongressDaily

Douglas Rediker in CongressDaily | 'Sovereign Fund Growth Blurs Traditional Roles'

Communications — Mon, 05 May 2008 08:51:00 -0400

New America in the News:

...Combined sovereign wealth reached $3.5 trillion in 2007 -- the largest generator being China, according to the firm. Russia and Kuwait are next. And, according to recent news reports, two other countries with substantial population and/or wealth -- Saudi Arabia and India --are considering setting up sovereign wealth funds.

Douglas Rediker, co-director of the New America Foundation's Global Strategic Finance Initiative, noted that sovereign funds derive their assets from oil or trade imbalances that generate current reserves.

"Traditionally over the years, we and the IMF have been advocating that countries keep a significant amount of reserves to ensure they are protected from a rainy day. These countries did exactly what we and others advocated that they do," Rediker said.

But, he added, "at some point the reserves got so high" that the involved governments felt the need to diversify these reserves. As a result, "they are putting some of these into SWFs," explained Rediker... LINK

Jason Delisle in CongressDaily PM | 'Senate Budget Would Boost Advance Approps By $4 Billion'

Communications — Mon, 10 Mar 2008 12:06:00 -0400

New America in the News:

Senate Budget Would Boost Advance Approps By $4 Billion (CongressDaily PM, subscription only)

. . . "There's no reason to do it other than to increase spending," said Jason Delisle, an education analyst at the New America Foundation. Backers "want the money by any means necessary, but the trade-off is the debate gets confused and the budget lacks transparency."

Advance funding for education grew out of a timing quirk whereby the academic year usually spans parts of two fiscal years. Beginning in FY96, Congress began using advance appropriations to increase education funding for a given school year while technically staying within that fiscal year's discretionary spending cap, according to a New America report.

Since then the gimmick has become wildly popular -- what started out as $1.3 billion in advance education funding in FY96 grew to $17 billion in FY08, the report notes.

The New America report said the use of advance appropriations makes it difficult to compare actual year-over-year education funding totals. It can also cause problems in future years should budgetary circumstances change. . . .

New America's AMT Event Covered by CongressDaily

Jerry Irvine — Thu, 06 Dec 2007 17:05:00 -0500

New America in the News:

If the New America Foundation had hoped to umpire a snarled dispute between Democrats and Republicans on fixing the alternative minimum tax, its hopes were not advanced at a seminar today featuring advocates for both sides. The two parties are at swords' points over whether to hike other taxes in order to offset an estimated $50 billion revenue loss if Congress decides to prevent the AMT from biting some 23 million additional income taxpayers this calendar year.

A panel of tax policy mavens -- Alex Brill of the American Enterprise Institute, Len Burman of the Tax Policy Center, Robert Carroll of the Treasury Department, Aviva Aron-Dine of the Center on Budget and Policy Priorities, and former Rep. Bill Frenzel, R-Minn. -- all generally agreed that AMT is bad policy and should be radically altered or scrapped. But the immediate issue -- as NAF's Maya MacGuineas, who also heads the Committee for a Responsible Federal Budget, observed -- was how to patch it up now.

On that score, House Majority Leader Hoyer insisted that the Democratic-controlled House's recently passed remedy must, in the name of fiscal responsibility, prevail. It calls for offsetting tax increases to plug the hole that any fix would cost in lost revenue. "Not paying for AMT would not only be a [policy] mistake," Hoyer told the panel of experts, "it would be immoral." Future taxpayers, he said, would have to pay for the debt incurred by today's Congress if it again fails to balance the budget.

But House Budget ranking member Paul Ryan, R-Wis., countered that offsets should not be included in an AMT patch, since that would suck $50 billion in other taxes out of the private economy, and that his own tax package should be adopted instead to ensure against the growth of government at the expense of economic growth. Among other things, his proposal would repeal the AMT. "This great nation should keep its government lean and let people keep more of what they earn," Ryan said.

CRFB Applauds Conrad-Gregg Proposal for Medicare and Social Security

Communications — Tue, 18 Sep 2007 04:44:00 -0400

New America in the News:

Senate Budget Chairman Conrad and ranking member Judd Gregg, R-N.H., recently proposed to "create a task force to recommend comprehensive legislation addressing expected shortfalls in the major entitlement programs," such as Medicare and Social Security.

The Committee for a Responsible Federal Budget endorses the Conrad-Gregg proposal and is listed as a supporter in Congressional Quarterly Today (September 18, 2007) and in National Journal's CongressDaily (September 19, 2007). The Concord Coalition and GAO Comptroller General David Walker have also given praise to the proposal.

To receive information on these two articles, please visit CQ.com and NationalJournal.com.

CongressDaily Quotes Maya MacGuineas on PAYGO

Communications — Wed, 11 Apr 2007 20:49:00 -0400

New America in the News:

Congressional Democrats are using the budget process to express their longstanding legislative priorities. But they are not guaranteeing all of them will make it into law.

Roughly $150 billion to $160 billion over five years in new spending initiatives are outlined in the House and Senate budget resolutions that conferees will seek to iron out this month.

That is on top of expensive tax breaks assumed in the budget such as a fix for the alternative minimum tax, which would cost $50 billion for this year alone and $1 trillion over the next decade.

Ranging from expanding health insurance for low-income children to providing benefits for Filipino veterans of World War II, the measures reflect broadly popular proposals. But the numerous "reserve funds" promise action on those items only if commensurate offsets are found under new pay/go rules, which will require politically difficult tax increases or entitlement spending cuts...

Maya McGuineas, president of the non-partisan Committee for a Responsible Federal Budget, said given political pressures, it was surprising pay/go has made it this far.

"That said, it only gets harder from here," she said. "It's unlikely we make it through the entire process without any gimmickry or straying from the principle ... there's a real risk that widely popular programs get such support that it busts the budget and then it's easier for others to follow. There's a real risk of a snowball effect."

For the complete article, please visit the CongressDaily website.

Michael Dannenberg on Student Loan Subsidies in CongressDaily

Communications — Tue, 06 Mar 2007 17:47:00 -0500

New America in the News:

Banks and other private student loan providers are gearing up for battles on several fronts, including a fight against a possible congressional overhaul of a major loan program that would force companies to compete for business, and likely shrink their profit margins.

Already reeling from the Bush administration's FY08 budget proposal last month, which cuts lender subsidies by $11.2 billion to pay for a Pell Grant increase, private companies are also facing a threat from Senate Health, Education, Labor and Pensions Chairman Kennedy, who might offer legislation to require them to compete in a bidding process for $47 billion in Federal Family Education Loans they offer each year.

By forcing companies to bid to provide the 13.6 million FFEL loans, the government would no longer have to entice lenders by offering subsidies, which totaled $17 billion last year, proponents of this system say.

Instead, lenders would try to propose the most attractive financial package to the government by offering lower interest rates and smaller fees, in the hopes of being awarded student loan contracts.

"Right now, student loan subsidy rates are determined by congressional fiat," said Michael Dannenberg, director of education policy at the New American Foundation. "The problem with that is no one knows what the right subsidy is to bring in private lenders..."

For the complete article, please visit the CongressDaily website.

CRFB Featured in CongressDaily: 'Budget Reform, Yet Again'

Communications — Fri, 21 Jul 2006 09:39:00 -0400

New America in the News:

The Committee for a Responsible Federal Budget is a pretty low-key group. But with a board of directors as diverse as former OMB Director David Stockman and former House Budget Chairman Bill Gray, D-Pa., when the group talks, it's probably worthwhile listening to them a bit. Maybe more than a bit.

So budget writers might want to pay some attention to the committee's evaluation of Senate Budget Chairman Gregg's "Stop Over Spending Act of 2006," released last week. The title of the report pretty much sums it up: "A Good Start in Need of Balance."

You remember Gregg's plan: It's the budget overhaul proposal that includes line-item enhanced rescission, budget caps, sequestration, biennial budgeting, commissions, the kitchen sink, 2007 draft picks and a provision to be named later. Being the purists that they are, members of the Committee would much rather see Congress make the policy changes needed to bring the budget back to balance than adopt new rules.

"But given the polarized partisan environment and that it is an election year, improvements to budget process may be the best we can hope for," they said.

The Gregg plan includes specific deficit targets enforced by law, and the Committee is happy about that. However, it warns that the targets do not take into account the effect of economic and technical factors that it should do. The plan is out of balance, the Committee contends, because "automatic reductions would be applied on the spending side of the budget no matter what accounted for the failure to meet the deficit targets."

Do we smell some bias toward tax cuts in the Republican proposal? Nah, not possible. The Responsible Budget folks applaud Gregg and Co. for calling for statutory spending caps similar to those that had been in effect in the past. Spending caps work, they say, but only if they are set at a reasonable level. (Indeed, for several years, Congress approved budget resolutions containing artificially low targets to make members look like tightwads and then used every backdoor budget scheme and gimmic k to pay for programs in the appropriations process.)"As we saw in the 1990s, reasonable caps can be extremely effective; unreasonable ones are routinely ignored, contributing to the breakdown of the process," the Committee said. ...

For the complete article, see the CongressDaily web site (Paid subscription required.)