Except in Miami – The Miami Heat weren’t hot enough, but Washington saw record temperatures last week. Capitol Hill may warm things up this week as well as both chambers are in session together for the first time this month and the Biden group looks to pick up the pace of its debt limit/deficit reduction negotiations. CRFB will also add some sizzle with a big conference this week.
Biden Group Catches Fire – After only meeting once in the last two weeks, the bicameral, bipartisan group of lawmakers led by Vice President Biden plans to meet three times this week – Tuesday, Wednesday and Thursday afternoons – to make progress towards reaching a deal to raise the debt limit and reduce the deficit well ahead of a projected U.S. default in early August. Discretionary spending, entitlements, budget caps and other spending restraints are all on the agenda this week. CRFB has ideas for all these topics. We previously identified over $1 trillion in common-ground savings and offered ideas for reforming health care and Social Security. Additionally, the Peterson-Pew Commission on Budget Reform has provided recommendations for making a debt trigger work and last week unveiled a Fiscal Toolbox comparing budget process ideas like spending caps, balanced budget amendments and triggers. The group talked revenues last week (see our tax expenditure reform ideas here). In addition to picking up the pace, negotiators on both sides are also toning down the rhetoric, raising hopes that agreement can be reached relatively soon.
Gang of Six Returns to the Front Burner – Last week the bipartisan Gang of Six senators, now a group of five with Sen. Tom Coburn (R-OK) on sabbatical, returned to relevance as it shared its work with fellow senators at a meeting of about 18 colleagues split evenly by party. The group has found about $4.7 trillion in deficit reduction in its quest to devise a comprehensive, multi-year fiscal plan.
CRFB Conference Looks to Keep the Fiscal Responsibility Flame Alive – Speaking of the Gang of Six, two of its members, Sens. Mark Warner (D-VA) and Mike Crapo (R-ID), will appear at CRFB’s 2011 Annual Conference on Tuesday. The star-studded lineup also includes Federal Reserve Chair Ben Bernanke, White House National Economic Council Director Gene Sperling, House Budget Committee Chair Paul Ryan (R-OH), Fiscal Commission Co-Chair Alan Simpson, and many more. CNBC's Steve Liesman will moderate. More information can be found here. A live video stream of the event will be available on the Bottom Line Blog starting at 2:30 pm on Tuesday. You can also follow the conference on Twitter using the hashtag #debtconference. CRFB (@budgethawks) will be live-tweeting the event.
House Burning Up the Appropriations Track, Senate Not So Much – The House resumes its relatively torrid pace on FY 2012 spending bills this week, with the Military Construction-Veterans Affairs bill on the House floor today. The Agriculture bill is also expected to be considered and voted on the floor this week, with the Defense and Energy-Water bills coming before the House Appropriations Committee this week to be teed up for floor action next week. The Defense bill is the only one where spending is expected to increase. Meanwhile, there remains little action on the other side of the Capitol. Although Senate Budget Committee Chair Kent Conrad (D-ND) says he has made some progress in drafting a budget resolution that could pass his committee, no timetable for action has been set.
Will Ethanol Subsidies Get Torched? – Sen. Coburn has forced a vote on an amendment to cut the 45 cent blender tax credit for ethanol, which costs about $6 billion in lost revenues. The proposal is causing a rift among conservative groups. Americans for Tax Reform opposes repeal of the credit because the group calls it a tax increase, while the Club for Growth supports repeal. The Senate vote will occur Tuesday.
Key Upcoming Dates
- CRFB Annual Conference, with Federal Reserve Chair Ben Bernanke and many others at 2:30 pm. Information here and a live webcast will be available on our blog.
- House Oversight & Government Reform Committee hearing on "Achieving Transparency and Accountability in Federal Spending" at 9:30 am.
- Producer Price Index for May released by Labor Department.
- Senate Appropriations Committee hearing on the FY 2012 appropriations request of the Department of Defense with Defense Secretary Robert Gates and Joint Chiefs of Staff Chair Adm. Mike Mullen at 10:30 am.
- Consumer Price Index for May released by Labor Department.
- Consumer sentiment for June released by University of Michigan/ThomsonReuters.
- Leading economic indicators for May released by The Conference Board.
- Treasury Secretary Geithner says that the U.S. will default on its obligations by around August 2 if the statutory debt ceiling is not increased before then.