‘Line’ Items: State of the Union Edition

Jan 24, 2011 | Economics| Budget Process

What Will He Say? – On Tuesday President Obama will avail himself of one of the most effective tools a President has to shape the Washington agenda and the political narrative – the annual State of the Union address. The President has already given a preview to supporters in which he says that American competitiveness will be his “Number 1 focus” and that deficit reduction will be one of the “five pillars” of competitiveness and economic growth, along with innovation, education, infrastructure, and reforming government. There is a question as to what will he say about tax reform. Treasury Secretary Geithner met separately in the last two weeks with business executives and experts to discuss the subject, but it isn’t clear how hard the president will push for fundamental tax reform. Follow CRFB on Twitter (@BudgetHawks) to get the answers; we will live-Tweet the proceedings Tuesday night.

Ryan’s Hope – Republicans sent a strong signal of what their focus will be Tuesday night as they tapped House Budget Committee Chairman Paul Ryan (R-WI) to give their party’s response immediately after the president’s speech. Ryan is the House GOP point person on budget and fiscal matters and will concentrate on those issues in his brief remarks. He will be in the spotlight earlier in the day as well when the House will vote on a resolution directing him as Budget Committee chair to “reduce spending through a transition to non-security spending at fiscal year 2008 levels.” He was given authority to set spending targets for the remainder of FY 2011 in the House rules passed earlier this month and has already signaled he will set the spending levels accordingly, but the vote will put the House on record as supporting the lower levels just ahead of the president’s speech.

State of Anticipation over New CBO Numbers – Ryan is waiting on the Congressional Budget Office (CBO) to issue its 2011 Budget and Economic Outlook with its new budget baseline on Wednesday to set his spending targets. Many others are also eagerly awaiting the report to see the latest assessment from the nonpartisan CBO on the U.S. economic and fiscal position. CRFB will offer an analysis shortly after the report is released.

State of Unity on Cutting Printing Costs – The House last week unanimously approved of legislation to eliminate the mandatory printing of congressional bills and resolutions by the Government Printing Office. The bill is a part of the House leadership plan to bring at least one federal spending cut bill to the floor each week, inspired by their YouCut effort that allows people to vote online on spending cut proposals. Up this week is a bill on Wednesday to eliminate federal financing of presidential campaign matching funds and political party conventions.

Addressing the Deficit Draws Plenty of Ideas, But No Consensus – A string of proposals are hitting Capitol Hill to reduce the deficit. Last week the House Republican Study Committee unveiled a proposal that is intended to reduce the deficit by $2.5 trillion over ten years. President Obama will discuss deficit reduction in his State of the Union address Tuesday. And freshman Senator Rand Paul (R-KY) says he will release his own budget proposal this week that will cut $500 billion a year. Plenty more ideas are sure to come from lawmakers, but they also need to get down to the business of negotiating and hammering out a plan together. The proposal from the White House Fiscal Commission is a good start. You can compare its proposals with other plans here. You can design you own plan using our “Stabilize the Debt” online budget simulator. And you can tell Washington what you think via CRFB’s “Voices of America” video contest.

Key Upcoming Dates

January 25 – President’s State of the Union address, where fiscal issues will be one focus.

January 25 – Senate resumes legislative activity.

January 25 – Federal Open Market Committee (FOMC) of the Federal Reserve convenes first Fed monetary policy meeting of 2011, with new voting members.

January 26 – FOMC meeting concludes and statement released.

January 26 Congressional Budget Office (CBO) will release its 2011 Budget and Economic Outlook with an updated budget baseline and deficit projections at 10 am.

January 26 House Budget Committee holds its organizational meeting at 9 am and a hearing on “The Fiscal Consequences of the New Health Care Law” at 10 am.

January 26 – House votes on bill to eliminate federal financing of presidential campaigns and party conventions.

January 26-30 – Annual Meeting of the World Economic Forum in Davos, Switzerland.

January 27Senate Budget Committee hearing on “The Budget and Economic Outlook: Fiscal Years 2011-2021” with CBO Director Douglas Elmendorf at 10 am.

January 27 – The International Monetary Fund releases an update of its “Fiscal Monitor” analyzing the latest global public finance developments and providing medium-term fiscal projections.

January 28 – Commerce Department issues its “advance estimate” of U.S. GDP for the 4th quarter of 2010.

Week of February 14 – The White House will unveil its FY 2012 budget.

March 4 – The current continuing resolution (CR) funding government operations expires. Congress must adopt spending bills funding the federal government for the rest of FY 2011 by then or pass another stopgap measure.

March 31 - May 16 – Period in which Treasury Secretary Geithner says the U.S. will likely reach the debt ceiling.