Line Items: After the Party Edition
Stumbling Back Home – Budget Day and Fat Tuesday collided this week as the White House unveiled its $3.9 trillion Fiscal Year 2015 budget request on Tuesday, a month later than the law dictates. The budget landed as people around the world partied ahead of Lent. It is fitting that the two events collided given that the budget this year, maybe even more than usual, primarily centers on parties, namely the political parties. Last year’s Bipartisan Budget Act established the topline spending numbers for this year and the next, meaning Congress has no real incentive to pass a budget resolution in an election year that includes tough tradeoffs. Therefore, the two parties can use their respective budget plans as messaging documents that hit home with their respective bases. The forthcoming budget proposal from the House will center on Republicans’ vision for addressing poverty while the president’s budget is aimed squarely at Democratic priorities. The Senate has already declared that it won’t put forth a budget plan. Meanwhile, a comprehensive tax reform plan stirred some discussion last week, but there’s little chance that it will be acted on this year. In fact, not much of anything is expected to be accomplished in Washington this year as policymakers have their eyes firmly on the elections in November. In Washington, it is hard to stop the parties.
No Budging on the Budget – There will be no budget resolution from Congress this year. Lawmakers are not eager to make budgetary tradeoffs in an election year. President Obama’s budget will spur some discussion about national priorities, but it is not intended to mobilize promote congressional action. However, there are several aspects of the budget plan worth noting. First, it aims to put public debt on a downward path as a share of the economy, though we point out that the Congressional Budget Office (CBO) may not see it that way. It also contains some new deficit reduction policies, including additional health care savings and pays for new initiatives with specific offsets. Furthermore, it features a restructuring of the military to achieve savings from the defense budget as well as corporate tax reform. However, it does not go nearly far enough in addressing the long-term debt or in reforming entitlements and the tax code. Read our analysis of the budget and follow our ongoing series examining various aspects of the proposal.
Not Taxing Themselves Over Tax Reform – House Ways and Means Committee Chair Dave Camp (R-MI) released a comprehensive tax reform proposal last week that was years in the making. Though fundamental tax reform isn’t at all likely to be accomplished this year, the plan can serve as a solid starting point for bipartisan collaboration to revamp the tax code. The proposal lowers individual and corporate tax rates while eliminating or reforming many of the myriad tax breaks that litter the tax code and primarily benefit the wealthy. The plan is revenue neutral over ten years, but we are concerned that it would increase long-term deficits. Read our analysis of the plan, as well as our reviews of how it impacts revenue and the economy. We also compared it to other tax reform plans. Rep. Camp is continuing his push to build support for tax reform, despite the long odds, holding listening sessions for lawmakers. Learn all you need to know about the topic with our Tax Reform Resource Page.
Not An Inappropriate Time for Appropriations – Because last year’s budget deal included topline spending figures for FY 2015, appropriators don’t need to wait for guidance from the budget committees. Yet it is not clear if lawmakers will be able to reach agreement on how to spend the funds when compromise on anything is difficult.
Doc Fix Premium Calculated – CBO scored bipartisan, Bicameral legislation to permanently repeal the Sustainable Growth Rate (SGR) as costing $138.4 billion over ten years. Lawmakers are still trying to figure out how to cover the cost of the “doc fix”, while the Wall Street Journal suggests not paying for it. We responded that “Paying for the ‘doc fix’ isn't only the fiscally responsible approach, but it offers an additional opportunity to enact structural health-care reforms.”
Key Upcoming Dates (all times are ET)
- Bureau of Labor Statistics releases February 2014 employment data.
- House Appropriations subcommittee hearing on the FY2015 Homeland Security budget at 4 pm.
- House Ways and Means Committee hearing on the FY2015 Health and Human Services budget at 10 am.
- Senate Budget Committee hearing on the FY2015 budget with Treasury Secretary Jack Lew at 10:30 am.
- House Appropriations subcommittee hearing on the FY2015 State Department budget at 10:30 am.
- House Budget Committee hearing on the FY2015 budget with Treasury Secretary Jack Lew at 2 pm.
- House Appropriations subcommittee hearing on the FY2015 Transportation Department budget at 2 pm.
- Senate Foreign Relations Committee hearing on the FY2015 international affairs budget with Secretary of State John Kerry at 2:30 pm.
- Senate Homeland Security and Governmental Affairs Committee hearing on the FY2015 homeland security budget at 10 am.
- House Appropriations subcommittee hearing on the FY2015 Defense budget at 10 am.
- House Committee on Veterans' Affairs hearing on the FY2015 Veterans Affiars budget at 10 am.
- House Appropriations subcommittee hearing on the FY2015 Housing and Urban Development budget at 2 pm.
- House Appropriations subcommittee hearing on the Department of Agriculture budget at 10 am.
- Bureau of Labor Statistics releases February 2014 Consumer Price Index data.
- Bureau of Economic Analysis releases third estimate of 4th quarter GDP growth.
- "Doc fix" expires.