Line Items: An Appropriate Result Edition
One Debate Spent, More to Come – The long saga over the Fiscal Year 2014 budget came to an end as Congress approved of spending bills funding the government. While the votes on the appropriations package in both houses were lopsided, the bipartisan result came only after a protracted process that included a shutdown in October, two sets of tense negotiations, and several stopgap measures. Observers hope that the Ryan-Murray and Mikulski-Rogers deals can lead to fruitful bipartisan cooperation down the road and that returning to some semblance of budgetary order will spur what has been a dysfunctional and partisan Congress to work more effectively. But expectations remain tempered because 2014 is an election year with high stakes for both parties, and there are still difficult and politically volatile issues ahead -- namely the debt ceiling, which could arise as early as next month. Ahead of the coming battles, the House and Senate are in recess this week, and both parties will hold retreats to plan their respective legislative strategies.
Ending on An Omnibus Note – Last week, Senate Appropriations Chair Barbara Mikulski (D-MD) and House Appropriations Committee Chair Harold Rogers (R-KY) unveiled an omnibus package wrapping together the twelve annual appropriations bills to fund the federal government through September. The bill fleshed out the budget deal reached by Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA) last month, divvying up the $1.012 trillion spending level agreed to in the previous deal among the various federal agencies and providing details on how the money is to be spent. The House approved of the legislation last Wednesday in a 359-67 vote and the Senate followed suit on Thursday with a 72-26 vote. Both votes included strong bipartisan majorities. After several years of moving from one stopgap bill to another to fund the government, the passage of the omnibus represents at least a partial return to a functional budget process and provides some guidance and stability to federal agencies that have had to rely on short-term funding measures. We did a brief analysis of what’s in the bill and also who the winners and losers are. In addition, we took a closer look at defense spending, including a concern that overseas contingency operations funding was being used to circumvent caps on defense spending. A breakdown of the bill can also be found here.
Wary of Getting Back on the Budget Cycle – After finally putting a bow on the FY 2014 budget, policymakers may not be enthusiastic about jumping right into the FY 2015 budget process. Word is already coming from the White House that it will likely be late in producing the president’s FY 2015 budget request, which according to statute is to be released by the first Monday of February. It is said to be running about a month behind schedule. Meanwhile, there are some rumblings on Capitol Hill that the House may not produce a FY 2015 budget resolution because the Ryan-Murray deal already set the topline spending number for 2015 as well, and House leaders may not want another messy budget debate in an election year.
Another Debt Limit Debate at Hand – Lawmakers will have to contend with the statutory debt ceiling once again, perhaps very soon. The suspension of the debt limit expires on February 7. “Extraordinary measures” will be able to delay a national default, but Treasury Secretary Jack Lew is warning that those measures may not buy much time because of a wave of tax refunds going out at that time. The limit could be reached as early as late February according to Lew. The Bipartisan Policy Center has some resources explaining what the extraordinary measures are and factors that affect when the debt ceiling must be raised. Battle lines are already being drawn, with the White House saying it will not negotiate and congressional Republicans promising to seek concessions in exchange for raising the limit, though there is no consensus yet on what the demands will be. Read our primer on the debt ceiling.
Still Seeking Cloture on Unemployment Insurance Extension – The Senate continues to deadlock over extending expanded unemployment insurance benefits. Paying for the extension remains a key point of contention. Senate Majority Leaders Harry Reid (D-NV) proposed an extension until November that would be paid for by reducing disability insurance benefits for people who also receive unemployment benefits and extending the mandatory sequester cuts which end in 2023 into 2024. While we were encouraged that the debate turned towards offsets and a specific idea was offered, we also noted that under the proposal the cost of the extension would not be offset within ten years, which is the PAYGO standard. We explained the unemployment/disability insurance double-dipping option here. We highlighted several options for offsetting an extension. And CRFB President Maya MacGuineas also offered an idea for paying for an extension and two other priorities in an op-ed.
Regrouping on Tax Reform – The tax man may cometh, but tax reform will not goeth away, according to a key player. House Ways and Means Committee Chair Dave Camp (R-MI) is doubling down in his push for a fundamental rewrite of the tax code even though the conventional wisdom is that tax reform will not happen in an election year. Camp unveiled a new website, Twitter handle and video to tout the need for tax reform and its benefits to society. Although his previous partner in the effort, Senate Finance Committee Chair Max Baucus (D-MT), has been nominated to be ambassador to China, Baucus’s likely successor, Sen. Ron Wyden (D-OR) also has a strong interest in tax reform. Camp and his supporters plan to convince their colleagues to push reform at the upcoming retreat. And the New York Times sees a window for tax reform in 2014. Interestingly, a map from the Pew Charitable Trusts indicates deep disparities across the country regarding tax breaks. Meanwhile, the fate of the 55 tax extenders that expired at the beginning of the year are in limbo as Camp and his allies want to address them as a part of broader reform. If they are brought up outside of tax reform, a key question will be how to pay for an extension. The matter reportedly will be a top priority for Sen. Wyden when he takes the chairman's gavel and The Washington Post called for any extensions to be paid for. And Friday was the deadline for comments on Baucus’s tax reform drafts he released last year.
Social Security Debate Continues – The conversation about the future of Social Security continues, and CRFB has been busy making sure it is an informed discussion. We engaged in a debate on another blog to get the facts right on the vital program’s finances and our Ed Lorenzen wrote in Huffington Post about five facts you should know about Social Security. A recent event featured two distinct views on how to strengthen Social Security.
Hopes for a Farm Bill Grow – After several ups and downs, negotiators once again are upbeat about the prospects for reaching a deal on a farm bill. Movement has been made on several issues, such as dairy policy. The farm bill could have significant fiscal repercussions depending on what is agreed to.
Key Upcoming Dates (all times are ET)
- President Obama delivers the State of the Union address.
- Bureau of Economic Analysis releases advance estimate of 4th quarter GDP growth.
- Statutory deadline for the President to submit the Fiscal Year 2015 budget request.
- Congressional Budget Office (CBO) releases annual Budget and Economic Outlook.
- The extension of the statutory debt ceiling expires.
- Bureau of Labor Statistics releases January 2014 employment data.
- Bureau of Labor Statistics releases January 2014 Consumer Price Index data.
- Bureau of Economic Analysis releases second estimate of 4th quarter GDP growth.
- Bureau of Labor Statistics releases February 2014 employment data.
- 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.