Line Items: Budget Blossoms Edition
Blossoms– It’s a special time in Washington as the Cherry Blossoms are finally blooming after a long winter. The city itself seemingly comes alive as the long dormant buds burst with color and tourists come from all over to view them. People are also coming to the Capitol as Congress resumes work after a two-week break. There too are blossoms as hopes for a budget deal intensify yet again. Will these buds bloom or will they wither?
Budget Blooms – It’s been delayed longer than the peak bloom of the Cherry Blossoms, but the White House will finally release its Fiscal Year 2014 budget request on Wednesday, more than two months after the mandated date. Will it be worth the wait? Advance reports indicate it will include concessions to facilitate a comprehensive deal that addresses the national debt. In an attempt to entice Republicans to deal, it will include entitlement changes including a switch to a more accurate measure of inflation called Chained CPI in exchange for raising additional revenue by closing loopholes known as tax expenditures. It will also reportedly include investments in universal pre-kindergarten, paid for by increasing in the cigarette tax, limiting individual retirement accounts (IRAs) to $3 million and preventing people from “double dipping” in unemployment and disability insurance at the same time. President Obama will then woo Senate Republicans that evening at a dinner. See more of what is expected in the budget here and read what we would like to see in the budget here.
Chained CPI DOA? – One of the proposals in the President’s budget will be to switch to Chained CPI, which will bring in savings from both the revenue and spending sides. Predictably, critics on both right and left are trying to nip it in the bud. Reportedly, the measure will include protections for the oldest and least advantaged, which strikes at one of the biggest criticisms of the idea. If policymakers continue to take ideas off the table before they can be considered as part of a comprehensive approach, addressing the debt in a smart way will not be possible. Find out more on Chained CPI on our Chained CPI Resources Page.
Pruning Tax Loopholes – Sen. Max Baucus (D-MT) and Rep. Dave Camp (R-MI), the chairs of the congressional tax-writing committees, penned an op-ed in the Wall Street Journal reaffirming their commitment to revamping of the tax code. The duo discusses the work they’ve done so far laying the foundation for tax reform and previewing the work ahead. They note that they soon will allow the public to provide input on how reform should look through social media. In addition, The Washington Post profiles Baucus and the challenges he faces. Limiting or eliminating tax loopholes referred to as tax expenditures will be key to such an effort. Meanwhile, the President’s budget reportedly will include revenue-neutral corporate tax reform, upsetting some Democrats who want to raise revenues in the process. Try your hand at corporate tax reform with our interactive tool.
Medicare Reform Ideas Sprout – Going forward health care will be the single largest driver of the national debt. Policymakers seem to understand this reality, with the White House budget proposing some savings and several Medicare reform ideas popping up lately. The Washington Post editorial board recently endorsed cost-sharing reform that can reduce the deficit and streamline the system. Another idea is to raise the Medicare retirement age from 65 to 67. In order to mitigate the effects this would have on some seniors, the nonpartisan Urban Institute examined allowing 65- and 66-year olds to buy into the Medicare program with subsidies for low- and middle-earners. Former Sen. Judd Gregg (R-NH) suggests yet another idea, called a “value-based withhold,” which would reward Medicare providers for meeting efficiency and quality targets. Also, some lawmakers are proposing tying a permanent “doc fix” that will eliminate drastic cuts to physicians who see Medicare patients to payment reforms. There is incentive to implement a “doc fix” now because the cost of doing so has lowered significantly due to a slowdown in healthcare costs. No single approach will put Medicare on a sustainable path, so the deluge of ideas is welcome.
What a Waste – The Government Accountability Office (GAO) released a report this week identifying waste throughout the federal government due to redundancy. For example, at least 23 federal agencies run programs for renewable energy. It is difficult to estimate how much taxpayer money is wasted due to these redundancies because agencies could not account for how much is spent. The President’s budget reportedly will call for eliminating or merging some 215 programs to save $25 billion.
Don’t Keep Your Story Sequestered – The sequester is in place, now Senate Budget Committee chair Patty Murray (D-WA) wants to hear how it is affecting you. You can share your story here.
Key Upcoming Dates (all times are ET)
- The White House releases its FY 2014 federal budget request.
- House Ways and Means subcommittee hearing on the “Government’s Ability to Continue Operations When at the Statutory Debt Limit” at 10 am.
- Senate Budget Committee hearing on the nomination of Sylvia Matthews Burwell to be director of the Office of Management and Budget (OMB) at 10:30 am.
- House Small Business Committee hearing on small business tax reform at 1 pm.
- House Ways and Means Committee hearing on the President’s FY 2014 budget request with Treasury Secretary Jacob Lew at 10 am.
- House Veterans Affairs Committee hearing of the President’s FY 2014 budget request for the Dept. of Veterans Affairs at 10 am.
- House Armed Services Committee hearing on the FY 2014 Defense Authorization Request at 10 am.
- Senate Appropriations subcommittee hearing on FY 2014 budget estimates for the Dept. of Commerce at 10 am.
- Senate Appropriations subcommittee hearing on FY 2014 budget estimates for the Dept. of Housing and Urban Development at 10 am.
- House Appropriations subcommittee hearing on the FY 2014 budget request for the Dept. Of Homeland Security at 10 am.
- House Energy and Commerce Subcommittee on Health hearing on strengthening Medicare for seniors at 10 am.
- House Appropriations subcommittee hearing on the President’s FY 2014 budget request for the Dept. of Interior at 1 pm.
- House Appropriations subcommittee hearing on the President’s FY 2014 budget request for the Dept. of Commerce at 1:30 pm.
- Senate Budget Committee hearing on the President’s FY 2014 budget with acting OMB director Jeffrey Zients at 2 pm.
- Senate Finance Committee hearing on the President’s FY 2014 budget with Treasury Secretary Jacob Lew at 2:30 pm.
- House Ways and Means Committee hearing on the President’s FY 2014 budget request for the Dept. of Health and Human Services (HHS) with HHS Secretary Kathleen Sebelius at 9 am.
- House Homeland Security subcommittee hearing on sequestration’s impact on homeland security at 9 am.
- Congress is required to pass a concurrent budget resolution as specified in the Congressional Budget Act.
- Tax Day! Federal tax returns due by this date.
- Dept. of Labor's Bureau of Labor Statistics releases March 2013 Consumer Price Index data.
- Senate Budget Committee hearing on the President’s FY 2014 budget and revenue proposals with Treasury Secretary Jacob Lew at 3 pm.
- Senate Armed Services Committee hearing on the FY 2014 Defense Authorization Request and Future Years Defense Program at 9:30 am.
- Senate Homeland Security and Governmental Affairs Committee hearing on the FY 2014 budget request for the Dept. Of Homeland Security at 10 am.
- Senate Energy and Natural Resources Committee hearing on the FY 2014 budget request for the Dept. of Energy at 10 am.
- Bureau of Economic Analysis releases advance estimate of 2013 1st quarter GDP.
- Dept. of Labor's Bureau of Labor Statistics releases April 2013 employment data.
- Dept. of Labor's Bureau of Labor Statistics releases April 2013 Consumer Price Index data.
- The debt limit is re-instated at an increased amount to account for debt issued between the signing of the suspension bill and this date. After re-instatement, the Treasury Department will be able to use "extraordinary measures" to put off the date the government hits the debt limit potentially for a few months.
- Bureau of Economic Analysis releases second estimate of 2013 1st quarter GDP.