‘Line’ Items: Deeming, Dreaming, Votes and Quotes
Little Resolve for Budget Resolution – Leaders in the House have yet to make a final decision on moving forward with a FY2011 budget resolution. But every day that goes by makes it less likely Congress will adopt a budget blueprint this year. House Democrats are split between moderates who want cuts in discretionary non-security spending along with longer-term deficit reduction targets and others who fear social program cuts and think defense spending should also be subject to limits. Limiting discretionary spending and setting deficit reduction goals are critical to putting the country on a sustainable fiscal course. The goal recommended by the Peterson-Pew Commission on Budget Reform of stabilizing the debt at 60 percent of GDP by 2018 is a good place for lawmakers to start.
A Broken Process – If the House does not agree on a budget resolution, it would be the first time since the current budget process was created that the chamber has failed to produce an initial budget. The difficulty in adopting a budget blueprint at a time when leadership on fiscal matters is most needed underscores the need for serious budget process reform. The Peterson-Pew Commission is currently developing budget reform proposals that will be released later this year.
“Deeming” Likely – Under House rules, appropriations bills can now be considered without a budget resolution in place. Congress is now likely to adopt a “deeming” resolution that will set spending figures for appropriators to work under. Such a resolution can simply be attached to other legislation and avoid a floor debate that will highlight the bleak fiscal situation and the inability of politicians to confront it so far.
CRFB Dream Team Set for Budgetball – The CRFB Budget Hawks are set to take their fiscal responsibility message to the field this coming Friday, May 21 for the second annual “Budgetball on the Mall.” The tournament will be played in the shadow of the Washington Monument on the National Mall and will pit college squads against teams representing the Washington “establishment.” Budgetball is a unique sport that promotes physical, and fiscal, fitness by combining athletic activity with sound budget strategy. We won’t try to explain how exactly the oven mitts, life preservers, masks and hats come in; visit http://www.budgetball.org/crfb to learn more about the game and tourney.
Voting on Cuts – Last week House Republicans introduced “YouCut” which will allow people to vote each week on government programs to cut towards reducing the deficit. They promise to push for a floor vote for the top-voted idea. In that same vein of promoting more public engagement in finding fiscal solutions, stay tuned for an announcement this week from CRFB on a new interactive initiative to get Americans thinking and talking about the tough decisions that will be required to stabilize the debt.
Voting and Cutting – Congress wants to finish work on financial regulatory reform and “extenders” legislation that will expand tax breaks like the research and development tax credit as well was social spending such as expanded unemployment benefits and COBRA subsidies for the unemployed before lawmakers cut out of DC for the Memorial Day recess. Financial reform will likely pass by the end of this week. Legislators are still working out the extenders package. The main stumbling point is the cost, which may reach up to $200 billion, with little of it paid for. CRFB has been tracking the proposed spending and related items such as a possible estate tax extension and calling for them to be fully offset over the longer term.
Feldstein Favors Two-Year Extension Over Permanent Tax Cuts – Supply-side icon Martin Feldstein last week argued against permanently extending the 2001/2003 tax cuts in the present environment due to the excessive U.S. debt. Instead he recommends a two-year extension as part of a grand bargain that includes spending cuts. This mirrors an idea that CRFB president Maya MacGuineas has put forward. Feldstein concludes, “The inherent uncertainty about the out-year deficits means that it would be unwise to enact tax cuts that stretch beyond the next two years. Congress should move quickly to reassure taxpayers and financial markets that the current tax rates will be preserved for two years but that further tax cuts will depend on the future fiscal outlook.”