‘Line’ Items: Fall Colors Edition

Leaves of Change – The colors of fall draw many sightseers to view nature’s beauty. Yet, it is important to recognize that behind the changing leaves are nature’s preparations for surviving the harshness of the approaching winter. From a budget standpoint, this winter could be harsher than usual, with fights over the budget and the Super Committee. What colors will Washington show this fall? Hopefully there will be less red and yellow. The House is out this week while the Senate tries to make progress on appropriations.

CLASS Dismissed – On Friday the Obama Administration quietly announced that it was leaving behind the Community Living Assistance Services and Supports (CLASS) Act. The program was a part of last year’s health care reform bill, designed to facilitate long-term care. CRFB sharply criticized the program’s financing because it would have collected revenues for five years before any benefits were distributed. This timing gimmick helped boost the budget score for the health care bill over the ten year window, but it set up a fiscal train wreck because the program lacked sustainable funding for the longer term. The law required that the program be financially solvent over the course of a 75-year period, and the Department of Health and Human Services struggled to find a way to administer the program in an actuarially sound manner. Obviously it concluded that was not possible.

Primary Colors – Economic and fiscal issues were front and center last week in the presidential campaign as a debate that focused on the economy forced candidates to discuss these issues. The “9-9-9" plan from contender Herman Cain drew a great deal of attention. Many experts have criticized the plan for not raising sufficient revenue and for likely raising effective taxes on the poor. CRFB concluded that a lot more details will be needed to come to a definitive conclusion. But the fact that everyone is talking about the plan underscores the public hunger for a fiscal strategy. Meanwhile, the newspaper Politico held a contest to determine who could generate the most support for a third party candidacy. Two CRFB board members, Erskine Bowles, the White House Fiscal Commission co-chair, and David Walker, former comptroller general of the U.S., were among the ten nominees. Walker finished second behind winner Hilary Clinton, showing that voters are looking for someone to tackle our fiscal challenges.

Budget Reform Gets a Green Light – The Senate Budget Committee sent proposals to the Super Committee on Friday to improve the budget process. Recommended were a switch to biennial budgeting, changes to the Senate “vote-a-rama” process to make it more functional, and stronger incentives to produce a timely budget resolution. The Senate Budget Committee held a hearing earlier in the week on the topic where two witnesses, Phil Joyce of the University of Maryland, and Paul Posner of George Mason University, cited the work of the Peterson-Pew Commission on Budget Reform, a project of CRFB, on ways to strengthen the Budget Committee.

Moving Appropriations – Speaking of the broken budget process, congressional leaders have decided that the best approach to approving spending bills for the fiscal year that started at the beginning of the month is to rake up the 12 bills into a few “minibus” packages. The first minibus will come to the Senate floor this week, consisting of the Agriculture, Commerce-Justice-Science, and Transportation and Urban Development spending bills.

Super Committee Gets Ideas – Friday was the deadline for congressional committees to submit recommendations to the Super Committee and the ideas came like leaves falling from a tree. However, besides the budget reform proposal from the Senate Budget Committee mentioned above, there were few bipartisan proposals. CRFB is tracking submissions to the Super Committee here.

Key Upcoming Dates (all times ET)

October 18

  • Senate Finance Committee hearing on tax reform and charitable giving at 10 am.
  • GOP presidential debate in Nevada.

November 18

  • Continuing resolution (CR) currently funding federal government operations expires.

November 23

  • The Super Committee is required to vote on a report and legislative language recommending deficit reduction policies by this date.

December 2

  • The Super Committee report and legislative language must be transmitted to the President and Congressional leaders by this date.

December 9

  • Any Congressional committee that gets a referral of the Super Committee bill must report the bill out with any recommendation, but no amendments, by this date.

December 23

  • Congress must vote on the bill recommended by the Super Committee by this date. No amendments are allowed.