Line Items: Late Filing Edition
Taxing Time – This week was initially about the federal tax filing deadline, but the tragedies in Boston and Texas have shifted attention away from taxes and Washington. Our thoughts are with all those affected. The events have pushed back the Hill agenda, as well as your trusty Line Items. Lawmakers face a full plate dealing with the aftermath of these incidents as well as immigration reform. Of course, fiscal issues continue to be on the agenda as well as policymakers have been unable to come to agreement on solutions.
Obama Budget, Better Late than Never – President Obama last week unveiled his fiscal year 2014 federal budget request more than two months late. But the document is quite relevant despite its tardiness. It signaled that the White House is still interested in pursuing a comprehensive debt deal by including the offer it made to House Speaker Boehner during the last round of negotiations. The plan pairs $1.8 billion in deficit reduction from all parts of the budget with some proposals to spur the economy. Like the budget resolutions passed by the Senate and House, it brings debt down as a share of the economy by the end of the decade, but does not do enough to rein in the debt over the long term. It does represent a step in the right direction and now it’s time for policymakers to work together to bridge differences and agree on a comprehensive approach. Read our analysis of the President’s budget, our reaction, a summary, a comparison of the three budgets, and our ongoing analysis of the budget on this blog.
Tax Day, the Tax Way to a Deal – Monday was Tax Day, the due date for filing federal income tax returns. This time of year usually prompts thinking about the role of taxes in funding our government and that sentiment is heightened this year as lawmakers contemplate fundamental reform of the tax code and as revenues are a central element in the debate over addressing the national debt. The President’s budget offers up a corporate tax reform proposal that would get rid of tax breaks in exchange for lowering tax rates. Try your hand at corporate tax reform with our interactive tool. The budget also contains some other revenue provisions. CRFB’s Maya MacGuineas points out in an op-ed that tax reform could be the key to a debt deal by reforming tax expenditures.
The Latest on Chained CPI – One of the proposals in the President’s budget is a switch to a more accurate measure of inflation, known as Chained CPI, which would achieve savings on both the spending and revenue sides of the budget. The President’s proposal has protections for the most vulnerable to prevent them from being impacted by the change. In addition to achieving significant deficit savings over the long term, it would also help shore up the finances of Social Security, which faces trust fund exhaustion in 2033 resulting in a reduction in benefits without action. The matter was a subject of a hearing in the House of Representatives on Thursday, which included testimony from CRFB’s Ed Lorenzen. Find more information on our Chained CPI Resource Page, including a FAQ and common myths. Also, check out a video from the Fix the Debt Campaign.
Another Missed Deadline – April 15 was not only a deadline for taxpayers, it was also the date by which the House and Senate were supposed to agree on a budget resolution. Although both chambers passed budget resolutions this year, the two blueprints are far apart. Congressional leaders have yet to form a conference committee to reconcile the two budgets. The conference process could be an opportunity to negotiate a comprehensive deficit reduction package. Lawmakers must begin the process.
Appropriations Process Held Back – Because there is no concurrent budget resolution, the appropriations process where spending decisions are made has yet to get off the ground. It could be a long process as House and Senate appropriators will start with different topline spending numbers. Senate appropriators will not factor in sequestration, assuming a topline figure of $1.058 trillion for FY 2014. The House assumes the sequester and will use a topline number of $967 billion.
Simpson-Bowles Will Release Detailed Plan – Fiscal Commission co-chairs Alan Simpson and Erskine Bowles on Friday will release a detailed plan to reduce the deficit by $2.5 trillion over the next decade. The plan will be a comprehensive version of the blueprint they announced earlier this year.
Key Upcoming Dates (all times are ET)
- Senate Armed Services Committee hearing on Dept. of the Army budget for FY 2014 at 9:30 am.
- Senate Appropriations subcommittee hearing on FY 2014 budget for the United States Agency for International Development at 10 am.
- Senate Budget Committee hearing on FY 2014 budget for veteran's programs at 10:30 am.
- Senate Appropriations subcommittee hearing on FY 2014 budget for homeland security at 2:30 pm.
- 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.