‘Line’ Items: New Year Edition
Happy New Year – Washington is gearing up for what will be an interesting 2011. President Obama is back to work on Tuesday from his vacation and the new Congress, featuring a Republican majority in the House, will gavel into session on Wednesday. Key dates are taking shape – the White House will release its 2012 budget request on February 14 and the stopgap measure currently funding the government expires on March 4. Yet, what may be the most significant fiscal date is not quite clear – when Congress will have to vote on raising the debt ceiling. The federal government is expected to approach the limit by spring, and many lawmakers are threatening to refrain from approving an increase, which could result in a national default, unless action to reduce the debt is taken. So, 2011 is shaping up to be the year of key fiscal policy decisions. You can make your own budget decisions using CRFB’s “Stabilize the Debt” online budget simulator here.
New Year, New Rules – Decisions affecting fiscal policy will be made this week as the House will approve of its new rules when it first convenes on Wednesday. Many of the new rules proposed by the new Republican majority will affect budgeting. CRFB highlighted some of these proposed rules in a blog post, such as “Cut-go.” Proposed changes to budget reconciliation rules also deserve attention, as they will replace the rule prohibiting reconciliation instructions which increase the deficit with a prohibition on reconciliation instructions which increase spending, even if they are offset by a greater amount of revenue increases. This means that a tax cut that is not offset could be considered under reconciliation. That would represent a big step backward in budgetary controls and could result in increasing the deficit. The House GOP Conference will vote on the rules on Tuesday and the full House will vote the next day. While Congress is pondering how it does business, it should consider significant changes to the budget and appropriations process. The Peterson-Pew Commission on Budget Reform offered comprehensive recommendations in the recent report, Getting Back in the Black.
Daniels May Enter Presidential Lions Den – Mitch Daniels (R), Indiana Governor and OMB Director under George W. Bush, says his decision on whether to run for president in 2012 will hinge on whether any of the candidates deal “openly and honestly” with the “debt iceberg” that is approaching. Daniels will be one the honorees on Wednesday evening at the inaugural FI$CY Awards, along with Senate Budget Committee Chairman Kent Conrad (D-ND) and incoming House Budget Committee Chairman Paul Ryan (R-WI). CRFB serves on the Awards Committee. More info on the big event can be found here.