Line Items: Poolside Edition
Dive In – The pools have opened to provide relief from the summer heat and an opportunity to work on those tans. Congress is back in session this week, but they are only dipping their toes into the fiscal waters. Will lawmakers dive into work to address the budget and related issues or will they stay on the deck and get burned?
Budget Still Wading – No progress has been made on the fiscal year 2014 budget as a conference committee still has yet to be formed. Some Republicans in the Senate are concerned that a debt ceiling increase would be included in budget negotiations, though the second-ranking Republican on the House Budget Committee, Rep. Tom Price (R-GA), says he has no qualms with that. And House Speaker John Boehner (R-OH) says he won’t take a debt limit increase off the table in budget negotiations. In addition, House Appropriations Committee chair Hal Rogers (R-KY) has made it clear he wants a budget conference in hopes that an agreement can be reached to replace or mitigate the sequester. However, House Majority Leader Eric Cantor (R-VA) on Thursday said that budget talks won’t be allowed until Democrats agree to take tax increases off the table. Politico notes the role reversal as Democrats are now the ones pushing for the normal budget process to proceed after years of Republicans faulting Democrats for not producing a budget.
Going Through the Strokes on Appropriations – The appropriations process for the next fiscal year has begun, but how it will end is unclear. On Tuesday the House voted to “deem” the $967 billion spending level in the budget resolution the House approved earlier this year so that the process of approving spending bills can proceed in lieu of a joint budget resolution approved by both chambers. The House quickly passed spending bills for Military Construction-Veterans Affairs and Homeland Security. However, President Obama threatened to veto any spending bills without a broader budget agreement, which drew a rebuke from Speaker Boehner in a letter. The veto threats and the fact that the House and Senate are over $90 billion apart on total spending levels makes it quite likely that appropriations bills will not be enacted by the time the fiscal year ends on September 30, meaning that the federal government will shut down unless a stopgap measure is agreed upon.
Going Off the Deep End on Debt Ceiling? – In addition to the September 30 deadline for a budget/spending plan, Washington faces another deadline sometime in the fall regarding the statutory debt limit. President Obama wants a clean debt ceiling increase to avoid a national default while Republicans want something in exchange, though there is no agreement yet within the caucus on what exactly to demand. Many leaders want entitlement reforms, though House Ways and Means Committee chair Dave Camp (R-MI) floated tax reform as a possibility. While it would be difficult to get a fundamental overhaul of the tax code completed by the fall, a process could be created with broad parameters outlined and triggers if the parameters aren’t met in a timely fashion. Read what we would like to see from the upcoming fiscal discussions. See our updated infographic of the fiscal speed bumps ahead. And keep track of debt ceiling developments here.
Social Security Reform Gets Time in the Sun – In light of last week’s report from the Social Security Trustees saying that the program’s Disability Insurance Trust Fund will be exhausted in 2016 and that the overall Social Security Trust Fund will run out in 2033, there has been discussion about what to do to ensure that the vital program will be financially secure for future generations. On Tuesday, CRFB hosted a forum to discuss the findings of the report and options for meeting the challenges ahead. See a recap of the event along with video and presentations here. The event also featured the launch of our new “Social Security Reformer” online tool that allows you choose how you would fix Social Security. Dylan Matthews of The Washington Post called it "the only game you need to understand Social Security." CRFB’s Marc Goldwein also penned an op-ed in the The Hill urging action now to strengthen Social Security’s finances. Read our analysis of the Social Security Trustees report.
Taking the Plunge on Farm Bill Rewrite – The Senate plans to vote Monday on a reauthorization of the farm bill that would cut projected spending by $24 billion over ten years. The House is considering legislation that would cut even more, with most of the difference coming from bigger cuts to food stamps. Costly farm subsidies that have survived for years even though they were meant to be temporary may finally be on their way out.
Belly Flop on Student Loans – Student loan interest rates are set to double on July 1 and Washington cannot agree on how to avoid the abrupt increase. The Senate on Thursday failed to muster enough support for either the Senate Democrats' or House Republicans' approach. The House earlier passed a bill on a party-line vote that is similar in concept to the White House's approach, but differs on the specific rates used. See a summary of the different plans.
Key Upcoming Dates (all times are ET)
- Bureau of Labor Statistics releases May 2013 employment data.
- House Budget Committee hearing on the FY 2014 budget and the Department of Defense at 1 pm.
- Deadline for estimated quarterly individual and corporate tax payments.
- Dept. of Labor's Bureau of Labor Statistics releases May 2013 Consumer Price Index data.
- Bureau of Economic Analysis releases third estimate of 2013 1st quarter GDP.
- The date Treasury Department expects a nearly $60 billion payment from Fannie Mae, which will help delay the time by which lawmakers will need to raise the debt ceiling.
- Bureau of Labor Statistics releases June 2013 employment data.
- Dept. of Labor's Bureau of Labor Statistics releases June 2013 Consumer Price Index data.
- Bureau of Economic Analysis releases advance estimate of 2013 2nd quarter GDP.