‘Line’ Items: Post-Halloween and Pre-Election Edition
Tricks and Treats Not Done Yet – Halloween was celebrated last night and Election Day is tomorrow. Which day is scarier likely depends on your political view, but Tuesday will be filled with plenty of tricks and treats for political junkies. The election results will significantly influence the fiscal policy agenda.
Really Scary Times Could Be Ahead – With Republicans poised to gain a significant number of seats in tomorrow’s mid-term election, the likelihood of confrontation in Washington over the budget is greatly increased. Some are already suggesting a government shutdown in order to push for deeper federal spending cuts. A more perilous showdown could occur over raising the debt limit next year. According to CQ (subscription required) House Republican Whip Eric Cantor (R-VA) last week called for an up or down vote on increasing the limit when the time comes, which will probably be in the middle of next year, and suggested that his caucus would want to see major progress on spending cuts and deficit reduction before supporting an increase. Failure to increase the debt limit would likely lead to a U.S. default and could trigger a financial crisis.
Fiscal Issues a Big Factor in Mid-Term Elections – There is no denying that fiscal policy has been a key focus during this campaign season. The deficit/debt has consistently ranked just behind the economy/jobs as the top issue for voters in polls. Federal spending and taxes are primary talking points for candidates. Whether that focus will result in more fiscal responsibility in Washington and solutions to our fiscal challenges remains to be seen. CRFB provided 10 Questions to Ask the Candidates on fiscal responsibility in order to move beyond the campaign rhetoric towards discussing solutions. Don't forget to vote tomorrow if you haven't already.
More Are Getting Specific – Last week saw more specific ideas for reducing our fiscal imbalances. The National Taxpayers Union and U.S. Public Interest Research Group teamed up on a proposal that would save around $600 billion by 2015. The Heritage Foundation followed suit by detailing some $343 billion in spending cuts that could be enacted in the coming fiscal year. CRFB has said it’s time to get specific, hosting an event in September highlighting specific ideas and releasing detailed proposals for health care, Social Security, and tax expenditures, with more to come. CRFB president Maya MacGuineas also devised a fiscal plan with Bill Galston of the Brookings Institution.
Lame Duck on the Menu After Election – Congress will convene for a lame duck session starting November 15 that will address several pending fiscal issues, including the expiring 2001/2003 tax cuts, extensions of expired tax breaks like the research and development tax credit, and FY 2011 federal funding. On the tax cuts, Senator John Cornyn (R-TX) hinted there may be room for compromise that extends all the tax cuts temporarily and the White House reportedly is considering a permanent extension of the tax cuts for families making less than $250,000 and a temporary extension for those above the threshold.
Some Intel on Intelligence Funding – Last week the federal government disclosed that just over $80 billion was spent on intelligence in FY 2010, a more complete accounting than is usual for the intelligence budget. This comes as the two chairs of the committees overseeing the intelligence community in Congress signaled they will target the intelligence budget for waste and duplication, looking for significant savings.