‘Line’ Items: Recess Over, Deadlines Loom
They’re Back – Congress returns from its spring recess this week. The Senate is back in session today and the first order of business is a cloture vote this afternoon on legislation to extend expanded unemployment benefits, COBRA subsidies and the Medicare “Doc fix” until May 5. Republicans are withholding support unless the cost is offset through cuts elsewhere. Meanwhile, legislation extending the unemployment and COBRA provisions and several tax breaks until the end of the year has been passed by both chambers, but a disagreement over offsets is preventing final passage. CRFB has called for offsets that ensure that stimulus legislation does not add to the long-term debt.
Coburn Notice – Fights over offsets will likely be a recurring theme as Senator Tom Coburn has promised to block all spending bills that are not paid for. Lawmakers will feel a particular squeeze because the recent health care legislation utilized several pay-fors that they planned to use for their proposals. CRFB hopes that the enthusiasm to offset spending will also apply to the revenue side as well.
Deadline Brings Focus to Taxes – The looming deadline to file tax returns this Thursday, April 15 has focused attention on the unfinished tax agenda in Washington. Congress has no clear plan for what to do with the 2001 and 2003 tax cuts that will expire this year. Inaction on the estate tax, which was repealed this year but will return next year at pre-2001 levels without further action, illustrates the tax muddle that lawmakers must unravel. The Bottom Line is highlighting the issue with a Count Down to Tax Day series examining issues such as the revenue situation, tax expenditures, and new types of taxes being considered.
The Other April 15 Deadline – Though not as immediately relevant to the average taxpayer as the tax filing deadline, April 15 is also an important milestone in the annual budget process – or, at least, it’s supposed to be. Congress is to have approved the budget resolution by then but, as opposed to the tax deadline, legislators face no penalties for missing the date. Leaders on the Hill have already made it clear that Congress won’t meet that goal this year. The Bottom Line saw this coming way back. Although they blame the lengthy health care debate for the delay, the majority Democrats are not yet certain they want to go through a process that will highlight the bleak fiscal picture facing the country. The only positive they see is that ratifying a resolution with budget reconciliation instructions will make it easier to pass some of their priorities later in the year. Adopting a budget resolution on time has become more of the exception than the rule in recent years, underscoring the dysfunction of the budget process and the need for reform. The Peterson-Pew Commission on Budget Reform will issue recommendations for fixing the broken system this fall.
Commission Will Meet at the End of the Month – The White House fiscal commission will hold its first meeting on April 27. The commission must report recommendations to put the country on a more sustainable fiscal path to Congress by December 1. Federal Reserve Chairman Ben Bernanke highlighted in vivid terms the need to reduce the mounting debt in remarks last week. Expect him to discuss the perils of rising debt some more in Congressional testimony Wednesday on the “Economic Outlook.”