Was the Sequester Obama’s Idea? Who Cares?

Was the Sequester Obama’s Idea? Who Cares?

By February 19, 2013

The Great Sequester Showdown of 2013 (also known as Fiscal Wars: Episode Ad Nauseum) is in its final stretch, with big, harmful spending cuts due to hit in 10 days and each side seeming to settle on its closing argument in the fight. President Obama made his case at the White House today, surrounded by firefighters and first responders. His view, in short: Let’s avoid the sequester by replacing it with deficit reduction that includes both spending cuts and new tax revenues. The short version of the GOP case is: The sequester was Obama’s idea.

This from The Hill this morning:

Republicans are also getting ready to battle by reminding voters it was the White House that conceived of the sequester—the $1.2 trillion in deficit reductions, including lower interest payments, that were included as part of the deal in 2011 to raise the debt ceiling. Continue reading “Was the Sequester Obama’s Idea? Who Cares?”

Estimated Impact of Automatic Budget Enforcement Procedures Specified in the Budget Control Act

September 12, 2011

read complete document  (pdf, 89 kb)

Highlights

The Budget Control Act of 2011 (enacted on August 2 as Public Law 112-25) made several changes to federal programs and established budget enforcement mechanisms—including caps on future discretionary appropriations—that were estimated to reduce federal budget deficits by a total of at least $2.1 trillion over the 2012–2021 period. The caps on discretionary appropriations will decrease spending (including debt-service costs) by an estimated $0.9 trillion during that period, compared with what such spending would have been if annual appropriations had grown at the rate of inflation. At least another $1.2 trillion in deficit reduction was anticipated from provisions related to a newly established Congressional Joint Select Committee on Deficit Reduction. That committee is charged with proposing legislation to trim budget deficits by at least $1.5 trillion between 2012 and 2021. However, if legislation originating from the committee and estimated to produce at least $1.2 trillion in deficit reduction (including an allowance for interest savings) is not enacted by January 15, 2012, automatic procedures for cutting both discretionary and mandatory spending will take effect. The magnitude of those cuts would depend on any shortfall in the estimated effects of such legislation relative to the $1.2 trillion amount. Continue reading “Estimated Impact of Automatic Budget Enforcement Procedures Specified in the Budget Control Act”

Strategic analysis of the Budget Control Act

Strategic analysis of the Budget Control Act

1 August 2011 by Keith Hennessey 1 Comment

hundreds-stack

This is the third of three posts on the Budget Control Act.

The other two posts are:

  1. Quick summary of the Budget Control Act; and
  2. Understanding the Budget Control Act.

I cover three topics in this post: what important players won in this deal, the core concepts and tradeoffs within the deal, and what the different strategies might be this Fall under this bill if (when?) it becomes law.

The President’s priorities

The President knows he will get debt limit increases through early 2013 no matter what House conservatives/Tea Party members do. Those Members can no longer “hold a debt limit increase hostage” before the 2012 election.

We could also describe this as eliminating liquidity risk through 2012. Continue reading “Strategic analysis of the Budget Control Act”

Understanding the Budget Control Act

Understanding the Budget Control Act

1 August 2011 by Keith Hennessey 1 Comment

hundreds-rows

This is the second of three posts on the bill agreed to by the President and the bipartisan bicameral leaders of Congress (Speaker Boehner and Leaders Reid, McConnell, and Pelosi).

The other two posts are:

  1. Quick summary of the Budget Control Act; and
  2. Strategic analysis of the Budget Control Act.

If you have not read my quick summary post, please do so before reading this one. I cover three topics in this post:  how taxes are treated in the Joint Committee, how the spending cut trigger works, and the intentional imbalance of triggered spending cuts.  All three are critical to the strategic analysis. Continue reading “Understanding the Budget Control Act”

White House Warns Of Sequestration’s Effects

by Krishnadev Calamur

February 17, 201311:27 AM
White House Chief of Staff Denis McDonough at the White House on Jan. 25.

White House Chief of Staff Denis McDonough at the White House on Jan. 25.

Carolyn Kaster/AP

The White House and congressional Democrats are sounding the alarm bells over the consequences of the sequester, the across-the-board cuts to the budget that are scheduled to go into effect in March.

White House Chief of Staff Denis McDonough said the cuts would offset “pretty good” economic activity over the past few months. He said President Obama had a plan to cut an addition $1.5 trillion from the deficit.

“He’s ready to do another $1.5 trillion to get up to the $4 trillion target that economists across the country tell us is needed to stabilize the debt over the next 10 years,” McDonough said on ABC’s This Week. “So that’s exactly what the president has done, working with Democrats and Republicans.” Continue reading “White House Warns Of Sequestration’s Effects”