Whisper it—we may be at a tipping point in the US economic recovery. The announcement that U.S. budget negotiators have reached a provisional two-year deal to avert another government shutdown (which had been set to happen, sans deal, in early 2014) was fantastic news. For the last few years, government has been a headwind, rather than a help, to the recovery. If you’d have stripped the public sector out of the growth numbers over the last year or so, you’d find that the U.S. was already in a 3 percent growth economy, rather than the sluggish “New Normal” of 2 percent that we’ve all gotten used to. If this deal, which still has to be voted on in both the House and Senate, marks a move from gridlocked, partisan politics in Washington to something more constructive, that’s a big deal. Continue reading “Budget Deal Is a Tipping Point for the US Economic Recovery”
|FOR IMMEDIATE RELEASE
December 10, 2013
CONTACT: National Priorities Project
NPP Communications Officer Derrick Crowe, 512.516.5067
WASHINGTON – December 10 – With less than a week remaining before the budget conference committee’s Dec. 13 deadline, reports indicate that negotiators have not yet agreed on a federal spending plan for 2014. Though there is some optimism that a fairly small deal could be reached before Friday, nothing concrete has been released from the closed-door negotiations between House Budget Committee Chair Paul Ryan, R-Wisc., and Senate Budget Committee Chair Patty Murray, D-Wash. National Priorities Project (NPP) issued a statement Tuesday calling out Congress for not acting more quickly develop a budget blueprint that reflects the priorities of the American people.
“Americans have a clear, shared understanding of what the federal budget should look like: we want Congress to protect Social Security and Medicare benefits, reduce waste in the military budget, protect education and safety net programs, close corporate tax loopholes and control health care costs. It’s unconscionable that Congress is up against yet another deadline, and has yet to deliver on one of their most basic obligations to the American people. The budget committee should look to our nation’s shared priorities as its guiding star for a 2014 spending and revenue plan, and get a budget passed in time to avoid another government shutdown,” NPP Executive Director Jo Comerford said. Continue reading “Time Is Running Out for the Budget Conference Committee”
The clock is ticking on the Congressional Budget Conference Committee, which only has eight days left to cobble together a budget before the Dec. 13 deadline. And though lawmakers have signaled that they are close to a deal, nothing is certain.
Budgeteers in both parties are aiming for a deal that cancels the second wave of sequester cuts authorized under the Budget Control Act of 2011. To undo those cuts, they’ll have to find savings in other areas. Some potential elements in the emerging deal include raising federal employees’ contributions to their pension funds, or having the Federal Communications Commission auction rights to electromagnetic spectrum, according to congressional aides.
As difficult as it may be for Republicans and Democrats to agree on a narrow package to replace the sequester cuts, much more difficult choices lay ahead. As the Congressional Budget Office put it in a report released last month: “To put the federal budget on a sustainable long-term path, lawmakers would need to make significant policy changes—allowing revenues to rise more than would occur under current law, reducing spending for large benefit programs to amounts below those currently projected, or adopting some combination of those approaches.” Continue reading “Federal Budget: 10 Cuts That Would Save the Most”
Congressional Budget Office
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”
For fiscal year 2012 (which ends on September 30), the federal budget deficit will total $1.1 trillion, CBO estimates, marking the fourth year in a row with a deficit of more than $1 trillion. That projection is down slightly from the $1.2 trillion deficit that CBO projected in March. At 7.3 percent of gross domestic product (GDP), this year’s deficit will be three-quarters as large as the deficit in 2009 when measured relative to the size of the economy. Federal debt held by the public will reach 73 percent of GDP by the end of this fiscal year—the highest level since 1950 and about twice the share that it measured at the end of 2007, before the financial crisis and recent recession. Continue reading “An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022”