The Government Accountability Office (GAO) has released yet another dire warning about the nation’s long-term fiscal condition. The report—an annual update of long-term budget simulations—projects that debt held by the public will likely exceed the historical high within 10 years. What was once viewed by many as a distant budget imbalance has suddenly become a near-term crisis. Unfortunately, simply ignoring the issue—the action of choice for most lawmakers to date—exacerbates the problem. The GAO notes the urgency of the situation: With the passage of time the window to address the …
The front page of today’s Wall Street Journal brings some unsurprising yet alarming news about the nation’s fiscal situation. Simply put, the federal government is spending an increasing amount on benefits in the form of entitlements while simultaneously trimming the number of taxpayers paying the bill: Efforts to tame America’s ballooning budget deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history. At the same time, the fraction of American households …
Without action from Congress, the Obama tax hikes are set to take effect January 1, 2011. However, this doesn’t mean businesses are waiting until then to prepare for the potential impact. In fact, the uncertainty surrounding the tax increases is already holding back potential job growth. Today’s Wall Street Journal points out, “The uncertainty over looming tax increases is starting to affect both investing and corporate decision making. … Small-business owners say unease about tax policy, along with the economy, has led them to hold off on hiring and investment.” …
Not satisfied by the billions in federal bailouts already passed, House Speaker Nancy Pelosi recently announced that she intendeds to bring the House back from the August recess to pass yet another multi-billion-dollar federal bailout. This version—costing taxpayers $26.1 billion—is touted as aid “to save teachers’ jobs, help seniors and children.” Perhaps anticipating a backlash against additional billion-dollar bailouts (the national debt recently polled on par with terrorism as threats to the United States), congressional Democrats were quick to claim that this would all be “paid for.” Unfortunately, even a …
Last night the House passed a “budget enforcement resolution” setting discretionary spending levels for fiscal year 2011 at $1.12 trillion. This is approximately $7 billion less than President Obama’s budget and $3 billion less than the Senate proposal. However, the resolution isn’t newsworthy so much for what it contains but rather for what it lacks. Make no mistake: This is not a true budget. All future federal spending and revenue projections, which would normally be included in an actual budget resolution, are conspicuously absent in what was passed last night. …
The Congressional Budget Office (CBO) released their annual Long-Term Budget Outlook today, and the updated projections—which include the effects of Obamacare—paint a grim picture. If Obamacare really did bend the cost curve down, CBO shows little evidence of it in this report. In fact, CBO openly admits that “projections understate the severity of the long-term budget problem because they do not incorporate the significant negative effects that accumulating substantial amounts of additional federal debt would have on the economy.” Here are a few highlights: Debt held by the public will …
Monday, Senate Majority Leader Harry Reid (D-NV) filed cloture on the tax extenders package. The bill would extend a variety of tax provisions that expire yearly and require Congress to pass them annually to prevent tax increases for many taxpayers, further extend unemployment benefits, and prevent a 21 percent decrease in payments to doctors that treat Medicare patients – the so-called “doc fix.” The extension of the expiring tax provisions is a long-overdue exercise for Congress and should be relatively uncontroversial. But Congress – as usual – could not restrain …
Gallup recently asked a sampling of Americans, “How serious of a threat to the future of the United States do you consider the following…” The results are clear: Americans judge the national debt on par with terrorism as the top threat facing the nation. Further, independents – a crucial constituency during an election year – believe the debt to be the single most threatening issue facing the country, even topping terrorism. A quick analysis of the numbers reveals why the public is alarmed. Today debt held by the public stands …
Testifying before the House Budget Committee today, Federal Reserve Chairman Ben Bernanke noted: Even after economic and financial conditions have returned to normal, however, in the absence of further policy actions, the federal budget appears to be on an unsustainable path. A variety of projections that extrapolate current policies and make plausible assumptions about the future evolution of the economy show a structural budget gap that is both large relative to the size of the economy and increasing over time. Chairman Bernanke joins a large and growing chorus of voices …
Last week, Congressman Jim Jordan (R-OH) and Tom Price (R-GA) introduced the Republican Study Committee (RSC) FY2011 budget. This is a welcome fiscal blueprint that would restore fiscal discipline to the nation and avert a Grecian formula meltdown. It also does an excellent job of drawing a sharp distinction between a conservative fiscal plan and the liberal proposal presented by President Obama’s budget. Comparing President Obama’s own budget projections to the RSC’s tells the story of two very different futures for the United States. While the focus is primarily spending …
