Issue Brief posted May 13, 2014
Spending Season Is Back: How Congress Is Planning to Dish Out Your Tax Dollars in 2015
After the past two years of budgetary dysfunction, during which Congress relied on temporary agreements to fund the government, the appropriations committees are back in session with the charge to present all 12 spending bills for fiscal year (FY) 2015. These bills will divide the $1.014 trillion designated for discretionary spending in FY 2015 amongst the federal…
Issue Brief on May 12, 2014
Cutting the Commerce, Justice, and Science Spending Bill by $2.6 Billion: A Starting Point
The House Committee on Appropriations has approved a draft that allocates spending for the Commerce, Justice, and Science (CJS) bill, the third of 12 appropriations bills the House will consider. The proposal would spend $51.2 billion for 2015, a decline of roughly $400 million (or less than 1 percent) from the 2014 level. There is still plenty of room to trim the…
Issue Brief posted April 8, 2014
Tax Day 2014: How Tax Reform Would Make Filing Taxes Better
April 15, the day Americans’ tax returns for the previous year are due to the IRS, is fast approaching. Families all over the country are scrambling to find documentation for their incomes and any expenses they incurred that might be deductible, creditable, or exemptible. It is a day of consternation for most families because of the mind-numbing complexity of completing…
Issue Brief posted April 1, 2014
The Federal Budget in 2013: Dysfunction Revisited
The federal fiscal year begins on October 1 and ends on September 30. The budget process calls for presidential, House, and Senate budgets, with the latter two to be resolved in a budget conference to arrive at the discretionary topline level from which the 12 appropriations bills are written. This process completely collapsed in 2013.
By September 2013, Congress was…
Issue Brief posted March 31, 2014
Tax Extenders an Opportunity to Improve the Tax Code
The tax extenders are a group of approximately 50 tax-reducing policies that expire regularly. Congress has traditionally extended them just as regularly as they expire.
Most recently, they expired at the end of 2013, and Congress has yet to address them this year. Congress previously extended them as part of the “fiscal cliff” deal struck at the beginning of 2013. That…
Issue Brief posted February 14, 2014
Blank Check: What It Means to Suspend the Debt Limit
Some commentators have criticized use of the phrase “blank check” to describe the recent vote to suspend the debt limit for more than a year. They argue that the debt limit suspension merely means that the Treasury is allowed to borrow for the purpose of covering spending Congress already approved.
That is only part of the story. Here is why the “blank check” analogy…
Issue Brief posted February 6, 2014
Economy Better, but Still Growing Too Slowly Because of Anti-Growth Policy
The new Bureau of Economic Analysis (BEA) report measuring how fast the economy grew in the fourth quarter of 2013 and for the entire year of 2013 confirms that while the U.S. economy has clearly picked up steam, it is still in the grip of a subpar recovery from the recession that ended in 2009.
The cost of this slack-paced expansion—compared to past recoveries—has been…
Issue Brief posted November 14, 2013
America’s Austerity: It’s the Tax Increases
U.S. policymakers pursued deficit reduction (also called “fiscal consolidation” or “austerity”) twice in 2013. As economists have shown in dozens of papers, how a country goes about reducing deficits matters a lot in determining the economic impact of the deficit reduction. As Alberto Alesina of Harvard, Daniel Leigh of the International Monetary Fund, and Kevin Hassett…
Issue Brief posted October 31, 2013
A Repatriation Holiday Would Not Create Jobs
The House and Senate have convened a conference committee in an attempt to reconcile the very different budgets they passed earlier this year.
Some have suggested that, if the Senate refuses to agree to tax reform in the course of negotiations, the House should seek a repatriation holiday instead. A repatriation holiday would eliminate almost all the tax liability…
Issue Brief posted September 19, 2013
Tax Reform Should Eliminate the Deduction for State and Local Taxes
House Ways and Means Committee chairman Dave Camp (R–MI) and Senate Finance Committee chairman Max Baucus (D–MT) will face many difficult decisions as they proceed on tax reform. Among them will be whether to retain certain deductions currently in the tax code, including the deduction for state and local taxes.
Tax reform should eliminate the state and local tax…
Issue Brief posted August 13, 2013
CBO Should Measure Long-Term Obligations and Policy Impact
Senators John Thune (R–SD) and Tim Kaine (D–VA) have introduced legislation to require the Congressional Budget Office (CBO) to conduct long-term fiscal scoring and annual measurement of the fiscal gap. Their effort is timely.
Today, the largest fiscal questions facing Congress concern policies that will determine the health of America’s finances decades in the…
Issue Brief posted August 2, 2013
Detroit’s Bankruptcy Marks the Tip of the Iceberg
Detroit’s recent filing for Chapter 9 bankruptcy protection would protect the city from its creditors while allowing it to restructure its debts. The proceedings that follow will, in many respects, set precedents for the swell of municipal bankruptcies that are likely to follow. Some of these precedents will be set through the courts, but federal policymakers have the…
Issue Brief posted July 17, 2013
House Can Save $2.3 Billion More on the Commerce, Justice, and Science Bill
House appropriators are considering the fiscal year (FY) 2014 Commerce, Justice, Science (CJS) appropriations bill in full committee this week. The bill would allocate $47.4 billion for commerce, justice, science, and related agencies—only $350 million (1 percent) less than the FY 2013 post-sequestration level. House appropriators can do better than that.
Issue Brief posted June 27, 2013
History Suggests Social Security Insolvency Is Coming Sooner Than Projected
This year’s Social Security trustees report was released with little fanfare, as the projected date of Social Security’s financial insolvency held steady at 2033. Many analysts and lawmakers have pointed to 20 years of alleged solvency as an excuse to delay meaningful Social Security reform. However, if history is any guide to future solvency, the Social Security…
Issue Brief posted June 18, 2013
Soaring National Debt Remains a Grave Threat
Federal government debt has nearly doubled since President Barack Obama took office and is projected to increase 50 percent over the next decade—and then rise rapidly thereafter—under existing policies. As federal debt has soared, so have concerns about America’s future.
Used properly, debt can safely finance private and government investment in productive capital to…