Wonkblog: Economy, Budget

Americans want to cut the deficit, but they’re loath to give up much to do it

Americans want to cut the deficit, but they’re loath to give up much to do it

A rapidly growing number of Americans think that reducing the deficit is very important: 69 percent in 2012 believe it’s a top priority, as compared to 53 percent in 2007, according to the Pew Research Center. Only the economy and jobs rank higher.

The problem is, Americans don’t like most of the big changes that would be necessary to reduce the deficit in a meaningful way, explains Pew Research Center president Andrew Kohut in a new brief on the issue. “In my years of polling, there has never been an issue such as the deficit on which there has been such a consensus among the public about its importance — and such a lack of agreement about acceptable solutions,” he writes.

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States refuse to abolish taxes, but they’re still eager to roll them back

States refuse to abolish taxes, but they’re still eager to roll them back

Conservatives in a handful of red states have been pushing to abolish some state taxes entirely. But they’ve been hitting a lot of roadblocks.

On Tuesday, the overwhelming majority of voters rejected a ballot measure that would have made North Dakota the first state to eliminate property taxes. Earlier this spring, Republican-controlled legislatures in Kansas and Oklahoma also defeated measures that would have abolished the state-income tax, fearing the loss of revenue.

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Fiscal cliff: Another shot at a grand bargain?

Fiscal cliff: Another shot at a grand bargain?

Congress is addicted to short-term fixes. Whether it’s a yearlong budget or long-term deficit reduction, lawmakers have limped from one stopgap measure to another. But some politicians and budget experts are holding out hope that the looming threat of the fiscal cliff will give them another shot at passing long-term reform: They hope the January 1 deadline will not only force Congress’s hand on the Bush tax cuts and the sequester, but also pave the way for a sweeping overhaul of both taxes and entitlements.

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Baucus’s not-so-simple plan to simplify the tax code

Baucus’s not-so-simple plan to simplify the tax code

Washington might be obsessed with the Bush tax cuts. But Max Baucus, chairman of the Senate Finance Committee, which has jurisdiction over the tax code, thinks they’re beside the point. “Today, the code is certainly not beautiful,” he said in a speech at the Bipartisan Policy Center on Monday. “Instead, it reminds me of Hydra, the mythical Greek beast with hundreds of heads. Each time you cut one off, two more grow back.”

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What a millionaire’s tax costs the government, in one graph

What a millionaire’s tax costs the government, in one graph

Liberals were upset when Nancy Pelosi demanded tax breaks for everyone with incomes under $1 million, arguing that the threshold should be $250,000 instead. Now they have more ammunition from the Center for Budget and Policy Priorities. If the cutoff for tax breaks is $1 million instead of $250,000, Pelosi’s proposal would lose the government $366 billion in lost revenue over the next 10 years, the CBPP points out in a new report, citing new figures from the non-partisan Joint Committee on Taxation:

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The government spends billions on research. Should we have to pay $20,000 more to see the results?

The government spends billions on research. Should we have to pay $20,000 more to see the results?

Taxpayers fund a ton of government research — and the results can get stuck behind a paywall that tops $20,000. Should they be able to see them without paying a second time around?

That’s a question Congress could take up, thanks to Rep. Mike Doyle (D-Pa.), who has introduced bipartisan legislation that requires free, online access to the results of federally funded research six months after it’s been published. “The public has a right to see the results,” he declared from a podium at the Brookings Institute on Wednesday. But opponents of Doyle’s bill say that’s not fair to the journals that actually select the work that’s fit to publish and depend on subscriptions to stay in business.

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Jeff Fortenberry: One House Republican who’s dared to defy Grover Norquist

Jeff Fortenberry: One House Republican who’s dared to defy Grover Norquist

There are only about 10 House Republicans who have refused to stand by Grover Norquist’s pledge against tax increases. Rep. Jeff Fortenberry (R-Neb.) is one of them, having declined to renew his pledge last year. He doubled down on his refusal in an interview this week with the American Conservative:

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Romney wants defense spending to be much, much higher. The public doesn’t.

Romney wants defense spending to be much, much higher. The public doesn’t.

There’s a yawning gap between how much the average American wants to cut defense spending in 2013 (18 percent) and how much Washington lawmakers want to cut (zero, or pretty close to it). But the gap between public opinion and Mitt Romney’s plan is much, much bigger.

Travis Sharp, a budget analysis at the Center for a New American Security, ran the numbers based on Romney’s plan for defense spending for CNNMoney and found that the presumptive GOP nominee would increase Pentagon spending in 2013 by $96 billion. That’s about a 17 percent increase over 2012 spending levels—nearly the same amount by which the public wants to decrease the defense budget, according to the Stimson Center’s recent study.

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Americans want to slash defense spending, but Washington isn’t listening

Ask your average American whether the defense budget should go up or down in 2013, and by how much, and they’ll tell you to cut spending by a whopping 18 percent. Ask your average member of Congress the same question, and no matter which party they’re from, you’ll likely hear that defense spending should barely budge from where it is right now.
Soldiers of the U.S. Army V Corps. (Ralph Orlowski - GETTY IMAGES)

“It’s a sizable gap—perhaps even a missile-sized gap,” suggested R. Jeffrey Smith, an editor at the Center for Public Integrity and former Washington Post reporter, unveiling the findings Thursday morning at the Stimson Center. On average, Smith and his co-authors found the public wants $103.5 billion in defense budget cuts, or 18 percent of the current budget; Republicans want $74 billion cut, on average, Democrats want a $124.4 billion cut, and independents want a $112.2 billion reduction. Participants evaluated 87 percent of defense discretionary spending, so their cuts might even be higher if the entire defense budget were covered.

Now just compare that to what both Republicans and Democrats are currently proposing: Rep. Paul Ryan (R-Wisc.) and House Republicans are trying to pass a budget that would keep base discretionary spending the same in 2013, as compared to the previous year. President Obama proposes a relatively small $4 billion cut to such spending below current levels. Both parties want to avoid the automatic defense spending cuts that are scheduled to happen in 2013 as part of August’s debt ceiling deal, which slashes defense spending by $63 billion. It's not quite an apples-to apples comparison — the defense budget in the survey was about 1 percent mandatory spending, which falls outside discretionary spending — but there’s a big divide between the public and Washington either way.
(SOURCE: STIMSON CENTER, HOUSE BUDGET COMMITTEE, OFFICE OF MANAGEMENT AND BUDGET)

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Paul Ryan and the second coming of Compassionate Conservatism

Paul Ryan and the second coming of Compassionate Conservatism

It sounded, at first, like the return of Compassionate Conservatism. When it comes to programs that serve the poorest Americans, “we need to meet our legal and moral obligations to lead,” Rep. Paul Ryan (R-Wis.) proclaimed on Monday before the House Budget Committee. “Are people getting out of poverty? We need to focus on that.”

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Bill Kristol tries to win Jewish vote for Romney

Bill Kristol tries to win Jewish vote for Romney

Bill Kristol walked up to the debate podium prepared to lose the case for electing Mitt Romney, even before his opponent had uttered a single world.

“Every four years, I dutifully accept invitations to debate before Jewish audiences,” the Weekly Standard editor told the American Jewish Committee’s annual confab in downtown D.C. “It’s always a pathetic scene. I have an unmatched record of failures, from 1984 on.” He smiled ruefully as the audience laughed.

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How Obama wants to soften the blow of the debt ceiling deal

How Obama wants to soften the blow of the debt ceiling deal

President Obama’s 2013 budget mostly sticks to the spending cuts mandated by the Budget Control Act. But the budget also proposes changes — both big and small — that would affect the impact of the law, which was passed as part of August’s debt-ceiling deal. First, Obama’s budget provides a plan under which sequestration — that is, the cuts triggered by the supercommittee’s failure to pass a $1.2 trillion deficit reduction plan — won’t actually happen. Obama’s budget would cut the deficit by nearly $2 trillion in 2021 through higher taxes, thus allowing the government to avoid the spending cuts by going well beyond the $1.2 trillion requirement.

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Five things you missed in Obama’s budget

Five things you missed in Obama’s budget

President Obama’s proposed tax hikes and infrastructure spending for 2013 have grabbed headlines. But there’s a slew of other changes that Obama has proposed in his $3.8 trillion budget that are worth flagging as well. Here are a few of them:

1) Obama wants to change the composition of nickels and pennies to save money. The president’s budget would give the Treasury Department the ability to “change the composition of coins to more cost-effective materials,” pointing out the current cost of making the penny is 2.4 cents and the nickel is 11.2 cents. Of course, the value of the U.S. dollar isn’t pegged to the materials that it’s composed of, but it’s still a compelling argument on its face. The composition of U.S. coins hasn’t changed since 1981, the Wall Street Journal notes, while major components like zinc have become more expensive. Industry lobbyists stalled the proposal when Obama brought it up in 2010, but it may have new appeal to the frugally-minded.

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Gallup: Wealthy worry about deficit, poor worry about jobs

Gallup shows that there’s a direct correlation between household income and concern about the deficit. A recent survey found that the national debt/deficit was the most frequently listed “economic worry” of those earning $75,000 or more, at 21 percent. By contrast, only 8 percent of Americans earning $30,000 or less listed the national debt as their biggest economic concern.


(GALLUP)
Gallup also notes that deficit hawks are more likely to reside in the heartland, as “residents of the Midwest are more concerned about the deficit than those elsewhere.”

Study: Spending cuts are more credible coming from left-wing governments

Study: Spending cuts are more credible coming from left-wing governments

Matt Mitchell of the Mercatus Center urges a renewed commitment to large-scale deficit reduction in the wake of the supercommittee’s demise, arguing that spending cuts would be more credible if they came from a Democrat-led government. He points to a 2004 paper showing that deficit-reduction efforts are far more credible and lasting when political parties defy what their constituencies expect of them. Mitchell cites a 2004 paper by Jose Tavares in the Journal of Public Economics that found as much:

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Does another fiscal stimulus stand a chance in Congress?

Does another fiscal stimulus stand a chance in Congress?

With the supercommittee finished, Washington is turned to the looming expiration of the payroll tax cut and unemployment benefits. But they won’t be alone: By December, Congress will need to resolve the most controversial parts of the 2012 budget, the GOP effort to reverse the defense cuts in the trigger, and the annual “doc fix” to boost Medicare payments to medical providers.

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House conservatives contradict themselves on tax increases

House conservatives contradict themselves on tax increases

On Thursday, 72 members of the Republican Study Committee sent a letter to the debt-reduction supercommittee that urged them to rule out any tax increases whatsoever as part of the deal, Roll Call reported. Pushing back against a proposal by fellow Republican Sen. Patrick Toomey to cut some tax credits and deductions, the RSC demanded that even the closure of tax loopholes beoffset by tax cuts, which would effectively erase that option as a way to slash the deficit.

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The tea party occupies the supercommittee

The tea party occupies the supercommittee

“The Gestapo kicked us out!” shouted a large, bearded man in a black windbreaker, blocks away from the U.S. Capitol. A police crackdown on Occupy Wall Street? Nope. It was a group of tea partiers from Freedomworks who had been kicked out of the Senate’s Russell building after Senate officials had determined the group’s presentation on deficit reduction had violated the chamber’s rules for outside group events by calling itself a “hearing.”

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Congress could avoid the trigger by creating . . . another trigger

Congress could avoid the trigger by creating . . . another trigger

The supercommittee’s prospects for success are looking dimmer by the day. But one of the few remaining options would be an all-too-common congressional tactic: passing the buck and deferring the hardest, most complex decisions until later. Legally speaking, there’s nothing stopping the supercommittee from tasking yet another group of lawmakers to carry out the parts of deficit reduction that are hardest to reach agreement on — and crafting another trigger to hold Congress to its promise.

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What really causes ‘regulatory uncertainty’? Budget cuts.

What really causes ‘regulatory uncertainty’? Budget cuts.

A federal watchdog at the heart of Dodd-Frank is facing major budget cuts that could derail its new duties to oversee the derivatives market and lead to regulatory uncertainty in the financial industry.

House Republicans and Senate Democrats have agreed to stop new funds from going to the Commodities Futures Trading Commission in the 2012 budget—a move that outside experts say would hamper the agency’s ability to put the new derivatives regulation into effect.

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Can two fraternity brothers save the supercommittee?

How do you break the partisan impasse on the supercommittee? Start by cracking a few jokes.


(AP)
Opening a Wednesday morning press conference on the deficit-reduction efforts, Democratic minority whip Steny Hoyer recalled his long history of getting to know Rep. Mike Simpson (R-Ida.), during their earlier careers in the Maryland and Idado state legislatures.

“I wasn’t alive early in your career,” the 61-year-old Idaho Republican told Hoyer, age 72.

“This is the kind of comment that undermines cooperation in the Congress of the United States!” Hoyer responded, chuckling.

The Maryland Democrat then turned to introduce Republican Sen. Saxby Chambliss to reporters as “my fraternity brother” — both were in Sigma Chi — as yet another bond that defied party affiliation. “The public doesn’t believe that we can work across the aisle,” Hoyer said. “But our national debt is our biggest national security threat. That’s why we all stand here on this podium,” he continued.

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All the supercommittee proposals (and counterproposals) in one post

The debt supercommittee’s deliberations have largely taken place behind closed doors, and they’ve been in constant flux. That’s made it difficult to keep track of the offers that both parties have put forward in the attempt to agree on at least $1.2 trillion in deficit reduction. The proposals and counterproposals have evolved over time, but the biggest stumbling block — revenue — has remained constant. Here’s a timeline of what the two parties have offered each other, and when:


(Mark Wilson - Getty Images)
Democrats’ first proposal: The last week of October, Democrats made their first formal proposal, which would have reduced the deficit by $2.5 trillion to $3 trillion over the next ten years. The plan was split evenly between tax increases and spending cuts. The cuts included as much as $500 billion in savings from Medicare, Medicaid, and other health-programs, $400 billion from appropriations (about half from defense), and $250 billion from benefits like federal-worker pension plans and farm subsidies. The package also called for more than $300 billion in additional economic stimulus, as well as Social Security savings through using a new formula to calculate cost-of-living increases. Finally, it included up to $1.3 trillion in new tax revenue.

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A special-interest wishlist for the supercommittee

A special-interest wishlist for the supercommittee

The members of the supercommittee have been subject to an enormous amount of lobbying in recent weeks, and a huge portion of it has come from the health-care industry. According to the Sunlight Foundation, nearly 30 percent of the lobbyists in the third quarter represent health-care groups, many of them pleading with the deficit-reduction committee to spare their interests. Kaiser Health News has compiled some of their suggestions into an “interest group wish list” to show how much pressure the members are facing. Here are just a few of their suggestions:

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Could the supercommittee spark another U.S. credit downgrade?

Could the supercommittee spark another U.S. credit downgrade?

The political dysfunction displayed in the debt-ceiling debate prompted Standard & Poor’s to downgrade our credit rating. If the supercommittee negotiations fall apart, could it happen again?

Not necessarily. Ratings agencies and outside economists say that a simple failure to reach a deal wouldn’t be enough to result in a downgrade, though it could still have a negative economic impact. However, our credit rating could still be at risk if the supercommittee deadlocks and Congress manages to reverse the automatically triggered spending cuts in response.

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Debt supercommittee: Frequently Asked Questions

Debt supercommittee: Frequently Asked Questions

Over the next two weeks, you’ll be hearing a lot about the supercommittee. So it’s a good time for a refresher on what the committee is meant to do, how it will carry out its work, and what the possible outcomes could be.

1. What is the supercommittee?

The Joint Select Committee on Deficit Reduction—better known as the “supercommittee”—was created as part of a law that Congress passed in early August in exchange for raising the federal debt-ceiling. The committee, which is composed of 12 members of Congress, must come up with a plan by late November to reduce the deficit by $1.2 to $1.5 trillion within the next ten years, beginning in 2013. The supercommittee’s cuts, combined with $900 billion in separate cuts agreed to in the debt-ceiling deal, will be accompanied by a debt-ceiling increase by the same amount.

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Plan B for the supercommittee?

Plan B for the supercommittee?

Could there be a contingency plan for the supercommittee? Two weeks away from the deficit-reduction group’s deadline, members have hit an impasse over revenue that’s fueled the growing predictions of failure. In response, some policy advocates are urging the supercommittee to save itself by pulling a more moderate compromise off the shelf. Third Way — the centrist Democratic think tank — is lobbying the supercommittee to adopt a $1.2 trillion deficit-reduction plan that it titles, “In case of emergency, Break Glass.” The plan doesn’t contain the sweeping changes of the kind of “grand bargain” that both Republicans and Democrats are gunning for, but it does fulfill the supercommittee’s basic mandate by culling ideas from President Obama, Bowles-Simpson, and GOP Sen. Tom Coburn.

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The White House’s warning shot to the GOP on the budget

Lately, most of the focus on the Hill has centered on the supercommittee and its Nov. 23 deadline to come up with $1.2 trillion budget cuts. But there’s another battle heating up, over the 2012 budget, that could prove equally contentious.

Under the debt-ceiling deal passed in August, Congress agreed on a $1.043 trillion budget for 2012 — a $900 billion spending cut — while letting the supercommittee handle spending from 2013 onward. Congress still, however, has to decide how to dole out that $1.043 trillion budget to fund individual programs by Nov. 18 to keep the government running.

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Why the GOP loves ‘dynamic scoring’

Why the GOP loves ‘dynamic scoring’

One of the biggest questions facing the supercommittee is how much revenue lawmakers will put on the table—and where it will come from. Supercommittee Republicans are so far sticking by their party’s hardline pledge not to accept any tax increases, infuriating Democrats. Instead, they’re offering up $640 billion through a small number of sources— including $200 billion “attributed to the impact of future tax reform spurring economic growth,” as Politico reported last week.

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Republicans think the supercommittee will succeed. Democrats don't.

In a new poll of “congressional insiders,” the National Journal finds that an overwhelming number of Beltway Republicans think the deficit-reduction supercommittee will succeed, while most Democrats think it will fail:


(SOURCE: NATIONAL JOURNAL)

Why the difference? Certainly Republicans aren’t inclined to compromise on taxes to raise revenue. Although a small number of Republicans have rebelled against the party’s hard line, they’re still on the fringes of the debate. The National Journal asked its pool of Beltway insiders whether they’d accept a range of major tax reforms to raise revenue, and 46 percent of Republicans replied “none of the above”:

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Bipartisanship lives! And it will likely cost taxpayers money.

Democrats and Republicans are already going to war over the budget for 2012. But there’s one big thing that both parties already agree on: cutting funding for the IRS.


(SOURCE: BLOOMBERG)
The GOP-crafted House appropriations bill cuts the agency’s budget by more than $600 million, compared with 2011 funding levels, while the Senate has proposed more than $450 million in cuts. Perhaps most significantly, both chambers would reduce funds for enforcement in 2012 by more than $266 million — more than $700 million under what the agency had requested for the year.

House Democrats, in particular, have denounced the bipartisan proposals for a funding cut, saying it would hamper the IRS’s ability to close the “tax gap” — the estimated 16 percent of revenue that the government loses because Americans fail to pay their taxes in full. “The IRS estimates that this cut will end up costing $4 billion per year due to the lack of enforcement on tax cheats,” Rep. Norm Dicks said of the House proposal. “This cut literally increases the deficit.”

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House Republican: Grover Norquist ‘is paralyzing Congress’

House Republican: Grover Norquist ‘is paralyzing Congress’

Rep. Frank Wolf (R-Va.) is one of just six Republican in Congress who haven’t signed Grover Norquist’s anti-tax pledge. On the House floor Tuesday, he attacked Norquist for single-handedly enforcing this hard line within the GOP, creating a destructive impasse in the legislative process. “Everything must be on the table and I believe how the ‘pledge’ is interpreted and enforced by Mr. Norquist is a roadblock to realistically reforming our tax code,” Wolf said. “Have we really reached a point where one person’s demand for ideological purity is paralyzing Congress to the point that even a discussion of tax reform is viewed as breaking a no-tax pledge?”

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How Congress is wasting taxpayer money and government time

As Washington has become increasingly partisan and year-long budget agreements harder to come by, Congress has relied more and more on stopgap budgets. Today, the House is scheduled to pass one funding the government for the next six weeks. Such fixes let Congress dodge the big budgetary questions, but they come at a cost. Even when there isn’t a government shutdown, the growing reliance on continuing resolutions has resulted in government waste and lost productivity for scores of government agencies.


(Big Stock Photo)
In a 2009, the Government Accountability Office found exactly how stopgap budgets muck up the basic functions of government: CRs have frequently forced agencies to put off hiring, reduplicate contracts and delay such things as food oversight and Social Security payments to disabled Americans. In 2009, the GAO says, the Veterans Health Administration estimated that a one-month CR “results in over $1 million in lost productivity at VA medical facilities and over $140,000 in additional work for the agency’s central contracting office.” What’s more, short-term stopgaps typically prohibit any new programs from being started and can wreak havoc on long-term planning for agencies. “This is not the way to run a railroad, much less a government,” says Stan Collender, a former Democratic congressional budget staffer. “It’s like a month-to-month lease.”

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Congress is addicted to stop-gap budgets

With government shutdowns now seeming to loom at every budget deadline, Washington seems more dysfunctional than ever. But let’s keep it in perspective: Congress almost never manages to pass the entire federal budget by the scheduled deadline of Sept. 30. Over the past 30 years, it’s happened only four times — in 1977, 1989, 1995, and 1997. Every other year, Congress has depended on short-term stopgaps and omnibus bills to keep the government running. In 2001 alone, Congress relied on a record 21 Continuing Resolutions before a full budget could be passed, as tensions over the 1997 Balanced Budget Act boiled over.
CRs per year, including both stopgap extensions and omnibus bills. (SOURCE: CONGRESSIONAL RESEARCH SERVICE, VIA SARAH BINDER)
 

What has changed is the tenor and length of such negotiations. In an earlier era, budget dealmakers used CRs simply to buy themselves more time to reach a bipartisan deal, and the stopgaps were routinely passed as a matter of course, generally extending the budget at the previous year’s levels. But the budget process has gotten increasingly politicized as Congressional politics have become polarized, particularly over the size and role of government.

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Amazon.com and the Grapes of Wrath

Amazon.com and the Grapes of Wrath

Want to learn about the plight of unemployed workers during the Great Depression? Head to Amazon.com and order John Steinbeck’s Depression-era epic, “The Grapes of Wrath.” Want to learn about the plight of workers during our own Lesser Depression? Head over to Amazon’s warehouse in Lehigh, Pa., and watch them prepare your book for shipping.

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House Republicans jockey to influence the next budget

House Republicans jockey to influence the next budget

Congress has avoided a shutdown over the budget for now. But a small faction of House Republicans is already tussling over how to position the party for the next round. House GOP appropriations leaders have released a draft bill to fund labor, health, and education for the 2012 fiscal year. While it’s still just a piece of the overall budget, it’s already making some battle lines clear. In fact, the bill’s biggest obstacle so far has come from within the House GOP itself.

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Bipartisanship lives! Sort of.

Bipartisanship lives! Sort of.

Asking Congress to do the bare minimum to keep the government running seems like a lot these days, as once-routine votes have escalated into partisan brawls. But even amid the latest round of shutdown drama, a few funding bills have managed to squeak their way past the gridlock.

At the end of last week, the Senate unanimously decided to extend funding through 2016 for key child welfare programs and approved some reforms to the system — a bill that passed the House on an overwhelming 395 to 25 vote. Congress also passed a three-month extension of a major welfare program, Temporary Assistance to Needy Families, with so little controversy that both houses passed the bill without a formal roll call, through what’s called a “voice vote.”

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The multi-billion-dollar price tag on budget brinksmanship


The rotunda of the U.S. Capitol is seen, Friday evening, Feb. 18, 2011, as Republicans and Democrats square off over a spending bill in the House of Representatives. (AP Photo/J. Scott Applewhite)
We’re all supposed to breathe a sigh of relief this morning. Last night, Senate leaders struck a deal that is likely to avert a government shutdown. But some in the chamber aren’t so impressed. As one fed-up senator told me last week, the United States has a lot of problems to solve, and yet success in today’s Congress constitutes simply keeping the lights on.

This week’s shutdown threat was perhaps the most absurd yet. In most budget battles, the two parties are separated by many billions of dollars. Earlier this year, for instance, the compromise budget that averted a shutdown cut $78.5 billion from the president’s budget request. In this debate, however, the parties were separated by a mere $1.6 billion. The fact is that the preparations for — and certainly the reality of — a shutdown probably would have dwarfed the difference between the two bills.

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LongWonk: LongForm.org’s weekend reading list

LongWonk: LongForm.org’s weekend reading list

Every weekend, Longform.org picks the week’s best in-depth stories on politics and policy for Wonkblog. For daily selections of new and classic nonfiction, check out Longform.org or follow @longformorg on Twitter.

Doom!

John B. Judis • The New Republic • October 2011

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The shutdown fight is over very, very little money

The shutdown fight is over very, very little money

Congress is at it again with another government shutdown fight. But the difference this time is that both parties are squabbling over so very little.

At the heart of the showdown is $1.6 billion in spending cuts to clean-energy programs — a pittance in the scheme of the federal budget. In exchange for $3.65 billion in disaster aid, House Republicans are demanding $1.5 billion in cuts to a fuel-efficiency program and $100 million to the clean-energy loan fund that backed Solyndra. Democrats say that a budget with any disaster aid offsets is dead on arrival in the Senate, which accordingly shot down the House budget this morning.

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The incredible shrinking welfare program

House Republicans quietly passed a bill on Wednesday that extends an unprecedented funding cut to a major federal welfare program—and even Democrats who opposed the change didn’t rise up to stop them.
(SOURCE: CRISTIANA COUCEIRO )

With little fanfare, the House passed a little-noticed extension of the Temporary Assistance to Needy Families program that had so little opposition that it was passed by a so-called “voice vote,” which doesn’t require individual legislators to go on the record. The funds for TANF—a welfare-to-work program created by Clinton’s 1996 welfare reform legislation—were set to expire on Sept. 30. The money has supported welfare programs for low-income families with children, such as child-care subsidies for working parents. The House’s short-term extension maintains the $16.5 billion in baseline money for the program through the end of December. But it also zeroes out funding for “supplemental grants” that have been in place since the program’s inception.

Congress has traditionally set aside $319 million each year in supplemental TANF grants, an amount that’s remained relatively consistent throughout the program’s history.  The supplemental TANF money was meant to address some of the inequities built into the program’s original funding structure. It makes additional money available to states with rapidly growing populations and states that have historically provided small welfare grants per person—including many with the nation’s highest poverty rates.

Despite the record number of people in poverty, that pot of money has been shrinking over the past year. In late 2010, Congress cut the supplemental grants for the first time, unable to find the money to pay for the entire year’s funding. The funds expired in June, and the year’s total dropped to $211 million, on top of other cuts to the program. Under Wednesday’s bill, there will be no supplemental grants through December—a trend that could continue through 2012.

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Democrats don’t need to fear the trigger

Democrats don’t need to fear the trigger

When he talks about the American Jobs Act, President Obama employs a simple refrain: “Pass this bill!” He used some variant of that a dozen times in his speech announcing the legislation.

But when it came time this week for the president to talk about his deficit-reduction proposal, three words were notably absent from the pitch. He never said “Pass this bill.” In part, that’s because he’s not offering a bill; he’s submitting a proposal to Congress’ Joint Select Committee on Deficit Reduction. But it’s also because there is no chance that a bill resembling Obama’s proposal will pass.

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Why the right isn’t gunning for a government shutdown fight

Back in August, the debt-ceiling deal seemed to put the brakes on another government shutdown fight. House Republicans leaders agreed to more spending in 2012 than they had been demanding in their own Ryan budget, in exchange for $900 billion in cuts right now and the $1.2-trillion-plus in deficit reduction. Instead, they agreed to a short-term, $1.043 trillion extension when appropriations funds expire on Sept. 30. Now House Speaker John Boehner is suggesting that the original agreement didn’t go far enough, suggesting that $1.035 trillion should be the target instead.

Does that mean that a government shutdown is again on the horizon? Not necessarily. Even conservative groups with a strong tea-party following don’t seem to be itching for a fight, at least for now.


(AFP/Getty Images)

Grover Norquist’s Americans for Tax Reform says it’s satisfied with the deal, pointing out that the next Continuing Resolution would decrease spending, if not at the levels it was hoping for. “The debt limit deal, while above the agreed-upon levels of the Ryan budget, still represents a cut in budget authority from 2011 levels. By the above metric, we would not oppose a CR set at the 2012 levels. Everyone agreed to that number a month and a half ago — this is now the landscape for future spending battles,” said Mattie Carrao, ATR’s government affairs manager. In other words, the group believes that there are bigger fish to fry — presumably the $1.2 trillion or more that will come in deficit reduction through either the supercommittee or the trigger.

FreedomWorks hasn’t gone as far as Norquist’s group in supporting the next CR, but the group isn’t yet gunning for a fight. “We’re going to have to watch to see how this plays out,” says Adam Brandon, communications director, describing the group as “neutral” and without an official position thus far on the 2012 budget. Brandon still warns that more conservative members could still rock the boat, even if the GOP leadership signs onto CR. After all, a handful of Republicans voted against the final debt-ceiling deal. “Don’t be surprised if you see some of these backbenchers rattling,” he says, warning that the group would be willing to challenge GOP freshmen who didn’t fight hard enough to reduce spending. Nevertheless, the group still recognizes the 2012 spending reductions achieved under the August deal as progress. “I think it will resonate as a good start,” Brandon concludes.

Even legislators who are itching for a 2012 fight will wait until the final details are released. If they do abide by the debt-ceiling deal, GOP leaders will have to reconcile the Ryan budget that passed the House with the $1.043 trillion budget agreed to in August, which caps security spending at $684 billion and non-security spending at $360 billion. The Ryan budget’s security spending is too high by $10 billion and non-security spending is too low by about $35 billion, according to Richard Kogan, a senior fellow at the Center for Budget and Policy Priorities. One way that legislators could make up the difference for non-security spending would be to set spending levels at 5.1 percent lower than the 2011 budget, Kogan explains. Doing across-the-board reductions could help leaders from both parties avoid potentially contentious fights about which departments or agencies should have their funding cut.

Restive Republicans could still use the 2012 budget as a way to roll back regulations, attaching riders restricting abortion or EPA rules, as they’ve done in the past. But with much more at stake over the supercommittee and Obama’s jobs plan, they might choose their battles. “I think that the risk of bringing back brinksmanship or another potential shutdown is not something right now that we need,” House GOP Leader Eric Cantor said earlier this week, backing off the hard line from Boehner’s office. Why quibble over billions when trillions in spending are on the table?

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