Obama Administration Could Freeze Tax Withholding at 2012 Levels to Blunt Fiscal Slope Impact in Early 2013

By: Monday November 5, 2012 9:20 am

The lame duck session will, at best, provide a temporary fix for the fiscal slope, according to House Speaker John Boehner. He expressed a philosophical opposition to a lame duck session passing major legislation – “lame duck Congresses aren’t known for doing big things and probably shouldn’t do big things” – that probably looms larger than anything. So the best-case scenario is some kind of stopgap that kicks things into next year, from the perspective of avoiding the slope.

 

Obama: Sequester Cuts to Defense “Will Not Happen”

By: Tuesday October 23, 2012 9:45 am

OK, “it will not happen” is new. And this comes on the heels of the White House digging in and saying that the President would sign nothing related to the fiscal cliff unless the top two marginal tax rates increase back to Clinton-era levels. That would contradict the sureness of “it will not happen.”

Debate Preview: Where Are the Jobs Questions?

By: Wednesday October 3, 2012 5:15 pm

Thoughts turn to tonight’s Presidential debate, which is scheduled to focus on domestic issues, particularly the economy. These debates actually matter less than the media would have you believe, at least according to the political science literature. But they may be crucial in ways outside the mere political sphere and in terms of the policy going forward.

Game-Planning the Proper Economic Response in the Lame Duck Session

By: Tuesday October 2, 2012 2:45 pm

With the three-stage grand bargain rocket in assembly, it’s worth stepping back and figuring out what the optimal policy would be as we head down the fiscal slope. In other words, what’s the counterpoint to slashing spending and the social safety net in exchange for a modicum of tax increases? And what’s the best way to that goal?

Key Senators Hard at Work on Three-Stage Grand Bargain Rocket

By: Tuesday October 2, 2012 7:25 am

Jonathan Weisman’s lead story in today’s New York Times puts together the three-stage process key Senators want to use to force a grand bargain on the country, which would put Medicare and Social Security on the table for cuts. Right now this hasn’t advanced to the upper echelons of leadership, and the best hope to stop it remains House Republican antipathy to tax increases. But here’s what it looks like.

Defense-Minded Senators Broach Idea of “Balanced” Solution to Avoid Sequester

By: Tuesday September 25, 2012 6:38 am

A curious coalition has come together to petition the Senate leadership of both parties to work on a bipartisan deal to avoid the sequester, the automatic cuts to defense and discretionary spending. Six senators, three in each party, wrote the letter to Harry Reid and Mitch McConnell. It’s mostly generic, but the identity of those involved does say something about what could come in the lame duck session.

House Passes 6-Month Continuing Resolution to Fund Government

By: Friday September 14, 2012 9:45 am

The House passed a six-month spending bill that will keep the lights on in government agencies until March 2013. Democrats and Republicans made a bet that the next Congress will find more favorable terrain for them, and kicked any contentious spending issues into it. They may do the same on the fiscal cliff, but there’s not likely to be any action there until the lame duck session, when they’ll know the outcome of the elections. So the calculus could change there.

Gang of Eight Discusses Six-Month Punt for Fiscal Cliff

By: Wednesday September 12, 2012 2:00 pm

Yesterday, John Boehner appeared to wave a white flag on talks aimed at resolving the fiscal cliff. Harry Reid reacted to that with disappointment, saying that there’s still time for a deficit reduction deal. But the real endgame – at least for the lame duck session – is coming into focus, with one of those “gang of” eight groups trying to negotiate a six month deal.

CBO: Letting Bush Tax Cuts Over $250,000 Expire Gains Nearly $1 Trillion Over Decade

By: Monday August 27, 2012 11:00 am

The Congressional Budget Office has calculated that ending the Bush tax cuts for earners on income over the first $250,000 would contribute $950 billion over a ten-year period. $823 billion of that would come from the increased revenue, and another $127 billion would arise from the lower interest on the associated debt.

Getting Things Straight on the Military Sequester

By: Wednesday August 15, 2012 2:53 pm

Justin Elliott has a useful story on how the press and politicians have inflated the military budget cuts that are part of the sequester that triggers at the end of the year. The total budgetary savings from the sequester are $1.2 trillion, equally divided between defense and discretionary spending. However, that includes the savings that come from reduced interest payments over ten years. If you borrow less because of spending cuts, your financing costs go down, to put it simply, and the annual cuts are closer to just $55 billion/year for 9 years.

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