Blame Will Avert a Government Shutdown

Unless Congress comes to an agreement over current fiscal year funding soon-- and one acceptable to President Obama -- many operations of the federal government will shut down after March 4. Although what exactly will be shutdown remains uncertain, it's likely the public will notice and be inconvenienced while hundreds of thousands of federal employees will be furloughed. In short, it would be a huge mess and someone will have to take the rap.

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Handicapping the Future

As part of his scheme to cater to business interests, President Obama yesterday appointed Intel CEO Paul Otellini to the President's Council on Jobs and Competiveness. The appointment of a corporate leader to such an advisory panel isn't particularly surprising, given that Obama has been bending over backward to make sure the opinions of Big BusinessTM are heard in the White House (you know, because they're soooo underrepresented). What is surprising is that Otellini has a blind spot for honest appraisals of economic policy.

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The Budget That Won't Be (But Still Matters)

This morning, President Obama officially proposed to Congress his FY 2012 budget. Marking the start of a year-long poker game, this is just an opening bid. Republicans will soon follow up within the next month or so their counter offer when the House votes on its FY 2012 budget resolution. Then the Senate will throw in its two cents (so to speak) and make its suggestion. Months later, actual spending bills will be offered, debated, negotiated, and adopted (though probably not on time) at the end of the year.

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House Budget Fail?

It's been an action packed week in Congress as the House tries to put together a $1.06 trillion spending bill to fund the operations of the federal government for the remaining seven months of the 2011 fiscal year. A divided Republican House caucus may be on their way to a huge tactical blunder that could result in a government shutdown or the failure of staying true to their pledge to massively cut federal spending.

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SOTU Budget and Economy Reactions

Here are a few clips from insightful commentaries on the president's State of the Union Address on what President Obama had to say about the federal budget and the economy.

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If I Hire You, That's Not Creating a Job

OMB Watch is back from the holiday break! I'm personally happy about that, because I have the sense that the new Congress, like the old Congress, is going to provide us lots and lots of good blogging material. Today, I get to put up tortured claims from incoming House Oversight Committee Chair Darrell Issa (R-CA) that teachers and police officers don't have real jobs and that if your private-sector job was ever cut, it never actually really existed as a real job.

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Federal Employees: Doing More with Less...Already

President Obama has proposed freezing salaries of most federal employees for the next two years as part of his effort to address the federal budget deficit. Projected to save some $5 billion over the next two years, the freeze would shave 0.22 percent off the $2.3 trillion in deficit spending over that time, making it a largely token measure.

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All Your Tax Cuts Are Belong to Us

This chart of average tax cuts per income group under several plans to extend various provisions of the Bush tax cuts, via the Washington Post's Ezra Klein, made my jaw drop this afternoon.

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$3.3 Trillion Deficit Reduction Plan Set to Take Effect Jan. 1

One deficit plan that's not getting much attention, and one which can easily pass a Republican-controlled Congress, is the one that the Republican-controlled Congress approved in 2001 (and further augmented in 2003): The 2001-2003 Bush tax cuts.

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The $80 Billion Middle Class Tax Hike

In this week's Watcher, we ponder the fate of fiscal policy in the lame duck session of Congress set to commence on Nov. 15. Our article and indeed most of the punditry, analysis, news, and campaign rhetoric has all but completely ignored the fate of some $80 billion in tax breaks for the middle class.

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