Federal Debt and Deficit | Center for Effective Government

The Wrong Approach to the Deficit Could Imperil More than Just the Recovery

by Craig Jennings, OMB Watch, Jan. 24, 2011
When President Obama delivers the State of the Union address Tuesday, one topic he will likely devote many words to will be the nation’s finances. For months, we’ve heard calls from all sides to “rein in the deficit” – a deficit so massive that, if some politicians are to be believed, it may plunge the nation into another Dark Ages. If Obama echoes these unceasing cries coming from inside the Beltway and sets forth a budget plan designed to meet the needs of Washington politics and not the nation, he could imperil the nascent economic recovery and future growth while stifling public protections, the effectiveness of the federal workforce, and the economic well being of millions of families.

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OMB Watch Criticizes House Vote on Estate Tax Amendment

WASHINGTON, Dec. 17, 2010—OMB Watch today criticized the House's Dec. 16 failure to adopt Rep. Earl Pomeroy's (D-ND) estate tax amendment to the Bush tax cut compromise reached by President Obama and congressional Republicans. The vote against the Pomeroy amendment indicates that the nation's fiscal priorities have been cast aside in favor of the estate planning needs of the wealthiest 0.3 percent of Americans.

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OMB Watch Pans Deficit Commission Plan

WASHINGTON, Dec. 1, 2010—OMB Watch today panned the plan proposed by the co-chairs of the National Commission on Fiscal Responsibility and Reform to reshape the nation’s fiscal priorities. While the plan contains some praiseworthy provisions targeted at the tax code and the federal budget process, overall, it represents an unfortunate step backward in meeting the needs of the nation’s working families.

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Commentary: Federal Debt and Its Implications for Economic Stability

When the Congressional Budget Office (CBO) produced a brief in late July on the nation’s debt levels and the risk they present to the economy, those pushing for immediate deficit reduction jumped on the report as evidence that the U.S. is about to go over a financial cliff. Upon closer inspection, though, the greatest threat facing the country is still the Great Recession and the lingering effects thereof.

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Americans for a Fair Estate Tax Urges Senators to Co-Sponsor the Responsible Estate Tax Act

WASHINGTON, July 26, 2010—Americans for a Fair Estate Tax (AFET), a coalition of national and state organizations, sent a letter to the Senate today asking members to co-sponsor the Responsible Estate Tax Act, S. 3533. Over seventy organizations, including major labor, religious, social equity, and good government groups, are urging senators to support the bill. OMB Watch is a member of AFET and signed on to the letter.

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Commentary: Fiscal Hawks Shaping Focus of Debt Commission

On April 27, President Obama’s fiscal commission convened its first meeting, kicking off a seven-month discussion among 18 panelists on ways the federal government can reduce the federal budget deficit and shrink the national debt. The next day, many of those same panel members, including co-chairs Erskine Bowles and former Sen. Alan Simpson (R-WY), attended a "Fiscal Summit" organized by the Peter G. Peterson Foundation to discuss the same issues. Talk about how to overcome deficits and the debt at the Peterson event, which centered on eviscerating the nation's social safety net, mirrored discussion at the commission meeting.

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An OMB Watch Statement on President Obama's Fiscal Year 2011 Budget Request

WASHINGTON, Feb. 2, 2010—President Obama has sent his budget request for fiscal year 2011 to Congress. Far from bringing change, it at best tinkers with federal priorities while perpetuating the wrong budget agenda.

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Commentary: Deficit Commissions Unlikely to Produce Results

On Jan. 26, the Senate rejected an amendment sponsored by Sens. Kent Conrad (D-ND) and Judd Gregg (R-NH) that would have created a bipartisan deficit commission. Due to the complex nature of the proposal, there is a low probability that such a commission would succeed in its goal to slow the growth of the national debt. Despite the improbability of success, there is much speculation that the president will now create a similar deficit commission through executive order.

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House Passes Statutory PAYGO Bill

The House passed legislation (H.R. 2920) on July 22 that would reinstate statutory "pay-as-you-go" (PAYGO) budgeting rules, which were allowed to expire in 2002.

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House Hearing Questions Whether PAYGO is Enough to Control Spending

The House Budget Committee held a hearing on June 24 on the Statutory Pay-As-You-Go (PAYGO) Act of 2009, which was recently introduced by Rep. Steny Hoyer (D-MD). During the hearing, House members focused on the enforcement mechanisms in PAYGO, the significant exemptions granted under the proposed legislation, and whether the bill is the appropriate method to reinstate fiscal discipline in Congress.

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