Commentary: Budget Cuts Imperil Vital Federal Role
Jun 15, 2010
Around the time that the American Recovery and Reinvestment Act (the Recovery Act) was being developed, a report co-authored by Christina Romer and Jared Bernstein indicated that passage of such an economic stimulus package could avert economic calamity. Yet now, with the unemployment rate hovering close to 10 percent, the president is setting about cutting federal spending by hundreds of billions of dollars in the coming years. The president's cuts are imprudent in the short run, given their potential to smother the burgeoning economic recovery before it can fully take hold, and could impair the federal government's ability to respond to economic or environmental disasters.
Senate Passes Limited "Audit the Fed" Amendment
May 18, 2010
During the ongoing Senate debate on the financial reform bill, Federal Reserve transparency briefly took center stage. Sen. Bernie Sanders (I-VT) introduced an "Audit the Fed" amendment to the bill during the week of May 16, which the Senate approved in a 96-0 vote after the amendment was greatly scaled back. The amendment would instruct the Government Accountability Office to "conduct a one-time audit of all loans and other financial assistance provided during the period beginning on December 1, 2007 and ending on the date of enactment of this Act."
Commentary: Fiscal Hawks Shaping Focus of Debt Commission
May 4, 2010
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.
Treasury's Rush to Sell Citigroup Shares Could Cost Taxpayers
Apr 6, 2010
On March 29, the Treasury Department announced that it would begin selling the 7.7 billion Citigroup shares it owns, which represent the government's 27 percent stake in the company. The move is the most significant step Treasury has taken so far in the long process of winding down the Troubled Asset Relief Program (TARP). Since selling the stock will generate more than $30 billion, a profit of at least $7 billion, many news reports are claiming it proves the bailout was a "great business" for the government. However, Treasury’s sale may be in conflict with one of TARP’s statutory goals: maximizing taxpayer returns.
read in fullCommentary: Why Discretionary Budget Caps Are Fiscally Irresponsible
Mar 23, 2010
With many families around the country facing financial hardship, fiscal hawks on Capitol Hill have begun ramping up their rhetoric: If America's families are forced to make hard decisions and cut back, they argue, why shouldn't their elected leaders do the same? During the week of March 15, Sens. Jeff Sessions (R-AL) and Claire McCaskill (D-MO) introduced an amendment to H.R. 1586 that aimed to give teeth to that rhetoric. The amendment's effects on the nation's long-term debt would have been minimal, while its impacts on millions of Americans would have been severe. The amendment ultimately failed on the Senate floor.
Commentary: Celebrating One of the Recovery Act's Legacies: Transparency
Feb 23, 2010
Feb. 17 marked the one-year anniversary of the American Recovery and Reinvestment Act, commonly called the Recovery Act. Both political parties celebrated the occasion with partisan attacks. Democrats heralded the act as having saved the nation's economy, while Republicans savaged it for being an expensive government program with little to show by way of jobs. While the two parties can argue over how effective the act actually has been, both can agree on one thing: the lasting legacy of the Recovery Act’s transparency provisions.
An OMB Watch Statement on President Obama's Fiscal Year 2011 Budget Request
Feb 2, 2010
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.
read in fullThe End of TARP to Be Met with Controversy
Jan 27, 2010
The Troubled Asset Relief Program (TARP) began with a single, basic idea: prevent imminent economic collapse. With that premise, then-Treasury Secretary Henry Paulson convinced Congress and President Bush to authorize $700 billion of emergency spending to undertake actions to avert such disaster. Now, with economic catastrophe averted but with the nation's economy still struggling, a new report turns policymakers' focus to the end of TARP.
read in fullCommentary: Deficit Commissions Unlikely to Produce Results
Jan 27, 2010
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.
read in fullFiscal Policy in 2009 – A Review
Dec 21, 2009
Federal fiscal policy has been front and center throughout 2009 as the Obama administration and Congress have gone to extraordinary lengths to bring the country's economy back from the brink of disaster. It seems like every week, we saw a crucial vote or major policy proposal released. A massive Wall Street bailout, an economic stimulus effort with unprecedented transparency provisions, an attempted reform of the financial regulatory system, a new presidential effort to reform the contracting system, significant gains in proper enforcement of the tax code, and a Congress that continued to fail at passing appropriations and tax bills in a timely manner have made for a pretty exciting, if not chaotic, year. Below is a review of some of the major developments in federal fiscal policy in 2009 from an OMB Watch perspective.
