Blog: The Fine Print / Revenue & Spending

Economic Slowdown Taking a Toll on Budget Deficit

Jan 8, 2008 by Dana Chasin

According to the CBO Budget Review, released yesterday: The federal budget deficit was about $107 billion in the first quarter of fiscal year 2008, CBO estimates—about $27 billion more than in the same period last year. Outlays have risen by 9 percent compared with their level in the first three months of [fiscal year] 2007, whereas revenues have grown by about 6 percent. The deficit increase is attributed to:

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    The Bush Administration Still Doesn't Care About Children

    Jan 7, 2008 by Matt Lewis

    Bush is preventing some states from opening up Medicaid to more children. The New York Times: The Bush administration is imposing restrictions on the ability of states to expand eligibility for Medicaid, in an effort to prevent them from offering coverage to families of modest incomes who, the administration argues, may have access to private health insurance. The restrictions mirror those the administration placed on the State Children's Health Insurance Program in August after states tried to broaden eligibility for it as well.

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    A Rebirth of Keynes?

    Jan 3, 2008 by Matt Lewis

    Joseph Stiglitz sees stagflation on the horizon. If it does hit, what's a fiscal policy wonk to do? For those who think that a well-managed globalisation has the potential to benefit both developed and developing countries, and who believe in global social justice and the importance of democracy (and the vibrant middle class that supports it), all of this is bad news. Economic adjustments of this magnitude are always painful, but the economic pain is greater today because the winners are less prone to spend.

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    Bring The Money Home

    Jan 2, 2008 by Matt Lewis

    The Bush administration has consistently tried to make the war in Iraq seem like a costless effort. But we pay for every dollar spent in Iraq, particularly in terms of opportunity costs. Every dollar spent in Iraq is lost potential spending in domestic programs.

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    SCHIP Extended, But Won't Be Expanded For A While

    Jan 2, 2008 by Matt Lewis

    President Bush signed a short-term extension of the State Children's Health Insurance Program last Saturday. The bill is supposed to ensure that nobody will be cut from the program as it is now, but it also makes expanding it a non-issue until 2009, since the extension lasts until April 2009. In other words, the 4 million children who would have been covered under the vetoed SCHIP expansion will go without health insurance for at least another year, thanks to the president and the conservative coalition in the House.

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    2007 Budget Endgame: A Re-Capitulation

    Dec 21, 2007 by Dana Chasin

    The Devils in the Details Now that Congress has completed its work on the budget for 2007, we can take a critical backward glance at the process and where it ended up. Althought there are silver linings, as noted in 2007 Budget Endgame: Recapitulating the "Capitulations", in the main, it's not a pretty picture.

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    Congress Abandons Fiscal Responsibility

    Dec 20, 2007 by Adam Hughes*

    OMB Watch released a statement yesterday afternoon harshly criticizing the Democratically control Congress and the president for abandoning fiscal responsibility in the final hours of 2007 after they entire year was spent adhering to or attempting to adhere to righting our nation's fiscal course. From the statement: Adding insult to a year of fiscal policy injuries, Congress has abandoned fiscal responsibility by waiving pay-as-you-go (PAYGO) rules in order to pass a one-year patch to the alternative minimum tax (AMT) without offsets. This tax cut adds another $50 billion to an already expanding deficit next year, and will give fewer options for our children and grandchildren to seek solutions to the problems of tomorrow. While I expect as much from President Bush, this is a huge disappointment from the new Democratic majority in Congress whose number one promise was to uphold pay-as-you-go (PAYGO) rules. So much for promises: This vote is particularly disappointing as Democrats have gone to great lengths this year to comply with PAYGO rules, particularly on spending. From student loan reforms to expansions of the State Children's Health Insurance Program and Food Stamps, Democrats have negotiated the turbulent fiscal waters of the federal budget responsibly, diligently, even courageously. That is why at this point, after all that work and sacrifice, the compromises and the concessions needed to construct balanced solutions to the AMT problem, it is unacceptable for them to abandon their stated principles of fiscal responsibility because they fear Americans will not accept paying up front for the services and benefits the country demands. As the statement makes clear, there is plenty of blame to go around in Washington for this policy failure. What an awful way to end 2007.

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    What's Left of PAYGO? A Promissory Note

    Dec 19, 2007 by Dana Chasin

    The "I'll gladly pay you Tuesday for a hamburger today" Plan Moments before the last rites were performed this afternoon on PAYGO following a 352-64 vote in favor of an un-paid-for AMT patch, House Speaker Nancy Pelosi promised that it would be revived next year, saying offsets would be found retroactively for the cost of this year's AMT patch before Congress moves forward on a tax extenders and AMT package next year. Next year? Why should anything be any different next year? Good luck cashing that promissory note -- that's one thing that is never intended to be collected.

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    Requiem for a Budget Resolution

    Dec 19, 2007 by Dana Chasin

    The high-water mark of the budget-making process in 2007 may have been Congress' adoption of a budget resolution, a worthy accomplishment rarely achieved in recent years, but hardly a substitute for regular order enactment of appropriations bills pursuant to it. Why was Congress unable to build on its budget resolution this year, why was it left to whither on the vine? Stan Collander, in A Review Of 2007 offers a cogent explanation:

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    Congress Demands Investigation of Overuse of Contractors

    Dec 19, 2007 by Adam Hughes*

    Walter Pincus reported in the Washington Post on Monday that the fiscal 2008 intelligence authorization bill includes a requirement that Director of National Intelligence Mike McConnell produce a report by March concerning the "activities performed by contractors" in all 16 intelligence agencies and how the outsourcing process at those agencies is overseen. Apparently Congress is concerned the intelligence community does not understand which functions can appropriately be outsourced and which should be handled by government employees. Perhaps they are also concerned about one estimate showing a core government worker, on average, costs about half as much ($126,500) as a average contracted employee ($250,000). That fact alone is cause for concern. How are contractors supposed to be saving the government money when they are charging twice as much as it would cost the government? Tom Shoop, who blogs over at Government Executive magazine, quoted another blogger who focuses on the intelligence community who correctly points out the funding structure Congress has implemented has lead to increased levels of outsourcing: By limiting the number of positions within the Intelligence Community while adding funds for services, Congress set the stage for the wide scale outsourcing we see today, with some 70% of the de facto workforce of the CIA's National Clandestine Service made up of contractors. After years of contributing to the increasing reliance upon contractors, Congress is now providing a framework for the conversion of contractors into federal government employees--more or less. An interesting aspect to this issue is that Congress has allowed Mr. McConnell the leeway to automatically change positions held by contractors into full-time government positions. McConnell has the authority to increase the size of the intelligence agencies by up to 10 percent. This approach might be one way to fight back against the raft of outsourcing that has accelerated during the Bush presidency - by giving executive branch personnel the authority to expand government positions automatically rather than having to pound a higher appropriations number through Congress every year for staff increases. I'm curious to see if this tactic will work, and if so, if it will be tried elsewhere in the Federal government. Stay tuned...

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