Federal Budget Policy

Feb 8, 2016

Top 400 Taxpayers See Tax Rates Rise, But There’s More to the Story

As Americans were gathering party supplies to greet the New Year, the Internal Revenue Service released their annual report of cumulative tax data reported on the 400 tax r...

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Feb 4, 2016

Chlorine Bleach Plants Needlessly Endanger 63 Million Americans

Chlorine bleach plants across the U.S. put millions of Americans in danger of a chlorine gas release, a substance so toxic it has been used as a chemical weapon. Greenpeace’s new repo...

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Jan 25, 2016

U.S. Industrial Facilities Reported Fewer Toxic Releases in 2014

The Toxics Release Inventory (TRI) data for 2014 is now available. The good news: total toxic releases by reporting facilities decreased by nearly six percent from 2013 levels. Howe...

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Jan 22, 2016

Methane Causes Climate Change. Here's How the President Plans to Cut Emissions by 40-45 Percent.

UPDATE (Jan. 22, 2016): Today, the Bureau of Land Management (BLM) released its proposed rule to reduce methane emissions...

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Watcher: July 12, 2005

Jul 12, 2005 by Guest Blogger

Federal Budget

Minnesota Government Experiences Unprecedented Shutdown Due to Budget Deadlock
Expiring Tax Cuts Will Prove Costly to Extend

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ET Non-Affect on Farms: NY Times and CBPP Weigh In

Jul 11, 2005 by Adam Hughes*

Sunday's New York Times included an article discussing the findings of the estate tax report released by the CBO last friday. The article notes that the number of farms owing the estate tax when the owners die has fallen by 82 percent since 2000. The number has fallen to 300 farms. The estate tax raised an estimated $23.4 billion last year from the richest 1 percent of Americans. Responsible reform, as opposed to repeal, is necessary in order to ensure this continued source of much-needed revenue. For more information, also see this new Center on Budget and Policy Priorities analysis of the CBO report.

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Minnesota Experiences Unprecedented Government Shutdown Due to Budget Deadlock

A budget deadlock in the Minnesota state legislature led to a partial shutdown of the state government, temporarily leaving thousands jobless and halting many important public services. This government shutdown, unprecedented in Minnesota, could have been avoided had the legislature passed a simple stopgap spending bill to fund the government at previous levels until a new budget could be worked out.

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High Medicaid Costs Loom for State Budgets

Jul 8, 2005 by Guest Blogger

According to a new report issued by the National Governor's Association, many state budgets are near historical levels of growth. Only five states' revenues for fiscal year 2005 are below projections, while 42 states generated more tax revenue than they planned. Despite this good news, the NGA does caution in their report that Medicaid costs for long-term care and other services still threatens budgetary stability. NGA Executive Director Raymond Sheppach stated, "The continued rise in health care costs, spurred by Medicaid, continues to throw a wrench in the recovery of many states." Medicaid, in fact, has now surpassed education as the greatest overall expense to states.

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Estate Tax Effects on Small Farms and Businesses

Jul 7, 2005 by Guest Blogger

The Congressional Budget Office (CBO) released a report today called "Effects of the Federal Estate Tax on Farms and Small Businesses." The report, which was prepared at the request of Senate Finance Committee Ranking member Max Baucus (D-MT), looks at how family farms and small businesses are truly affected by the existence of an estate tax. Proponents of estate tax repeal often make the argument that the tax unfairly hurts family farms and small businesses. In reality, a number of exemptions for family farms and small businesses exist, which can serve to significantly lower the number of estate tax filers. This analysis, which uses data from 1999 and 2000, looked at the effects of freezing the estate tax exemption level at $1.5 million, $2 million, and $3.5 million. The report found that any of those expemtion levels, along with a 48 percent tax rate and a large Qualified Family-Owned Business Interest (QFOBI) would substantially reduce the number of small businesses and farmers affected by the tax. The estate tax needs to be reformed so that in 2011 (when it is scheduled to revert to it's pre-2001 form), family farms and small businesses are not unfairly burdened with the tax. However, as this report alludes to, repeal is not necessary in order to reduce the burden on family farms and small businesses. Deductions like QFOBI as well as raising the exemption level to one of the above-mentioned levels can work to do the accomplish the same end.

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Creating Private Accounts With the Surplus is a Bad Idea

Jul 6, 2005 by Guest Blogger

The White House is continuing to push for legislation which would create private accounts funded by payroll taxes, even though Democrats remain almost unanimously opposed and some top congressional Republicans want to scale back such plans. Some House Republicans support Ways and Means Chairman Bill Thomas' (R-CA) proposal, which creates these accounts and while also claiming to move the program towards solvency. Yet although he has the support of some, many House members on both sides of the aisle continue to remain skepitcal about moving a solvency bill loaded with benefit cuts. As this Economic Snapshot from the Economic Policy Institute illustrates, the plan to create private accounts out of the Social Security surplus is less sound than it appears. As EPI says, "Proponents tout this plan as a way to 'stop the raid' on Social Security, but, like other privatization proposals, it diverts money from the trust fund and relies on infusions of general revenues to avoid worsening the trust fund balance." The Social Security surplus next year is projected to be around $85 billion. EPI estimates, "credits in the accounts would start at 2.2% of payroll in 2006 and shrink thereafter, dropping below 2% by 2009, below 1% in 2014, and to zero in 2017. Over 11 years, the typical worker would probably accumulate about three to five thousand dollars in such an account and face a comparable debt to the government."

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Minnesota State Government Shuts Down

Jul 1, 2005 by Guest Blogger

Today, parts of the Minnesota state government shut down for the first time in history, leaving 9,000 state employees without jobs, pay, or benefits. The shut down occured at midnight last night because lawmakers failed to to pass a stpgap plan to keep the government up and running while budget negotiators continue to work on funding details. Senate Majority Leader Dean Johnson, a Democrat, said ''We need to fix it today. As far as I'm concerned, a one-day partial government shutdown is enough.'' While many states often miss their budget deadlines, their governments continue to run because of laws that automatically extend spending past the end of its fiscal year if a new budget is not approved. The major services affected in Minnesota Services were the highway rest areas, which closed, and the issuing of new driver's licenses. Also significantly affected were the 9,000 employees who were locked out of their jobs. Hopefully this shut down will be temporary, and state legislators will consider passing budget process laws to avoid this in the future. New York Times article: Minnesota Government Shuts Down; 9,000 Jobless

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Senate Moves Ahead On SS Legislation

Jul 1, 2005 by Guest Blogger

Along with work happening in the House, the Senate Finance Committee also plans to move ahead with work to draft a Social Security bill. The Finance Committee staff plans to meet next week during the July 4 recess with the goal of having a draft ready to present to senators when they return. The focus during staff sessions leading up to this work has been mainly on how to work payroll tax funded "carve-out" accounts into a solvency bill. Apparently, tax increases are off the table, and Senate Finance Committee Chairman Grassley is continuing to push for larger carve-out accounts than proposed last week by Sen. Jim DeMint, (R-SC), sources said. It is not clear yet if the legislation will end up including carve-out accounts or "add on" accounts that are funded outside the Social Security system. Apparently, Grassley will insist on legislation that includes accounts as well as provisions for making the system solvent, even if the House does only a limited DeMint-style proposal without addressing solvency.

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White House Power Grab Puts Public at Risk

Statement of Robert Shull, Director of Regulatory Policy & Adam Hughes, Budget Policy Analyst
The White House submitted a legislative proposal to Congress today that would imperil the balance between the executive and legislative branches by concentrating power in the White House free of democratic accountability and would expose long-standing public protections to powerful special interests and industry insiders.

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House Ways and Means Keeps Talking Private Accounts

Jun 30, 2005 by Guest Blogger

Yesterday the House Republican Conference met to discuss a Social Security proposal to create private accounts by using the "Social Security surplus." The House Republicans, who could move a bill as early as July, have called the creation of private accounts one of three parts they would hope would be included in reform legislation; the other two parts would address solvency and private pension security issues. House Subcommittee on Social Security Chair Jim McCrery (R-LA) said the legislation would "stop the raid on Social Security.... Every penny of payroll taxes will be paid on Social Security benefits." However, the plans discussed so far do not address solvency and will drain money from other government programs. Ways and Means Ranking Member Charles Rangel (D-NY) called the GOP plan "a scam that doesn't stop their raid on Social Security and starts privatization." House Republicans are also arguing that the GOP bill will increase transparency by exposing the true size of the deficit, since the government won't be able to "borrow" from the surplus anymore to pay down the deficit. In 2004, $155.2 billion of the Social Security surplus was loaned to the government in return for Treasury bonds. Had the government not been able to borrow that money, the deficit would have been $567 billion as opposed to $412 billion (which was a record high as it is). However, if Social Security were simply "on-budget" instead of "off budget," the surplus would not help mask the true size of deficits, because the government wouldn't be able to borrow it in order to pay down the deficit. Therefore, there are other ways of increasing transparency besides the creation of these surplus-funded private accounts.

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