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For months, Democrats and Republicans in Congress have been talking about the need to come together on a plan to extend several policies that will expire at the end of the year. But with just a handful of days left before the holiday break, the two sides are only growing further apart on how to get it done.

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Supercommittee Failure and Stimulus

November 22, 2011 - by Donny Shaw

While the failure of the supercommittee may be a good thing for long-term deficit reduction, it's not great for what Congress should really be working on -- supporting the economic recovery in the near term. There was some hope that if the supercommittee reached a deal, it would include an extension of some of the fiscal stimulus measures that are set to expire at the end of December. With no deal, the route to sustaining these measures is more difficult, and that threatens the small gains in employment we've seen in recent months.

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Supercommittee to Admit Failure

November 21, 2011 - by Donny Shaw

There was never any reason to think that giving and inordinate amount of power to a subset of Congress split between the two parties would somehow solve the partisan dispute over whether or not to raise taxes. So it's not surprising to read that with just a few days left before their deadline, discussions have turned to how to announce their failure:

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Here's an idea for how Congress and the supercommittee can overcome gridlock and reduce deficits: stop paying so much attention to pundits and corporate lobbyisyts, and, instead, start listening to the people they were elected to serve. Unlike the hardened and polarized Washington establishemnt, the public-at-large has broad agreement on several proposals for handling budget deficits.

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Dems Intro Bills to Extend Unemployment Insurance

November 4, 2011 - by Donny Shaw

With all jobs bills dead and the supercommittee almost certain to deadlock, Democrats in both chambers have introduced stand-alone legislation to protect the hardest-hit victims of the recession -- the long-term unemployed.

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Next Dem Jobs Bill to Focus on Infrastructure

October 21, 2011 - by Donny Shaw

Majority Leader Harry Reid [D, NV] has selected the next piece of Obama's jobs bill for Republicans and conservative Democrats to filibuster.

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Checking in on the Supercommittee

October 20, 2011 - by Donny Shaw

When Congress created the deficit supercommittee they attached a trigger to it that would automatically enact large cuts in defense spending if they failed to vote out a proposal. The idea was that nobody in Congress wants to make major cuts to defense so the threat would compel the supercommittee to accomplish the kind of deficit-reduction compromise that the full House and Senate were unable to achieve. More than halfway through the supercommittee's tenure, however, the only progress being made involves finding a way out of the trigger.

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House Readies a Bipartisan "Jobs" Bill

October 19, 2011 - by Donny Shaw

Republicans and Democrats in the House are throwing their support behind a bill to let federal contractors retain more of their payments up front. They're planning to pay for it by scaling back federal health care subsidies for the poor and middle class.

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Dems Plan Next Jobs Bill Vote

October 17, 2011 - by Donny Shaw

Following up on last week's symbolic vote on Obama's jobs bill, Senate Majority Leader Harry Reid [D, NV] has decided on the next step. He's whittling the $447 billion down to a single, fully-offset $35 billion spending measure that would provide state and local aid to public employees facing layoffs. He's planning to bring it up for a vote in the Senate later this week. 

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Prospects Dim for Unemployment Insurance Extension

October 11, 2011 - by Donny Shaw

The American Jobs Act contains a provision that would be extremely stimulative in terms of GDP expansion and jobs growth while also providing direct relief to the workers who have been hardest hit by the recession. Yet in discussions over which parts of the bill to keep for inclusion in a smaller, bipartisan package after the American Jobs Act is officially killed, that provision doesn't seem to be popular.

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Dems Revise Jobs Bill to Make it Fail Less Hard

October 5, 2011 - by Donny Shaw

At this point there are basically two conceivable ways for Obama and the congressional Democrats to get their jobs bill, the American Jobs Act, through Congress this year. They could cut it down dramatically to things that could potentially get bipartisan support, like the payroll tax holiday and the unpaid job training program for the unemployed, or they could go hardball and threaten to withhold appropriations and shut down the government. This morning, Majority Leader Harry Reid [D, NV] (pictured) announced what he intends to do. He's going with none of the above, choosing the purely political option instead.

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It's Still a Democracy for the Rich and Connected

October 3, 2011 - by Donny Shaw

Last week I wrote about how the deficit supercommittee has so far held the majority of its meetings in complete secrecy. Well, as it turns out, that's not exactly true. According to Politico, the committee members have choosen a select group of citizens to give special access to their private meetings to. You and I just happen to not be on the list.

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Supercommittee Meeting Secretly

September 28, 2011 - by Donny Shaw

The "public access and transparency" rules that the deficit supercommittee adopted when they first convened contain a major loophole. If they want to block the media and the public out of their meetings, all they have to do is vote to do so and they can operate in total secrecy. Not surprisingly, invoking that loophole seems to have become their standard operating procedure.

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Previewing the Obama Jobs Plan

September 7, 2011 - by Donny Shaw

Various news outlets are out this morning with a top-line number for the stimulus measure that Obama will be proposing before a jointy session of Congress tomorrow night -- $300 billion. According to the reports, most of that money would be used for extending current measures that are scheduled to expire soon. Just $100 billion or so would be spent on new stimulus measures, which is clearly not enough of an investment to create the levl of demand for goods and services that's needed to get businesses hiring. Let's take a look at the specifics.

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On jobs, Congress is probably not going to do anything. On deficits, however, expect Congress to act. It's an unfortunate situation. Without congressional action on jobs, the unemployment rate is expected to stay around 9% -- or even get worse -- until 2014 or so. But on deficits, if Congres doesn't act the problem will basically take care of itself. As the CBO explained recently, under current law, annual deficits are on track to shrink from where they are today (8% of GDP) to about 1% of GDP by 2015. That's because Congress' of the past created policies with expiration dates and controls that were designed to prevent them from being perpetual drains on the budget. For example, the 2003 Bush tax cuts were passed under special rules that make it easier for the majority party to overcome minority opposition for controversial legislation, but, in exchange, require the legislation to expire after 10 years. Other examples include the Alternative Minimum Tax and the formula the government uses to reimburse doctors under Medicare, both of which are "patched" by Congress year after year so that they don't end up raising taxes too much or reducing doctor pay.

The problem, however, is that doing nothing and letting these sunsets and budget controls do their job is that it would mean more of the burden would get shifted to people and interests groups with money and political influence. For that reason, Congress is not likely to keep their hands off.

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