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.Read Full Article
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.Read Full Article
We already know that the House Republicans support increasing the debt limit. All but four of them recently voted in favor of a budget blueprint that calls for adding $9 trillion to the debt subject to limit over the next decade. Yet somehow they have convinced Obama and the Democrats that they have to get something in return, like spending cuts that make tax increases less likely, in exchange for actually voting for the debt limit increase they've already endorsed.Read Full Article
Should taxes be on the table for balancing the budget, or should we look at spending cuts only? This is they key partisan debate right now in Congress, and it's going to come to a head in the next few weeks when the House and Senate vote on the debt limit and, likely, some kind of structural enforcement mechanism for bringing annual deficits down to zero.Read Full Article
On voice vote, the House of Representatives this afternoon passed a bill that would put pressure on the big international financial institutions to completely cancel all of Haiti's debt so that the country can use what resources it has for rebuilding from the earthquake they suffered in January, 2009.
The bill is H.R. 4573, sponsored by Rep. Maxine Waters [D, CA-35] and co-sponsored by 69 other lawmakers, mostly Democrats. According to the official title, it would "direct the Secretary of the Treasury to instruct the United States Executive Directors at the International Monetary Fund, the World Bank, the Inter-American Development Bank, and other multilateral development institutions to use the voice, vote, and influence of the United States to cancel immediately and completely Haiti's debts to such institutions."Read Full Article
Still no path forward for health care reform. House Democrats have a light legislative schedule this week, and they will hear Obama's State of the Union address on Wednesday. The Senate's going to be voting on a slate of controversial deficit amendments and on confirming Fed Chief Ben Bernanke to another term.Read Full Article