CRFB Releases and Events

Event Recap: Fixing the Budget Process

As part of our Better Budget Process Initiative, the Committee for a Responsible Federal Budget recently hosted a briefing on Capitol Hill called “Fixing the Budget Process.” The event featured remarks from the House Budget Committee Chairman Tom Price (R-GA) and a panel of experts made up of Maya MacGuineas, president of the Committee for a Responsible Federal Budget; Paul Posner, former federal budget managing director at the Government Accountability Office; Dr. Stuart Butler, senior fellow in economic studies at the Brookings Institute; and Dr. Marvin Phaup, public policy & public administration professor at The George Washington University. The event was moderated by Kelsey Snell, a reporter for The Washington Post. It aired live on C-SPAN and can be viewed here.

Chairman Price kicked off the event with an overview of the country’s dire fiscal situation by describing the high and growing debt and slow economic growth. He noted that many of the problems we face are attributed to “extremely weak budget enforcement,” and he stressed the importance of reforming the budget process now instead of waiting for the debt to grow to 86 percent of Gross Domestic Product (GDP) by 2026. In lieu of offering specific suggestions for reform, Chairman Price gave three basic options for policymakers to choose from moving forward: increase taxes, decrease spending, or grow the economy. He also raised questions to frame the debate for budget process reform, inquiring whether Congress should face enforceable consequences for failing to produce a budget by a deadline, whether we ought to have fiscal targets and what they should be, what authority the budget committees should have in shaping and enforcing fiscal policy, what role the executive and the Congressional Budget Office should have in the process, what the budget baseline ought to be (current law, current policy, or zero baseline), how often a budget should be presented, and what should be done with unauthorized programs.

Event Recap: McCrery-Pomeroy SSDI Solutions Initiative Recommendations Release

On Wednesday, April 6, the McCrery-Pomeroy SSDI Solutions Initiative released its final recommendations and book of policy proposals dedicated to improving the Social Security Disability Insurance (SSDI) program. The book, SSDI Solutions: Ideas to Strengthen the Social Security Disability Insurance Program, represents the culmination of a nearly two-year effort to foster discussion on ways to improve the SSDI program for its beneficiaries as well as those who pay into the program and the economy as a whole.

A video of the event can be found below as well as a detailed recap:

Breaking Down CBO's Analysis of the President's Budget

The Congressional Budget Office (CBO) released its own estimate of the FY 2017 President's budget yesterday, a document that includes a 16-page report and several supplemental analyses. Our report on CBO's analysis breaks down the key budgetary takeaways, namely that while the budget does include substantive deficit reduction, it does not do enough to bring debt down as a share of GDP.

Our Analysis of CBO's January 2016 Budget and Economic Outlook Summary

The era of declining deficits is over. That's the conclusion of our analysis of the Congressional Budget Office's (CBO) January 2016 Budget and Economic Outlook summary. The report shows that deficits will once again start increasing by $105 billion from Fiscal Year (FY) 2015 to 2016. They will balloon to $1.4 trillion by FY 2026. Trillion-dollar deficits will reappear as soon as FY 2022 – 3 years earlier than CBO projected in August.

Read the full analysis.

The paper discusses how this year's forecast is much worse than last year's, largely due to lawmakers' fiscally irresponsible behavior – including passage of the unpaid-for tax extenders and omnibus legislation in December – as well as a gloomier economic picture. At this rate, public debt levels are expected to reach 86 percent of Gross Domestic Product (GDP) by 2026 – an even-more unsustainable level than our current debt of 74 percent of GDP.

2015’s Fiscal Follies and Reasons for Hope

It’s the end of the year and like so many organizations, CRFB wanted to share with you our top 10 list: a look back at Congress’s 10 top fiscal achievements of 2015.

The problem is, we couldn’t. Even pooling the creative minds of our entire staff, we could not produce 10 solid Congressional actions that reduced the national debt or deficit, or were a clear step toward a responsible federal budget.

Compiling a list of the year’s 10 greatest fiscal follies was a lot easier, so we are delighted to share that with you now. 

How a Fed Rate Increase Could Affect the Budget

Today, the Federal Open Market Committee, the Fed's interest rate setting and deliberative body that meets eight times a year, could announce that they will raise the federal funds rate to be above near-zero for the first time in seven years. There has been much debate about the appropriateness of a rate increase for the economy, but the decision also has budgetary consequences, which we discuss in an updated analysis Interest Rates and the Debt.

Read the full paper here.

With interest rates likely to return to more normal levels at some point, spending on interest on the debt will increase significantly as a result. If debt rises as it is projected to do in the future, we risk further increases in interest rates that will put greater pressure on the budget. Ultimately, the best way to guard against interest rate risks is to put debt on a downward path to lessen the negative effect of interest rate increases.

Update: What Will Happen If the Government Shuts Down?

Here we go again, again. With government funding set to expire at the end of the week and no deal on the table, it is possible that the government will shut down for the second time in three years or at least require another Continuing Resolution. While the Bipartisan Budget Act of 2015 set topline spending levels above the previous sequester caps, there is no set agreement on exactly how that money should be spent and which policies ought to accompany it in an omnibus appropriations bill. To help prepare for a possible shutdown, CRFB has released an updated primer on what happens in and the the consequences of a government shutdown.

The primer, Q&A: Everything You Should Know About Government Shutdowns, goes through the funding process and the budgetary, economic, and administrative consequences of a shutdown.

Update: Why Our Debt Is Still a Problem Even if Deficits Fall

September 30th marked the end of the Fiscal Year, and the final numbers are in.  The deficit for last year was $439 billion, according to the final report by the Treasury Department (a previous estimate from the Congressional Budget Office (CBO) had projected the deficit at $435 billion). We've released a short paper FY 2015 Deficit Falls to $439 Billion, but Debt Continues to Rise that shows even though this is roughly 10 percent below the FY 2014 deficit and nearly 70 percent ($439 billion) below its 2009 peak ($1.4 trillion), the country remains on an unsustainable fiscal path.

Click here to read the full paper

The decline in deficits from 2009 to 2015 was largely expected as a result of the recovering economy and the fading of measures intended to boost the recovery. While legislated spending reductions, tax increases, and other factors have played a role in reducing short-term deficits, the long-term challenge is still largely unaddressed: growing mandatory spending and relatively flat revenue are projected to cause deficits and debt to rise over the next decade and beyond, with trillion-dollar deficits returning by 2025, if not sooner.

What Will Happen If the Government Shuts Down?

Here we go again. With government funding set to expire in one week and no clear plan appearing yet, it is possible that the government will shut down for the second time in three years. The Senate voted down a continuing resolution (CR) that would have funded the government through December 11 but also defunded Planned Parenthood, a non-starter for Democrats and the Obama Administration. Senate Majority Leader Mitch McConnell (R-KY) is working on a plan for a clean CR, but whether that move will succeed or not is uncertain. To help prepare for the shutdown, CRFB has released a new primer on the consequences of a government shutdown, updating a report it last issued before the 2013 shutdown.

The Q&A goes through the funding process and the budgetary, economic, and administrative consequences of a shutdown. It answers 15 different questions:

How to Get This Year's Budget Process Back on Track

On October 1, lawmakers will have to pass new appropriations or a continuing resolution, or the government will shut down for the second time in two years. This is one part of the four-part "gathering storm" that lawmakers face over the remainder of the year. One of the sticking points in funding the government is the return of the sequester-level spending caps, which will essentially hold FY 2016 spending to the previous year's level. Both parties have proposed higher spending levels, but have done so in different ways. To show a way around the impasse, CRFB has released the Sequester Offset Solutions (SOS) plan, which provides $300 billion of sequester relief that is fully offset.

The SOS plan consists of four parts:

  • Sequester Relief: The plan repeals about half of the sequester over the next two years, then allows the spending caps to grow with inflation after 2017. This provides $300 billion of sequester relief in total with smaller amounts of relief over time.
  • Offsets for Two-Year Relief: To offset the $90 billion cost of the two-year sequester relief, the plan outlines $110 billion of savings split roughly equally between policies that build off the 2013 Ryan-Murray deal and targeted mandatory program savings and receipts from the President's budget. The savings are slightly higher than the cost to account for the interest costs associated with the upfront relief.
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