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Renewing America

Ideas and initiatives for rebuilding American economic strength.

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Showing posts for "Debt and Deficits"

Policy Initiative Spotlight: Multiyear Budgeting

by Steven J. Markovich
President Obama's FY 2014 budget proposal is released (Gary Cameron/Courtesy Reuters). President Obama's FY 2014 budget proposal is released (Gary Cameron/Courtesy Reuters).

The U.S. budget process has become increasingly dysfunctional, a large factor in Standard and Poor’s downgrading the U.S. sovereign credit rating in 2011. Budgets were always passed for each fiscal year from 1977 to 1998, but in the thirteen fiscal years since, Congress has failed to adopt a budget five times, including for FY 2013. A continuing resolution—a stopgap spending measure—was passed in late March to fund discretionary programs of the federal government through the end of September, the last month of the 2013 fiscal year. Read more »

Battleground Budget

by Michael Spence
House Budget Committee member Marsha Blackburn (R-TN) displays a copy of U.S. President Barack Obama's FY2014 budget proposal on April 10, 2013 (Kevin Lamarque/Courtesy Reuters). House Budget Committee member Marsha Blackburn (R-TN) displays a copy of U.S. President Barack Obama's FY2014 budget proposal on April 10, 2013 (Kevin Lamarque/Courtesy Reuters).

MILAN – The world’s developed economies, of which the United States is by far the largest and systemically most important, face a range of difficult political and social choices. President Barack Obama’s proposed U.S. budget acknowledges and addresses those choices and tradeoffs directly and fully for the first time in the post-crisis period. Obama’s proposal is an important, honest, and politically courageous document. The debate that follows will largely determine whether the United States shifts toward a strong, inclusive, and sustainable pattern of growth and employment, and how the burden of moving to such a path will be shared by Americans of various ages, educational levels, incomes, and wealth. Read more »

U.S. Budget Policy: Problem Solved?

by Renewing America Staff

The Obama administration’s long-term budget projection estimates government debt as a share of GDP will remain stable until 2050, then decline, and in seventy-five years place the U.S. federal government in a net creditor position equal to around 60 percent of GDP. This is a more optimistic projection than produced by the Congressional Budget Office and independent commissions studying deficit reduction. Read more »

Chained CPI’s Diminishing Returns for U.S. Budget

by Renewing America Staff

On Wednesday, President Obama will send his proposed budget to Capitol Hill. While it includes many ideas floated in the president’s previous budget plans, it proposes a switch to an inflation formula intended to reduce cost-of-living payments to Social Security beneficiaries, known as the chained Consumer Price Index (CPI), which has excited some deficit hawks and worried some Social Security defenders. Read more »

The Sales Tax: The New Way to Fund Transportation?

by Rebecca Strauss
Cars wait in a traffic jam in New York City (Mike Segar/Courtesy Reuters). Cars wait in a traffic jam in New York City (Mike Segar/Courtesy Reuters).

Engineers have been browbeating U.S. policymakers about the dire state of the country’s infrastructure for years. This year is no different. Last week the American Society of Civil Engineers gave U.S. infrastructure a barely passing grade of D+ and warned that “it’s time to stop duct-taping this problem.” Much of the problem has to do with how the country pays for its infrastructure, which does not raise enough revenue to keep up with the costs of needed repairs and improvements. But the engineers may finally have the ear of policymakers in one state, Virginia, who are making real changes about how the state funds its highways and roads. Read more »

Europe, Italian-Style

by Michael Spence
Outgoing Italian prime minister Mario Monti speaks during a news conference at a European Union leaders summit to discuss the EU's long-term budget on February 8, 2013 (Eric Vidal/Courtesy Reuters). Outgoing Italian prime minister Mario Monti speaks during a news conference at a European Union leaders summit to discuss the EU's long-term budget on February 8, 2013 (Eric Vidal/Courtesy Reuters).

Last summer, after two years of growing uncertainty, systemic risk in the eurozone finally began to wane, as conditional commitments came together. Italy and Spain offered credible fiscal and growth-oriented reforms, and the European Central Bank, with Germany’s backing, promised intervention as needed to stabilize the banking sector and sovereign-debt markets.=Unfortunately, that trend may be reversing. Growth in the eurozone has turned negative overall, significantly so in the south. Unemployment stands at about 12% in Italy, and 38% for the young. Likewise, Spain’s unemployment rate is above 25% (and 55% for young people). And French economic indicators are slipping quickly. Read more »

The Renewing America Interview: Robert Reischauer on Fiscal Reform

by Jonathan Masters
A view of the House of Representatives Building and the East Portico of the U.S. Capitol (Ron Cogswell/Courtesy Flickr). A view of the House of Representatives Building and the East Portico of the U.S. Capitol (Ron Cogswell/Courtesy Flickr).

This week, for the first time in more than ninety years, both houses of Congress put out their annual budget proposals before the White House, an anomaly that reflects the topsy-turvy world of fiscal politics in Washington today. The Obama administration has delayed its fiscal blueprint for a few more weeks, which White House officials blame on the chronic budget brinksmanship over the last several months. Read more »

To Fix U.S. Budget, Reform Medical Malpractice Law

by Renewing America Staff

The rapidly approaching budget sequester imposes too much austerity too soon, and actually makes little headway in improving the nation’s long-term fiscal picture, writes CFR Adjunct Senior Fellow Peter Orszag.

“Far more beneficial would be to make sure that the deceleration in health costs we have been enjoying continues. This is why medical-malpractice reform, although far from a panacea, is worth trying,” he says. Read more »

Policy Initiative Spotlight: The Global Squeeze on Tax Cheats

by Jonathan Masters
Logo of Swiss bank UBS is seen on a building in Zurich (Michael Buholzer/Courtesy Reuters). Logo of Swiss bank UBS is seen on a building in Zurich (Michael Buholzer/Courtesy Reuters).

Midnight. A fishing trawler lurches violently in a squall off the coast of Marseille. A seemingly lifeless body is spotted adrift off the bow, and fished out of the roiling sea. No identification. No memory. Only three enigmatic clues bizarrely implanted in the man’s hip: 000-7-17-12-0-14-26. Gemeinschaft Bank. Zurich. Read more »

The Sequester: What Do Americans Want From Government?

by Edward Alden
Glacier National Park (akalat/Flickr). Glacier National Park (akalat/Flickr).

On many sunny weekends, I go walking with my wife and kids along the Billy Goat Trail in Maryland, using the access at Carderock Recreation area in the C&O Canal National Historic Park. There is a public restroom operated by the National Park Service, an agency of the Interior Department, at the parking lot where the trail begins. It is normally open throughout the year. But when I went there last weekend, I noticed that the facility was closed, with a padlock on the door. Read more »