Inauguration Day in DC

Posted on January 21, 2013

Earlier today, Barack H. Obama was sworn in for his second term as the 44^th President of the United States. During his inaugural speech, the President called for action on climate change, gay rights, immigration, and the nation’s partisan divide. The President also made the case that the nation needs to come together to do things people cannot do on their own — from training teachers to building roads to providing for the nation’s defense. On the deficit fights that have consumed much of the public debate in DC the past two years, Obama called for reform that still preserves entitlement programs.

Meanwhile, House Republicans unveiled their proposal today to temporarily increase the nation’s debt ceiling. The measure scheduled for House floor action this week would suspend the debt limit through May 18^th, and then provide for an automatic increase in the current $16.4 trillion limit to match the amount of the government’s outstanding debt plus new obligations “to fund a commitment incurred by the federal government that required payment before May 19.” The legislation would also suspend the payment of salaries to lawmakers in either chamber that does not adopt a FY2014 budget resolution by April 15^th, as required by the 1974 budget law. The measure is expected to be on the floor Wednesday.

House GOP Proposes 3-Month Debt Limit Deal

Posted on January 18, 2013

Earlier today, House Republicans announced a plan to condition a three-month increase in the debt limit on the Senate committing to pass a budget by the April 15^th statutory deadline. As a consequence of not meeting that statutory deadline, the House GOP proposal would withhold congressional members pay. The 1974 Congressional Budget Act requires passage of a budget resolution by that date each year, yet the Senate has not approved a budget for the past four years.

House Speaker Boehner (R-OH) had said since 2011 that any increase in the debt ceiling must be accompanied by dollar-for-dollar spending cuts or reforms. The new 3-month delay proposal would not include any additional spending cuts.

The White House, which has demanded a “clean” debt-ceiling increase free of spending cuts, welcomed the proposal as a step in the right direction.

Sequestration would be a “Devastating Blow” to NIH

Posted on January 16, 2013

NIH Director Francis Collins calls the potential cuts from sequestration a “profound and devastating blow” for medical research. If Congress cannot find a way to achieve debt reduction without massive federal spending cuts, NIH will lose 6.4 percent of its budget this year. This could hurt the availability of research grants. Currently, 80 percent of NIH funding goes to university and medical school researchers but the odds of award have been declining in recent years. According to Collins, only one in six of those that apply receive grants; the chances used to be one in three. And all of this could get much worse if sequestration is implemented.

This Week in DC

Posted on January 14, 2013

Washington, DC is gearing up for the Presidential Inauguration, scheduled to take place on Monday, January 21^st (MLK Day). The Senate will remain in recess until then (they were in recess last week as well), while the House is in session today through Wednesday.

The big issues facing this new Congress continue to be fiscal in nature. Last week, the Office of Management and Budget (OMB) confirmed that the administration’s FY2014 budget proposal would be delayed until March. By law, the President’s budget proposal is due to Congress the first Monday in February, which will be February 4^th this year, but many now expect it to be about a month late. Preparation of the FY2014 budget has been complicated by greater than usual uncertainty as Congress has yet to settle on final spending levels for the current fiscal year, which is currently under a continuing resolution (CR) until the end of March. And until last week’s fiscal cliff deal was enacted, it was unclear what tax rates would be in effect or whether $109 billion in automatic spending cuts would begin January 2^nd (sequestration now delayed until the end of February). It now seems possible that the federal government may have to operate under a yearlong CR and that sequester is a distinct possibility.

But before Congress takes final action on FY2013, or preliminary action on FY2014, they must first deal with raising the debt ceiling. It is predicted that the government will begin defaulting on some of its obligations sometime between February 15^th and March 1^st. This debate will begin in earnest in the next couple of weeks, but the partisan messaging has already begun. Republican leadership is indicating that they may force a government shutdown if democrats and the President don’t agree to additional spending cuts in exchange for raising the debt ceiling. Democratic leadership has indicated that they would support the President in lifting the debt ceiling without congressional approval if an agreement cannot be reached in Congress.

While nothing seems certain these days, the one thing that is clear is that Congress will continue it’s partisan fight over how best to deal with deficit reduction and other major policy issues like gun control and immigration.

White House White Board on Tax Deal

Posted on January 4, 2013

For those of you who love to “white board” ideas, this video is for you! In this new White House White Board, Brian Deese, the Deputy Director of the National Economic Council, explains what the new agreement to extend tax cuts for the middle class means for the economy and how it meets our Nation’s economic priorities. College tax credits are mentioned.