Skip to content
News and updates

Category: Budget

FISCAL CLIFF COUNTDOWN: 15 DAYS

Posted on

As we move into the last two weeks of the calendar year – and come ever closer to the edge of the “fiscal cliff” – House Speaker Boehner (R-OH) has offered to allow a tax increase on millionaires, which is a significant shift toward President Obama’s position on raising tax rates for the wealthy.  But is comes with a caveat:  Boehner would only agree to this if Democrats agree to significant spending cuts, including to entitlement programs. In exchange for higher tax rates for annual income of more than $1 million, the GOP offer would raise the eligibility age for Medicare benefits from the current 65 to 67 and require $1 trillion in new spending cuts.

The GOP appears to be moving closer to President Obama’s position on tax rates, but the Speaker’s offer is still nowhere close to what the President or Democratic leaders on Capitol Hill can ultimately accept. The two sides also remain far apart on the extent and source of cuts to entitlement programs. No new talks have yet been announced for this week, but both sides say the lines of communication between the Administration and Capitol Hill Republicans remain open.

17 Days to “Fiscal Cliff”

Posted on

President Obama and House Speaker Boehner (R-OH) met for almost an hour yesterday at the White House to discuss issues related to the fiscal cliff, but there were no obvious signs of progress.  Instead, both sides appear to be holding fast to their partisan views on taxes and spending. This is the second face-to-face meeting they have held in the past week on a deal to extend expiring tax cuts and replace scheduled across-the-board spending cuts (sequestration). Republicans continue to demand additional spending cuts and democrats continue to show confidence that taxes will go up on high-income earners without having to give in on entitlement reform.  Democrats said Thursday they have no plans to discuss concessions on spending, at least until Republicans accept a tax rate increase on upper-income earners.  Many had expected a deal to come together by this point in the lame duck session.  It now appears that Congress will remain in session right up to Christmas and may even be working during the week between Christmas and New Years.

FY2013 Appropriations Update

Posted on

Appropriators had been hoping to move an FY2013 omnibus during the current lame duck session, but with time running out it now appears unlikely that they will move any FY2013 spending bills by the end of the year.  Instead, Congress is most likely to pass another six-month CR to cover the remainder of FY2013, probably just before the current continuing resolution (CR) expires March 27th.  Operating under CRs for an entire year has become a recent trend in election years. In two out of the past three election years, 2006 and 2010, the majority of annual spending bills were never completed, and scores of federal agencies were left operating at the prior year’s funding levels for the entire budget year.

A second six-month CR for FY2013 would likely contain a large number of special provisions to address urgent needs of federal agencies, inviting some of the same political battles that would have come with an omnibus.  Some appropriators remained optimistic about clearing fiscal 2013 spending legislation early next year, noting that bipartisan agreements were in the works.  But a new Congress would likely have little interest in considering FY2013 bills and would be more inclined to focus on the 2014 budget process instead.

Three weeks to “Fiscal Cliff”

Posted on

“Fiscal cliff” discussions continue to dominate the public airwaves as the White House continues to negotiate with House Speaker Boehner (R-OH) on a possible deal.  The word on the street today is that the Speaker has asked the White House for more details about its position on taxes, and the President’s team has asked the House GOP for more details about its desires on spending.  This is a good sign with only three weeks to go before the Bush tax rates expire and the sequester takes effect.  It is sounding more and more likely that the republicans will agree to allow tax rates to go up; the only real question is by how much and for whom.  And they will certainly require any rate increase to come with serious cuts to discretionary spending and entitlement programs.  Two years of fighting over how to rein in federal spending and lower national debt is now coming down to a few final weeks of deal-making.  Regardless of the outcome, many of these budget-related issues will likely spill over into the next Congress.