With the start of a new year, governors, like the president, gave their annual state of the state addresses. We would like to commend those governors who used their annual address as an opportunity to call for bipartisanship and interparty cooperation. In particular, we highlight Republican Governor Rick Snyder of Michigan and Democratic Governor Steve Beshear of Kentucky, who devoted time in their addresses to reach a hand across the political aisle.
This month, BPC highlights two bipartisan duos that have taken steps to move significant legislation through Congress, which has brought renewed optimism that the tide may be slowly turning back to cooperation in Washington.
The debt limit is a law that restricts the amount that the federal government is allowed to borrow to finance its obligations. The limit has been raised dozens of times since it was instituted in 1917, including under every president since FDR. In part, the increase in debt (and thus, the debt limit) has been a result of the huge growth of the U.S. economy and substantial expansion in the role of government over the past century.
The continued, slow recovery from the Great Recession, combined with growth in major federal health care programs (expected to increase from 4.8 percent of GDP in FY 2014 to 6.1 percent of GDP in FY 2024) and growth in net interest payments (expected to increase from 1.3 percent of GDP in FY 2014 to 3.3 percent of GDP in FY 2024) has resulted in a forecast showing declining deficits in the near term but a sustained, increasing path in the long term.
U.S. Treasury Secretary Jacob J. Lew spoke yesterday at the Bipartisan Policy Center, where he reiterated his view on the critical need to increase the debt limit in a timely manner to ensure the U.S. government can continue financing its existing obligations. Otherwise, he said, “delaying action can cause harm to our economy, rattle financial markets and hurt taxpayers.”
Make no mistake: improving the budget process will not by itself eliminate partisan polarization, restore civil discourse, or increase willingness to seek common ground. Nor will it make elected leaders more courageous in the face of hard choices. But if the Murray-Ryan agreement presages a new willingness to break out of gridlock and get urgent public business done, then an improved budget process would be a big help.
What are the most promising opportunities to promote greater residential energy efficiency? Is there a role for the federal government?
There is growing awareness about the role of energy efficiency investments in fighting poverty. Reducing energy consumption in low-income housing not only lowers utility bills, but helps extend the life of the property by freeing up capital that can be used to address maintenance repair needs or make necessary improvements. Energy efficiency investments also create healthier living environments, which can lower the incidence of asthma, and other ailments that keep children home from school or adults from their jobs.
Turkey’s ruling Justice and Development Party (AKP), led by Prime Minister Recep Tayyip Erdoğan, came to power more than a decade ago and, under their leadership, took Turkey from a struggling economy to the seventeenth largest in the world. While the AKP earned success and legitimacy from the rapid growth of the Turkish economy, Turkey has recently been beset by economic difficulties that, as Turkey approaches a series of pivotal elections, could pose a threat to the AKP’s continued rule. Turkey’s Central Bank has taken action to ameliorate economic strain and restore investor confidence, but its actions, running counter to Erdoğan’s stated economic policy, could make it a political target.
Our country is in the midst of a rental affordability crisis that is having a devastating impact on our nation’s most vulnerable families. Many of these families are forced to make the difficult choice of spending less on health care, food, and other basic necessities just to cover their housing costs. With rental demand expected to be strong throughout the remainder of the decade, rents are likely to rise even higher, exacerbating an already difficult, if not impossible, situation.
New Laws Have Made Big Banks Safer
By Phillip L. Swagel, Financial Regulatory Reform Initiative Co-chair, The New York Times
“U.S. banks are financed with considerably more capital than previously, meaning that they can suffer more losses (or fines) before failing. And if a large bank does fail, the resolution authority in the Dodd-Frank financial regulatory reform legislation provides legal authority not previously available to deal with failing large banks. The demise of a large bank will be no minor event, but the financial system is safer than previously and so too is the broader economy as a result.”