A Truly Realistic Look at Sequestration

Action should be taken as quickly as possible to counter negative ramifications already being felt

By Loren Adler and Shai Akabas

Recently, the Center on Budget and Policy Priorities (CBPP) posted a blog that criticized the analysis of the sequester contained in the BPC Task Force on Defense Budget and Strategy’s recent report, Indefensible. CBPP generally does quality and important work, including a very good, substantively correct technical analysis of the sequester, but this recent criticism of BPC’s report is unfounded and overstated.

The CBPP post does not actually take issue with any of the Task Force’s findings or conclusions. Instead, it emphasizes what CBPP believes to be “very questionable assumptions” underlying the Task Force’s analysis, and concludes by levying the charge that “we should take a realistic look at what [the sequester] means, not one based on worst-case scenarios that won’t likely come to pass.”

What is the “Medicare Guarantee”?

By Joseph Minarik, Senior Vice President and Director of Research, Committee for Economic Development; Member, BPC's Debt Reduction Task Force

This blog post was originally published on "Back in the Black," the blog for the Committee for Economic Development's Fiscal Health Initiative.

This is the third installment in a series about the two keys – Medicare reform and tax reform – to a comprehensive agreement to solve the budget problem. These commentaries will explain the details of the two issues, and show where it is that each political party – the Democrats and the Republicans – must give ground to resolve this crucial issue.

In CED’s 2007 policy statement, Quality, Affordable Health Care for All, we advocated consumer cost-responsible choice among competing private health-insurance plans. Although we did not go into detail on the implications of that program for Medicare, we stated that we believed that the same model would both improve quality and reduce cost for that program. We then went on to elaborate on that vision for Medicare in a paper by Alain C. Enthoven, To Reform Medicare, Reform Incentives And Organization. That Medicare model has come to be referred to as “premium support.”

Now, there is a similar congressional proposal with bipartisan co-sponsors: Senator Ron Wyden (D-OR) and House Budget Committee Chairman Paul Ryan (R-WI). That proposal has attracted a great deal of attention, and it has proven highly controversial.

Senator Baucus Outlines Goals for Comprehensive Tax Reform

“Nothing of consequence is ever accomplished by doing something alone. You have to work with people.”

By Abbey Brandon

Taylor Harvey contributed to this post.

BPC hosted Senator Max Baucus (D-MT) today as he presented his goals for a comprehensive tax reform package, which he cited as a crucial part of solving the federal government’s fiscal woes. The event was sponsored by BPC as a part of its efforts to promote a fiscal plan that would stabilize the nation’s debt. Senator Baucus said that he intended to use both BPC's Domenici-Rivlin plan and the recommendations of the president’s Simpson-Bowles fiscal commission as starting points for full-scale tax reform. He expects to hold hearings on both bipartisan proposals.

A Closer Look at How the Public Views Defense Spending

A new report reveals bipartisan support in favor of thoughtfully reforming the Defense Department

By Loren Adler and Shai Akabas

Kevin McGrath contributed to this post.

A new report from the Program for Public Consultation (PPC) – conducted in collaboration with the Stimson Center and the Center for Public Integrity – found that over three-quarters of the American public supported some level of cuts to the U.S. defense budget. The survey highlights a growing mood in the country that, given the nation’s current fiscal problems, the Department of Defense (DoD) must trim some fat out of its budget.

Alice Rivlin: To Reform Medicare, Preserve Traditional System and Offer Premium Support

The United States now devotes approximately 18 percent of its gross domestic product to health care

In testimony today before the House Committee on Ways and Means, Alice Rivlin, co-chair of BPC's Debt Reduction Task Force, detailed the Domenici-Rivlin Protect Medicare Act and spoke about the need for structural reform to preserve Medicare:

"Medicare is a hugely successful program that has dramatically increased the availability of health care to seniors, increased the length and quality of life of older Americans, and greatly reduced their fear of being unable to afford care when they need it. We need to preserve Medicare’s guarantee of affordable health care for older and disabled people and make sure that the program is sustainable as the number of beneficiaries explodes and upward pressure on health care costs continues.

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We Ordered Tax Reform, But Congress Delivered a Pu Pu Platter Instead

America deserves real tax reform, not one-off proposals that fail to address structural problems

By Loren Adler and Shai Akabas

Kevin McGrath contributed to this post.

Most Americans are content to finally be done with their tax returns. The Senate and House, on the other hand, are back in session and engaging in political showdowns on tax law. Each chamber considered a separate bill on tax policy this week, and they both fell squarely along the partisan lines that we have come to expect for this election year.

Senate Democrats proposed a change that has become known as the “Buffett Rule,” named after billionaire investor Warren Buffett, who admitted to paying a lower effective tax rate than his secretary. The proposal was a highlight of President Obama’s State of the Union address and, although the bill failed to proceed in the Senate on Monday, the underlying principle remains a campaign plank of the Democratic Party heading into this fall’s elections.

Where The Budget Is Going In 2012

What were once presumed to be routine extensions or expirations of temporary laws have become major policy dilemmas

By Joseph Minarik, Senior Vice President and Director of Research, Committee for Economic Development; Member, BPC's Debt Reduction Task Force

This blog post was originally published on "Back in the Black," the blog for the Committee for Economic Development's Fiscal Health Initiative.

This is a rather long post. It tries to put into a clearer perspective the highly publicized impending end-of-year budget and tax events – called “taxmageddon” by some in the press. It takes the position that as imposing as these legal developments are on paper, a short-sighted Congress and White House could work their way around the consequences – but only in the near term. The budget time bomb continues ticking. What are the fundamental elements needed for a new President and Congress to take this problem on? We close with a few observations.

You surely have heard of the extraordinary budgetary events that lurk in the nation’s tax and spending law, just waiting to spring out upon us at the end of this year. The list is long, and frankly frightening.

In the previous decade, temporary laws involving hundreds of billions, even trillions of dollars became highly fashionable. Then with the financial paroxysm at the turn of the decade, the Congress and the President enacted more temporary legislation to provide near-term stimulus to the economy. The former actions were based on the assumption that robust economic growth would continue forever; the latter assumed that after the recession, the economy would bounce back vigorously. Both of these assumptions have proved wrong. So now, what were once presumed to be routine extensions or expirations of temporary laws have become major policy dilemmas.