Tag: U.S. budget

Mr. President, here’s how the budget works

Washington Post logo“We’re actually taking in more revenue now than we did when we had the higher taxes because the economy’s doing so well.”

— President Trump, in an interview with Rush Limbaugh, Jan. 6, 2020

The way the federal budget works is often a mystery to Americans. But it shouldn’t be to the president of the United States.

Here, the president makes a basic mistake. He asserts that even though he signed into law a bill cutting taxes in 2017, revenue has kept going up — a fact he attributes to a robust economy. Some listeners might even have gotten the impression that the tax cuts were paying for themselves — a false claim the administration made repeatedly before the passage of the tax bill.

But revenue was always supposed to be going up year after year, despite the tax cuts. And revenue is way down from what had been anticipated before Congress approved the tax cuts, which (along with higher spending) is the reason the federal budget deficit is soaring despite a good economy. Continue reading.

Lawmakers pile on the spending in $1.4 trillion deal

The Hill logoLawmakers added $24.7 billion in emergency and “off-book” spending to a nearly $1.4 trillion package as they sought to settle differences and finish the congressional appropriations bills for the fiscal year.

The White House and Congress had reached a $1.37 trillion deal in July that increased defense spending by $22 billion and domestic spending by $12 billion.

But the final deal brings the sum total to $1.394 trillion and includes emergency funding for natural disasters, the 2020 census, medical funding and other priorities.

Continue reading

Budgeting the Future

Introduction and summary

The U.S. economy finds itself at a crossroads of overlapping challenges. Long-term productivity and economic growth are low, while income and wealth inequality are high. Meanwhile, the country faces a series of challenges: from collapsing economic security for middle- and working-class Americans to climate change and more.1 Addressing these challenges will undoubtedly require the deployment of significant federal resources since the private sector has failed to do so.

The good news is that the economic evidence suggests there is indeed room for the government to address the country’s current challenges. And the economic research shows ways this can be accomplished by using spending and tax policy more effectively than how it has been used in the past. The content of those investments is crucial: smart investments that boost competitiveness and secure economic stability for working families will yield returns, while wasteful tax cuts will create massive, long-term deficits without clear, tangible benefits. In short, America still can do big things—and it can do those more effectively than it has in the past. Each dollar spent on smarter, more effective government programs and tax policy will then go a lot further in boosting the economy and strengthening a struggling middle class. Continue reading “Budgeting the Future”

Another continuing resolution won’t solve the real problem within the Republican Party

The following article by William B. Heller, Associate Professor of Political Science, Binghamton University, State University of New York, and Olga Shvetsova, Professor of Political Science and Economics, Binghamton University, State University of New York, was posted on the Conversation website January 23, 2018:

Senate Republicans, led by Majority Leader Mitch McConnell, right, have been working through the snags with their tax bill. (Bill Clark/CQ Roll Call)

Republicans can’t agree on a budget.

That lack of agreement has made it necessary for Congress to pass a series of continuing resolutions to keep the government open.

There’s no budget agreement because factions within the GOP hold contradictory policy positions on almost every issue. James Madison, an author of the Federalist Papers might have framed the problem this way: The party draws on votes from – and is accountable to – diverse groups of citizens with conflicting interests. That conflict within the Republicans’ voting base means that any policy they propose would hurt at least some of the members’ key constituents. Continue reading “Another continuing resolution won’t solve the real problem within the Republican Party”