FISCAL CLIFF IN DECEMBER AND STALLED TAX BILL
On Sept. 8, 2017 President Trump signed HR 601, an emergency measure negotiated with congressional Democratic leaders, and passed by the Senate 80-17 and by the House 316-90 (all the "no" votes being Republican). The bill has four components:
Fiscal Cyclone: Hurricane Harvey aid, Federal Debt Ceiling, and Government Shutdown; Budget and Tax Cuts Stalled; Health Update
1. Provides $15.25 billion in emergency supplemental appropriations for Hurricane Harvey and other disasters, including $7.4 billion for the FEMA Disaster Relief Fund (passed a day before FEMA’s disaster funds would have been exhausted), $450 million for the Small Business Administration Disaster Loan Program, and $7.4 billion in Community Development Block Grant funding for areas most affected by the 2017 disasters;
2. Extends the National Flood Insurance program, which was due to expire September 30, to December 8, 2017;
3. Suspends the debt ceiling through December 8, 2017, temporarily avoiding a Treasury default on U.S. obligations; and
4. Provides continuing appropriations (effectively, a “continuing resolution”) to fund the federal government at current FY 2017 levels through December 8, 2017, avoiding a federal shutdown when the new fiscal year begins October 1.
While the measure provides much-needed emergency disaster relief, the “fiscal cliff” has only been postponed until December 8th, when a federal shutdown and economically catastrophic default faces the nation absent bipartisan agreement on spending levels and the debt ceiling – both requiring 60 votes in the Senate.
(The exact date of a default crisis will depend on Treasury’s cash balances on December 8 and the timing of government spending on disaster relief.)...
See our new disaster funding webpage covering Flood Insurance, FEMA, Disaster Relief, and assistance available to individuals, families, and businesses. Some key points:...
Tax Cuts and Infrastructure Stalled; October Shutdown, Default Loom
Congress faces a train wreck when they return after Labor Day:
$2 Trillion Infrastructure Gap and Tax-Exempt Bonds
- Federal government shutdown looms on October 1st unless Republicans and Democrats reach bipartisan agreement on new federal appropriation caps for FY 2018.
- U.S. Treasury default looms in early October as GOP remains deeply divided on how to pass a debt ceiling increase.
- Tax Cuts are stalled due to lack of GOP agreement on an FY 2018 Budget Resolution.
- Infrastructure investment is stalled due to opposition to public financing and lack of a capital investment budget.
- 80% of Americans want to mend, not end, the ACA according to a new survey.
$2 Trillion Infrastructure Gap On March 9, 2017, the American Society of Civil Engineers gave U.S. infrastructure a cumulative grade of D+, finding that “we can no longer afford to defer investment in our nation’s infrastructure. To close the $2.0 trillion 10-year investment gap, meet...
The Process is Not the Problem; the Problem is the Problem
Here we go again. In a hearing on Tuesday, as reported by Congressional Quarterly, Sen. David Perdue, R-GA, told the Budget Committee, “it’s almost guaranteed that we will not have a budget process” this year. Treasury Secretary Steven Mnuchin agreed, “it is completely broken.”
The Dangers of Distraction: Health Care, Debt Ceiling, Dodd-Frank Repeal, Shutdown, Tax, Infrastructure
Administrations and Members of Congress have been “blaming the budget process” since the current process began in 1974.
Former Congressional Budget Office Director Rudy Penner hit the nail on the head when he observed over 30 years ago, “The problem is not the process, the problem is the problem.”
This year’s “problem” is that the House and Senate Appropriations Committees have started writing the 12 regular appropriations bills for FY 2018, which begins October 1st, without having top-line numbers to work from (see Appropriations Portal)....
Special Counsel Mueller's investigation and all the related and rapidly unfolding developments deserve our highest level of attention and concern. The stability, integrity, and future of our democracy is at stake.
CBO Projects 23 Million Uninsured, More Instability
At the same time, we cannot afford to lose sight of vital matters of governance that continue to unfold and have profound implications for tens of millions of Americans and future generations.
Over the coming weeks, public policy matters of the greatest importance will be addressed in Congress: (1) the health care of tens of millions of Americans will be directly impacted by critical decisions made on Medicaid, health insurance subsidies, pre-existing conditions and other insurance protections; (2) the stability of our economy will be at risk if Congress fails to raise the debt ceiling and leaves the Treasury unable to honor U.S. financial obligations; 3) the federal government will shut down October 1st if Republicans and Democrats remain seriously divided on appropriate spending levels for defense and non-defense programs; (4) the stability of our banking and financial sectors are at stake as Congress works through changes to the Dodd-Frank reforms; (5) dozens of critical federal programs--from medical research to low-income energy assistance--are on the chopping block as work on the FY 2018 budget moves forward; and (6) our nation's ability to compete in a complex global economy will be compromised if we fail to invest in a 21st century infrastructure and a skilled & educated workforce.
The Congressional Budget Office on May 24, 2017 released its analysis of the Obamacare repeal-and-replace legislation passed by the House of Representatives 217-213 on May 4, 2017 (H.R. 1628, "American Health Care Act of 2017"). Following are essential facts, findings, and estimates:
Background on the ACA:
Obamacare is aimed at providing access to health care for uninsured Americans through: (1) expanding Medicaid to cover all
Americans up to 138% of the federal poverty level; (2) government subsidies to purchase private health insurance
on State or Federal exchanges for people between 138% and 400% of federal poverty level; (3) barring discrimination on coverage or premiums due to pre-existing conditions; (4) barring annual and lifetime limits; (5) requiring all health policies to cover essential health benefits (EHBs); (6) limiting premiums for older Americans; and (7) stabilizing the private insurance market through individual and employer mandates....
"CBO and JCT estimate that in 2018, 14 million more people would be uninsured under H.R. 1628 than under current law. The increase in the number of uninsured people relative to the number projected under current law would reach 19 million in 2020 and 23 million in 2026.... The increase would be disproportionately larger among older people with lower income—particularly people between 50 and 64 years old with income of less than 200 percent of the federal poverty level...."
FY 2018 Trump Budget: Top 10 Things You Should Know
The Trump Administration released the President's FY 2018 Budget on Tuesday, May 23, launching a contentious and consequential debate over America's priorities.
FY 2018 Budget: Major Clashes Expected on Appropriations, Tax Cuts, Entitlement Cuts
Most analysts would agree that projected deficits are unsustainable. Annual federal deficits, under current policies, are projected by the nonpartisan Congressional Budget Office (CBO) to increase from nearly $500 billion in FY 2018, to $1 trillion in 2022, to $1.4 trillion in 2027. Federal debt (owed to the public) is projected to rise from 77% of GDP in 2018 to 89% in 2027, 113% in 2037, and 150% of GDP in 2047; and within 10 years, annual federal interest payments will exceed three-quarters of a trillion dollars.
All of this underscores the need for long-term stabilization of debt as a percent of GDP. However, as explained below, the Trump Budget's claim to balance the Federal budget is based on unrealistic economics, dubious savings, unfunded investments, ignoring trillions in tax cuts, and spending cuts impacting the most vulnerable Americans and those who have fallen on hard times.
Administration will release the President's FY 2018 Budget on Tuesday, May 23, launching a contentious and consequential debate over America's priorities. OMB Director Mulvaney will testify at House Budget Committee on 5/24 and Senate Budget Committee on 5/25.
Five Major Pieces to this Year's Contentious Budget Debate:
[1.] Appropriations Impasse or a New Bipartisan Budget Deal?
[2.] Cutting Entitlements $500 - $800 billion over 10 Years
[3.] Individual and Business Tax Cuts, Reforms
[4.] Balancing the Budget vs. Investment & Infrastructure
[5.] Debt Ceiling...