Off the Charts Blog | Center on Budget and Policy Priorities

This week on Off the Charts, we featured a quiz challenge, the looming debate on taxes and spending cuts, and housing affordability problems.

• Each day during our quiz challenge, we focused on one key issue facing Congress when lawmakers return next week.  Here they are: Day 1: The 2001 and 2003 Tax Cuts (answers here), Day 2: The Estate Tax (answers here), Day 3: Unemployment (answers here), and Day 4: Did Stimulus Work? (answers here). Do each quiz and tell us how many questions you answered correctly to receive a free Center on Budget and Policy Priorities T-shirt.
• On the tax vs. spending debate, Robert Greenstein responded to House Minority Leader John Boehner’s proposal to cut funding for discretionary (i.e., annually appropriated) programs other than defense, homeland security, and veterans and to extend all of President Bush’s tax cuts for two years, including those for the wealthiest Americans.  Chuck Marr answered questions about the future of the estate tax, outlining policy implications and potential paths for political action. Chuck also blogged about the high-income Bush tax cuts and why they should expire on schedule.
• On housing, Doug Rice explained how renting has in recent years become even more difficult for those living below the poverty line.

In other news, the Center released reports on “fairtax” proposals to replace state income and business taxes with expanded sales tax, the Boehner proposal to cut non-security discretionary programs 22 percent, and a podcast on the estate tax.  You can find it on iTunes here.

Below are the answers to today’s quiz on the impact of government programs in boosting the economy and reducing hardship during the recession. Send an email to communications@cbpp.org today with your final score for the challenge and we’ll send you one of our newly-designed Center on Budget T-shirts.

1. The Congressional Budget Office estimates that the nation’s Gross Domestic Product in the second quarter of 2010 was ____ it would have been without the Recovery Act.
   ANSWER: b. between 1.7 and 4.5 percent larger than
2. CBO also estimates that without the Recovery Act, the unemployment rate in 2010 would have been ____ than it actually will be.
   ANSWER: a. 0.7 to 1.8 percentage points higher
3. Up to ____ jobs would have been lost next year if Congress had not extended fiscal aid to states in August.
   ANSWER: c. 900,000
4. The TANF Emergency Fund has helped create ____ subsidized private- and public-sector jobs.
   ANSWER:
   250,000
5. The number of Americans receiving food stamps has grown by roughly ____ since the start of the recession.
   ANSWER: d. 13 million

We issued an analysis this morning of House Minority Leader John Boehner’s proposal to cut funding for discretionary (i.e., annually appropriated) programs other than defense, homeland security, and veterans and to extend all of President Bush’s tax cuts for two years, including those for the wealthiest Americans.  Here are the highlights:

• The plan would require the largest domestic funding cuts in recent U.S. history. Rep. Boehner’s proposed funding level for these programs is 22 percent below the fiscal year 2010 level adjusted for inflation (the latter of which is roughly the level President Obama has proposed).  Coming amidst the deepest economic downturn since the Depression, these cuts would remove substantial purchasing power from the U.S. economy and thereby cost hundreds of thousands of jobs while heightening the risk of a double-dip recession.These cuts would also have sharp effects on basic services.  For example, a 22 percent cut in K-12 education funding would take nearly $9 billion out of this area in fiscal year 2011, on top of the deep education cuts that many state and local governments across the country are being forced to make because of their own budget problems.

• Rep. Boehner’s claims that his proposal would freeze non-security discretionary funding at the 2008 level and that such funding has increased 85 percent since then are incorrect. His proposed funding level actually is $44 billion below the 2008 level ($22 billion below it if you don’t count emergency funding Congress approved in 2008).  And the funding increase between 2008 and 2010 — excluding emergency funding in both years — is not 85 percent but 15 percent, after adjusting for inflation, a reasonable amount given the severe weakness in the economy and the accompanying drop in consumer, business, and state and local government purchases.

• While Rep. Boehner has equated his proposed tax-cut extension with a recent proposal from former OMB director Peter Orszag, the two differ in a critical respect. Orszag called for extending the “middle-class” tax cuts (and, if politically necessary, the high-income tax cuts as well) for two years and then terminating all of them; he envisions a commitment by key policymakers that, in extending the tax cuts now, they will allow them to end after 2012.  In contrast, Rep. Boehner has made clear he still wants all of the tax cuts made permanent. Rep. Boehner’s proposal is a rather transparent effort to extend the tax cuts into the next Congress when those who seek to make them permanent will have more votes.  It would entail continuing tax cuts that average well over $100,000 a year — double the entire income of the typical American household — for people making over $1 million while cutting basic programs and services that most Americans of ordinary means rely on.

Today’s quiz topic is the impact of government programs in boosting the economy and reducing hardship during the recession.

Here’s today’s quiz:

1. The Congressional Budget Office estimates that the nation’s Gross Domestic Product in the second quarter of 2010 was ____ it would have been without the Recovery Act.

   a. between 1.7 and 4.5 percent smaller than

   b. between 1.7 and 4.5 percent larger than

   c. 3.2 percent larger than

   d. the same as

2. CBO also estimates that without the Recovery Act, the unemployment rate in 2010 would have been ____ than it actually will be.

   a. 0.7 to 1.8 percentage points higher

   b. 0.7 to 1.8 percentage points lower

   c. 1 percentage point higher

   d. neither higher nor lower

3. Up to ____ jobs would have been lost next year if Congress had not extended fiscal aid to states in August.

   a. 300,000

   b. 500,000

   c. 900,000

   d. 1.2 million

4. The TANF Emergency Fund has helped create ____ subsidized private- and public-sector jobs.

   a. 50,000

   b. 100,000

   c. 200,000

   d. 250,000

5. The number of Americans receiving food stamps has grown by roughly ____ since the start of the recession.

   a. 3 million

   b. 7 million

   c. 10 million

   d. 13 million

Reminder: We’re posting a quiz every day this week on a key issue facing lawmakers this fall. We’ll post the answers each afternoon. If you keep score on your own and send an email to communications@cbpp.org at the end of the today with your score, we’ll send you one of our newly-designed Center on Budget T-shirts.

Here are answers to today’s quiz on unemployment:

1. There are ___ fewer jobs in the economy than there were when the recession began in December 2007.ANSWER: c. 8 million
2. Over ___ percent of the unemployed, ___ million people, have been looking for work for 27 weeks or longer.ANSWER: d. 42, 6.2
3. True/False: The TANF Emergency Fund has helped create jobs in the public sector but not the private sector.ANSWER: False
4. True/False In August, job gains in the private sector offset a decline in government jobs.ANSWER: False

Reminder: If you keep score on your own and send an email to communications@cbpp.org at the end of the week with your score, we’ll send you one of our newly-designed Center on Budget T-shirts.