December 12, 2013 at 12:47 pm
We’ve released our full analysis of the budget agreement between Senate Budget Committee Chair Patty Murray and House Budget Committee Chair Paul Ryan. As we stated yesterday, although the agreement is modest, it represents an improvement over current law. Congress should approve it, but lawmakers should make every effort to accompany it with an extension of federal emergency unemployment benefits that will otherwise expire the week after Christmas.
Here’s an excerpt:
Senate Budget Committee Chair Patty Murray (D-WA) and House Budget Committee Chair Paul Ryan (R-WI) announced a small-scale budget package on Tuesday that would replace $63 billion of the sequestration cuts slated for 2014 and 2015 with alternative savings measures. … Read more
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December 11, 2013 at 6:45 pm
The Murray-Ryan budget deal provides a stimulative boost to the economy — albeit a modest one. But here’s the rub: the economic drag caused by lawmakers’ failure to include an extension of federal emergency jobless benefits in the deal would likely negate that stimulus.
Economist Joel Prakken of Macroeconomic Advisers says that the deal would boost economic growth by “maybe 1/4 percentage point” compared to the sequestration cuts scheduled under current law. The deal follows the sound principle under current circumstances of raising deficits in the near term to boost the economic recovery but reducing them by an even larger amount later, when the economy is expected to be stronger.… Read more
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December 11, 2013 at 12:54 pm
CBPP President Robert Greenstein has just issued the following statement on the recently announced budget agreement.
The budget agreement between Senate Budget Committee Chair Patty Murray and House Budget Committee Chair Paul Ryan represents an improvement over current law, albeit a modest one. Congress should approve it, but lawmakers should make every effort to accompany it with an extension of federal emergency unemployment benefits that will otherwise expire the week after Christmas.
The additional funding that the agreement provides for non-defense discretionary programs as part of its effort to provide relief from sequestration would mean that policymakers could scale back a number of damaging cuts that they imposed in 2013 in areas ranging from education and Head Start to low-income housing and medical research, among others.… Read more
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December 10, 2013 at 1:28 pm
Demand for rental housing has surged even as the supply has shrunk, the New York Times reports today, and the budget cuts under sequestration “are only adding to the problem, hitting housing programs especially hard.” Indeed, as we pointed out last month, the long wait for housing assistance is getting longer under sequestration. The cuts could eliminate vouchers for as many as 185,000 low-income families by the end of next year (see chart).
More than 2.1 million low-income households use vouchers to rent modest private-market housing at an affordable cost. … Read more
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December 10, 2013 at 12:18 pm
November’s drop in unemployment to 7.0 percent was obviously welcome, but policymakers should not conclude that they can now justifiably let federal emergency unemployment insurance (UI) expire at the end of this year. That’s because a look only at the unemployment rate provides too optimistic a picture of the overall health of the labor market.
As I explained last week in my statement on November’s jobs report, labor market conditions are significantly better than in the depths of the Great Recession in 2008-2009, but they remain far from what they should be. … Read more
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December 9, 2013 at 3:11 pm
“Lawmakers from both sides of the aisle are starting to ramp up their efforts to renew targeted tax breaks set to expire at the end of the year,” The Hill notes. Our new report explains that, simply by paying for any renewal of these and other tax “extenders,” policymakers could shrink by one-third the projected increase in the debt as a share of the economy over the next several decades. Here’s the opening:
Several dozen temporary tax-expenditure provisions, collectively known as “tax extenders” because Congress routinely extends them, are set to expire again at year’s end. … Read more
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December 9, 2013 at 12:30 pm
The President and Congress need to extend four important Medicaid and Children’s Health Insurance Program (CHIP) provisions that are expiring and that provide health coverage to families leaving welfare for work, assist low-income seniors and people with disabilities with their Medicare premiums, and increase enrollment of eligible low-income children in Medicaid and CHIP, as we explain in a new paper. Policymakers should extend them in end-of-year legislation that they enact either this month or next.
This week, the Senate Finance Committee and the House Ways and Means Committee are expected to draft legislation that would permanently avert scheduled cuts in payments to doctors under Medicare; if policymakers include such a measure as part of end-of-year legislation, they also should make the four expiring Medicaid and CHIP provisions permanent in the same legislation.… Read more
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December 9, 2013 at 10:41 am
In a letter to state school superintendents encouraging them to raise teacher pay, Florida Gov. Rick Scott boasted that the state’s budget this year includes “the most state funding for education ever,” and that Florida’s increase in per-student spending this year — $263 — ranked second among states for annual increases in our report on K-12 school spending.
That’s welcome news for a state that slashed spending on education and other public services as its revenues plummeted during and after the recession, including at the start of Gov.… Read more
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December 6, 2013 at 3:01 pm
This week on Off the Charts, we focused on the economy, the federal budget and taxes, Social Security, and state budgets and taxes.
- On the economy, Chad Stone explained that the November jobs report shows the jobs market is not strong enough to justify policymakers’ letting emergency federal unemployment insurance expire. Stone also pointed to his latest U.S. News blog post charting the growth in income inequality in recent decades. Chuck Marr warned that allowing unemployment benefits to expire would be detrimental to the economy.
… Read more
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December 6, 2013 at 1:16 pm
Incomes at the top have started rebounding from their sharp decline in the financial crisis and Great Recession, new figures from the Congressional Budget Office confirm — just as they rebounded strongly from the dot-com collapse of the early 2000s (see graph). My latest post for U.S. News & World Report’s Economic Intelligence blog charts the growth in income inequality in recent decades, which President Obama discussed in Wednesday’s speech on the economy.
My post lays out three broad themes:
1. … Read more
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December 6, 2013 at 9:41 am
Labor market conditions are significantly better than they were in the depths of the Great Recession in 2008-09. Nevertheless, nonfarm payroll employment is not yet back to where it was at the start of the recession in December 2007, unemployment is still much too high — especially long-term unemployment — and the share of the population with a job remains well below what it would be in a normal labor market. The jobs market is not strong enough to justify policymakers’ letting emergency federal unemployment insurance expire.… Read more
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December 5, 2013 at 2:11 pm
We and others warned a year ago that letting the payroll tax expire would hurt the economy. Policymakers ignored those warnings, and in a new analysis, Goldman Sachs highlights the economic damage that the resulting tax increase has caused in 2013.
Congress now confronts a similar choice on federal Emergency Unemployment Compensation (EUC) benefits, which are set to expire Christmas week. The Congressional Budget Office (CBO) has raised the red flag: inaction will mean slower growth and job losses on top of the hardship it will cause for jobless workers and their families. … Read more
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