Budget News Dec. 6 - 10

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News
FRIDAY
Treasury: Financial bailout income at $35 billion
The government's heavily criticized $700 billion financial rescue program has earned nearly $35 billion in income over the past two years, according to data obtained by The Associated Press.
Twenty Senators Step up Pressure for a Deficit Reduction Plan
Group includes Democrats Warner and Conrad, and Republican Grassley.
Boehner will cut Hill budgets by 5 percent
Incoming Speaker John Boehner said he will propose to cut nearly every office budget by five percent as one of Congress’ first measures next year.
Poll: Americans Much More Worried About Jobs Than the Debt
Republicans dislike the deficit panel's plan more than Democrats do.
State News Roundup
Here’s a look at some of this week’s most interesting, and consequential, budget- and economy-related issues in the 50 states…

THURSDAY
California Budget Gap May Reach $28.1 Billion Over 18 Months, Brown Says
The deficit estimate takes into account a $2.7 billion drop in projected estate-tax receipts, and compares with the most recent forecast of a $25 billion gap for the period, Brown said today at a public meeting of state officials.
UPDATE: CEOs Press Congress to Cut Spending, Overhaul Tax Code
A group of chief executives spelled out a plan on Wednesday to boost business growth, urging Congress to redesign the corporate tax system, cut government spending and pass pending free trade agreements.
Deficit hawks find tax-cut deal 'exasperating'
Last week was such a happy week for deficit hawks. This week, they're back to beating their heads against the wall.
Preparing for a Debt Ceiling Hike
Republican House leaders have months to prepare for a tough vote on increasing the debt limit.
House approves $1T budget bill
The House narrowly approved a stripped-down budget bill Wednesday evening, cutting nearly $46 billion from President Barack Obama’s requests in order to hold total governmentwide appropriations to no more than the current $1.09 trillion level.
Massive Budget Bill Faces Opposition in Senate
The 423-page measure, opposed by Republicans, conservative Democrats and some anti-war lawmakers, wraps a dozen unfinished spending bills into a single measure.

WEDNESDAY
States Face Budget Shortfalls of $26.7 Billion
Fifteen states are facing combined budget gaps midway through their 2011 fiscal year totaling $26.7 billion, according to a National Conference of State Legislatures report to be released Wednesday. The other 35 states say they are on target with their budgets. At this time last year, 36 states reported a combined $28.2 billion shortfall.
Italy's Parliament Tightens Budget Amid Tensions
The Italian parliament on Tuesday approved €25 billion ($33.3 billion) in budget cuts over the next two years, locking in austerity measures aimed at stabilizing public finances and reassuring jittery sovereign debt markets.

TUESDAY
Schwarzenegger Proposes $9.9B In Cuts
Gov. Arnold Schwarzenegger has declared a fiscal emergency and is asking lawmakers to meet in a special session to save the state $9.9 billion over the next two years.
White House Looking for Billions in Additional CR Spending for Next Year
The White House has asked lawmakers to add more than $11 billion to any long-term continuing resolution cleared by Congress before the end of the year, according to materials circulating on Capitol Hill Monday.
Kingston Has List of Ideas for Capitol Hill Cost Cuts
On the chopping block in a Kingston-led committee: Capitol Police security details, Capitol Visitor Center tour guides and maybe even an entire agency.

MONDAY
Deficit Spending Is Top Worry in New Poll
By 59% to 30%, Americans believe that Congress should cut federal spending rather than raise taxes.
Pension Woes Prompt GOP Move
The new Republican House leadership, whose party benefited in November from public antipathy toward the bailout of banks, is moving to avoid a federal bailout of state and local pension funds
A Whole New Name Game
Parks, Transit, Schools Consider Corporate Monikers in Bid to Plug Budget Gaps.
Senator says deficit needs White House involvement
The chairman of the Senate budget committee on Sunday called on the White House to hold a summit to tackle the federal deficit, saying it is the next logical step in getting the nation's financial house in order.
Flaherty Says Canada May Move Forward the Target Date for Balanced Budget
Canadian Finance Minister Jim Flaherty said he may consider bringing forward a goal of balancing the budget within five years after consulting with various groups over the next few months.

Economist Comments
FRIDAY
Opinion: Want to Balance the Budget? Get Out the Chainsaw
If you wanted to spread the pain around, that would mean cutting every agency budget by 45 percent.

THURSDAY
BACON: Thinking the unthinkable about the national debt
Americans need to know the financial endgame they're trying to avoid.
The Cuts That Weren't
"[T]he commission report doesn't go nearly far enough in reducing the size, cost, and intrusiveness of government."
EDITORIAL: Exposed: TSA's X-rated scanner fraud
Firms hawking this dubious technology have their eyes on the $2.4 billion the Obama administration has allocated for the scanning program. It's not surprising they would leave out mention of its limitations.
The Obama Stimulus Impact? Zero
Liberals are still arguing that the federal spending stimulus wasn't large enough. How many multiples of nothing—its result according to new evidence—would they like?

WEDNESDAY
$200 Billion in Obsolete, Ineffective Federal Programs
Despite all the tough talk by the Tea Party about shrinking the size of government, federal programs usually take on a life of their own and are very hard to kill off.
The end of big government?
One difference between now and the mid-’90s is the magnitude of the numbers. The federal deficit is projected to exceed $1 trillion in 2011, compared with the relatively paltry $152 billion deficit in fiscal 1995.

TUESDAY
This Budget Would Never Pass
A five-part plan to cut the deficit, narrow inequality, and strengthen the economy—and why special interests would block it.
The Deficit Commission: The Good and the Bad
The answer here is to follow the Bowles-Simpson proposals on tax rates and tax subsidies, while ignoring the call for more federal revenues that history shows won't fix the deficit anyway.
FEULNER: Reversing the trend to spend
Debt commission's proposal is a good start.
Enough Talk About Deficit-Cutting; Just Do It
Many of the proposals the Obama commission put forth have been heard before. It's time for action, not more discussion.
How to Balance the Budget Without Raising Taxes
The 19 Percent Solution.

MONDAY
US Budget Experts: Early Next Year Critical For Fiscal Policy
...in the wake of the release of three sweeping reports in the last month about the impending fiscal crisis in the U.S., many budget experts are willing to make this prediction: it will be clear by early next spring if the U.S.'s fiscal debate has turned a corner and is focusing on finding solutions to the nation's increasingly serious fiscal outlook or if a decade-long budget stalemate will continue.
Unions limit state's budget-cutting options
Some say Legislature gave up too much power in 2002.
What the Simpson-Bowles Plan Left Out
They performed an accounting exercise to shrink the deficit without trying to define what government should do and why.
The fiscal commission's omission
A critical element is the question: “What is the proper role of the federal government?”

Blogs
FRIDAY
Cut the deficit, but not my programs
The majority of Americans think the federal deficit needs to be reduced, according to a new poll from the Pew Research Center for the People & the Press. They just don’t like many of the ways of doing it.
How Can States Limit Spending?
What can states do to arrest the rapid growth in state spending? What tools do state legislators have to limit the growth of their budgets?
Social Security Doesn’t Contribute to the Deficit? That Was Then…
The $116 billion 10-year cost of the payroll tax cut is effectively added to the deficit and the debt, although it remains to be seen if the credit will survive.

THURSDAY
Policymakers Needn’t Fear Spending Cuts
A recent study by economists Alberto Alesina, Dorian Carloni, and Giampaolo Leece looked at 19 OECD countries from 1975 to 2008 and found no evidence that “governments which quickly reduce budget deficits are systematically voted out office.” Therefore, the authors conclude that governments can “decisively” reduce deficits and be returned to office by voters.
False Choice
This thesis rests on several dubious assumptions, but none more questionable than the one that equates higher government spending on education with better education.
A Leaner Leviathan
Unfortunately, balancing the federal budget won't require radical change.
Where’s the Tax Bill?
A developing problem with this secret compromise among leaders in the House, Senate and White House with regard to extending tax cuts for all is the fact that nobody has seen the agreement.

TUESDAY
Crisis in the States
We have a triple-whammy of rising health care costs, a demographic bulge, and the historical legacy of a major expansion of government.
The Deficit Commission’s Plan and Balancing the Budget
Also, the commission’s plan increases spending by $1.6 trillion between today and 2020.
How Much Federal Spending Can Americans Afford?
...the median household income in the U.S. would have to rise to be $70,097 in order for this level of government spending to not produce a significant budget deficit. That's about 41% higher than the actual median household income in 2009 of $49,777!
Fiscal Fitness
And as far as I can tell, the only thing it tells us about fiscal policy is that tax revenues are really remarkably stable outside of recessions, even though we've had many different tax regimes over the years.
Morning Bell: Freeze Taxes, Freeze Spending, and Go Home
Then after the 111th lame duck has frozen taxes and frozen spending, they should just go home. They have done enough damage already.

MONDAY
The Zero Deficit Line
if we assume the median household income in 2011 will be $49,000, that means that any federal spending over $20,592.91 per household will only add to the national debt and make the nation's fiscal situation worse. How much worse will depend upon how much over that figure the spending figure will work out to be.
The hidden truth about the deficit
What nobody wants to say: the real looming deficit problems are medical. Health costs must be controlled. The rest is peanuts.
VIDEO: Congress Must Cut Spending
...while this issue has garnered increased scrutiny, some continue to ignore the real cause of our debt and deficit problems—rampant spending—focusing instead on raising taxes.

Reports
TUESDAY
TEL It Like It Is: Do State Tax and Expenditure Limits Actually Limit Spending?
This study combines the two approaches described above to evaluate TELs based on where they are applied (high- vs. low-income states) and based on how they are structured.