Budget News Jan. 10 -14

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News
FRIDAY
GOP lawmaker: I can cut $153 billion
Rep. Kevin Brady has incorporated two dozen commission proposals into legislation he has introduced in the House.
House GOP Mulls Retroactive Spending Cuts
With House Republican leaders looking to slash about $60 billion from the budget this year, they are considering retroactively cutting money out of the temporary spending measure that is funding the government through March 4.

THURSDAY
AIG to fully repay U.S. government
When the transaction is complete, the Treasury will own approximately 92% of AIG's common shares.
The State of Our States' Budget Crises
A sampling of the 2011 State of the State addresses.
Auto bailout's estimated cost to taxpayers: $19 billion
The previous estimate from the panel was that taxpayers would lose $40 billion of the $81.3 billion given to the automakers and their finance arms from the Troubled Asset Relief Program.

WEDNESDAY
GOP Bill Lists Over $150 Billion In Budget Cuts
Rep. Kevin Brady, R-Texas, introduced legislation Tuesday that would cut more than $150 billion over five years from a host of government programs, a list that incorporated several proposals from the presidential deficit commission.

TUESDAY
Brown's California Budget Must Shun Gimmicks, Bond Investors Say
California Governor Jerry Brown will be judged on how he avoids gimmicks, cuts spending and raises more money when he presents a budget to close a $28 billion deficit for the biggest U.S. state borrower, according to bondholders such as Nuveen Asset Management.
Texas Confronts Budget Travails as Revenue Slows
Texas is heading into its next two-year budget cycle, which begins Sept. 1, with about $5 billion less in tax revenue than the state had in 2009, State Comptroller Susan Combs forecast on Monday.

MONDAY
California budget: $25 billion dilemma for Jerry Brown
After years of cutting billions and billions in spending, California has to do it again.

Economist Comments
FRIDAY
Another Day Older and Deeper in Debt…
If lawmakers are going to vote in favor of raising the debt ceiling, they should do it only in exchange for a change in the country’s direction.
The Triple-A Debt Threat
The crisis is moving inexorably toward the core of the global financial system, leading to speculation that others may be hit, too. Can the Big Four, the U.S., U.K., France and Germany, be sure of their ratings?
To save the planet and the budget, cut energy off the dole
s long as current energy subsidies stay in place, and K Street lobbyists have sway over what interests deserve congressional favoritism, American tax dollars will continue to retard the market forces that are pushing the United States toward energy independence and a greener future
New Hit to Strapped States
Borrowing Costs Up as Bond Flops; Refinancing Crunch Nears.
Can We Trust Republicans on Spending?
GOP’s fiscal track record and campaign promises should give us pause.

THURSDAY
Extreme Budget Illogic At the CBO
With such logic, we could cut the deficit by passing a new entitlement program. Indeed, we could solve the whole budget problem by passing new entitlement programs every day of the year.
State Budget Bunk
A taxonomy of fiscal gimmicks, evasions, and ploys.
A Price for Raising the Debt Ceiling
Republicans should attach provisions repealing the worst aspects of ObamaCare and financial reform to spending that the president absolutely needs.

WEDNESDAY
Budgetary Delusions: Federal Deficit Charts From CBO Budget Projections
Can the budget deficit be solved by cutting earmarks? How about cutting 100% of all federal non-defense discretionary expenditures?
Revenues Are Rising
Individual receipts are up 23% in three months.
The Politics of State Budget Cuts
The governors' report described "new austere realities" that require reform of how states and cities spend their money, and the laws governing that spending.

TUESDAY
U.S. overspending: the Portugal parallel
Portugal last week paid 3.7% for debt that matures in just six months. That's 18 times what the U.S. government pays to borrow for that length of time.

MONDAY
4 Ways to Think About the Debt Ceiling Frenzy
Treasury Secretary Tim Geithner's letter to Congress on the debt ceiling warns that if Washington doesn't raise the government's borrowing limit, the economy will face catastrophe.
How to Cut $100 Billion Without Really Crying
The 2011 U.S. fiscal year began on Oct. 1, 2010, without a budget in effect, and with Democrats in charge. Since that time, the government has been funded by passage of continuing resolutions, maintaining expenditures at 2010 levels. When the current one expires on March 4, Republicans will have just seven months to make their mark on the 2011 budget.
Should the US Raise Its Debt Ceiling... or Default?
The Obama administration and emboldened Republicans in Congress are locked in a game of economic chicken over raising the national debt ceiling or facing default on US government obligations.

Blogs
FRIDAY
Secondary Sources: U.S. Default, Structural Unemployment, Fed on Autopilot
Greg Ip notes that a failure to raise the debt ceiling wouldn’t automatically result in a U.S. Default.
States’ Fiscal Woes Far From Over
Goodman points out that while tax revenue is rebounding over the past three quarters, it is from such a diminished base that it will take several years to return to pre-Great Recession levels.
The Wrong Line in the Sand
To treat the real disease, I believe we need to get serious about addressing the spending problem.
Moody’s Warns U.S. On Sovereign Debt Ratings
By cutting back on benefits, making people work longer, and repealing Obamacare we could do it without large tax increases. These things may be the third rail of politics but it is the same in other countries and they are seeing the light by resorting to more market-based solutions to things like medical care.

THURSDAY
Why Public Sector Union Compensation Matters
Close analysis of the relevant data make three points abundantly clear: (1) state and local government spending has doubled as a share of the economy over the past 50 years; (2) this spending is increasingly directed away from traditional state and local responsibilities, like roads and local infrastructure; and (3) the recent decline in state and local tax revenue is actually quite modest and not the key driver of the current pension crisis.
House Republicans ready push for balanced-budget amendment
It's essentially the same bill that passed the House in 1995 and came within one vote of getting through the Senate.
Rep. Brady’s CUTS Act
Rep. Kevin Brady (R-TX) has introduced the Cut Unsustainable and Top-heavy Spending Act, which would cut spending by $44 billion annually.
Morning Bell: No Debt Ceiling Raise Without Spending Cuts
On March 16, 2006, when our national debt stood at $8.27 trillion, a young Senator from Illinois announced his intention to vote against raising our nation’s debt ceiling to $9 trillion…

WEDNESDAY
Portugal Bailout Denial: Sure Sign One Is Coming Soon?
Portugal’s prime minister said Tuesday that the country won’t need a bailout. If history does in fact repeat itself, this means Portugal’s probably going to be asking for help in a matter of days.
Governor to disconnect 48,000 cellphones in hands of state workers
Requiring 48,000 cellphones to be turned in by June 1 will save the state about $20 million a year.

TUESDAY
Gates’s ‘Cuts’ and the Neocons’ Lament
The Secretary would ideally like to see the $78 billion over five years in savings filtered elsewhere into the budget; meanwhile, the 2012 budget will actually grow.
Would Washington, Fed Be Able to Say No to Strapped States?
The problem — for state governors, at least — is that Washington itself is out of money and the newly elected Congress wants to focus on cutting federal spending, not expanding it.
A Libertarian's Guide to Cutting Spending
...any reliance interest rationale for increasing taxes in order to pay for programs must take account of reliance interests on the other side.

MONDAY
Thoughts on the Debt Limit Debate
Congress has voted to increase the limit numerous times over the decades, including 10 times since 2001.
Congress Needs to Be More Budget-Minded
Complexity is the enemy of good regulation: it makes regulations hard to enforce, and hard to comply with. The more regulations you have, the less likely it is that you will be enforcing any of them well.
The Fiscal Condition of States and Cities
Nobel Prize Winner Gary Becker reminds us that it is not pretty.

Reports
FRIDAY
Maryland's Fiscal Slide
These tactics are not part of a one-time strategy prompted by the recession. Maryland has struggled to balance its budget for much of the last decade.

THURSDAY
The Debt Ceiling: Time, Options, and Action
Holding the current debt ceiling in place would require eliminating all deficit spending. For the remainder of the fiscal year, this would entail immediate spending cuts of approximately $150 billion per month; the 2012 budget would have to eliminate the projected $1 trillion deficit.
Enough Is Enough: Why General Welfare Limits Spending
Although the Spending Clause is the source of congressional authority to levy taxes, it permits the levying of taxes for two purposes only: to pay the debts of the United States, and to provide for the common defense and general welfare of the United States.

TUESDAY
Britain’s Coalition Government: A Preliminary Verdict
Action is being taken in Britain, but in the U.S., there is continuing pressure either to take no serious action at all or to take the wrong action, most notably by repairing the deficit with tax increases or—to make matters worse—by increasing spending even further.

MONDAY
How to Save Money, Reform Processes, and Increase Efficiency in the Defense Department
Making defense operations more efficient will not automatically produce savings, allowing further reductions in defense budgets.