Committee for a Responsible Federal Budget

‘Line’ Items: Commissions, Summits, Caps and Dogs

Commission Coming – The White House says President Obama will create a fiscal commission by executive order within days. Meanwhile, Republicans still have not committed to participating.

Snow Job – Just hours after Senators Max Baucus (D-MT) and Charles Grassley (R-IA) announced they had reached a deal on a jobs bill, Senate Majority Leader Harry Reid (D-NV) plowed it under, saying it was too bloated with provisions not related to creating jobs. The Senate will consider the scaled-down version Reid crafted on February 22 when it returns from its week-long President’s Day recess.

Estate of Uncertainty – Reid’s pairing down of the jobs bill also upset a deal between Baucus and Grassley to move estate tax legislation this year. Under current law the tax is repealed for 2010 but will return in 2011 to pre-2001 levels.

Summit All Up to Wishful Thinking? – The White House on Friday formally invited a number of legislators to its February 25 health-care summit, which will be televised live. The administration says it will post online a health insurance proposal ahead of the meeting and encouraged Republicans to do the same.

Blue Dogs on the Prowl – Fresh off their victory in achieving statutory PAYGO, the House Blue Dogs have now set their sights on discretionary spending caps.

Brown-out for Bank Bonuses – Senator Sherrod Brown (D-OH) introduced legislation last week to impose a 50 percent tax on bonuses above $25,000 awarded to employees of banks that received TARP funds. Similar legislation has already been unveiled in the House.

Target Practice – The Senate Budget Committee held hearings last week addressing the economic and fiscal outlook and the need for a fiscal target. CRFB President Maya MacGuineas testified at the fiscal target hearing, where she was joined by fellow Peterson-Pew Commission on Budget Reform commissioners Alice Rivlin and Rudolph Penner. A common theme at both hearings was that the U.S. should develop a fiscal plan now to be implemented as the economy recovers in order to avoid a fiscal crisis. The Peterson-Pew Commission will host a conference on “Avoiding a Government Debt Crisis” on Tuesday, February 16 in Washington, DC.

Economic Report Released – The White House released the Economic Report of the President on Thursday. Among its highlights is a forecast for sluggish job growth and a call to stabilize the federal budget deficit at about 3 percent of GDP, which would result in a debt-to-GDP ratio of about 70 percent. The Peterson-Pew Commission recommended a much more ambitious goal of stabilizing the debt at 60 percent of GDP by 2018 in the Red Ink Rising report released late last year.

Raise the Roof – President Obama Friday signed legislation raising the debt ceiling to $14.3 trillion dollars and reinstating statutory PAYGO.