CBO has just released an estimate of the budgetary effects of the health bill, H.R. 3590, that passed the Senate on December 24. Todays estimate differs from the estimate for a slightly earlier version of the legislation that we released on December 19 in that it encompasses all of the amendments that were adopted by the Senate, reflects a revised assumption about its enactment date, and incorporates some technical revisions. Like the December 19 estimate, this estimate is based on CBO's baseline projections from March 2009.
CBO Blog
I spoke yesterday at the annual economic policy conference of the NABE, the National Association for Business Economics. The theme of the conference was The New Normal? Policy Choices After the Great Recession, and naturally I discussed fiscal policy choices.
CBO has just released its preliminary analysis of the Presidents budget. This analysis presents CBOs assessment of the budgetary outlook for the 2010-2020 period assuming enactment of the Presidents policy proposals and reflecting CBOs economic forecast and technical estimating procedures. The analysis compares that outlook with CBOs baseline projections, whichunlike the Presidents budgetassume that current laws and policies that affect federal spending and revenues remain unchanged.
Last week I made presentations on the budget and economic outlook to both the Prosperity Caucus and the National Economists Club.
CBO estimates, in its latest Monthly Budget Review, that the federal government incurred a budget deficit of $655 billion in the first five months of fiscal year 2010, about $65 billion greater than the shortfall recorded in the same period last year.
Today CBO responded to Senator Grassleys questions about the Presidents proposal for a Financial Crisis Responsibility Fee. The President proposes to assess an annual fee on liabilities of banks, thrifts, and security dealers, as well as U.S. holding companies controlling such entities. The fee, which would apply to firms with consolidated assets of more than $50 billion, would be approximately 0.15 percent of a firms total liabilitiesexcluding federally insured deposits and certain liabilities related to insurance policies.
Recently the Department of Energy (DOE) announced that, subject to certain conditions being met, it would guarantee $8.3 billion in loans for the construction of two nuclear reactors in Georgia. Those guarantees would be made under title 17 of the Energy Policy Act of 2005. As with any loan guarantee, the government would run the risk of losing money if the borrowers were to default on those loans.
Federal laws try to protect taxpayers and recipients of government benefits from the effects of rising prices by specifying that dollar amounts in many parts of the tax code and in some programs be automatically adjustedor indexedfor inflation. Without such indexing, a rise in the general level of prices would alter the effects of federal policies even in the absence of action by lawmakers.
CBO is celebrating its 35th birthday! The agency was created by the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344) and officially opened for business on February 24, 1975, when Alice Rivlin became its first director. Since then, under eight different directors, the agency has provided the Congress with objective, non-partisan budget and economic information on a wide variety of issues.
I testified this morning before the Joint Economic Committee about policies to increase economic growth and employment in 2010 and 2011. This hearing was originally scheduled for several weeks ago but then canceled because of the snow. My prepared remarks today were essentially the same as those released a few weeks ago and were based on CBOs January report on this topic and a follow-up letter to Senator Casey.
My comments emphasized three points: