CBO Blog

  • CBO released a letter this morning that analyzes the Administration's July 14th proposal to provide temporary authority to the Secretary of the Treasury to purchase obligations and other securities issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. The authority provided under this proposal would expire on December 31, 2009. (The Congress may consider a slightly modified version of the proposal, but it is unlikely that the modifications would have a significant effect on the estimated costs.)

  • CBO sent a letter today to Senator Conrad estimating the long-term fiscal effect of two personal income tax proposals. The first would index the Alternative Minimum Tax (AMT) for inflation beginning in 2008. The second would, in addition to indexing the AMT for inflation, also permanently extend the personal income tax provisions of the Economic Growth and Tax Relief and Reconciliation Act of 2001 (EGTRRA) and Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) that otherwise would expire in 2010.

  • Rapid growth in imports of merchandise from the Peoples Republic of China over the past decade has posed a challenge for competing U.S. manufacturers. Some observers believe that the Chinese government has contributed to growth in U.S. imports by maintaining an undervalued currency, and there have been calls for China to revalue its currency, the renminbithat is, to raise its value (or allow it to rise) relative to the dollaras a way to level the playing field for U.S. manufacturers.

  • I am testifying before the Senate Finance Committe today on overuse, underuse, and misuse of health care. Todays remarks focus on several key points:

  • Today I'm delivering testimony before the House Budget Committee on increasing the value of federal spending in health care. The webcast is posted here. This is the first of two hearings this week on health costs -- tomorrow I'll address similar issues before the Senate Finance Committee.

  • This morning I'm testifying before the Senate Finance Committee on infrastructure investment. My statement can be found here. The testimony occurs at a time when burgeoning congestion on the nations transportation networks and concerns that the nation is underinvesting in its physical infrastructure have focused attention on the federal governments role in sustaining that infrastructure. The testimony defines "infrastructure" as including transportation, utilities, and some other public facilities.

  • CBO has been doing a significant amount of analytical work on climate change, and I wrote an oped for today's Washington Post on the topic.

    The piece notes that the economic cost of emission reductions will depend on the degree to which flexibility is provided on when emission reductions can occur and what policymakers do with the valuable emission allowances created under a cap-and-trade program.

  • CBO released its monthly budget review today. During the first nine months of FY 2008, the federal government incurred a deficit of $268 billion according to CBO estimates -- $148 billion more than the shortfall recorded during the same period in 2007. About $79 billion of that change is due to the tax rebates enacted in the Economic Stimulus Act of 2008. Compared with their level in 2007, outlays have risen by more than 6 percent, whereas revenues have declined by about 1 percent.

  • I was on a panel this morning at the Aspen Ideas Festival on the future of health care reform. During a session earlier in the conference, David Brooks delivered an important talk about how policymakers should pay more attention to neuroscience, emotion, peer effects, and other related factors in the design of public policies. Many of his themes are echoed in, and reflect, the growing field of behavioral economics (see here for a related discussion).

  • The variability of individual earnings and household income (that is, how much a worker's earnings or a household's income bounces around from year to year) has become a topic of much interest to analysts and the policy community. Today, CBO issued a comprehensive paper on the topic. The study follows up on our earlier work on earnings and income variability -- see here.