Federal Budget & Tax

Federal Budget & Tax: News Blog Background

Tuesday, April 29, 2008

The BEA will release 1st quarter GDP figures tomorrow, and the BLS will release employment data on Friday. To be sure, these will be carefully-watched figures as the nation holds its breath waiting to see if we're moving closer to the R-word.

But these are national data, and it becomes easy to overlook the fact that some areas within the nation are currently in throes of economic turmoil. This morning's release of metropolitan employment data reminds us that, regardless of what happens in aggregate, many Americans are already living a recession.

Unemployment rates were higher in March than a year earlier in 309 of the 369 metropolitan areas, lower in 40 areas, and unchanged in 20 areas, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Fourteen areas, 12 of which are located in California, recorded jobless rates of at least 10.0 percent, while 9 areas registered rates below 3.0 percent. The national unemployment rate in March was 5.2 percent, not seasonally adjusted, up from 4.5 percent a year earlier.

In March, 45 metropolitan areas reported unemployment rates of at least 7.0 percent, up from 26 areas a year earlier, while 69 areas recorded rates below 4.0 percent, down from 128 areas in March 2007....Overall, 193 areas recorded unemployment rates below the U.S. figure of 5.2 percent, 163 areas had higher rates, and 13 areas had the same rate.

Posted by Craig Jennings, 10:37:57 AM

Friday, April 25, 2008

Federal Decisions Impact State Budgets

There were a slew of articles today from around the country about the impact of federal budget cuts on local communities, particularly for local education programs (see below). These articles detail the impact of cuts on a wide variety of programs and constituencies, from summer school to youth vocational education, from a rape crisis hotline to arts and music classes, from school counseling to early-reading instruction.

Many of these cuts are finally being felt at the local level, despite being approved by Congress up to a year ago. The Center on Budget and Policy Priorities released a report last week stating that 20 states have made or proposed budget cuts that threaten vital services, including public health programs (13 states), services for the elderly and disabled (five states), K-12 education (nine states), and college and university programs (12 states).

The CBPP report has an excellent passage about the importance of federal assistance during economic downturns - particularly in supporting state level investments:

The federal government, which can - and arguably should - run deficits during troubled economic times, can help states minimize damaging budget cuts by providing assistance to the states, as it did in the recession in the early part of this decade. Federal assistance can lessen the extent to which states take these harmful, "pro-cyclical" actions and prevent budget cuts in vital services residents need.

Hopefully those in Congress who are crafting the FY 2009 budget resolution this week will remember their decisions on funding will have consequences for real people down the road. Hopefully they will make the choice to invest in our communities by restoring some federal funding in areas that have been drastically under funded the last few years and help the states support its services when people most need them.

Chicago Tribune: Federal funding cuts could devastate rape crisis hot lines
Chicago Daily Herald: Fox Valley jobs program, participants face tough times with budget cuts
San Diego Union Tribune: School board approves cuts to budget and loss of jobs
Charlottesville, VA: Madison Co. School Budget Cuts
Baltimore Sun: Lean budget proposal unveiled in Carroll
Arizona Republic: State universities await ruling on budget cuts

Posted by Adam Hughes, 10:13:50 AM

Monday, April 21, 2008

SCHIP Rules Imposed in 2007 Violated Law

The Government Accountability Office and the Congressional Research Service have concluded that rule changes imposed by the Bush administration on the State Children's Health Insurance Program (SCHIP) in 2007 violated federal law: BNA reports:

In legal opinions released April 18, the Government Accountability Office and the Congressional Research Service said the SCHIP guidance is a rule for purposes of the Congressional Review Act (CRA) and so violates statutory requirements for congressional notice and review.

The Congressional Review Act was passed in 1996 and serves to keep Congress informed of rulemaking activities at federal agencies and makes sure those rules are submitted to Congress and the Comptroller General before they take effect. In this case, the SCHIP rules were published and used to deny a request by New York State to expand its SCHIP coverage to children from higher-income families (up to 250 percent of poverty, or $44,000 for a family of 3).

Unfortunately, $44,000 isn't a lot of money for a family of three in many parts of New York State, particularly NYC. Come to think of it, that isn't a lot of money for a family of three in many parts of the United States. Considering the prices of health care these days, restricting access to SCHIP for families in NY was an unfortunately decision from the Bush administration. This latest development gives some hope that it can be overturned.

Read the Opinions:
GAO Opinion
CRS Opinion

Posted by Adam Hughes, 09:37:46 AM

Thursday, April 17, 2008

More Fallout From Federal Budget Cuts

The Washington Post reported this morning that U.S. nuclear weapons labs are losing staff and not undertaking necessary and valuable research because of budget cuts. From the Post article:

The directors of the nation's three national nuclear weapons laboratories say that budget cuts by Congress and the Bush administration have reduced their ability to carry out scientific research needed to ensure the reliability of the nation's nuclear arsenal in future years.

Another example of the impact of budget cuts and years of underfunding important priorities. There isn't much fallout at this point from the lack of resources, but I think this is one area in particular we do not want to wait to see what happens.

Posted by Adam Hughes, 11:09:11 AM

Wednesday, April 09, 2008

DAILY FISCAL POLICY REPORT -- April 9, 2008

Health Care -- Bipartisan Support for Blocking Bush Medicaid Rule: CQ reports ($) that a House bill that would block the president's Medicaid rule changes is gaining support among Republicans. The proposed rule changes would shift about $17.8 billion (over five years) in Medicaid costs to states. The bill, H.R. 5613, will be marked up today in the Committee on Energy and Commerce Health Subcommittee.

War Spending -- Iraq Supplemental May Have Additional Stimulus Spending: After last week's deterioration of employment data released by the government, Sen. Majority Leader Harry Reid (D-NV) and Sen. Debbie Stabenow (D-MI), along with Democratic House leaders, are calling for adding extension of unemployment benefits to the upcoming Iraq war spending bill. House Republicans have vowed to oppose additional stimulus spending. CongressDaily ($)

Inequality -- CBPP/EPI: Income Inequality Continues to Rise: The Center on Budget and Policy Priorities and the Economic Policy Institute have released a lengthy report analyzing state-by-state data on income trends. The report concludes that "The gap between the richest and poorest families...grew significantly in most states over the past two decades...In fact, the nation's longstanding trend of growing inequality accelerated since the late 1990s as incomes fell for poor families in a number of states." CBPP/EPI Report Executive Summary

Taxes -- "Extenders" Package Could Move Before End of May: Sen. Finance Committee Chairman Max Baucus (D-MT) hopes to introduce, mark up and bring the extenders package of tax cuts to the Senate floor before the start of the Memorial Day Recess in May. The legislation would be fully offset, cover two years (2008 and 2009), and cost about $50 billion. Baucus would not pin down a date for introducing the measure, but stressed the need to get work done early: "We've got to do as much as we can during this work period." BNA ($)

Posted by Adam Hughes, 09:27:00 AM

Latest Entries by Theme

All Themes

Appropriations & Spending

Federal Tax Policy

Income/Wealth Inequality

Budget Projections

Government Performance