Register to Vote: Rock the Vote, powered by Credo Mobile

HOME

ABOUT US

OUR ISSUES

Information & Access

Nonprofit Advocacy

Regulatory Policy


PRESS ROOM

ACTION CENTER

PUBLICATIONS

THE WATCHER

OUR BLOGS


SIGN UP

Receive news, updates, and alerts!

DONATE

Help support our work


OTHER SITES

FedSpending.org

RTK NET

NPAction

Working Group on Community Right-to-Know

Citizens for Sensible Safeguards

Open the Government

OMB Watch Logo

Demanding a federal budget that is fair, responsible, and meets our nation's priorities

Home :  Federal Budget & Tax : 
Federal Budget & Tax:      News     Blog     Background    



Wednesday, December 21, 2005

GDP Growth At 4.1 Percent

The Commerce Department reported today the economy grew by 4.1 percent in the fourth quarter, despite surging energy prices. Business growth was slightly lower than the government had previously estimated it would be. This growth was attributed to high consumer demand, especially for cars, as well as business investment.

Despite this economic upswing, it would be misleading to ignore current economic weaknesses, and instead point to GOP tax cutting as the reason for economic success. Yes, GDP growth has been solid over the last few years, but as Gene Sperling discusses in this article on ThinkProgress.org, the growth does not necessarily mean all is well with the economy. In terms of employment growth, for example, our current economic recovery is the weakest ever recorded. Also, the poverty rate has risen each year Bush has been in office. 5.4 million people have fallen into poverty since 2000, making this the only recovery on record where poverty has increased from the second year to the third year after the recession. Finally, the personal savings rate has has hit a rock bottom -2.18 percent (recorded in August). This level of negative savings has not been seen since the Great Depression. So while GDP is on the rise, it is important not to ignore the other economic factors which measure just how well the average person in society is faring.

Economy Grows at Fastest Pace in 1 1/2 years



Posted by Becky Lewis, 10:39:01 AM



Tuesday, December 20, 2005

Tax Gap Is The Highest It's Been In 46 Years

The tax gap is the gap between personal income and adjusted gross income (AGI), and it is currently the highest it has been in 46 years worth of data analyzed by the Bureau of Economic Analysis.

AGI is the key before-tax definition of income, used by the IRS in the calculation of individual income tax liabilities, while personal income is often used in examining trends in national economic output, consumer spending, saving, and investment. In other words, the tax gap is the difference between the amount of money people actually have, and the amount of money they say they have in their tax returns. The gap is currently at 14.4%, and is up from 10.7% in 2000.



Posted by Becky Lewis, 06:05:44 PM



Monday, December 19, 2005

Congress Clears Katrina Tax Package

On Friday, the House and Senate approved by unanimous consent a package of tax breaks (H.R. 4440) that are meant to help individuals and businesses in the Gulf Coast region. The Senate accepted the House's decision to exclude casino's and liquor stores from the tax measure, which provides a bonus depreciation deduction for property in the Gulf, as well as a carryback of net operating losses. Thte Joint Committee on Taxation scored the cost of the bill at about $7.8 billion over five years.



Posted by Becky Lewis, 02:44:58 PM



Friday, December 16, 2005

CBO Releases Another Depressing Long-Term Outlook

The Congressional Budget Office released their Long-term Budget Outlook today, in which they noted

Even if taxation reached levels that were unprecedented in the United States, current spending policies could become financially unsustainable. An evergrowing burden of federal debt held by the public would have a corrosive and potentially contractionary effect on the economy.

And although this administration has been touting their economic growth lately, the CBO points out that economic growth itself is "unlikely" to bring the nation's long-term fiscal position into balance, especially if we accrue ever-larger amounts of debt.



Posted by Adam Hughes, 03:00:29 PM



Thursday, December 15, 2005

GOP Budget Policies Don't Honor Or Promote Work

We have been saying a lot lately that Congressional GOP budget and tax policies look out for the wealthy by providing them with tax cuts, while at the same time hurt the poor by robbing social programs of funding in the name of fiscal responsibility and deficit reduction. While this is true, there is more to the picture. As Josh Lynn and Robert Gordon have recently discussed at Think Progress and in the American Prospect, the latest GOP policies are also responsible for discouraging hard work and self-reliance - two ideals endlessly promoted in conservative rhetoric. Lynn and Gordon write

[the cuts] to Medicaid, food stamps, and child care, for starters — punish working Americans by undermining incentives to hold down a job, or by essentially classifying them as “too rich” to collect assistance.

Additionally, the tax burden is blatantly being shifted from capital to labor, as witnessed by the House's recent passage of the tax reconciliation bill extending low capital gains and dividends rates. Policies such as these reward wealth while making it harder for the average working family to pay the bills.

Posted by Becky Lewis, 06:17:59 PM



House Passes Labor/HHS Bill; ANWR Attached To Defense Bill

The House passed a $602 billion Labor/HHS Appropriations bill yesterday by a close vote of 215-213, nearly one month after twenty-two Republicans surprisingly voted with Democrats to defeat the initial bill that came out of conference. In the vote, all Democrats and only 12 Republicans voted against the bill, which provides $142.5 billion in discretionary funding (the remainder is automatic spending on entitlement programs). This discretionary amount is 0.1 percent - or $163 million - less than what was appropriated for FY 2005, and $785 million more than President Bush’s budget request.

In order to pick up support for the bill, appropriators increased rural health spending by $90 million and, in a nod to Rep. Bill Thomas (R-CA), struck a provision barring Medicare coverage of erectile dysfunction drugs. The overall cost of the bill did not change, however, because money added was offset by a $120 million reduction to an HHS vaccine fund.

The Senate will most likely clear the measure later today, even though there is widespread bipartisan dissatisfaction with this bill, which is the most austere Labor/HHS bill seen in decades. Overall, the bill cuts nearly $1.5 billion from the FY05 levels; however, if a 1 percent across-the-board cut is implemented later this week (as is being pushed by GOP leaders like Dennis Hastert (R-IL), total cuts would approach $3 billion.

Arlen Specter (R-PA), chairman of the Senate Labor-HHS-Education Appropriations Subcommittee, said that even though the measure provides insufficient funding for major health and school programs, he expects it to pass. He said, "I will vote for it if my vote is needed to pass, otherwise I will vote against. There is not enough money in it."

In other appropriations news, Sen. Ted Stevens (R-AK) - the Senate's biggest proponent of opening up the Arctic National Wildlife Refuge for drilling - has attached the ANWR provision to the Defense appropriations bill. The defense bill also includes funding for hurricane disaster relief, and Stevens, who is the chair of the Senate Defense Appropriations Subcommittee said, "It’s going to be awfully hard to vote against Katrina [disaster assistance]. . . . If it’s in there, then maybe those disaster people — area people — will vote with me on ANWR." This move will also likely clear the way for Congress to pass a roughly $42 billion deficit reduction reconciliation bill that was being held up partially over ANWR language.

Stevens has had some difficulty amassing support for ANWR, particularly from House Republicans, a number of whom refused to vote for their version of the budget reconciliation bill until the leadership removed ANWR language from the measure.

Posted by Becky Lewis, 03:30:33 PM



Tuesday, December 13, 2005

Deficit Up Sharply In November

This November the Treasury recorded a n $83.1 billion deficit. The significant increase is partially due to hurricane payouts, as government spending is far exceeding tax receipts. The total deficit for the first two months of this fiscal year - which began October 1 - was $130.3 billion, or 13.1 percent higher than it was during the same period last year (when the Treasury reported a $115.2 billion deficit). Revenues for the month totaled $138.8 billion while spending was up to $221.9 billion.



Posted by Becky Lewis, 11:18:35 AM



Wednesday, December 07, 2005

Temporary Victory for Wolf in Tax Bill

Rep. Frank Wolf (R-VA) has pursuaded the House GOP leadership to put forward a Hurricane Katrina tax bill that exempts some businesses in the Gulf Coast from receiving tax breaks. According to a Ways and Means Committee summary of the bill, the "Gulf Opportunity Zone" restoration tax incentives will not be extended to country clubs, liquor stores, massage parlors, private or commercial golf courses, racetracks, tanning salons, or "facilities used for gambling."

Wolf and 35 others have said they will oppose a conference agreement that puts tax breaks for those businesses back in. The fear is that the tax reconciliation bill and the Katrina tax relief bill will be combined in conference, which would put these dissenting Republicans in a significantly more precarious political position if they decided to vote their consciences.

Not surprisingly, the revised House bill has drawn criticism from both the White House and prominent Republican Senators. White House Press Secretary Scott McClellan said that administration officials "don't believe you can be selective when it comes to addressing the economic needs of the region. It should apply equally and fairly to all those businesses." Trent Lott (R-MS) said in a statement yesterday, "To reject legitimate businesses from providing good jobs to a state’s disaster victims would set a serious precedent in disaster relief funding. I cannot recall the Congress ever discriminating against legal businesses in the dissemination of disaster relief — not against gaming establishments, not against businesses which sell tobacco products." Business discrimination or not, it would have been nice to see Lott display a scintilla of this same outrage over Congressional actions to cut funding from social service programs after citizens in his region suffered in the wake of the worst natural disaster seen in recent American history.



Posted by Becky Lewis, 01:02:26 PM



Friday, December 02, 2005

Greenspan Again Supports Budget Rules For Congress

In his last speech to the Federal Reserve before retiring, Federal Reserve Chairman Alan Greenspan again warned about the economic risks posed by long-term budget deficits and an escalating national debt. Greenspan described the risk of sustained deficits on the U.S. economy over the long-term as "severe" and urged swift action to begin instituting policies to correct structural problems.

Greenspan again supported budget rules, such as pay-as-you-go (PAY-GO) rules, for Congress to help "craft a budget strategy that meets the nation's longer- run needs." A few weeks ago, Sen. Tom Coburn (R-OK) shifted his position on true PAY-GO rules and now 51 Senators are on record supporting the mechanism that helped to lower deficits and produce surpluses between 1997 and 2002.



Posted by Adam Hughes, 04:02:49 PM



Economy Posts Solid Job Gains in November

The country's businesses added 215,000 jobs in November, according to a report released this morning by the Labor Department. This increase is more than the average monthy gains for the first eight months of 2005 (196,000) and follows two months of disappointingly low gains following the hurricanes along the Gulf Coast.

But it was recovery from those very same hurricanes that drove much of the increase in jobs in November, with construction employment adding 37,000 jobs and leisure and hospitality jobs jumping 29,000 - possibly showing a return of workers to the tourism industry in New Orleans.

The Labor Department also included specific information about workers who evacuated from the Gulf Coast because of Katrina and their prospects of finding work in the aftermath. Out of an estimated 886,000 who evacuated, 442,000 have returned. The overall unemployment rate for evacuees is 20.7 percent. The unemployment rate among people who had not returned home was far greater, 27.8 percent, than among those who had come back, 12.5 percent.

The overall unemployment rate held steady at 5.0 percent, and most breakouts of the rate were the same as previous months with the exception of unemployment for blacks, which jumped from 9.1 percent to 10.6. The 1.5 percent jump is the largest in the history of the household survey done by the Bureau of Labor Statistics, according to the Economic Policy Institute.



Posted by Adam Hughes, 10:31:17 AM




Latest Entries by Theme

All Themes

Appropriations & Spending

Federal Tax Policy

Income/Wealth Inequality

Budget Projections

Government Performance

Estate Tax

State Fiscal Policy

Watcher

Entitlements

Budget Process

Debt & Deficit

Oversight & Enforcement

Transparency

Privatization

Contact Us

Most Recent Entries for Federal Budget & Tax

Approps Update: Senate Back to Work

OMB Releases FY 2008 Earmarks Data

DPC Hearing on Iraq Contracting This Week

Monthly Budget Review: June, 2008

Congress to End White House Forest Conservation Program

Fiscal Policy Agenda Returns to Washington

Bush Signs War Supplemental

BudgetBlog on Hiatus for Holiday: Happy Fourth Everyone!

The Heat Must Be Getting to Them

GAO Report Finds Private Medicare Providers Prefer Profits Over Providing Better Service

Archived Entries for Income/Wealth Inequality

July

June

May

April

March

February

January

December, 2007

November, 2007

October, 2007

September, 2007

August, 2007

July, 2007

June, 2007

May, 2007

April, 2007

March, 2007

February, 2007

January, 2007

December, 2006

November, 2006

October, 2006

September, 2006

August, 2006

July, 2006

June, 2006

May, 2006

April, 2006

March, 2006

February, 2006

January, 2006

December, 2005

November, 2005

October, 2005

September, 2005

August, 2005

July, 2005

June, 2005

May, 2005

April, 2005

March, 2005

February, 2005

January, 2005

December, 2004

October, 2004

September, 2004

August, 2004

July, 2004

June, 2004

May, 2004

March, 2004

December, 2003

October, 2003

September, 2003

July, 2003