Fiscal Stewardship

OMB Watch Offers Testimony to National Deficit Commission

On June 30, OMB Watch's Gary Therkildsen offered the organization's perspective on the long-term fiscal gap facing the nation to the National Commission on Fiscal Responsibility and Reform. In the two-page testimony, Therkildsen noted, "OMB Watch recognizes the dangers posed by the unsustainability of the long-term fiscal outlook. However, the current atmosphere of deficit scaremongering poses a different danger: poor fiscal policy that ultimately harms Americans and does nothing to change the trajectory of the long-term budget situation. 'Fiscal responsibility' is not simply setting arbitrary limits on federal spending for the sake of reducing the federal budget deficit. Rather, it is an assessment of the current economic and fiscal environments and a determination of an equitable deployment of national resources."

Read the full text of the testimony.

Articles & Analysis

BP Agrees to $50.6 Million Penalty for Safety Violations that Killed 15

The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) announced Aug. 12 that BP has agreed to pay a $50.6 million penalty for safety violations related to the 2005 explosion at its Texas City, TX, refinery that killed 15 workers and injured 170 others. In addition to the fine, BP has also agreed to allocate about $500 million to address unsafe conditions at the refinery.

Congress Sends Aid to States, Gaps Remain

With all of the attention placed on federal budget problems, it can be easy to forget that state budgets are facing similar troubles. Since almost every state has some form of a balanced budget requirement, states can be extremely susceptible to swings in the economy, and the recent recession is a perfect example. In an effort to help ameliorate the states' fiscal situation, President Obama recently signed into law a $26 billion state aid bill passed by Congress in a rare August session. The bill, which includes $10 billion in education funding and $16 billion for state Medicaid programs, is expected to save some 300,000 jobs. Still, it pales in comparison to the actual size of the fiscal problem facing the states.

Commentary: Federal Debt and Its Implications for Economic Stability

When the Congressional Budget Office (CBO) produced a brief in late July on the nation’s debt levels and the risk they present to the economy, those pushing for immediate deficit reduction jumped on the report as evidence that the U.S. is about to go over a financial cliff. Upon closer inspection, though, the greatest threat facing the country is still the Great Recession and the lingering effects thereof.

Alaska Court Stops All Oil and Gas Activities in Chukchi Sea

On July 21, a federal district court judge in Alaska issued an order halting all oil and gas activities in more than 29 million acres of the Chukchi Sea. The order said that the former Minerals Management Service (MMS) failed to adequately consider the environmental impacts of potential natural gas production in violation of the National Environmental Policy Act (NEPA).

Congress' Spending Slump

The month of August is seen as an important time in every Congress because the weeks-long recess breaks up the legislative calendar. As the number of legislative days dwindles, Congress is faced with a slew of spending bills, including a war supplemental bill, a small business jobs bill, and a slow-starting appropriations process. The sheer amount of spending bills that remain on the docket, and the tardiness of these bills, nearly guarantee at least one continuing resolution in the fall.

Commentary: The Case for a Strong Estate Tax

On Capitol Hill, there exists a debate about the future of the Bush tax cuts and the federal estate tax. While President Bush's 2001 tax policy eliminated the estate tax for 2010, it is set to return to pre-Bush tax cut levels in 2011 unless Congress intervenes. How Congress chooses to address the estate tax will have significant implications for the federal budget deficit and the fair distribution of the nation’s prosperity.

Americans for a Fair Estate Tax Urges Senators to Co-Sponsor the Responsible Estate Tax Act

WASHINGTON, July 26, 2010—Americans for a Fair Estate Tax (AFET), a coalition of national and state organizations, sent a letter to the Senate today asking members to co-sponsor the Responsible Estate Tax Act, S. 3533. Over seventy organizations, including major labor, religious, social equity, and good government groups, are urging senators to support the bill. OMB Watch is a member of AFET and signed on to the letter.

Commission Examines Wartime Contracting and Inherently Governmental Functions

On June 18, the Commission on Wartime Contracting in Iraq and Afghanistan (CWC) held the first of two hearings to examine the proper role and oversight of private security contractors (PSCs) in wartime contingency operations. The commission called six individuals from the private, academic, and nonprofit sectors to testify about the thorny issue of defining and enforcing what should and should not be outsourced to PSCs. While disagreement abounded on the issues, commissioners were able to pick out a few lines of consensus among the witnesses.

For-Profits Use Nonprofit Structure to Avoid Earmark Ban

In response to intense criticism of congressional earmarks, House Appropriations Chair David Obey (D-WI) announced a ban on all earmarks to for-profit organizations. These companies and their congressional patrons wasted little time in funneling earmarks to nonprofit organizations in order to circumvent the ban. Using nonprofits to circumvent the ban on earmarks raises questions about the practice itself, as well as the policy of ending all earmarks to for-profit corporations.

Commentary: The Case for a Second Stimulus

If there's one thing Republicans and Democrats can agree on, it's that the economy has seen better days. Indeed, looking at various employment statistics, it's hard for anyone to express optimism about the nation's economic condition. The national unemployment rate is 9.5 percent, and the number of workers unemployed for 27 or more weeks is at an historic high. The nation's present economic state has provided ammunition to critics who argue that the Recovery Act, the $787 billion package designed to stimulate the economy, has failed. The current economic situation has prompted calls from others for a second stimulus.