Author Archive

A “Normal” Budget Isn’t Really Normal

Treasury closed the financial books on fiscal 2014 last week. As my colleague Howard Gleckman noted, the top line figures all came in close to their 40-year averages. The $483 billion deficit was about 2.8 percent of gross domestic product, for example, slightly below the 3.2 percent average of the past four decades. Tax revenues […]

The $300 billion question: How should we budget for federal lending?

Lending programs create special challenges for federal budgeting. So special, in fact, that the Congressional Budget Office estimates their budget effects two different ways. According to official budget rules, taxpayers will earn more than $200 billion over the next decade from new student loans, mortgage guarantees, and the Export-Import Bank. According to an alternative that CBO […]

Does the Export-Import Bank Make or Lose Money?

Suppose your aunt decides to start a business making pizza ovens. She will design and build the ovens, and her daughter will manage operations. A bank is ready to lend her $100,000 to get started, but it wants someone to co-sign and be on the hook if she misses any payments. She offers to pay […]

Seven Tax Issues Facing Small Business

Today I had the chance to testify before the House Small Business Committee on the many tax issues facing small business. Here are my opening remarks. You can find my full testimony here. America’s tax system is needlessly complex, economically harmful, and often unfair. Despite recent revenue gains, it likely will not raise enough money […]

Time to Fix the Budget Process

Congressional negotiators are trying to craft a budget deal by mid-December. Fareed Zakaria’s Global Public Square asked twelve experts what they hoped that deal would include. My suggestion: it’s time to fix the budget process: Odds are slim that the budget conference will deliver anything big on substance. No grand bargain, no sweeping tax reform, […]

Should We Eliminate the Extraordinary Measures?

You’ve probably heard that Treasury will hit the debt limit on October 17 and soon thereafter it won’t be able to pay all of America’s bills. That second part is true: Congress needs to act soon—preferably before the 17th—so Treasury doesn’t miss any payments. But the first part isn’t: Treasury actually hit the debt limit […]

Actually, the United States Has Defaulted

Since the day of Alexander Hamilton, the United States has never defaulted on the federal debt. That’s what we budget-watchers always say. It’s a great talking point. One that helps bolster the argument that default should not be an option in Washington’s latest debt limit showdown. There’s just one teensy problem: it isn’t exactly true. […]

The Costs of Debt Limit Brinksmanship

Today I had the chance to testify before the Joint Economic Committee about a perennial challenge, the looming debt limit. Here are my opening remarks. You can find my full testimony here. I’d like to make six points about the debt limit today. First, Congress must increase the debt limit. Failure to do so will […]

Uncle Sam Is Smaller (Relatively) Than We Thought

At 8:30 this morning, Uncle Sam suddenly shrunk. Federal spending fell from 21.5 percent of gross domestic product to 20.8 percent, while taxes declined from 17.5 percent to 16.9 percent. To be clear, the government is spending and collecting just as much as it did yesterday. But we now know that the U.S. economy is […]

The Fed and America’s Debt

Is the Federal Reserve part of the government? You might think so, but you wouldn’t know it from the way we talk about America’s debt. When it comes to the debt held by the public, for example, the Fed is just a member of the public. That accounting reflects the Fed’s unusual independence from the […]