At the Economic Policy Institute, Hunter Blair writes—Bipartisan Senate budget bill could damage the economy during recessions:
Last week, the Senate Budget Committee passed a bipartisan set of budget reforms out of committee. While they include some important steps forward, such as effectively eliminating the archaic debt limit, their centerpiece is a deeply damaging provision that, if passed into law, would make recessions far more damaging by forcing Congress to consider steep cuts just when the economy would be most hurt by them.
Under the reforms, instead of passing a budget every year, Congress would be on a two-year budget cycle. This is not totally objectionable. The damaging provisions are the “special reconciliation instructions“ provided in the second year of this budget cycle. In the first year, the Congressional Budget Office (CBO) would project the debt-to-GDP ratio from the budget. In the second year, CBO would report on whether the federal government is meeting those debt-to-GDP targets, and if not, trigger the special reconciliation instructions. These instructions would require the Senate Budget Committee to recommend an amount of deficit reduction in response to missing the debt-to-GDP targets and create a fast track for passing those deficit reductions.
Others have rightly focused on the extent to which this could line up budget cuts to programs that U.S. families rely on, like Medicaid, Medicare, and the Affordable Care Act. For example, revenues have come in even lower than CBO expected following the Republican Tax Cuts and Jobs Act (TCJA). If this reform bill were in place, Congress would be expected to respond to these larger-than-expected tax cuts for the rich with deficit reduction. This has been in the Republican leadership playbook all along, as they have made it abundantly clear that cuts to vital programs for low- and moderate-income families are the intended next step after passing regressive tax cuts for the rich and corporations.
But that’s not the only disaster for U.S. households this process could create. If Congress tried to reduce the deficit on the scale of missed debt-to-GDP targets during a recession, the result would be an economic catastrophe by further sapping demand from the economy and driving the United States further into recession. As data from a recent CBO report makes clear, recessions are exactly when CBO debt projections are likely to be extremely off, as fewer revenues come in and more government spending occurs as the economy contracts. [...]
TOP COMMENTS • HIGH IMPACT STORIES
QUOTATION
“The scientists that present at TED confabs needn’t affirm free-market capitalism directly… so long as the implication of their thinking have free-market ‘consilience’… In fact, TED has become a spectacularly influential force in part through its conciliation of science and libertarian economics, which it then sells to us as entertainment.”
~~Curtis White, We, Robots: Staying Human in the Age of Big Data (2015)
TWEET OF THE DAY
BLAST FROM THE PAST
At Daily Kos on this date in 2018—Federal judge blocks Trump's asylum ban:
A federal judge is once again standing in the way of Donald Trump’s illegal orders—this time his proclamation blocking people who cross the southern border between ports of entry from applying for asylum:
"Whatever the scope of the president's authority, he may not rewrite the immigration laws to impose a condition that Congress has expressly forbidden," Tigar wrote in his opinion. "Asylum seekers will be put at increased risk of violence and other harms at the border, and many will be deprived of meritorious asylum claims."
The immigration law in question says that migrants can apply for asylum “whether or not at a designated port of arrival.”
This is likely another place where Trump will look to Brett Kavanaugh and Neil Gorsuch to bail him out by being a lapdog and a sociopath, respectively.
On today’s Kagro in the Morning show: Sondland testifies. The bombshells begin in 5 minutes. Greg Dworkin has bad newsfor Trump on impeachment. SDNY opens a #RudyColludy probe, with an eye on Ukrainian gas deals. House now investigating Trump's lies to Mueller. But Haley's emails.
RadioPublic|LibSyn|YouTube|Patreon|Square Cash (Share code: Send $5, get $5!)