Committee for a Responsible Federal Budget

Line Items: Election Edition

Nov 5, 2012 | Budget Process| Taxes

Decision Time – Election Day is tomorrow and the stakes are high. Not only is control of the White House and Congress at stake, but the election will also have repercussions for the federal budget and national debt. Although it will be the current group of policymakers that will address the fiscal cliff (or not) in a post-election lame duck session of Congress, the results of the voting will no doubt play a role in the deliberations, which could very likely spill into next year. Will our leaders pull the lever on a solution or will they elect to kick the can down the road again?

Down to the Wire – As the candidates eye the finish line, the bottom lines of their fiscal plans are getting more scrutiny. The Concord Coalition looked at the Obama and Romney budget proposals and called for more specifics. Wonkblog gives you the opportunity to fill in the blanks for both the Romney and Obama tax plans. And check out this video from Fix the Debt on the election debt discourse. The candidates have not been keen to detail how they would address the debt, but whoever sits in the Oval Office next year will quickly learn that the debt is getting in between all of their priorities.

Fiscal Cliff as Dark Horse – The looming fiscal cliff has been a dark horse in this campaign as it has been rarely discussed but always looming in the background. However, it will take center stage immediately after the votes are counted as Congress will attempt to address it before the year-end deadline, though House Speaker John Boehner (R-OH) says that the best scenario is a “bridge” over the cliff -- a temporary fix that delays the cliff until next year. The Financial Services Roundtable proposed a two-pronged “bridge” approach in an open letter last week. If policymakers push back the fiscal cliff, they should provide a down payment and credible approach for fully resolving the cliff in the first half of 2013. Leaders in Washington are learning that the cliff is not just a national problem, as more countries are expressing concern that it will impact the global economy.

Debt Ceiling May Be Fiscal Cliff’s Running Mate – The fiscal cliff will have a partner as the Treasury Department confirmed that the statutory debt ceiling will also be reached at the end of the year, though "extraordinary measures" can be taken to put off the need for a debt limit increase until early 2013. You can follow debt ceiling developments here.

Tax Reform Throws Hat Into the Ring – Lots of groups are making the case for tax reform in 2013, and lines are being drawn on Capitol Hill. Fundamental tax reform will be key to a comprehensive debt reduction plan. While tax reform won’t be easy, there is general agreement that reform should contribute to reducing the debt. The Business Roundtable is also pushing for corporate tax reform to  be a part of the equation. To get an idea of how corporate tax reform can be accomplished, try out our corporate tax reform calculator.

Sandy Gets on the Ballot – Superstorm Sandy is gone, but its devastating effects still linger. As millions of people slowly recover, lawmakers are considering a supplemental appropriations bill to fund the cleanup and recovery efforts. Last week, we blogged that preparing for disasters should also include being fiscally prepared so that we can deal with such catastrophes without busting the budget.

Key Upcoming Dates (all times are ET)

November 6

  • Election Day

November 13

  • House and Senate due to convene for lame duck session

November 15

  • Consumer Price Index for October released

November 29

  • Second estimate of Third Quarter GDP figures released

December 7

  • Unemployment statistics for the month of November released

December 14

  • Consumer Price Index for November released

December 20

  • Third estimate of Third Quarter GDP figures released

January 1, 2013

  • The “fiscal cliff” occurs, including the expiration of the 2001/2003/2010 tax cuts and across the board spending cuts the following day