Budget Matters Blog

One of the major issues not addressed as part of the recent deal on the fiscal cliff is the future of the major entitlement programs – Social Security, Medicare and Medicaid.Entitlements are programs that pay benefits to anyone who applies for them and meets the eligibility requirements for that specific program. Social Security and Medicare – the two largest entitlement programs – together account for roughly one third of total federal spending.Many analysts, along with congressional Republicans, consider these programs to be the main contributors to our growing federal debt. Senate Minority Leader Mitch McConnell (R-KY), who led GOP negotiators during ...

The discretionary budget would see substantial cuts if sequestration took effect.

Last week’s fiscal cliff deal left much unresolved – no agreement on raising the debt ceiling, the fiscal year 2013 budget is still incomplete, and there was no more than a delay in dealing with one of the major components of the cliff: sequestration.Sequestration – the automatic, across-the-board cuts to discretionary spending mandated in the Budget Control Act (BCA) of 2011 – was supposed to go into effect on Jan. 2. The fiscal cliff deal delayed its implementation by two months, until March 1. A lot of confusion remains about ...

Here are the top 5 things you need to know  about the fiscal cliff deal enacted by Congress this week:

1)  Extends the Bush-Era Tax Cuts: The Bush-era tax cuts were scheduled to expire on Dec. 31. The tax cuts benefited nearly every American taxpayer, though they offered the most generous benefits to the wealthiest Americans. Congress permanently extended the tax rates on income below $400,000 for individuals and $450,000 for couples, and raised the rate on capital gains and dividends from 15 percent to 20 percent for income above the same threshold. Tax rates will rise for ...

The U.S. Senate Chamber

I recently read an article that compared the gridlock in Washington, D.C., to living next to a railroad track with trains constantly going by – eventually you don’t even notice it. And with the fiscal cliff looming, concerns about the inability of Congress to get anything done are mounting.So it comes as some surprise that last week the Senate voted unanimously – 98 to 0 – to pass the fiscal year 2013 defense authorization bill. Apparently in Washington – or at least in the Senate – when it comes to the Pentagon it’s not gridlock, but ...

Cleanup in Breezy Point, NY. Photo courtesy of FEMA

The White House is preparing an emergency funding request to help repair the damages caused by hurricane Sandy. Although final details are not yet available, the request is expected to be for about $50 billion.This is considerably below the total amount requested by states which suffered severe damage from Sandy. According to the New York Times, New York, New Jersey and Connecticut are seeking $82 billion in federal funding both to repair hurricane damage and make infrastructure improvements to prepare for future storms.Earlier in November Congressman Chaka Fattah (D-PA ...

In the wake of the elections, Democrats and Republicans are pledging to work together to solve the fiscal cliff and other daunting challenges that confront the current lame duck session of Congress.But how likely is that, really? For example, both sides claim that the election was a mandate for their respective position on the expiring Bush-era tax cuts. President Obama is proclaiming broad support for extending tax breaks for the middle class while getting the wealthy to pay more, and House Speaker John Boehner sees validation for the GOP’s position – no raising taxes, period.Many Washington watchers ask ...

Now that the elections are over, in Washington it’s all about the fiscal cliff. If you haven’t heard that phrase yet, you will soon. And often.The term “fiscal cliff” refers to the combination of two major events that will occur at the end of the year should Congress fail to act – the expiration of the Bush-era tax cuts and the automatic across-the-board funding cuts to federal programs knows as sequestration. According to the Congressional Budget Office, should the tax cuts expire and sequestration kick in, it would likely cause the economy to fall back into a recession ...

With the elections just a week away, here's where President Obama and Governor Romney stand on some of the critical issues.

The two presidential candidates have put forth very different proposals on nearly every issue, and now it's up to voters to choose the path our country will take for years to come. From Medicare to education to budget deficits, here's where the candidates stand on 12 key issues:

The Issue

Barack Obama

Mitt Romney

Job Creation

The private sector is adding jobs at a slow rate, while government budget cuts bring layoffs.

Proposes $350 billion over ...

During Monday’s presidential debate both candidates discussed their plans for future Pentagon spending. Gov. Romney claimed that President Obama would cut $1 trillion from the Pentagon’s budget, while President Obama questioned how Gov. Romney would fund $2 trillion in new Pentagon spending.So what’s going on here? Let’s look at some numbers.As part of his fiscal year 2013 budget request, President Obama proposed a 2.5 percent decrease in the Pentagon’s annual “base” budget – meaning the military budget excluding war costs and a few other things. This minimal decrease would be the first reduction ...

Because the Social Security program is an earned benefit programs – future beneficiaries pay into the system while they are members of the work force – it is often assumed that your benefits are based on your contributions to the program. In this model, Social Security would effectively operate like a type of government run savings plan.But that’s not the case. Social Security works as a pay-as-you-go system, which means that current workers’ contributions to the Social Security program are used to pay benefits to current retirees. Rather than functioning as a retirement savings account, Social Security actually shifts wealth ...