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Sunday, January 11, 2009
9:00 PM |
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Obama Urges Swift Action on
Economic Stimulus Package in Face of $1.2 Trillion Deficit |
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President-elect Barack Obama on Sunday renewed his
call for Congress to take immediate action on his roughly
$800 billion economic stimulus package aimed at jumpstarting
an economy that is expected to become the longest and deepest
recession since World War II. "The sooner a
recovery and reinvestment package is in place, the sooner we can
start turning the economy around," Obama said during an interview
on ABC's This Week with George Stephanopoulos. "We can't
afford three, four, five, six more months where we're losing half
a million jobs per month." Obama went on to acknowledge that even
without any new economic stimulus legislation, he and Congress
will face a record-shattering deficit this year.
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Earlier this week, the Congressional Budget Office (CBO)
predicted an eye-popping $1.2 trillion federal budget shortfall for the current
fiscal year (FY 2009) that ends Sept. 30, or 8.3 percent of GDP, a record in
terms of percentage of GDP. This projection -- also called a "baseline" --
assumes no changes in current law.
| "As a share of the economy, the deficit for this year is
anticipated to be the largest recorded since World War II," CBO Acting Director
Robert Sunshine said.
CBO pointed to several factors contributing to the stark
budgetary picture on both sides of the ledger. With respect to federal revenues,
CBO expects a decline of $166 billion (6.6 percent) from FY 2008 due to
substantial declines projected for individual and corporate income taxes.
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Total Deficit or Surplus (Percentage of gross domestic product)
Source: Congressional Budget Office |
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On the spending front, CBO estimates an additional $180 billion
in additional outlays stemming from the $700 billion Troubled Asset Relief
Program (TARP), which was created in the fall of 2008.
During a press conference following Wednesday's release of
CBO's outlook report, House Budget Committee Chairman John Spratt (D-SC)
explained that additional funding for military operations in Iraq and
Afghanistan will further balloon this year's deficit.
"The deficits facing us are daunting," Spratt said. "You
can't describe them in any other way. Even without the cost of a recovery plan
they're daunting. And they beg the question, should we make the deficit worse by
trying to make the economy better?"
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House and Senate appropriators announce new earmark reforms. On
Tuesday, House and Senate Appropriations Chairmen Dave Obey (D-WI) and
Daniel Inouye (D-HI) announced
new earmark policy reforms for the 111th Congress, including a
requirement that members post their earmark requests on their websites
at the time the requests are made. Meanwhile, the full House approved
language within the
rules package that will govern the body during the 111th Congress
that codifies the so-called "air drop" earmark point of order.
Federal IGs identify $26 billion in lost savings. The House
Oversight Committee released a
report revealing that the federal government's inspector generals
identified $25.9 billion in lost savings because departments and
agencies had failed to implement all of the IGs 13,800 recommendations
made since 2001. Nearly half of these recommendations were made over
a year ago. "The five agencies that could save the most money by
implementing open recommendations are the Social Security
Administration, the Department of Health and Human Services, the
Department of Defense, the Department of Transportation, and the
Department of Housing and Urban Development," the report states.
Gates predicts another $70 billion needed for war operations.
Government Executive reported on Jan. 6 that Defense Secretary Robert
Gates notified lawmakers that he projects the Pentagon will need an
additional $69.7 billion for ongoing military operations in Iraq and
Afghanistan this fiscal year. Congress has already provided $65.9
billion for this fiscal year's war operations.
Senate budget writers call for creation of fiscal task force.
Senate Budget Committee Chairman Kent Conrad (D-ND) and Ranking
Republican Judd Gregg (R-NH) co-wrote an
OP/ED printed in the Jan. 5 Washington Post calling for the
creation of a bipartisan panel tasked with developing a legislative
proposal "to steer our budget back on course." The two agree that both
spending and revenues (i.e., tax policy) should be on the table.
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Quorum Call: Preview of House
and Senate Floor Action |
The House this week is scheduled to take up the TARP Reform and Accountability
Act (H.R.
384), legislation would require existing or future institutions
that receive funding under the $700 billion Troubled Assets Relief
Program to provide no less than quarterly public reporting on its use
of the funding, among other provisions. The House this week is also slated to consider an amendment to
the body's internal rules that would require each committee to hold
"periodic hearings on the topic of waste, fraud, abuse, or
mismanagement in Government programs which that committee may
authorize."
Across the Capitol, the Senate today held a rare Sunday session and
approved a motion to proceed to floor consideration of the Omnibus
Public Land Management Act (S.
22), a bill that would designate certain land as components of the
National Wilderness Preservation System, authorize certain programs
and activities in the Department of the Interior and the Department of
Agriculture, along with other provisions. The Senate continues debate
on the bill tomorrow.
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