Downsizing Blog
The Price of Shortsightedness: Emergency Spending’s $2 Trillion Interest Tab
New Emergency Spending Would Cost $28-$41 Billion More Than Incomplete Budget Score Suggests
Legislators and the public tend to underestimate the fiscal costs of emergency spending. Emergency supplemental bills, such as the Ukraine‐Israel foreign aid package, are often billed as one‐time, temporary costs. This framing obscures the tens of billions of dollars in interest costs generated by new deficit spending.
Affordable Housing: Tax Credits vs Deregulation
Policymakers across the nation are concerned about the high costs of housing for moderate‐income families. One federal response to the problem is the low‐income housing tax credit (LIHTC), which provides income tax credits to developers of multifamily housing. Currently, Congress is considering expanding the LIHTC and adding a new middle‐income or workforce version of the credit.
Responding to Critiques of the Congressional Fiscal Commission
Since the House Budget Committee passed the Fiscal Commission Act out of committee in January, several critics have come out of the woodwork to argue against the bill. Criticism ranges from calling the commission process undemocratic, to claiming that Social Security and Medicare (or at least Part A) don’t contribute to the debt, to worrying about tax increases that might get passed under false pretenses, to calling the commission a death panel.
Below I list prominent critiques and their main charges, and defuse each argument in turn:
Social Security Pays Excessive Benefits to the Highest‐Income Earners: A UK Comparison
When it comes to government provision of retirement benefits, differences abound. Comparing the US Social Security program to the UK state pension illustrates a stark contrast. While both countries promise an old‐age safety net, the US Social Security benefit for the highest‐income earners looks more like a golden parachute than what President Franklin D. Roosevelt referred to as “some measure of protection to the average citizen and to his family … against poverty‐ridden old age.”
Seven Emergency Spending Reforms Congress Should Consider
Congress designated $12 trillion as emergency spending over the last 30 years, according to our recent policy analysis. That’s equal to 43 percent of public debt. Despite the true size and scope of emergency spending remaining obscured until recently, some legislators have been leading the way on the interlinked issues of emergency spending and emergency powers.
The CBO Budget and Economic Outlook: Debt Projected to Grow to Record Highs
The Congressional Budget Office (CBO) released its annual Budget and Economic Outlook, providing 11‐year fiscal projections for 2024 to 2034.
Six Reforms to Enhance Transparency and Fiscal Accountability Through the Congressional Budget Office
Decentralize Spending to Tackle Government Debt
The federal government’s debt is rising to dangerous and unprecedented heights. Compared to the size of the economy, the debt will soon reach levels never seen in our nation’s history.