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November 13, 2013 at 11:48 AM
WASHINGTON — It’s a picture he’s drawn many time before. But Congressional Budget Office (CBO) Director Doug Elmendorf painted it again Wednesday: The federal debt is growing at an unsustainable rate — but the paradoxical best short-term response is to cut taxes or boost spending.
That was the thrust of Elmendorf’s message to lawmakers at the second meeting of the budget conference committee. The 29-member bipartisan panel, co-chaired by Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis., is attempting to hash out a compromise budget for the remainder of the 2014 fiscal year and beyond to avoid another government shutdown in January.
The nation’s long-term fiscal outlook, Elmendorf said, is dismal. The $12.2 trillion federal debt held by the public equals 73 percent of the country’s total economic output. In 25 years, the public debt will equal 100 percent of the gross domestic product, pushed up by higher interest rates and spending on Social Security, Medicare and subsidies under the Affordable Care Act, among others.
In addition, the federal government holds $4.9 trillion in intergovernment debt, money borrowed from the Social Security Trust Fund and other sources.
Prompted by Sen. Lindsey Graham, R-S.C., Elmendorf said there are about three workers today for every Medicare beneficiary. But thanks to a wave of retiring Baby Boomers, the ratio will fall to 2 to 1 in two decades.
Given that, Graham asked, “how can we avoid entitlement reforms?” such as reducing inflation-adjusted increases for Social Security benefits or raising Medicare premiums for higher-income retirees.
At the same time, Elmendorf warned lawmakers that spending cuts, including the automatic budget reductions known as sequestration, has acted as “head wind” against a fragile economy. The cuts curtailed short-term demand for goods and services. The CBO projects 800,000 jobs will be lost to sequestration by end of 2014.
That has taken a huge toll on Americans, some harder than others. Elmendorf said the unemployment rate overall is 7.3 percent. But 12.5 percent of workers aged 20 to 24 are jobless; for blacks, the unemployment rate is above 13 percent.
March 28, 2013 at 10:05 AM
Gov. Jay Inslee will meet with reporters at 11 a.m. Thursday to discuss how he intends to close the state’s budget shortfall — projected at up to $1.3 billion — and boost education spending as ordered by the state Supreme Court.
Watch the governor’s presentation live on TVW, and come back to seattletimes.com for details and anaylsis from Olympia reporter Andrew Garber as the event gets started.
The GOP-led majority in the Senate will issue its budget in the coming days, followed by House Democrats. The legislative session is to run through the end of April.
March 14, 2013 at 3:28 PM
OLYMPIA — State House Republicans unveiled an education budget proposal Thursday that would increase K-12 spending by $556 million without raising taxes over the next two years.
The budget would dedicate $817 million to respond to a state Supreme Court order to increase basic education funding, including by expanding full-day kindergarten, reducing class sizes in kindergarten through third grade and increasing class time. But it would simultaneously remove $347 million, mostly by continuing the suspension of Initiative 732, a 2000 measure that mandates annual cost-of-living raises for teachers.
The budget proposal also calls for an additional $86 million for policy changes.
To get the extra money into education — and address a now roughly $1.3 billion budget shortfall — House Republicans would accept Medicaid expansion paid for by the federal government, continue the suspension of family leave for state employees and make other cuts to the Department of Health and Social Services.
The budget also would find about $100 million in government “efficiencies” through a 2 percent cut to state agencies, would make about $200 million in budget transfers and would net about $80 million by eliminating a tax break for telecommunications companies.
House GOP budget writer Gary Alexander called it a “balanced approach.”
“I’m convinced that when we finish up in 105 days, we can balance this budget with reforms, resizing and reduction without new tax increases,” Alexander, R-Olympia, said at a news conference.
The budget has little chance of becoming law, as Republicans are at a 43-to-55 minority in the House. But it offers a window into the thinking of the GOP, which runs the state Senate.
Senate Republicans have been reluctant to say how much more money they want to dedicate to education, so far only offering a window of between $500 million and $1.5 billion.
Many Democrats, especially in the House, believe the court order mandates additional spending as high as $1.7 billion.
In a statement, House Democratic budget-writer Ross Hunter criticized Alexander’s proposal, in part by noting the proposal would barely set anything aside for reserves.
“My initial reaction is that this proposal is more like a press release than a budget,” said Hunter, D-Medina. “Budgets require you to make decisions about balancing competing demands – this document does not do that.”
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