February 9th Edition

President Obama will release his final budget today, andPolitico is reporting “...that Congress, in a break with tradition, said it won’t even hold hearings on this year’s budget request. That’s because the request 'will continue to focus on new spending proposals instead of tackling 'our $19 trillion in debt,’ Senate Budget Committee Chairman Mike Enzi (R-Wyo.) said last week.” Personally, I think there should always be a place for any administration to explain its proposals to Congress and that the traditional hearing fills that part of the process. Not inviting OMB Director Shaun Donovan to testify runs the risk of appearing petty and dismissive.

February 8th Edition

The president's budget will be out Tuesday, and the White House has leaked that it will propose a $10 per barrel tax on U.S. oil producers. As Politico reported, it "will propose more than $300 billion worth of investments over the next decade in mass transit, high-speed rail, self-driving cars, and other transportation approaches designed to reduce carbon emissions and congestion. To pay for it all, Obama will call for a $10 “fee” on every barrel of oil, a surcharge that would be paid by oil companies but would presumably be passed along to consumers.”

February 4th Edition

At the time of the announcement of the Iranian nuclear deal, the administration claimed it would provide Iran access to about $50 billion in frozen assets. Weeks ago, Secretary of State john Kerry labelled as “fictional” the notion that Iran would gain access to $100 billion due to the Iran nuclear deal. Suddenly, the State Department has changed its tune; spokesman John Kirby said the U.S. would be releasing about $100 billion to Iran. (The humorous footnote to this episode is the State Department’s attempt to convince reporters that because Iran would have to repay $45 billion in debts, it was really only “getting” $55 billion. Conveniently, this is closer to the original number but it is the same as asserting your paycheck is misleading because you have to pay student loans, mortgages, car loans or other expenses. It makes no sense.)

February 3rd Edition

The Hill newspaper is reporting that White House Press Secretary Josh Earnest "said [Speaker Ryan, Majority Leader McConnell and President Obama] will probably discuss the Trans-Pacific Partnership, earned income tax credit, and heroin addiction problem.” It is a healthy development for there to be good communication between these three leaders.  And there may be room for some agreement on enhancing the Earned Income Tax Credit, (EITC) a shared commitment to the Trans-Pacific Partnership, and concern over the scourge of addiction. But that is a far thing from constituting a “to do” list for the Congress.

February 2nd Edition

The Earned Income Tax Credit (EITC) is the most successful federal anti-poverty program. It uses the tax system — in the form of a refundable tax credit — to subsidize the wage earnings of those low-income Americans who choose to work. To date, however, the focus of the program has been on families with children, especially single mothers. However, with labor force participation at 30-year lows and poverty rising during the recovery from the Great Recession, it is quite timely for House Speaker Paul Ryan’s plan to expand the EITC for childless adults.

February 1st Edition

Friday’s report on growth in Gross Domestic Product (GDP) during the fourth quarter of 2015 checked in at a paltry 0.7 percent annual rate. The weak GDP report, coupled with a disastrous start to 2016 in equity markets, has raised considerable chatter about an impending U.S. recession. For what it’s worth, that is far from the consensus in the economics profession. The Financial Times reports that "Leading global economists now see a 20 percent chance of the US falling into recession this year”. Still slowing global growth and financial market turbulence have taken their toll; the same group previously put the probability of recession at 15 percent over the next two years.

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