When speaking on lifting the 1970s era crude oil export ban yesterday, a White House spokesman said “The administration does not support efforts to move this bill.” Today, AAF released a new study finding that the 40 year crude ban has cost the U.S. over $1 trillion in lost revenue. This is while the White House has brokered a deal with Iran allowing the country to resume crude exports. Prior to international sanctions, Iran was grossing $100 billion a year from crude oil.

ICYMI: Yesterday, Congress passed a continuing resolution to avoid a shutdown and fund the government through December 11. The CR easily passed the House with a vote of 277-151. Read Douglas Holtz-Eakin’s Eakinomics below for what happens next.

Today the administration must release their final ozone standards rule. When AAF reviewed the proposed rule late last year, it found that 100 state and federal parks (including Yellowstone, Joshua Tree, and Great Smoky Mountains) would not comply to the new rule. If parks can’t comply, how can we expect businesses to survive?

Eakinomics: Now Comes the Hard Part

Whew. No government shutdown. The Senate passed a funding bill yesterday morning, the House imposed “martial law” and sent it to the president’s desk later in the day. Now comes the hard part.

It simply makes no sense for the Congress and administration to live with the current caps (enforced by the sequester). Everyone is painfully aware that in an ever-more-dangerous world, funding for the Pentagon has to be increased above the planned caps. The continuing resolution passed yesterday does not do that; indeed, the increases should be for more than just fiscal year 2016 so that sensible defense planning can take place. A case can also be made — and the president is making it — that non-defense spending must rise as well. 

But even more to the point is the fact that discretionary spending is not the budgetary threat. The growth in government spending is centered in the entitlement programs (so-called mandatory spending) and is driven largely by retiring baby boomers and rising health care costs. With large (and projected even larger) budget deficits, the basic budget math is simple: increase the caps on discretionary spending and more than offset the increase by reducing mandatory spending. Spending priorities are realigned and the deficit is reduced.

That is the task that the White House and Congress must complete in the next months. To get over the finish line, the left has to give up on its fantasies of soak-the-rich taxes and entitlement expansions and the hard right has to acknowledge the political reality of more non-defense spending. That is the hard part.  

From the Forum

The U.S. Crude Export Ban and the Iran Deal by Kimberly VanWyhe, AAF Director of Energy Policy

Ex-Im’s Closure Precludes U.S. Companies from Bidding on Projects Abroad by Meghan Milloy, AAF Director of Financial Services Policy

EPA Cutting Reg Tape? by Sam Batkins, AAF Director of Regulatory Policy

Lifting The Ban On Internet Taxes Can Cost Consumers $16.4 Billion by Will Rinehart, AAF Director of Technology and Innovation Policy

Poor Policy Disguised as Consensus Proposals: The Progressive Approach to High Cost Medications by Douglas Holtz-Eakin, AAF President; and Christopher Holt, AAF Director of Health Care Policy

Fact of the Day

In 2014 and 2015, military service members received 1 percent pay raises – the smallest in the history of the all-volunteer force.