![]() Overall, we believe policymakers will find common ground that likely results in few, if any, near-term cuts to spending, but will produce longer-term deficit savings relative to the CBO’s current projections. ![]() There is also a question about duration of the spending caps: Democrats want two years Republicans have argued for 10. The depth and composition of the spending caps: The questions amount to how much slower spending growth would be when compared with the Congressional Budget Office’s (CBO) projections (i.e., how much will growth be “capped”) and how those caps would be levied on non-defense discretionary spending (everything from national parks to meat inspectors) versus defense spending.If FY24 spending is set at FY23 spending levels – the Democrats’ preference – this would likely represent a freeze in discretionary spending (i.e., no cuts), but nevertheless represent longer-term deficit reduction over 10 years. Setting the so-called spending baseline for fiscal year 2024: If FY24 spending is reset to FY22 levels – the Republicans’ ask – it would likely drive short-term cuts in discretionary spending and produce longer-term deficit savings.The real obstacles, however, seem to be in the specific spending details: We could also see tweaks to how Medicare reimburses providers for hospital treatments. government’s $6 trillion annual budget), work requirements for specific entitlements (which poll quite well but tend to be burdensome to administer, and therefore do little from a deficit perspective), and potentially some down payment on energy-permitting reform (both traditional and clean energy). Indeed, while each side of the political aisle has been testing the contours of a possible debt ceiling deal with new asks (i.e., immigration reform for Republicans, tax increases for Democrats), the broad outline hasn’t changed much over the past few weeks: reclaiming unused COVID-19 money, caps on “discretionary” spending (which represents roughly 25% of the U.S. We would assert we are in the painful period right now. To use an apt, albeit graphic analogy: Passing the debt ceiling is like passing a kidney stone – we know it will pass, it is just a question of how painful it will be. After all, while neither side seemingly has a political incentive to make concessions before they absolutely have to, neither side has any political incentive to default either. Treasury’s “X date” on June 1 (i.e., the estimated date when the federal government would no longer have enough funds to pay its bills) – although possibly not until the (literal) eleventh hour. It is our view – with high conviction – that the recent on-and-off-and-now-on-again negotiations will result in a debt ceiling deal ahead of the U.S.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |