The Council of Economic Advisors’ latest analysis of the $862 billion stimulus bill figures that it created 2.5 to 3.6 million jobs. How good is this estimate? The same CEA told us that the stimulus bill would keep the unemployment rate below 8 percent. Almost a year and a half later unemployment is still above 9 percent.
The Department of Housing and Urban Development is pushing legislation that would enable public housing projects to access private financing. Due to limits on how much of a tenant’s income can be used for rent, public housing authorities have been reliant on billions of dollars in annual federal operating and capital subsidies.
A recent paper by Veronique de Rugy examines how policymakers use various budgeting gimmicks to increase spending and obscure liabilities. One particularly abusive mechanism is the designation of supplemental spending as an “emergency.” The emergency designation makes it easier for policymakers to skirt budgetary rules, particularly “pay-as-you-go” (PAYGO) requirements.
Republicans on the Senate Appropriations Committee have announced support for caps on the discretionary spending portion of the federal budget. According to press reports, discretionary spending under the cap for fiscal year 2011 would be approximately $20 billion less than what the president has proposed.
U.S. Postal Service management has repeatedly told Congress that it needs greater labor flexibility to reduce costs. Despite increased automation and workforce reductions, labor continues to account for 80 percent of the USPS’s cost structure.
Paul Krugman is dismissing concerns that the Obama administration’s fiscal and regulatory policies are fostering uncertainty in the business community, and thus inhibiting job growth and an economic recovery.
The Low-Income Home Energy Assistance program provides $5 billion annually to the states, which distribute the funds to businesses, nonprofits, and homeowners. Unfortunately, the states do a poor job making sure the money isn’t lost to fraud and abuse.
NASA administrator Charles Bolden says that his “foremost” mission is to improve relations with the Muslim world. This head-scratching statement is made more bizarre by Bolden’s claim that he received this instruction from the president himself.
The long-term prospects for the U.S. Postal Service monopoly are bleak. To help stem the flow of red ink, the USPS intends to seek a rate increase. Only a government monopoly would try to raise prices when the demand for its services is plummeting. The rate increase will only push its already declining customer base to use cheaper, more efficient electronic alternatives.
I testified to President Obama’s National Commission on Fiscal Responsibility and Reform today on Capitol Hill. The Commission is tasked with creating a package of specific budget reforms by December to be considered by the House and Senate.