OMB Report Pursuant to the Sequestration Transparency Act of 2012 (PDF)
Source: Office of Management and Budget (White House)
The Sequestration Transparency Act of 2012 (STA) (P.L. 112-155) requires the President to submit to Congress a report on the potential sequestration triggered by the failure of the Joint Select Committee on Deicit Reduction to propose, and Congress to enact, a plan to re duce the deicit by $1.2 trillion, as required by the Budget Control Act of 2011 (BCA). In re sponse, the Ofice of Management and Budget (OMB) is issuing this report based on assump tions required by the STA. The report provides Congress with a breakdown of exempt and non-exempt budget accounts, an estimate of the funding reductions that would be required across non-exempt accounts, an explanation of the calculations in the report, and additional information on the potential implementation of the sequestration.
In August 2011, bipartisan majorities in both the House and Senate voted for the threat of sequestration as a mechanism to force Congress to act on further deicit reduction. The specter of harmful across-the-board cuts to defense and nondefense programs was intended to drive both sides to compromise. The sequestration itself was never intended to be imple mented. The Administration strongly believes that sequestration is bad policy, and that Con gress can and should take action to avoid it by passing a comprehensive and balanced deicit reduction package.
As the Administration has made clear, no amount of planning can mitigate the effect of these cuts. Sequestration is a blunt and indiscriminate instrument. It is not the respon sible way for our Nation to achieve deicit reduction. The President has already presented two proposals for balanced and comprehensive deicit reduction. It is time for Congress to act. Members of Congress should work together to produce a balanced plan that achieves at least the level of deicit reduction agreed to in the BCA that the President can sign to avoid sequestration. The Administration stands ready to work with Congress to get the job done.
The estimates and classiications in the report are preliminary. If the sequestration were to occur, the actual results would differ based on changes in law and ongoing legal, budgetary, and technical analysis. However, the report leaves no question that the sequestration would be deeply destructive to national security, domestic investments, and core government func tions. Under the assumptions required by the STA, the sequestration would result in a 9.4 percent reduction in non-exempt defense discretionary funding and an 8.2 percent reduction in non-exempt nondefense discretionary funding. The sequestration would also impose cuts of 2.0 percent to Medicare, 7.6 percent to other non-exempt nondefense mandatory programs, and 10.0 percent to non-exempt defense mandatory programs.
Tax Proposals by 2012 Presidential Candidates
Source: Tax Policy Center (Urban Institute and Brookings Institution)
TPC has analyzed the distributional effects of tax proposals from President Obama, Republican presidential candidate Mitt Romney, and Republican vice-presidential candidate Paul Ryan. The following pages provide links to TPC research related to the 2012 candidates.
Libertarians are an increasingly prominent ideological group in U.S. politics, yet they have been largely unstudied. Across 16 measures in a large web-based sample that included 11,994 self-identified libertarians, we sought to understand the moral and psychological characteristics of self-described libertarians. Based on an intuitionist view of moral judgment, we focused on the underlying affective and cognitive dispositions that accompany this unique worldview. Compared to self-identified liberals and conservatives, libertarians showed 1) stronger endorsement of individual liberty as their foremost guiding principle, and weaker endorsement of all other moral principles; 2) a relatively cerebral as opposed to emotional cognitive style; and 3) lower interdependence and social relatedness. As predicted by intuitionist theories concerning the origins of moral reasoning, libertarian values showed convergent relationships with libertarian emotional dispositions and social preferences. Our findings add to a growing recognition of the role of personality differences in the organization of political attitudes.
Implications of Governor Romney’s Tax Proposals: FAQs and Responses
Source: Brookings Institution
Our recent paper examined the tradeoffs among competing goals in tax reform – including maintaining tax revenues, maintaining progressivity, and lowering marginal tax rates. As a motivating example, we estimated the degree to which individual income tax expenditures would have to be limited to achieve revenue neutrality under the individual income tax rates and other features advanced in presidential candidate Mitt Romney’s tax proposals, and how the required reductions in tax breaks could change the distribution of the tax burden across households.
In this note, we summarize our earlier results and answer a number of substantive questions we have received about the study. We also discuss new estimates that incorporate into our analysis the taxation of interest income from municipal bonds and the taxation of inside buildup in life insurance vehicles.
Further Decline in Credibility Ratings for Most News Organizations
Source: Pew Research Center for the People & the Press
For the second time in a decade, the believability ratings for major news organizations have suffered broad-based declines. In the new survey, positive believability ratings have fallen significantly for nine of 13 news organizations tested. This follows a similar downturn in positive believability ratings that occurred between 2002 and 2004.
The falloff in credibility affects news organizations in most sectors: national newspapers, such as the New York Times and USA Today, all three cable news outlets, as well as the broadcast TV networks and NPR.
Across all 13 news organizations included in the survey, the average positive believability rating (3 or 4 on a 4-point scale) is 56%. In 2010, the average positive rating was 62%. A decade ago, the average rating for the news organizations tested was 71%. Since 2002, every news outlet’s believability rating has suffered a double-digit drop, except for local daily newspapers and local TV news. The New York Times was not included in this survey until 2004, but its believability rating has fallen by 13 points since then.
These are among the major findings of a survey by the Pew Research Center for the People & the Press, conducted July 19-22 among 1,001 adults. The survey asks people to rate individual news organizations on believability using a 4-point scale. A rating of 4 means someone believes “all or most” of what the news organization says; a rating of 1 means someone believes “almost nothing” of what they say.
The believability ratings for individual news organizations – like views of the news media generally – have long been divided along partisan lines. But partisan differences have grown as Republicans’ views of the credibility of news outlets have continued to erode. Today, there are only two news organizations – Fox News and local TV news – that receive positive believability ratings from at least two-thirds of Republicans. A decade ago, there were only two news organizations that did not get positive ratings from at least two-thirds of Republicans. By contrast, Democrats generally rate the believability of news organizations positively; majorities of Democrats give all the news organizations tested ratings of 3 or 4 on the 4-point scale, with the exception of Fox News.
CBO — Letter to the Honorable John Boehner providing an estimate for H.R. 6079, the Repeal of Obamacare Act
Letter to the Honorable John Boehner providing an estimate for H.R. 6079, the Repeal of Obamacare Act
Source: Congressional Budget Office
CBO and the staff of the Joint Committee on Taxation (JCT) have estimated the direct spending and revenue effects of H.R. 6079, the Repeal of Obamacare Act, as passed by the House of Representatives on July 11, 2012. H.R. 6079 would repeal the Affordable Care Act (ACA), with the exception of one subsection that has no budgetary effect. This estimate reflects the spending and revenue projections in CBO’s March 2012 baseline as adjusted to take into account the effects of the recent Supreme Court decision regarding the ACA.
For various reasons discussed in the report, the estimated budgetary effects of repealing the ACA by enacting H.R. 6079 are close to, but not equivalent to, an estimate of the budgetary effects of the ACA with the signs reversed.
On the Distributional Effects of Base-Broadening Income Tax Reform
Source: Brookings Institution
This paper examines the tradeoffs among three competing goals that are inherent in a revenue-neutral income tax reform—maintaining tax revenues, ensuring a progressive tax system, and lowering marginal tax rates. As a motivating example, we estimate the degree to which individual income tax expenditures would have to be limited to achieve revenue neutrality under the individual income tax rates and other features advanced in presidential candidate Mitt Romney’s tax plan, and how the required reductions in tax breaks could change the distribution of the tax burden across households. (We do not score Governor Romney’s plan directly, as certain components of his plan are not specified in sufficient detail, nor do we make assumptions regarding what those components might be.)
The Economic Impact of the Budget Control Act of 2011 on DOD & non-DOD Agencies (PDF)
Source: Aerospace Industries Association
From press release:
A new economic impact analysis concludes that 2.14 million American jobs could be lost if the Budget Control Act’s sequestration mandate takes effect on January 2, 2013. That is the date that budget cuts of $1.2 trillion start throughout government unless Congress and the administration agree on a solution.
Dr. Stephen S. Fuller, Dwight Schar Faculty Chair and University Professor and Director for Regional Analysis at George Mason University, in conjunction with Chmura Economics and Analytics, conducted the study on behalf of the Aerospace Industries Association.
“The results are bleak but clear-cut,” said Fuller. “The unemployment rate will climb above 9 percent, pushing the economy toward recession and reducing projected growth in 2013 by two-thirds. An already weak economy will be undercut as the paychecks of thousands of workers across the economy will be affected from teachers, nurses, construction workers to key federal employees such as border patrol and FBI agents, food inspectors and others.”
The analysis concludes that the automatic spending cuts mandated in the Budget Control Act of 2011 affecting defense and non-defense discretionary spending in just the first year of implementation will reduce the nation’s GDP by $215 billion; decrease personal earnings of the workforce by $109.4 billion and cost the U.S. economy 2.14 million jobs.
Can Russia Reform? Economic, Political, and Military Perspectives
Source: Strategic Studies Institute, U.S. Army War College
These three papers represent the first panel of papers from SSI’s annual Russia conference that took place in September 2011. They assess the nature of Russia’s political system, economy, and armed forces and draw conclusions, even sharp and provocative ones, concerning the nature and trajectory of these institutions. The three papers presented here offer attempts to characterize first of all, the nature of the state; second, the prospects for economic reform within that state—perhaps the most pressing domestic issue and one with considerable spillover into defense and security agendas as well—in contemporary Russia; and third, the nature and lasting effects of the defense reform that began in 2008. The papers are forthright and pull no punches, though we certainly do not claim that they provide the last or definitive word on these subjects. The papers go straight to the heart of the most important questions concerning the nature of the state and the possibilities for its economic and military reform. As such, we hope that the papers presented here, and in subsequent volumes, provide insight and understanding to several critical questions pertaining to and/or affecting Russia, a country that deliberately tries to remain opaque to foreign observers despite its many changes. These papers aim to be a resource, to enlighten, to edify readers, and to stimulate the effort to understand and deal with one of the most important actors in international affairs today.
Give Me Liberty or at Least Your Votes: A Study of Governors’ Altruism on Health Care
Source: Brookings Institution
“Give me Liberty or give me Death,” proclaimed Patrick Henry in defense of revolution. In many ways, more than a few Republican governors over the past several months have embraced this mantra in criticizing the president’s health care law. They view the law as an affront to basic liberty, and while it would deliver assistance to their constituents that could prevent illness or death, liberty is of greatest import.
Elected officials have the choice of representing the needs or views of those who put them in office or stand on principle to do what they believe is right. Officials often frame their views of the health care law in terms of the latter. Democrats and progressives view the law as a means of opening access to affordable health insurance for more Americans. Republicans and conservatives describe the law as a government overreach that threatens the basic liberties that all Americans enjoy and must retain.
Regardless of the needs of constituents, elected officials’ values appear to be a driving force. In a basic way, states with lower rates of uninsured often have Democratic governors or are traditionally blue states, and states with higher uninsured rates more commonly have Republican governors or are traditionally red states.
Source: U.S. House of Representatives (Oversight and Government Reform Committee)
House Oversight and Government Reform Committee Chairman Darrell Issa today released a new report following the Committee’s three year investigation into Countrywide Financial’s “Friends of Angelo” and “VIP Program” that issued discounted mortgages to influential Washington policy figures. The report finds that Countrywide used its VIP Program to aid its lobbying efforts as well as to strengthen its relationship with taxpayer backed Fannie Mae. Countrywide partnered with Fannie Mae in a strategic business alliance that also included joint lobbying efforts.
Source: Pew Research Center for the People & the Press
Republicans and Democrats find little to agree on these days, but they have some similar reactions to the 2012 presidential campaign. Nearly identical percentages of Republicans and Democrats say the election will be exhausting. On the positive side, there also is widespread partisan agreement that the campaign will be informative.
The national survey by the Pew Research Center for the People & the Press, conducted June 7-17 among 2,013 adults, finds that just 49% expect the election to be exciting. Nearly six-in-ten Democrats (59%) say the election will be exciting, compared with 51% of Republicans and just 41% of independents.
The expectation that the election will be exhausting is in line with perceptions of the campaign so far. Most Americans say the campaign has been too long and dull (56% each), while 53% say it has been too negative. At the same time, an overwhelming majority (79%) views the presidential campaign as important.
Comparable percentages of Republicans, Democrats and independents say that the campaign has been too long and too negative. And more than eight-in-ten Republicans (85%) and Democrats (83%) say the campaign is important, as do 77% of independents.
CRS — U.S. Foreign Assistance to Latin America and the Caribbean: Recent Trends and FY2013 Appropriations
U.S. Foreign Assistance to Latin America and the Caribbean: Recent Trends and FY2013 Appropriations (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
Geographic proximity has forged strong linkages between the United States and the nations of Latin America and the Caribbean, with critical U.S. interests in the region encompassing economic, political, and security concerns. U.S. policymakers have emphasized different strategic interests in the region at different times, from combating Soviet influence during the Cold War to advancing democracy and open markets since the 1990s. Current U.S. policy toward the region is designed to promote economic and social opportunity; ensure citizen security; strengthen effective democratic institutions; and secure a clean energy future. As part of broader efforts to advance these priorities, the United States provides Latin American and Caribbean nations with substantial amounts of foreign assistance. Congress – which authorizes and appropriates aid for the region, and engages in oversight of assistance programs – is currently considering the President’s foreign aid request for FY2013. In recent years, the State Department, Foreign Operations, and Related Programs appropriations measure has been the primary legislative vehicle through which Congress reviews U.S. assistance and influences executive branch policy toward the region.
Trends in Assistance Since 1946, the United States has provided over $148 billion (constant 2010 dollars) in assistance to the region. Funding levels have fluctuated over time, however, according to regional trends and U.S. policy initiatives. U.S. assistance to the region spiked during the 1960s under President Kennedy’s Alliance for Progress, then declined in the 1970s before spiking again during the Central American conflicts of the 1980s. After another decline during the 1990s, assistance to the region remained on a generally upward trajectory through the first decade of this century, reaching its most recent peak in the aftermath of the 2010 earthquake in Haiti. Aid levels for the region have fallen in each of the past two fiscal years, however, as Congress has sought to trim the foreign aid budget.
FY2013 Obama Administration Request The Obama Administration’s FY2013 foreign aid budget request would continue the recent downward trend in assistance to Latin America and the Caribbean. The Administration has requested some $1.7 billion for the region to be provided through the State Department and the U.S. Agency for International Development (USAID). If Congress appropriates funding at the requested levels, Latin America and the Caribbean would receive nearly 9% less assistance than the region received in FY2012, and about 11% less than in FY2011. The proposed cuts are widespread, affecting nearly every foreign aid account. Colombia, Haiti, and Mexico would see some of the largest absolute dollar declines, but would remain the top three regional recipients, collectively accounting for some 55% of the aid to the region. Beyond the assistance provided through the State Department and USAID, many Latin American and Caribbean nations will continue to receive additional aid from agencies such as the Department of Defense, the InterAmerican Foundation, the Millennium Challenge Corporation, and the Peace Corps.
Congressional Action In May 2012, the House and Senate Committees on Appropriations marked up their annual appropriations bills for the State Department, Foreign Operations, and Related Programs (H.R. 5857 and S. 3241). Funding in the FY2013 House bill is 11.8% lower than the Administration’s request, and funding in the Senate bill is 4.7% lower than the Administration’s request. It is unclear how much foreign assistance each of the nations of Latin America and the Caribbean would receive under the two bills, however, since appropriation levels for individual countries and programs are generally not specified in the legislation or accompanying reports. Nevertheless, both of the reports (H.Rept. 112-494 and S.Rept. 112-172) express concerns over conditions in the region and recommend assistance levels that are above the Administration’s request for certain Latin American and Caribbean countries. As the legislation moves forward, Congress may consider issues such as how best to reconcile assistance priorities with budget constraints, improve inter-agency and donor coordination, and ensure the sustainability of U.S. assistance efforts.
US Election Note: International Trade Policy after 2012
Source: Chatham House
The 2012 presidential election is occurring as the US economy emerges from a significant recession. While trade is a small part of the campaign debate, it remains an emotional ‘wedge issue’ for the electorate. This paper lays out the likely trade policy of either a second-term Barack Obama administration or an incoming Mitt Romney administration.
Unauthorized Alien Students: Issues and “DREAM Act” Legislation (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
The 109th and 110th Congresses considered, but did not enact, comprehensive immigration reform legislation that included large-scale legalization programs for unauthorized aliens. In the aftermath of these unsuccessful efforts, some interested parties have urged the President and Congress to pursue more limited legislation to address the status of unauthorized alien students. Such legislation is commonly referred to as the “DREAM Act.” Unauthorized aliens in the United States are able to receive free public education through high school. They may experience difficulty obtaining higher education, however, for several reasons. Among these reasons is a provision enacted in 1996 that prohibits states from granting unauthorized aliens certain postsecondary educational benefits on the basis of state residence, unless equal benefits are made available to all U.S. citizens. This prohibition is commonly understood to apply to the granting of “in-state” residency status for tuition purposes.
Unauthorized alien students also are not eligible for federal student financial aid. More broadly, as unauthorized aliens, they are not legally allowed to work and are subject to being removed from the country.
Multiple DREAM Act bills have been introduced in recent Congresses to address the unauthorized student population. Most have proposed a two-prong approach of repealing the 1996 provision and enabling some unauthorized alien students to become U.S. legal permanent residents (LPRs) through an immigration procedure known as cancellation of removal. While there are other options for dealing with this population, this report deals exclusively with the DREAM Act approach in light of the considerable congressional interest in it. In the 111th Congress, the House approved DREAM Act language as part of an unrelated bill, the Removal Clarification Act of 2010. However, the Senate failed, on a 55-41 vote, to invoke cloture on a motion to agree to the House-passed DREAM Act amendment and the bill died at the end of the Congress. The House-approved language differed in key respects from earlier versions of the DREAM Act.
Bills to legalize the status of unauthorized alien students (S. 952, H.R. 1842, H.R. 3823) have again been introduced in the 112 th Congress. It is unclear, however, whether any of these measures will be considered.
On June 15, 2012, the Obama Administration announced that certain individuals who were brought to the United States as children and meet other criteria would be considered for relief from removal. Under a memorandum issued by Secretary of Homeland Security Janet Napolitano on that date, these individuals would be eligible for deferred action for two years, subject to renewal, and could apply for employment authorization.
Madagascar’s Political Crisis (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
Madagascar, an Indian Ocean island country, ranks among the world’s poorest countries, is the world’s fourth largest island and is extremely biologically diverse, with thousands of unique species of flora and fauna. It has experienced political instability since early 2009, initiated by tensions between the country’s last elected president, Marc Ravalomanana, and an opposition movement led by Andry Rajoelina, then the mayor of the capital city, Antananarivo. Mass protests in early 2009 and eventual military support for the ouster of President Ravalomanana culminated in his forced resignation from office. Rajoelina then seized power and, with other leaders, formed an interim self-declared transitional government, the High Transitional Authority (HAT, after its French acronym). Ravalomanana now lives in exile in South Africa.
Periodic protests by Ravalomanana supporters after the takeover led to violent clashes with security forces. Negotiations between the parties led to the signing of an agreement in 2009 in Maputo, Mozambique to establish an inclusive, transitional government, but Rajoelina subsequently appointed a cabinet seen to be primarily composed of his own supporters. Southern African leaders and Madagascar’s opposition parties rejected the proposed government, and negotiations resumed. Two later agreements also failed to result in a unified transitional process.
The unconstitutional change of power and resulting political impasse have negatively affected economic growth and development efforts and strained Madagascar’s relations with international donors. Foreign governments, including the United States, reacted to Rajoelina’s seizure of power by sanctioning the government in various ways (e.g., through suspension of membership in some multilateral bodies, restrictions on aid, personal sanctions on some individuals, and removal of trade benefits). Aid restrictions have significantly decreased public spending. As a result of the coup d’état, U.S. aid is restricted to selected humanitarian and development programs delivered through non-governmental channels. Madagascar’s Millennium Challenge Account compact, worth an estimated $110 million, was terminated in May 2009. Madagascar is also subject to aid restrictions due to its poor performance in addressing the problem of trafficking in persons.
Until September 2011, when a Southern African Development Community (SADC)-mediated transitional roadmap was signed by most key political movements, international mediation and national efforts to agree upon a transition process had foundered. Notwithstanding continuing political disputes, implementation of the roadmap has gone relatively smoothly. In April, a political amnesty law was enacted, but it remains controversial, as it does not cover former president Ravalomanana due to his conviction for murder in absentia in August 2010, and he has not been permitted to return to Madagascar. An impasse over these issue has long stymied the transition process.
Madagascar faces a host of environmental pressures, however, and illegal logging and endangered wildlife exports have reportedly substantially increased under the HAT. Congress has expressed concern with threats to Madagascar’s unique ecosystem, as well as with the country’s ongoing political and development challenges. The House of Representatives passed legislation in 2009, H.Res. 839, condemning the 2009 coup and the illegal extraction of Madagascar’s natural resources.