Latest news with #federalbudget
New York Times
a day ago
- Business
- New York Times
Republicans Prepare to Open ‘Pandora's Box' of Budget Gimmicks
Over decades of intense disputes about the federal budget, Republicans and Democrats have shared a set of expectations for what government spending and taxes would look like in the future. The baseline, as it is called, assumed that Congress would operate on a form of autopilot. Spending would climb every year, in part to keep up with inflation, and tax rates would go up or down based on laws already on the books. The cost of policy changes would then be assessed against this rough sketch of the country's fiscal trajectory. Senate Republicans are preparing to upend that standard with the broad tax and health care bill they are trying to muscle into law. They want to create a new baseline of their own and wipe away much of the stated cost of the bill. The accounting gambit has angered Democrats and depressed independent budget experts. It could also soon force a reckoning between Republicans' ambitions for cutting taxes and the Senate's longtime parliamentary rules. 'We do worry about the precedent that this sets for both parties to say that this thing, whether it's a spending increase or a tax cut, doesn't cost what traditional scoring conventions, the conventions we've been using for decades, say it costs,' said Andrew Lautz, an analyst at the Bipartisan Policy Center, a think tank. 'You worry about opening Pandora's box when it comes to scoring.' The Republican effort focuses on changing how scorekeepers represent the cost of tax cuts. Under traditional standards, extending tax cuts beyond their scheduled expiration is treated as passing a new tax cut — and therefore a new cost to the budget. In wonky budget-speak in Washington, this is called the 'current law baseline.' Because much of their legislation is dedicated to extending temporary tax cuts from 2017, Senate Republicans have become preoccupied with this accounting practice. Just maintaining the 2017 tax cuts after this year would cost roughly $3.8 trillion over a decade under the current law baseline. How Much the Tax Portion of the Senate Bill Would Add to Deficits G.O.P. alternative baseline Traditional baseline If the cost of tax cut extensions is not counted, $441 billion would be added to deficits over 10 years. If the cost of tax cut extensions is counted, $4.2 trillion would be added. $500 bil. increase $500 bil. increase $400 $400 $300 $300 $200 $200 $100 $100 2025 2034 2025 2034 G.O.P. alternative baseline Traditional baseline If the cost of tax cut extensions is not counted, $441 billion would be added to deficits over 10 years. If the cost of tax cut extensions is counted, $4.2 trillion would be added. $500 bil. increase $500 bil. increase $400 $400 $300 $300 $200 $200 $100 $100 2025 2029 2025 2029 2034 2034 The alternative baseline refers to the current policy baseline, and the traditional baseline refers to current law. Source: Joint Committee on Taxation The New York Times Want all of The Times? Subscribe.
Arab News
2 days ago
- Business
- Arab News
Pakistan's National Assembly passes $62 billion budget for next fiscal year
ISLAMABAD: The lower house of Pakistan's parliament passed the federal budget for the next fiscal year on Thursday, which has a total outlay of Rs17.57 trillion [$62 billion] and projects economic growth at 4.2%, state-run media reported. The federal government unveiled the federal budget on June 10, which reflects a 7% decrease in overall spending compared to the current fiscal year. The largest portion of the budget – Rs8.21 trillion ($29 billion), or nearly half of total expenditures – will go toward debt servicing, continuing to strain Pakistan's fiscal space. Another salient feature of the budget is Pakistan's move to increase defense spending by more than 20% in the 2025-26 fiscal year to Rs2.55 trillion ($9.04 billion). Islamabad seeks to bolster military capabilities following Pakistan's worst confrontation with India in nearly three decades in May. 'The National Assembly has passed the federal budget for the next fiscal year, with a total outlay of 17,573 billion rupees, focusing on sustainable and inclusive economic growth,' state broadcaster Radio Pakistan reported. The House passed the budget with certain amendments, giving effect to the federal government's proposals for the financial year set to begin from July 1. The bill was read out in the National Assembly and approved clause by clause before the session was adjourned until 11 am, Friday. Pakistan remains under a $7 billion IMF loan program approved last year, and the budget reflects an attempt to balance security concerns with ongoing fiscal reform efforts. The government has aimed to reduce the fiscal deficit to 3.9% of the GDP for the next year's budget. While it has projected a growth of 4.2% for the upcoming year, Pakistan's economy grew just 2.6% in 2024/25, falling short of its 3.6% target due to weak agriculture and industrial output. Inflation has been projected for next year's budget at 7.5%. The Federal Board of Revenue (FBR), Pakistan's main tax authority, has been tasked with collecting Rs14.1 trillion of the projected Rs19.3 trillion in gross revenue in the budget, marking a 19% year-on-year increase. While announcing the budget on June 10, Finance Minister Muhammad Aurangzeb had announced plans to grow IT exports to $25 billion over the next five years and forecast a rise in workers' remittances to $38 billion by the end of the current fiscal year.
Forbes
3 days ago
- Business
- Forbes
Three Ideas To Boost Economic Growth And Reduce Government Deficits
NEW YORK - NEW YORK - JUNE 1: A man walks near the National Debt Clock in Midtown Manhattan on June ... More 1, 2023 in New York City. (Photo by Eduardo Munoz Alvarez/VIEWpress) The federal budget is a mess, with federal debt held by the public at $29 trillion and counting. States cannot print money and borrow the way the federal government can, but some of them still have deficit problems. Maine, California, Colorado, and New York are just a few of the states facing large deficits over the next few years. Fortunately, there are policy reforms both the federal government and state governments can implement to boost economic growth and reduce deficits. In a recent National Bureau of Economic Research (NBER) paper, economists Douglas Elmendorf, Zachary Liscow, and R. Glenn Hubbard examine several policies with the potential to increase economic growth and reduce deficits. The general idea is that increasing total factor productivity (TFP)—the primary driver of economic growth—increases incomes and thus tax revenue. If this can be done in a way that does not involve too much government spending (or revenue losses) then the higher tax revenue would lower the deficit. Using estimates from the Congressional Budget Office (CBO), the authors calculate that increasing TFP by 0.5 percentage points each year for the next decade would reduce the federal budget deficit by 1.2% of GDP and make debt held by the public around 12% of GDP lower than it otherwise would be. The authors discuss seven policies in their paper, but I am going to focus on the three that seem to have the most potential. And while the paper focuses on the policies' impacts on federal deficits, the same growth effects would also impact state budgets. The first policy idea is making it easier to build housing. Economists know land-use regulations that restrict the supply of housing—including minimum lot sizes, parking requirements, and prohibitions on apartments, duplexes, and other forms of multi-family housing—make housing more expensive. As the authors explain, reducing the cost of housing construction would lead to more housing being built, which has downstream impacts on the demand for appliances, furniture, carpet, decks, and all the other things that make a house a home. The increase in housing construction and the production of complementary products would directly increase GDP all else equal. In addition to this direct effect, more housing in the most productive cities would make it easier for workers to move to take higher paying jobs. A few studies estimate that this mobility effect would increase U.S. GDP by roughly 8%. New residents also have a significant impact on state budgets. A recent report from the National Taxpayers Union Foundation shows that adding new residents can increase a state's revenue by billions of dollars. For all these reasons, it is a good idea for policymakers to reform regulations so we can build more housing in the places people want to live. State and local governments control most of the regulations that restrict the supply of housing. Over the last several years, many states have implemented reforms to make it easier to build, including Montana, Florida, California, and Arizona. This year, Texas passed several laws that will make housing more affordable in the Lone Star state. Other states should adopt and build on these reforms. A second and related idea discussed by Elmendorf, Liscow, and Hubbard is permitting reform for construction projects. In recent years, long permitting times have gotten more attention, and for good reason. Federal laws like the National Environmental Policy Act (NEPA) can delay projects for years. A recent report from the Council on Environmental Quality, which oversees agency implementation of NEPA, found that 61% of environmental impact statements still take more than two years to review despite a law specifying a two-year deadline. Clearly, we need more changes at the federal level. States have permitting problems, too. Earlier this year, wildfires destroyed thousands of homes in Los Angeles County. California governor Gavin Newsome promised to fast-track permitting so families could rebuild and get on with their lives. Five months later, only 33 building permits have been issued and not one house has been rebuilt. This is unacceptable for a country as wealthy as the United States. Long permitting times increase project costs since money is tied up in resources—land, equipment, and buildings—that are not generating returns. As the authors note, shortening permitting times would accelerate projects already underway as well as increase the number and size of future projects by increasing the return on investment. And since reforming regulations and processes typically does not require a lot of government spending, the growth we create by shortening permitting times is likely to help bring down government deficits. A third idea to boost economic growth and help reduce government deficits is immigration reform. Allowing more foreign workers with advanced degrees in science, engineering, and math to live and work in America would increase U.S. innovation and productivity. The NBER study calculates that a one-time increase of 200,000 additional high-skill immigrants would reduce debt held by the public as a percent of GDP by 2% after thirty years. Adding more high-skilled immigrants every year instead of just a one-time increase would have a larger effect. In addition to increasing innovation and productivity, immigrants have a direct effect on government deficits. High-skill immigrants, like high-skill natives, have a positive effect on government budgets on average since they pay more in taxes than they consume in government services such as welfare benefits or Social Security. One study estimates that over a decade we could reduce federal deficits by $25 billion per 100,000 additional people who come to America to work. Another recent report from the Committee to Unleash Prosperity (CTUP) also makes the case for more immigration to increase growth. The basic formula for economic growth is to add workers and make workers more productive. The U.S. fertility rate is falling, and without a sudden rebound the best way to add workers will be through immigration. From 2013 to 2023 about half of the growth in the U.S. civilian labor force was due to immigrants, as shown in the figure below (red bar). Without immigration, U.S. labor force growth would slow and eventually turn negative. Labor force growth Immigrants also tend to be incredibly entrepreneurial. According to the CTUP report, nearly half of all Fortune 500 companies were founded by foreign-born or second-generation Americans. These immigrants and their children create jobs for native-born workers in addition to the valuable new goods and services their companies create for consumers. Federal policymakers should reform our immigration system so more high-skill immigrants can create and grow their companies in America. Government budgets throughout the United States are a mess. From cities such as Chicago to the Halls of Congress, policymakers struggle to keep spending in line with revenue. Economic growth cannot solve all these budget problems, but it can help. Policy changes that make it easier to build housing, reduce permitting times, and increase immigration would boost output, incomes, and tax revenue. If we could get government spending under control, too, we would have a real shot at fixing our debt problem.
Bloomberg
4 days ago
- Business
- Bloomberg
Republican Move to Mask $3.8 Trillion Tax-Cut Cost Rings Alarms
Senate Republicans are aiming to wipe away some $3.8 trillion of federal budget red ink from the GOP's signature tax-and-spending bill with an unprecedented parliamentary maneuver, stoking concerns about long-term US fiscal policy. Republicans are using a fast-track legislative process known as reconciliation, which will allow them to make President Donald Trump's 2017 income-tax cuts permanent without Democratic support. The cost of such legislation has long been measured by comparing it to what would otherwise happen to the federal budget under the current law.
New York Times
20-06-2025
- Business
- New York Times
There Might Not Be a Map for That: Budget Cuts Threaten Geological Surveys
Every spring for the last 31 years, Reed Lewis has traversed Idaho to do what technology still cannot: examine rocks, collect samples and make a map that is critical for mining, oil and gas and other industries. He knows getting an early start is essential, as summer smoke and winter snows limit the days that are useful for gathering data. Dr. Lewis, a geologist for the state of Idaho, is normally in the field by June at the latest. But halfway through the month, he's stuck at his desk. That's because amid uncertainty over the federal budget, funds from Washington that pay for geological mapping have not arrived. 'It's starting to be worrisome,' Dr. Lewis said. The concern is widespread; no states have received their 2025 mapping money. What's more, one line in the Trump administration's proposed budget could hamstring the ability of states to create basic geologic maps for years to come. Geologists in every state use federal funds to study wildfires, water resources, hazards and to map the locations of mineral deposits and energy sources. In addition to mining and fossil fuel industries, the free and publicly available maps are used by geothermal energy and real estate companies. Private companies might map a small area of particular interest but they generally do not share the information. Want all of The Times? Subscribe.
