James Pethokoukis

The stark difference between Reid’s defense cuts and Ryan’s

July 26, 2011

Here’s the big problem House Republicans have with Sen. Harry Reid’s budget plan: Some $1 trillion of its $2.7 trillion in savings over the next decade — or 37 percent — come from factoring in an expected troop drawdown over the next few years from Iraq and Afghanistan. This is something everyone expects — other than the Congressional Budget Office baseline fiscal forecast. It assumes no drawdown, and it is against CBO’s unlikely scenario that Reid compares his plan.

Why a debt ceiling deal is (probably) going to get done

July 25, 2011

If you believe in a) free enterprise and b) fiscal solvency, would the emerging Harry Reid proposal to raise  the debt ceiling and cut debt be so terrible an outcome? First some general deets:

Obama vs. Boehner: Tax battle again plagues debt ceiling tax

July 23, 2011

First the basics from Reuters:

Here is what’s happening on Friday in negotiations to raise the U.S. government’s $14.3 trillion debt limit by Aug. 2 and avoid a credit default:

A brief chat with Rep. Jim Jordan

July 22, 2011

Any good wrestler will tell you that the key to success is knowing a limited number of moves very well — not trying to mastery every counter or attack in the book. Rep. Jim Jordan, chair of the conservative Republican Study Committee, was a champion college grappler who’s brought that focused approach to the House. I talked with him briefly this afternoon about some of the compromise deals floating around Capitol Hill. For instance, Nancy Pelosi said she’s open to this deal (via Talking Points Memo):

Debt ceiling update: What Wall Street thinks is happening

July 22, 2011

One reason financial markets have been relatively sanguine about the debt ceiling negotiations is that investors have been almost certain that something gets done by August 2. Here is what one bank lobbyist told me today:

Resisting the Gang of Six budget temptation

July 21, 2011

America needs to raise its debt ceiling, ┬ácut spending and implement wide-ranging tax reform. The Gang of Six plan claims to do all those things as it reduces debt by close to $4 trillion over a decade. If I could summarize my opposition in one sentence, it would be this one from Rep. Paul Ryan: “The plan appears to increase revenues by $2.8 trillion, without addressing unsustainable health care spending that is driving our debt problems.”

The impact of U.S. credit rating downgrade

July 20, 2011

It does not appear to be as frightening as I might have assumed. Here is a bit (via Business Insider) from a Goldman Sachs conference call this morning where the impact of a AAA downgrade is discussed

How would U.S. react to a debt crisis?

July 20, 2011

If the U.S. doesn’t get a handle on federal debt, there will be a financial and economic crisis. By 2035, debt as a share of GDP could be 250 percent, though a panic would surely happen long before that point was reached. But if a crisis came, how would Washington react? What drastic measures would be taken? I think there would be a huge push for a massive tax increase, probably via a value-added tax. Here is some of what the Comeback America Initiative sees happening:

Americans still think raising debt ceiling a dodgy idea

July 20, 2011

These results from a survey by Northwestern’s Kellogg School of Management (via its Financial Trust Index site) are sure to get noticed in Washington:

Why the House GOP will deep six the Gang of Six

July 20, 2011

Will the House GOP play ball on the Gang of Six debt reduction plan? The Paul Ryan-led House Budget Committee is giving members all the ammo they need to take a pass (bold is mine):