Federal Budget - The S Corporation Association

A Post-Disinflationary World

Today’s meeting between Congressional leaders and the President is the first of many to come in what might be termed the post-disinflationary world.

Interest rates peaked at 16 percent in the early 1980s and, following the Volker rate hikes and a nasty recession, the US embarked on an unprecedented 40-year disinflationary period where rates went from record highs to record lows.

Well, that’s over. Rising prices and record deficits are back and, absent a change of course, they are not going to get better. Hence the importance of today’s meeting.

Debt and Interest …

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admin2023-05-09T14:25:12+00:00May 9, 2023|

President Releases 2011 Budget

The president released his FY2011 budget yesterday. According to the Office of Management and Budget (OMB), the administration begins with a ten year baseline deficit of $5.5 trillion dollars. Simply put, if Congress and the administration left current laws in place, the deficit would average over $500 billion per year for the next decade.

The president’s proposed policies would raise this deficit to $8.5 trillion. As a result, debt held by the public would increase from $5.8 trillion (41 percent of GDP) in 2008 to $17.5 trillion (76 percent of GDP) in 2019.

It …

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admin2019-02-06T17:21:00+00:00February 2, 2010|

Senate Jobs Bill First Out of the Chute

With health care reform in a state of political limbo, Senate leadership is busy assembling a job-creation package that is likely to be the chamber’s next significant legislative effort.

Just before Christmas recess, the House hastily assembled and adopted a $154 billion spending package. In response, the Senate Finance Committee is working on a package that focuses more on tax relief than the House counterpart. As reported by Dow Jones:

The package would be paid for largely by re-directing funds that were available for the government’s bank bailout program, according …

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admin2019-02-06T17:21:55+00:00January 26, 2010|

Tax Outlook for 2010 — Starting in a Hole

The economic fear that gripped folks in the Fall of 2008 has resulted in a historic collapse of federal revenues.

Revenue collections since 1960 have stayed in a relatively tight pattern centered around 18 percent of our GNP. Considering the range of tax policies we’ve imposed on taxpayers during that time, the steadiness of the 18 percent mean is remarkable and suggests some sort of political or economic boundary is in effect.

That steadiness was broken last year when federal collections fell to their lowest level since 1950. Meanwhile, Washington’s response to the crisis has driven federal spending to levels not seen …

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admin2019-02-06T17:21:55+00:00January 15, 2010|

Items Remaining on the Congressional “To-Do” List

Friends of ours who follow Congress have begun quoting the old country and western song, “How Can I Miss You If You Won’t Go Away?” With Christmas less than two weeks away, Members of Congress would like to leave soon, but a long list of to-do items still stands in the way:

Health Care Reform: Majority Leader Reid is still pressing to get the Senate bill finished before Congress leaves for the New Year. He still might make it, but the odds against him are climbing rapidly.
Government Funding: Congress passed a batch of …

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admin2019-02-06T17:21:55+00:00December 15, 2009|