Fasten your seatbelts we re in for a bumpy ride
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Fasten Your Seatbelts, We’re in for a Bumpy Ride. NASBO Spring Meeting April 26 , 2013 Santa Ana Pueblo, NM. Federal Funds Information for States. Where Are We Now?. Let’s Start at the Very Beginning. Focus on FY 2014. Divergent FY 2014 Budget Proposals. Health.

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Fasten Your Seatbelts, We’re in for a Bumpy Ride

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Fasten your seatbelts we re in for a bumpy ride

Fasten Your Seatbelts, We’re in for a Bumpy Ride

NASBO Spring Meeting

April 26, 2013

Santa Ana Pueblo, NM

Federal Funds Information for States


Where are we now

Where Are We Now?


Let s start at the very beginning

Let’s Start at the Very Beginning


Focus on fy 2014

Focus on FY 2014


Divergent fy 2014 budget proposals

Divergent FY 2014 Budget Proposals


Health

Health

President: Medicare Part D rebates; Medicare provider cuts; means-testing Medicare premiums; Medicare cost sharing; federal employee health programs

House: Repeal coverage provisions of ACA; convert Medicaid and CHIP to block grants; Medicare Part D tort and means-testing; Medicare premium support proposal would kick in later

Senate: Nonspecific cuts focused on providers rather than beneficiaries, and focused on Medicare


Other mandatory

Other Mandatory

President: Reduce tax fraud; reduce farm subsidies; increase federal employee retirement contributions; reduce fraud and abuse; reform PBGC

House: Increase retirement contributions; reduce farm subsidies; block grant SNAP; reform PBGC; wind down Fannie Mae and Freddie Mac; reform energy subsidies and reduce land purchases

Senate: Reform agriculture programs and PBGC


Discretionary

Discretionary

President: Reduce discretionary beyond BCA levels beginning in FY 2017

House: Reduce transportation and other discretionary spending

Senate: No specific recommendations


Chained cpi

Chained CPI

President: Adopt chained CPI for most parts of federal budget and tax code, excluding means-tested programs. Savings are split -$130b on spending side, -$100b on revenue side

House: No provision but possibly amenable to president’s proposal

Senate: No provision


Revenues

Revenues

President: Limit value of certain exclusions and deductions (including tax-exempt bonds) to 28% tax bracket; “Buffett Rule”; cigarette tax

House: Deficit-neutral tax reform (limiting tax expenditures to allow lower rates)

Senate: No specifics beyond limiting tax expenditures and targeting “the wealthiest Americans and big corporations”


Sequester

Sequester

President: Repeal sequester but implement cuts to discretionary spending beyond those mandated by BCA caps, beginning in FY 2017

House: Retain sequester but reallocate cuts from defense to nondefense

Senate: Repeal sequester but implement cuts to discretionary spending beyond those mandated by BCA, beginning in FY 2015


War and sandy

War and Sandy

President: Assume a reduction from FY 2013 levels, while CBO baseline assumes continuation at inflation-adjusted levels

House: Same as president, with more modest drawdown assumptions

Senate: Same as president, with more ambitious drawdown assumptions


Fasten your seatbelts we re in for a bumpy ride

Jobs

President: “Fix it First”; competitive transportation program; infrastructurebank; America Fast Forward Bonds; expand TIFIA; high-speed rail; payroll tax credit for employers; Department of Energy Race to the Top

House: No provisions

Senate: Infrastructure repair; fix dams; dredge ports; infrastructure bank and technology in schools


Themes in president s budget

Themes in President’s Budget

  • Implement new competitive grants

    • Preschool development

    • “First in the World”

    • High school redesign

    • “Race to the Top” energy grants

  • Add competitive elements to existing formula grants

    • LIHEAP energy burden reduction

    • Child Care Development Block Grant

  • Consolidate separate funding streams

    • ESEA reauthorization

    • National Preparedness Grant Program


Open questions of import

Open Questions of Import

Will the House and Senate adopt a concurrent budget resolution?

Will each chamber proceed based on its individual budget resolution?

How will the gap be bridged?

Will we end up back in Sequesterland?

The “action-forcing” event: debt ceiling

Will be reached soon, with enough wiggle room to get through July.


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