Congress Blows Yet Another Budget Deadline

Congress blows yet another budget deadline. After missing its chance to approve a spending bill to keep the government running after Thursday, Congress is now planning to vote this week on a very short-term continuing resolution—one good for just a few days. The measure  is designed to keep the government open and buy some time for Congress to pass an appropriations bill to fund most of the government through September 2015. The problem: It can take a long time to finalize details of one these end-of-year omnibus bills, especially because lawmakers have added nearly 100 policy riders to the must-pass bill. Congress has announced a $1.01 trillion deal but still will need a short-term extension to prevent a government shut-down.

Have pay-go rules, will make exceptions. President Obama is threatening to veto a House measure to make three highly-targeted tax breaks for charitable giving permanent. That's because they are not  paid for. The breaks are included in the  House-approved bill that would revive most other expired tax breaks only for 2014.

When did a rule become a suggestion? TPC's Howard Gleckman wants to know why Congress can pay for some things, and not others. If Congress was able to figure out how to pay for the ABLE Act, it should be able—and required—to pay for reanimating over 50 dead tax subsidies.

The federal government: States need it for more than just discretionary spending. TPC's Tracy Gordon argues that the federal government remains the primary driver of US domestic policy. She shares examples: States opting for Medicaid expansion thanks to the Affordable Care Act; more than $100 billion in federal tax subsidies to states and localities; and federal highway funding, which provides more than half the funds for states' capital improvements. There was also that federal stimulus in 2009: $140 billion that saved states from their own shrinking revenues. “The federal government is not going anywhere any time soon,” Gordon concludes. “And that's good because states and localities cannot and should not go it alone.”

Meanwhile, states are cutting taxes and keeping spending growth modest. The Fall Fiscal Survey by the National Association of State Budget Officers shows that states enacted $2.3 billion worth of tax and fee cuts in fiscal year 2015, up from $2.1 billion in fiscal 2014. In 2010, following the recession and steep revenue declines, they enacted $23.9 billion in net tax increases. Interestingly, NASBO's Scott Pattison notes, “We are not seeing very significant [spending] growth as you might expect in a recovery period.”

In Australia, like the United Kingdom: A “Google Tax” on multinationals? The Australian Tax Office (ATO) is currently working closely with 10 big companies to determine whether they are paying a correct amount of tax in Australia. Australia's Treasurer Joe Hockey hopes to collect another AU$1 billion ($833 million) in revenue over the next three years from the effort. Australia will pace itself, though: Hockey would prefer to join coordinated international action against profit shifting. The Organization for Economic Cooperation and Development, on behalf of G20 governments, is leading an international tax crackdown against multinationals, known as Base Erosion and Profit Shifting (BEPS).

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