CBO's Elmendorf warns of 'headwinds' to economic recovery

Posted by William Douglas on November 13, 2013 

The director of the Congressional Budget Office told a House-Senate budget conference committee Wednesday that uncertainty over fiscal policy is hampering the nation's economic recovery.

Douglas Elmendorf, the CBO's director, reaffirmed the non-partisan group's February projection that 2013's slow economic growth will be replaced by a more rapid expansion in 2014.

But he warned that "unusually high" uncertainty over fiscal policy and "stark disagreements" about tax and spending polices are "probably dampening growth, although we don't know by how much."

 "The further tightening of fiscal policy built into current law for the next few year, as well as ongoing uncertainty about fiscal policy, represent continued headwinds to the economic recovery," he said.

In addition to Elmendorf's testimony, the CBO released a report Wednesday detailing 100 options for reducing the federal deficit.

Formed following last month's partial government shutdown, it's the job of the bipartisan conference committee of 29 handpicked House and Senate members  to provide some fiscal certainty and come up with budget to fund the federal government.

The committee has a Dec. 13 deadline to reach resolve differences between budgets passed separately by the House and Senate. The short-term government funding that reopened the government expires Jan. 15. 

Meeting for only the second time, committee members showed some sharper elbows than in their introductory session in which most of them spoke of the need for bipartisanship and moving out of one's comfort zone to achieve a deal.

Instead, conferees appeared to return to their familiar corners Wednesday with Republicans highlighting the need for tax cuts and Democrats looking to curtail tax breaks and close loopholes. Rep. James Clyburn, D-S.C., for example, pressed Elmendorf on whether tax breaks should be considered "tax entitlements" or another form of spending.

Sen. Charles Grassley, R-Iowa, argued that the automatic domestic and defense spending cuts known as sequestration have been successful in reducing the deficit and the committee shouldn't try to change it.

Many Democrats and Republicans maintain that sequestration has hurt military readiness, negatively impacted social programs and services, and needs to be changed.

Still, Sen. Patty Murray, D-Wash., the lead Democrat on the committee, said "I've been encouraged by my discussions with (House Budget Committee Chairman Paul Ryan, R-Wis.) and I'm hopeful we can continue working to make progress towards a compromise."

 

 

 

 

 

 

 

 

 

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