Here are four things to watch for in August.
1. Speaker Boehner and Leaders Reid, McConnell, and Pelosi must each name their three picks to the Joint Select Committee on deficit reduction by Tuesday, August 16th. Leader Reid announced his today: Senator Patty Murray will co-chair the committee and be joined by Senate Finance Committee Chairman Max Baucus and Senator John Kerry.
2. The President needs a new Chairman of the Council of Economic Advisers to replace now-departed Austan Goolsbee. With Gene Sperling having replaced Larry Summers at the head of the National Economic Council, the President does not have an academic economist as a principal on his economic team until he fills the CEA slot.
3. CBO should release their updated economic and budget baseline projections later this month. I expect this will incorporate not only a new gloomier economic forecast, but also the effects of the Budget Control Act of 2011.
4. The President’s Mid-Session Review (MSR) of the budget should be released this month. The Administration missed the July 15th statutory deadline, but that’s not that unusual. Like the CBO baseline update, the MSR should incorporate the Administration’s new and more pessimistic economic and budget baseline forecasts. We’ll be able to see what the Administration forecasts for GDP growth, unemployment, and budget deficits.
In addition, the President typically puts his new policy proposals into the MSR, which works just like the President’s February budget – it’s a set of incremental proposals to Congress. Will he incorporate specific numbers and/or policies that reflect:
- His Spring speech, which the Administration labeled a budget “plan”?
- Some or all of the President’s position from the Grand Bargain negotiations?
- Any consensus-recommended spending cuts negotiated by the Biden group?
- His new stimulus proposals, including an extension and/or expansion of the payroll tax cut, extended unemployment insurance benefits, and more infrastructure spending?
- Elements of the Bowles-Simpson recommendations that the President now speaks of favorably?
- Other tax increases or spending cuts to shape the work of the Joint Select Committee?
If the Administration releases the MSR on a Friday afternoon, then you know they are trying to bury bad news.