Deficit Feed

Today's news is that there's no news from the U.S. Supreme Court on whether the tax subsidies offered to folks who used the federal insurance exchange will continue or be eliminated. UPDATE, June 25, 2015: The Supreme Court upholds Affordable Care Act tax subsidies for insurance purchasers at both federal and state exchanges. But just across the street on Capitol Hill, another part of the Affordable Care Act, or Obamacare as it's popularly known, is a bit closer to repeal. The House voted on June 18 to get rid of the medical device tax. This 2.3 percent levy has been... Read more →

Capitol Hill is in the throes of contentious budget negotiations. The process is complicated not only by the differing political priorities of Democrats and Republicans, but also the somewhat competing stances of GOP members, some of whom have higher political aspirations. Both sides of the Hill agreed on their fiscal plans in late March. Now they must reconcile the two. With the GOP in control of both chambers, the House and Senate fiscal year 2016 budgets actually are pretty similar. Both want to fast-track a measure that would repeal Obamacare, as well as add more money for defense projects. Balanced... Read more →

Workers have been paying the full 6.2 percent Social Security payroll tax for almost two years now. You remember this so-called tax holiday in place in 2011 and 2012. During those years, the deduction from your pay that goes toward the federal retirement program was reduced by 2 percentage points to 4.2 percent. The matching employers' portion stayed at 6.2 percent. The payroll tax cut for workers was made so that folks would have a few more dollars to spend, giving the sluggish economy a buying boost. But after two years, Congress decided enough was enough and let the payroll... Read more →

Remember the last election cycle when most of the campaign and Capitol Hill talk focused on the federal budget deficit? Now, however, with the Nov. 4 balloting day just about a month away, it's pretty much crickets when it comes to the deficit. Part of the reason is that as the fiscal 2014 year is winding down, the U.S. deficit is dropping. Last month the U.S. Treasury reported that the country's debt level fell again, on a fiscal year-over-year basis, to $589.5 billion. August's deficit was $128 billion. That's a 58 percent reduction from the fiscal 2009 deficit peak of... Read more →

The tax version of Groundhog Day is playing out again on Capitol Hill, this time in the Senate theater. But don't settle down on the couch with your popcorn just yet. The feature legislative presentation is still a ways off. Although Senators agreed yesterday (May 13) to consider the package of 52 (out of 55 or so) tax business and individual tax breaks that expired at the end of 2013, final passage is not a sure thing. And even if it clears the Senate this week, the House isn't likely to consider the bulk of the tax breaks until late... Read more →

And here we are again, if not on a fiscal cliff, at least standing on a debt ceiling ledge. When Congress agreed to reopen the federal government after October 2013's 16-day shut-down, it also suspended the debt ceiling until today, Feb. 7. Click image for the full interactive national debt clock. As we've all come to learn in the last few years, the debt ceiling is the limit on Uncle Sam's ability to borrow money to pay for bills he -- and by he, I mean Congress -- has already incurred, including, but not limited to Social Security and Medicare... Read more →

It's a done financial deal. This evening (Jan. 16), the Senate approved the $1.1 trillion spending bill that was OK'ed the day before by the House. Obama should sign the measure soon has signed the measure into law. Everyone in federal offices now knows just how big -- or small in the Internal Revenue Service's case -- a budget they'll have to work with for fiscal year 2014. Now for the next fiscal battle, increasing the debt ceiling. Debt And that deadline will be a bit closer than we previously thought. February, not March: Treasury Secretary Jacob (Jack) Lew says... Read more →

Maybe the National Taxpayer Advocate's recommendations came too late in the budgeting process. Or maybe members of Congress just like whacking the most hated federal agency with a fiscal bludgeon. Whatever the reason, the Internal Revenue Service is going to have to make do with less money in fiscal year 2014 under the omnibus budget bill worked out this week on Capitol Hill. UPDATE: The House passed the spending bill Wednesday, Jan. 15, afternoon by a bipartisan 359-to-67 margin. It now awaits Senate action. And that means all of us taxpayers will probably suffer at least a little bit this... Read more →

I'm a big believer in you get what you pay for. Apparently, so is National Taxpayer Advocate Nina Olson. Olson this week released her annual report to Congress. In the yearly analysis, the Internal Revenue Service's internal watchdog details at least 20 of the biggest problems that taxpayers face. For 2013, Olson enumerated 25 taxpayer troubles. And she put the inability to get good service from the IRS near the top of her latest list. One of the most frustrating taxpayer-IRS interactions is telephone service. Folks seeking answers via phone are getting worse service now. And why is there such... Read more →

For the last few days of September and the first 16 days of October, much of the attention was on one Representative and one Senator. Sen. Ted Cruz (R-Texas) led a fight to defund Obamacare and egged on House Republicans to do the same, leading in large part to the government shutdown. That made things difficult for House Speaker John Boehner (R-Ohio) as he tried to bring the opposing factions of his party together. However, now that a deal has been reached to reopen federal facilities, the focus has shifted to 29 members of Congress. They are the bipartisan group... Read more →

Grave government shutdown leaving us all adrift a la Gravity

Will Capitol Hill and the White House come to an agreement on raising the debt ceiling and reopening all federal offices? A meeting had been scheduled for this afternoon -- actually as I type -- between the White House and Senate Democratic and Republican leaders who are working on a deal. The word now, however, is that the confab has been pushed back, possibly into tomorrow. If Congress, including Speaker John Boehner and the House Republican Party's recalcitrant Tea Party wing, can't be coaxed into a deal, we all will be left flying blind. That feeling of fear and hopelessness... Read more →

Tell Congress what you think as brazenly as you wish

There's a lot of talk about the Beltway Bubble, the phenomenon where the nation's capital exists in an atmosphere insulated from the real lives the rest of us lead. One Representative, however, recently tried to burst it. Rep. Alan Grayson (D-Fla.) saw the latest surveys revealing that public approval of Congress has plummeted to its lowest level ever and he wanted to make sure his House colleagues knew about the lack of esteem in which they are held. Grayson attempted to use a special House rule that allows members to address harms to the "dignity" of the House. Yes, I... Read more →

What do we like more than Congress. Apparently, just about everything. But there is a silver lining to our disgust with Representatives and Senators. It might finally force federal lawmakers to rethink their so-called governing strategies. House Speaker John Boehner (R-Ohio) and other Republican leaders have put together a proposal to extend for six weeks the debt ceiling, which is the maximum amount the United States can borrow to pay already incurred bills. They've met with President Obama, who reportedly said he would make a deal, but only if it also went beyond the debt ceiling and cleared the way... Read more →

A lot of attention has been paid, rightfully, to the federal workers who are on furlough or working for free until Capitol Hill agrees on a fiscal 2014 budget. Among those sitting out the political stalemate are around 86,000 Internal Revenue Service rank and file workers. But as the shutdown approached, there also were some changes -- or not -- at the IRS' executive level. Werfel remains, for a while: First, the top guy's status. Daniel Werfel stepped in as Acting IRS Commissioner (his title was tweaked for administrative reasons in June) after word broke, and Congressional hearings began, on... Read more →

"I think, personally, it would bring stability to the world markets." That's the prediction by Florida Republican Rep. Ted Yoho of what will happen if Congress doesn't raise America's debt ceiling by Oct. 17 and lets the country default on what it owes. Yoho already is no stranger to outrageous statements. You might remember when he called the 10 percent tax on indoor tanning services racist. But the Tea Party darling's assessment of what might happen if the United States breaches the impending debt ceiling is being called the scariest, dumbest and stupidest thing said so far during this latest... Read more →

Nearly 800,000 federal employees are off their jobs. Those who are still working won't get actual money when their paydays arrive. They are working on a promise (also made to furloughed workers by a House vote Saturday afternoon) that they'll get what they are owed when Congress finally agrees on a budget plan for the 2014 fiscal year. Some agencies are offering their working-for-free employees a form letter explaining the financial situation that workers can show or send to creditors in lieu of the money they don't have. That might convince the electric or phone companies not to cut off... Read more →

Oct. 1, the beginning of the 2014 fiscal year, is more than half over. The stalemate between Congressional Republicans and Democrats over a stopgap spending bill is far from over. The biggest stumbling block is the continuing stubbornness insistence of House conservatives to tie Uncle Sam's operational costs to the president's signature health care law. The resistors, most of them recently elected thanks to Tea Party support, want Obamacare, as the Affordable Care Act is popularly known, either defunded or at least delayed for a year. That ship, folks, has sailed. The health care reform law's insurance coverage exchanges opened... Read more →

While Capitol Hill lawmakers are screwing around considering ways to deal with the country's impending financial deadlines, Congress' independent budget analysts announced some good fiscal news. The U.S. Treasury picked up $284 billion in August. That added revenue, according to the Congressional Budget Office (CBO), means Uncle Sam's budget deficit at the end of last month was $411 billion smaller than at the comparable period last year. That sizable reduction, making the budget deficit around $753 billion for the first 11 months of the 2013 fiscal year, is noteworthy. At this point in 2012, the budget deficit was $1.164 trillion.... Read more →

Looking for something to do this weekend? If you pay estimated taxes on earnings that aren't subject to withholding, then you can work on your third 1040-ES filing for the 2013 tax year. Click image to access the PDF version of Form 1040-ES, including all vouchers and instructions. In case you haven't yet encountered estimated taxes, these four extra payments are for such taxable income as investment and self-employment earnings, as well as unexpected income like prizes, gambling winnings or a lottery jackpot. Estimated taxes are the way to meet the tax code's pay-as-you-earn system that's covered for most wage... Read more →

The richest 20 percent of Americans enjoy more than half of the benefits from 10 major tax breaks. That's the analysis of the nonpartisan Congressional Budget Office in its report, "The Distribution of Major Tax Expenditures in the Individual Income Tax System," released last week. The tax breaks -- or expenditures as they are known in legislative circles -- include tax deductions, tax credits, preferential tax rates for certain types of income and income that is excluded from taxes. The CBO grouped the expenditures into four categories: Exclusions from taxable income, which includes employer-sponsored health insurance, net pension contributions and... Read more →