CBO Revises Deficit Down; Senate Comm Approves Farm Bill

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Due Diligence

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Chapter 1: CBO Revises Budget Deficit Down $200 Billion

The Congressional Budget Office has revised its deficit forecast for this year by $200 billion, dropping its estimate to $642 billion. This puts the budget on track for its smallest deficit since 2008 when the economic crash reduced tax revenues and spurred stimulus spending. The CBO credited an increase in tax revenues along with a cash return from mortgage giants Fannie Mae and Freddie Mac. Additionally, they predict the deficit will continue to shrink to below 3 percent of the entire economy within the next two or three years, a point generally considered as economically sustainable. This has led some analysts to suggest high deficits are a thing of the past.  We talk to Mark Rom, Professor at Government at Georgetown University.

Chapter 2:  Judiciary Approves Farm Bill with $20 Billion in Cuts to Food Stamps

The Senate Agriculture Committee yesterday finally approved a five-year farm bill designed to cut spending through a combination of cuts in in Supplemental Nutrition Assistance along with decreases in farm subsidies. About $400 million of the $2.4 billion in proposed savings comes from cuts in SNAP – popularly known as food stamps – eliciting outcry from a number of Democratic Senators such as Kristen Gillibrand of New York. Much of the rest comes from cuts in direct payments to farmers, a controversial program that, critics say, end up costing the government more for food production than the production is worth. We talk to Bruce A. Babcock, Professor of Economics at Iowa State University.

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