This morning I testified before the House Ways and Means Committee about the ways to reduce the economic cost of a cap-and-trade program for greenhouse-gas emissions by increasing firms flexibility in the timing of their emission reductions. Accumulating evidence about the pace and potential extent of global warming has heightened the interest of policymakersin cost-effectiveways to achieve substantial reductions in emissions.
March 2009
The CBOs budget projections released last Friday are based in part on our economic forecast. In this blog entry, I want to discuss how our projection of real (that is, inflation-adjusted) GDP, one of the most important economic factors in the budget projections, compares with two other forecaststhe Blue Chip forecast (an average of about 50 private-sector forecasters), and the Administration's forecast.
We have just released our latest projections for the budget and economic outlook, updating the projections published in early January 2009. In addition, we have reviewed the Presidents budgetary proposals contained in the February publication A New Era of Responsibility: Renewing Americas Promise, and our report summarizes our preliminary analysis of that budget plan. For a detailed discussion of the economic forecast underlying the report click here.
CBO released a cost estimate yesterday for H.R. 1256, the Family Smoking and Tobacco Control Act. This bill would authorize the Food and Drug Administration (FDA) to regulate tobacco products andrequire the agency to assess fees on manufacturers and importers of tobacco products to cover the cost ofthese new regulatory activities.
Global climate change poses one of the nations most significant long-term policy challenges. While the potential damage from climate change is large, the potential cost of avoiding it is also large. Policymakers could help minimize that cost by using either a tax, or a well-designed cap and trade program, to motivate reductions in emissions. As many analysts have noted however, either a tax or a cap would cause prices of goods and services to increase, with larger increases for goods that entail greater emissions, such as home heating.
The Subcommittee on Health of the House Committee on Energy and Commerce invited me to testify this morning about the opportunities and challenges that the Congress faces in trying to make the health care system more efficientso that it can continue to improve Americans health but do so at a lower cost. In my remarks I emphasized serveral points:
At the request of Senator Grassley and Congressman Camp, todayCBO released ayear-by-year estimate of the economic effects of the American Recovery and Reinvestment Act of 2009 (ARRA) asenacted on February 17, 2009. This isour firstsuch analysis of the ARRA legislation as enacted. (In CBO'sletter to Senator Gregg, Senator Grassley, and Congressman Camp on February 11, 2009, weestimated an average of the effects of theHouse- and Senate-passed versions of H.R.