Gyroscopic Investing

MachineGhost wrote: It adds $10 billion every week to the federal debt to have a shutdown because of the cost of shutting down, reopening and overtime pay. 

A 3-4 week shutdown will erase about 1.2% from GDP.

The Treasury's line of credit could forestall the Nov. 3 shutdown until between Nov. 10 and 19.

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The budget agreement would boost military spending for the next two years, a priority of many Republicans, while raising nonmilitary discretionary spending, a White House priority. The deal would increase spending by $50 billion in fiscal year 2016 and $30 billion in fiscal year 2017, split evenly between military and domestic spending.

Measures used to offset the bill’s cost look for savings or revenue from a wide variety of programs, including crop insurance, radio spectrum auctions, and oil sales from the Strategic Petroleum Reserve, among others.

The deal would extend the solvency of the Social Security program used to help support disabled people. The trust fund for the Social Security Disability Insurance program could be exhausted by next fall, triggering a 19% benefit cut for workers who collect disability.

Employees and employers now each pay a 6.2% payroll tax that funds both the disability insurance trust fund and the much larger retirement-benefits fund, which is currently expected to be depleted in 2034. The agreement would divert a slightly larger share of the payroll tax to the disability fund for three years, providing sufficient funding until 2022.

The deal also looks to prevent an expected 52% increase in premiums for the roughly 30% of people enrolled in Medicare Part B, which covers outpatient care such as doctor visits. The deal would prevent that sharp rise by increasing those premiums by a smaller 15%. It would also limit an expected increase in deductibles for enrollees.

Holding off on the increases would cost about $8 billion. But the agreement doesn’t add to the deficit because it calls for the lost revenue to be covered by a loan and paid back over time. Most beneficiaries who would have seen the 52% premium hike would instead cover the cost through a $3-a-month premium increase.

Without such an agreement, premiums and deductibles would rise next year because of a quirk in the formula governing such payments for years when Social Security benefits don’t receive an annual cost-of-living increase, as is the case for next year.

Separately, the Internal Revenue Service would have an easier time auditing large partnerships, including private-equity firms and hedge funds, under a provision of the deal that would revamp a 33-year-old law that sets the rules for partnership audits and requires the IRS to pass additional taxes to each of the partners.

The budget deal would also repeal a delayed provision of the 2010 health law requiring employers to automatically enroll workers in company plans.

As part of the legislation, the deal also suspends the debt limit through March 15, 2017, meaning the government could continue to borrow until then. That would place any future increase on the shoulders of a new president and Congress.