The Congressional Budget Office offers two visions of the future in its new long-run budget outlook. The first imagines a world in which lawmakers take pay-as-you-go budgeting really seriously. The budget baseline assumes that existing laws execute exactly as written: all the 2001 and 2003 tax cuts expire, the alternative minimum tax hits millions more families, real bracket creep drives taxes far above historical norms, Medicare payments to doctors are cut by more than 20%, discretionary spending grows only with inflation, and all the offsets in the recent health legislation – taxes on “Cadillac” health plans, cuts in provider payments, etc. – happen as scheduled. If Congress tries to avoid any of those changes, it would have to pay for them through offsetting spending cuts or tax increases.

On the day when the Congressional Budget Office projected that the federal debt could reach 185 percent of Gross Domestic Product by 2035, consider a bill introduced by two Arizona lawmakers, Senator John McCain and Representative Jeff Flake. Carrying on a nearly two-decades-old tradition, the two GOP legislators have introduced the “Debt Buy-Down Act,” which would let taxpayers designate up to 10 percent of their federal income tax liability for debt reduction. Congress would have to cut specific programs by the aggregate amount of designated taxes or accept an across-the-board spending reduction.

For the past decade, policymakers and pension experts have encouraged employers to increase worker participation in 401(k) plans by automatically enrolling their employees in these retirement programs. And it works. One study concludes that participation among new hires nearly doubles—from less than half to nearly 90 percent—when workers are auto-enrolled.

For two years, the homebuyer credit has been in the running for Washington’s worst tax policy idea. Now, new evidence about this bit of legislative bilge suggests it may be time to retire the trophy. The Commerce Department reports the new homes market collapsed in May after booming in March and April (chart). Why? Well, in early spring, in response to an intense marketing campaign by the real estate and mortgage industries, tens of thousands of buyers accelerated home purchases to take advantage of this sweet tax give-away (as much as $8,000 for some buyers) before the credit expired on April 30. Then, just as most sentient economists predicted, the market dried up. Actually, it didn’t just dry up. It became the Death Valley of housing.

Faced with continuing gridlock over a soup-to-nuts extenders bill, congressional leaders have gotten creative in their legislative strategy. Exhibit A is a stripped-down bill that passed the Senate by unanimous consent on Friday. This bill would temporarily reverse the 21% cut in Medicare physician payment rates that took effect earlier this month. The price tag for this six-month “doc fix” is a bit more than $6 billion over the next ten years.

Maryland Democratic congressman Steny Hoyer is something of a throwback. In an age of ideological extremes, the House Majority Leader is a moderate. At a time when elected officials are held in low esteem, the #2 House Democrat proudly serves in his fourth decade as a legislator. And when incendiary speech is the ticket to political stardom, Hoyer is far more comfortable counting votes in legislative backrooms than delivering red-meat polemics.

Congress' effort to pass a jobs bill stalled in the Senate on Wednesday. In part, the upper chamber tied itself into Senate-like knots thanks to the usual partisan wrangling. But the proposal has also rekindled a debate over the need for more economic stimulus versus fear of rising deficits. This argument is important and healthy, but wildly overblown in the context of such a small and poorly-targeted bill.

Back in March, the Congressional Budget Office (CBO) estimated that the new health legislation would reduce the federal budget deficit by about $140 billion over the next ten years and by about 0.5% of gross domestic product in the decade after that. Ever since, analysts have been debating whether we should believe those estimates. Some say the legislation will deliver much larger budget savings than those modest estimates suggest, while others insist it will greatly increase future deficits.

I use the Washington subway—the Metro—to commute from my home in the D.C. suburbs to my downtown office. The system has just approved a $109 million fare increase. But, in a tour de force of obfuscation, it has designed the hike so that few riders will have any idea what a given trip will cost.

Critics of the ongoing congressional effort to tax compensation of private equity managers as high-rate ordinary income rather than low-rate capital gains are focusing on a new objection: Whatever the tax treatment of this so-called “carried interest,” Congress would unfairly raise taxes on the sale of these partnerships by also treating a share of the returns as ordinary income rather than capital gains.