Morning Brief: Dissecting the White House Budget

The president's 2013 budget, while unlikely to advance legislatively, indicates the Obama administration's priorities and issues they are keen to work on if elected for a second term, writes the Brookings Institution's Isabel V. Sawhill. Primary themes in this budget include job creation, reducing the debt and deficits, revenue increases on the wealthy, but shying away from fundamental reform to taxes and entitlements.

Debt and Deficits

Republicans Shift Stance on Payroll Tax Cut

GOP lawmakers proposed moving to pass the payroll tax cut extension (Bloomberg) while continuing to debate unemployment benefits and a measure to put off cuts in Medicare reimbursements to physicians—all three measures are set to expire February 29. The shift in strategy is likely to fault Democrats if Americans face higher taxes next month.

Debt and deficits. Read more from experts on the challenges in reducing U.S. debt.

Corporate Regulation and Taxation

Foreign Complaints over Volcker Rule

Regulators in Washington faced a wave criticism from foreign banks opposing the imposition of the Volcker rule (FT), a proposed regulation aimed at barring banks from proprietary trading. Advocates of the regulation suggest it is intended to apply to all big financial firms operating in the United States, regardless of where they are based. The flood of industry outcry—both at home and abroad—is likely to result in a watering down of the measure, according to analysts.

Corporate regulation and taxation. Read more from top economists and business experts on solutions for addressing corporate tax reform.

Innovation

Why Some Companies Don’t Adapt—Culture

Writing for the Atlantic, Megan McArdle investigates the reason some companies, such as General Motors and Kodak, seem resistant to change, suggesting the answer may lie in their corporate DNA. "The need for accountability and reliability in the modern economy selects against constant radical experimentation," she says, "The larger and older the firm is, the heavier the selection for stability." This pattern may explain why innovation is often driven by small upstart firms rather than profitable established companies with big R&D budgets.

Innovation. Read more on how the U.S. capacity to innovate could play a chief role in economic growth.