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New CBO Score of ACA “artificially reduces the cost estimates”

Politicoreports, “President Barack Obama’s health care law just got cheaper — to the tune of $84 billion over 11 years, according to the Congressional Budget Office.

That’s because the Supreme Court’s June ruling on the law allowed states to opt out of a costly Medicaid expansion, and in a new report released Tuesday, CBO anticipates that some of them will do just that. As a result, about 3 million more people will remain uninsured, Capitol Hill’s official bean counters said.” … However, Douglas Holtz-Eakin, a former CBO chief who now runs American Action Forum, said, “‘From my point of view, I don’t believe these cuts are or will be real. They are just paper.’”

Gretchen Hamel, executive director of Public Notice, said in a statement that the report confirms that the American people can’t afford this new health care law.  She also criticized the CBO’s accounting method for artificially reducing projections by spreading eight years of spending over a 10 year time frame, saying, “Just because Americans are getting the first two months rent-free doesn’t mean they can afford to renew year after year when fees spike.”

Canadian Oil Going to China?

The Wall Street Journal editorializes, “President Obama may not want to exploit the energy buried in Canada’s Alberta oil sands, but China sure does. Think of Monday’s $15.1 billion offer by China’s state-owned Cnooc to buy Canadian energy giant Nexen as a post-Keystone XL Pipeline bid to replace the U.S. as Canada’s biggest energy investor and market. … The lesson for America, and especially Democrats, is that Canada’s oil sands will be developed, whether their green financiers like it or not. If the U.S. doesn’t want the oil, China and the rest of Asia will gladly take it.”

Going Over Tax Cliff Could Be “devastating” for Seniors

The Wall Street Journal editorializes, “Most people know that the U.S. government is rapidly approaching the edge of a fiscal cliff that will raise taxes for millions of Americans—at every income level and age. What is less known is that seniors, many of whom depend on investment income to fund their retirement, will be hurt the most. If Congress fails to act, tax rates for investment income will soar beginning Jan. 1, 2013. The top tax rate on capital gains will jump to 23.8% from 15% and the top rate on dividends will nearly triple to 43.4% from 15%. … If this happens, all taxpayers who receive dividend income, but especially seniors, would be hit. For those living on fixed incomes and counting on dividends to help pay their bills, smaller dividend checks could be devastating.”

Senate Stalemate on Vote to Extend Tax Cuts

The Senate is voting on extending tax cuts today, but  The Washington Post says that debate is going nowhere for now. “[W]hile the din of that rhetorical battle reverberated throughout Washington, the legislative battle set for Wednesday is largely meaningless. Neither side has the 60 votes necessary to overcome a filibuster and push its preferred tax package to final passage. … The ideological stalemate leaves the nation facing what Federal Reserve Chairman Ben S. Bernanke has called a ‘fiscal cliff’ in January, when a temporary payroll tax cut and a host of other temporary tax breaks will expire alongside the Bush tax cuts. Together with sharp scheduled spending cuts at the Pentagon and other federal agencies, the fiscal cliff threatens to siphon $600 billion out of the economy next year.”

The Hill on Congress: “Nothing is getting done”

The Hill reports, “Tax rates, spending cuts and the deficit will dominate the Capitol this fall, but lawmakers and lobbyists are quietly maneuvering to use the lame-duck session to clean up a whole mess of other issues that Congress has been unable — or unwilling — to handle. … All told, the lame duck is shaping up to be one of the most significant sessions in recent history. Here’s what expires at the end of the year: marginal tax rates for every American, the reimbursement rate for doctors who treat Medicare patients, the alternative minimum tax, the debt ceiling and unemployment insurance. Not to mention automatic spending cuts for the Pentagon and other domestic programs go into effect next year. … 

The uptick in lobbying and negotiating on a series of peripheral issues underscores the reality of this Congress so far: Nothing is getting done.”

Senate Legislation At Historic Low

The Washington Times reports the Senate “is doing less legislating now than at any other time since 1947, when data were first compiled and published. …The House, meanwhile, is doing somewhat better, notching a decidedly middle-of-the-pack performance.” Senate Majority Leader Harry Reid (D.-Nev.) said of the Senate, “‘Rather than debate important policy measures, we spend far, far, far too much time staying around looking at each other, simply waiting for the clock to run out on another filibuster.” Senate Minority Leader Mitch McConnell (R.-Ky.) takes a slightly different view, commenting, ““I would say to my good friend the majority leader, we don’t have a rules problem, we have an attitude problem. When is the Senate going to get back to normal?’”

Daily Finance reports, “The world’s largest package delivery company is more pessimistic about U.S. growth than many economists. It predicts global trade will grow even slower than the world’s economies — a trend not seen since the recession. It’s making cuts in its business and reducing its earnings projections. UPS on Tuesday lowered its forecast for all of 2012 and said its third-quarter earnings will fall below last year’s results. … ‘Economies around the world are showing signs of weakening and our customers are increasingly nervous,’ Chairman and CEO Scott Davis said in a conference call with analysts.”

Fed May Act On “disappointing economic news”

The Wall Street Journal reports, “Amid the recent wave of disappointing economic news, conversation inside the Fed has turned more intensely toward the questions of how and when to move. Central bank officials could take new steps at their meeting next week, July 31 and Aug. 1, though they might wait until their September meeting to accumulate more information on the pace of growth and job gains before deciding whether to act…Mr. Bernanke told Congress he wants to see more progress in reducing unemployment and he expressed frustration the economy appears to be ‘stuck in the mud.’”


The $12 Trillion Misunderstanding

In The Washington Post, Robert J. Samuelson editorializes, ”Call it the $12 trillion misunderstanding. It ranks among the biggest forecasting errors ever. Back in 2001, the Congressional Budget Office projected federal budget surpluses of $5.6 trillion for 2002-2011. Instead we got $6.1 trillion of deficits—a swing of $11.7 trillion. … [N]o single cause explains the change. …[A] weak economy was the largest cause. … Even projecting surpluses from 2002 to 2011, the CBO cautioned then that large deficits would ultimately return. …The CBO deputy director in 2001 Barry Anderson stated, ‘Over the longer term, budgetary pressures linked to the aging and retirement of the baby boom generation threaten to produce record deficits and unsustainable levels of federal debt.’ Unfortunately, that hasn’t changed.”

Privatization Answer to Postal Problems?

Peter Orszag, vice chairman of global banking at Citigroup, adjunct senior fellow at the Council on Foreign Relations, and former director of the Office of Management and Budget under Obama, editorializes in Bloomberg, ”Those who believe in the usefulness of government must be vigilant about making sure all its activities are vital ones, since the unnecessary ones undermine public confidence. With this in mind, Congress should now privatize the U.S. Postal Service. Further evidence for why this should happen came last week, when the Postal Service announced that it would be unable to meet billions of dollars in payments that are coming due in August and September for future retiree health benefits. Privatization is not always the best way to improve efficiency, but the problems facing the Postal Service will be difficult to address if it remains within the government, and there is no longer any sound reason for it not to go private.”

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