BA Spending Daily September 10, 2012

“Lawmakers get back to doing nothing”
In Politico, Scott Wong writes, “With the convention pomp and pageantry over, another production now begins on Capitol Hill — this one featuring meaningless show votes and theatrical hearings. House Judiciary Committee Chairman Lamar Smith (R-Texas) will hold an oversight hearing this week titled: The Obama Administration’s Abuse of Power. House GOP leaders will try to pass a bill to roll back automatic defense cuts — a bid to undo a law many of them supported in the first place. … To add more fuel to the “do-nothing Congress” label, at least one chamber — the Democratic-led Senate — could adjourn as early as Sept. 21 for another seven-week recess, coming on the heels of the five-week August recess.”

Another Short-Term Fix for Congress
Roll Call reports, “With lawmakers eager to get back on the campaign trail, Congress will seek to make quick work of a six-month stopgap spending bill, which could be the vehicle for an extension of federal farm programs set to expire at the end of the month. The House is on track to clear the continuing resolution this week, with the Senate expected to follow suit next week, according to House and Senate aides from both parties. The House could unveil the measure as soon as Monday and vote on it by Thursday. … The fiscal year expires Sept. 30, and House and Senate leaders have pledged to pass the CR to keep the government funded through March. This measure would allow Congressional leaders to avoid a politically self-destructive fight over funding the federal government before the November elections.”

Gregg:  Printing More Money Will Be Counterproductive to Long-Term Growth
Judd Gregg editorializes in The Hill, “This is not a nation that lacks in liquidity. It is a nation that lacks in leadership and certainty. Federal Reserve Chairman Ben Bernanke has made it reasonably clear that he is ready and likely to pursue a new round of quantitative easing. This is the current nomenclature for printing money. It is a decision that seems to be based on the chairman’s belief that the Fed can help with the unemployment problem in America, and our anemic economic performance, by expanding once again the money floating round the economy.   … The reason QE3 will be counterproductive to a long-term improvement in our nation’s economic  growth is simple.  It is not a lack of liquidity that is restraining our nation’s job engine.  It is a lack of certainty about fiscal policy.  Specifically, people who have cash to invest are guarding it because they do not know where the federal government is going on spending, deficits, tax policy and regulations. They are fairly sure that if it does act, it will choose badly.”

Romer:  Democrats Need A Plan For Debt Reduction
In an OpEd for the New York Times, Christina Romer, former Chairwoman of President Obama’s Council of Economic Advisors, called on Democrats to put their own plan on the table for dealing with our $16 trillion debt and annual trillion dollar deficits.  Romer writes, “Aside from the empty chair that Clint Eastwood debated, the main prop at the Republican convention was a debt clock, highlighting the federal deficit and the growing national debt. The importance of dealing with the deficit will clearly be a major Republican theme this fall. So far, Democrats have mostly been playing defense on this issue by criticizing the Romney-Ryan approach. It’s time for them to go on offense by putting their own plan front and center. … Government health care spending is a major cause of our terrifying long-run budget outlook. Any effective deficit plan has to slow that spending growth. … Honest talk about the deficit is risky. Voters are more enthusiastic about the abstract notion of deficit reduction than about the painful details of accomplishing it. But deficit reduction is coming, and this election will most likely determine how it’s done.”

Stalled Bill Angering Farmers
The New York Times reports, “When Congress returns to business this week, it will be met not by the Code Pink antiwar protesters or the Tea Party supporters who often gathered near the Capitol last year. Instead, farmers will be out in force, rallying for a bill that lawmakers failed to pass before they recessed five weeks ago. That unfinished bit of business threatens to cut off aid to farmers across the nation. But lawmakers, fresh off their parties’ conventions, appear to favor action on other bills that emphasize their political agendas over actual lawmaking. … Over the summer, the Senate passed a bipartisan five-year farm bill that the House declined to take up. House leaders also refused to consider their own Agriculture Committee’s sweeping farm measure, instead pushing through a short-term $383 million package of loans and grants for livestock producers and a limited number of farmers. Senate leaders declined to take action on that measure because they said it was too limited, a view shared by many farmers.”

Congress Focusing on “the bare minimum”
Andrew Taylor writes for the Associated Press, “When lawmakers return to Washington on Monday, they face big issues, including taxes, spending cuts and the prospect of a debilitating ‘fiscal cliff’ in January. Yet Congress is expected to do what it often does best: punt problems to the future. With Election Day less than two months away, their focus seems to be on the bare minimum – preventing a government shutdown when the budget year ends Sept. 30. Democrats controlling the Senate and their House GOP rivals also will also try to set up votes intended to score political points or paint the other side with an unflattering brush two months before the election. ”

President Obama Calls for “Leaner and More Efficient” Government
Bloomberg reports, “President Barack Obama said he is ‘more than happy to work with the Republicans’ to make the federal government ‘leaner and more efficient,’ adding that he would accept $2.50 in spending cuts for every $1 in new revenue. … ’We have an obligation to make sure government works,’ Obama said. ‘And there’s still waste, there’re still programs that don’t work.’ … While Obama said he would be willing ‘to make some adjustments to Medicare and Medicaid that would strengthen the programs,’ he criticized Republican vice presidential candidate Paul Ryan’s proposal, which he said would ‘voucherize’ Medicare and drive up seniors’ health care costs.”

Treasury to Sell Chunk of A.I.G. Shares
The New York Times reports, “The Treasury Department said on Sunday that it was planning its biggest sale of shares in the American International Group to date, making the federal government a minority shareholder in the bailed-out insurer for the first time since it took control of the company four years ago. With the sale of at least $18 billion worth of shares in A.I.G., a number that could grow to $20.7 billion if investors prove enthusiastic, the Treasury Department could reduce its holdings to as little as 15 percent from 53 percent. Taking the government’s stake in A.I.G. below 50 percent is the realization of a long-held goal by both the Obama administration and the company, helping to cut ties to one of the most controversial bailouts of the 2008 financial crisis. The Treasury Department expects to earn a profit on its investment in A.I.G., though it is unclear how large. … Regarded as one of the world’s most powerful insurers by the fall of 2008, A.I.G. nearly crumbled under the weight of risky bets on mortgages as the debt markets soured. The Bush administration intervened with an unusual $182 billion lifeline to help stabilize the global financial sector.”

Another Senate Hearing on GSA Scandal
The Washington Post reports, ”Five months after it was rocked by a Las Vegas spending scandal, the General Services Administration continues to land on Congress’ radar screen, even with a public relations effort to turn around its tarnished image. The agency’s new leader, Dan Tangherlini, will face questions next Wednesday at a hearing before the Senate Committee on Homeland Security and Governmental Affairs. The grilling is unlikely to be as rough as recent hearings in the Republican-controlled House, and Tangherlini is working hard to show that he is turning the agency aroundThe agency’s new leader, Dan Tangherlini, will face questions next Wednesday at a hearing before the Senate Committee on Homeland Security and Governmental Affairs. … Tangherlini, GSA’s acting administrator since April, will testify on his efforts to rein in travel and conference spending since the agency’s inspector general revealed details of a four-day extravaganza in Las Vegas for 300 employees.”