BA Spending Daily December 12, 2012

BA Spending Daily December 12, 2012

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Spending Daily | December 12, 2012

“75 Percent of Obama’s Proposed Tax Hikes to Go Toward New Spending”
According to The Weekly Standard, “Seventy-five percent of the new revenue pulled in by President Barack Obama’s ‘fiscal cliff’ plan would go toward new spending, not toward deficit reduction, the Republican side of the Senate Budget Committee contends. … According to the minority side of the Senate Budget Committee, $1.2 trillion of the proposed $1.6 trillion in tax hikes would go toward new spending, while only $400 billion would go toward deficit reduction. Click here to see a chart showing the breakdown.”

“Cliff chaos: Hundreds of billions apart”
Politico reports, “The bellowing on Capitol Hill about which side has offered more ‘specifics’ to resolve the fiscal cliff showdown masks a larger problem for Washington: The two sides are still hundreds of billions of dollars apart on revenue and entitlement cuts. Not to mention, Republicans and Democrats are also light-years apart on policy details that back up those budget targets. … The reality is the two sides are swapping proposals that do little but reaffirm the positions they’ve long held. And despite hopes for progress, the two sides seem to be diverging further, according to people involved in and familiar with the talks.”

Obama ‘confident’ on Budget Deal, Prepared to Do ‘tough things on the spending side’
According to The Hill, “President Obama said Tuesday he was ‘confident’ that Republicans would ultimately back legislation that would extend tax cuts to the middle class and raise taxes on the top earners as part of a deal on the so-called ‘fiscal cliff.’ ‘I’m pretty confident that Republicans would not hold middle-class taxes hostage to trying to protect tax cuts for high-income individuals,’ Obama said in an interview with Barbara Walters of ABC News.” In the same interview, he also said  ‘If the Republicans can move on that [taxes] then we are prepared to do some tough things on the spending side,” according to the Washington Post.

Reid Doesn’t Remember Blocking Vote On Obama Deficit Plan
The Daily Caller reports, “Responding to a question from The Daily Caller during a Tuesday press conference, Senate Majority Leader Harry Reid avoided discussing why he won’t allow a vote on President Barack Obama’s fiscal cliff plan, claiming in jest not to be aware of the proposal at all. Amid some laughter from reporters, Reid then asked TheDC to detail what is in the White House plan. TheDC: How about the president’s fiscal cliff plan, the White House plan. Why hasn’t that been put up for a vote yet in the Senate, and are you planning on putting it up for a vote? Reid: ‘I’m sorry –‘ TheDC: ‘The White House proposal that they floated around last week on Capitol Hill. Will you be putting that up for a vote?’ Reid: ‘I don’t know — I have no idea what you’re talking about, OK?’”

Both Sides Agree: Time To Get Specific On Spending Cuts
Bloomberg reports, “House Speaker John Boehner says he’s still waiting for the White House to get ‘serious’ about spending cuts. ‘Where are the president’s spending cuts?’ Boehner, an Ohio Republican, asked on the House floor today, adding that he is still ‘hopeful’ the two can reach a budget agreement before the end of the year. … On Twitter, the White House was ready with a response. ‘The irony of this is that the White House offer had very specific cuts, the GOP counter-offer had almost none,’ Dan Pfeiffer, communications director for President Barack Obama, said in his Twitter message.”

Some Republicans Saying Sequester Cuts Better Than No Cuts
Politico reports, “It’s been an article of faith for the GOP: Thou shalt not cut defense spending. But with the sequester threatening to slash hundreds of billions from the Pentagon budget, a surprising number of Republicans are ready to violate that commandment. The sequester cuts, they say, are better than no cuts at all. … ‘The problem with the sequester is not the cuts, but how the cuts are made. It cuts things that are not necessary at the same level it cuts things that quite honestly are necessary,’ said Georgia’s [Rep. Austin] Scott. ‘We’ve been operating under continuing resolutions for years now in this country and that means that we’ve maintained things that we probably should have gotten rid of a long time ago; that you simply can’t get rid of in a continuing resolution.’”

Gimmick It Up: White House Wants $1 Trillion In Last Year’s Cuts To Count This Year
Politico reports, “President Barack Obama and House Speaker John Boehner are fighting over the fiscal cliff endgame, but that doesn’t mean they’ve agreed on where to start. The White House wants more than $1 trillion in spending cuts that were approved last year counted toward the goal of a $4 trillion deficit-reduction package, since the cuts were part of a deal that set the stage for the fiscal cliff debate in the first place. But Republicans say that’s double counting. Obama approved those cuts in exchange for raising the debt ceiling and shouldn’t get to apply them here. ‘We have a debt crisis because of spending, not because of a lack of tax revenue,’ said Rep. Jeb Hensarling, the Texas Republican who along with Sen. Murray co-chaired the supercommittee that failed last year to reach agreement on a debt-reduction package. ‘Until the president gets serious about spending, I don’t know what we have to talk about.’”

Pelosi at Odds with Obama on Medicare?
The Hill reports, “House Minority Leader Nancy Pelosi (D-Calif.) slammed the idea of raising Medicare’s eligibility age as part of a year-end deal to reduce the deficit.  In an op-ed published Tuesday, the California Democrat criticized the proposal as ineffective and unfair to seniors. …  Pelosi’s line in the sand is sure to please the Democratic base and AARP, both of which oppose raising the Medicare age.  But it could put her at odds with President Obama, who was reportedly open to the idea last summer.”

Dems Fear Obama Will Cut Entitlements
USA Today reports, “Democrats are united behind President Obama’s proposal to raise tax rates on the wealthiest of Americans, but some Democrats worry the president could be willing to make further concessions on entitlement programs to avert the ‘fiscal cliff’ than many Democrats can support. Any final deal has to include Democratic concessions on entitlement programs, including Medicare and Social Security, House Speaker John Boehner, R-Ohio, said Tuesday on the House floor. … Obama has offered $400 billion in entitlement savings in his initial proposal that includes changes to beneficiaries, but Republicans and outside deficit hawks, including Obama’s debt commission co-chairman Erskine Bowles, have said more concessions are required to cut the deficit and rein in long-term health care spending. Fueling Democrats’ concerns is Obama’s previous willingness to negotiate with Republicans on these proposals.”

Debt Ceiling Dilemma On the Way?
The Associated Press reports, “We now know what’s on the other side of that menacing year-end ‘fiscal cliff.’ Another cliff. While White House and Republican congressional leaders labor behind closed doors to cut a deal to steer clear of the first cliff – mandatory tax increases and spending cuts due to hit in early January – another treacherous economic precipice looms. It’s when the government will again bump up against the congressionally-set debt ceiling. … The last debt-limit standoff came in August 2011 and the drawn-out gamesmanship cost the U.S. a first-ever credit downgrade. The current statutory limit on the government’s borrowing authority of $16.4 trillion will technically be reached in late December, but likely can be put off until mid-February through accounting maneuvers.”

Usually Silent Bernanke To Make Fiscal Cliff Plea
The Hill reports, “Capping a yearlong campaign, Federal Reserve Chairman Ben Bernanke will get one last chance on Wednesday to talk Washington down from the ‘fiscal cliff.’ The Fed chairman was one of the first to identify the scheduled mix of tax increases and automatic spending cuts as a fiscal contraction that could wreak havoc on the economy, coining the term ‘fiscal cliff’ at a February hearing of the House Financial Services Committee. Now, with just weeks to go before the damaging policies kick in, the Fed chief will have the chance at a press conference following a regular policy-setting meeting to drive home what’s at stake in the negotiations between President Obama and congressional leaders. … While the Fed does not typically delve into politics, chairmen have in the past dipped their toe into policy debates. Former Fed Chairman Alan Greenspan threw his support behind the tax cuts passed under President George W. Bush — the same tax policies that have become central to the debate over the fiscal cliff.”

Treasury Braces For ‘Extraordinary Measures’ As Debt Limit Approaches
The Wall Street Journal reports, “As the federal government closes in on its legal debt limit, the U.S. Treasury is dusting off its book of so-called extraordinary measures — moves that will buy it a few extra months to finance Social Security, military salaries and other payments. The U.S. was about $67 billion under the $16.394 trillion debt ceiling as of Friday. That’s small change in a world of trillion-dollar deficits and billions in monthly borrowing. … Treasury expects to bump up against the cap, which is set by Congress, very near the end of this month. … As a last resort, Treasury officials concluded that delaying payments would be the least harmful option, the report said.”

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