Spending Daily | January 15, 2013
Video: Obama Makes the Case for Spending Cuts
President Obama yesterday in a press conference suggested that the federal government spend less money, saying, “Everybody — everybody here understands this. I mean, this is not a complicated concept. You don’t go out to dinner and then, you know, eat all you want and then leave without paying the check. And if you do, you’re breaking the law. And Congress is — should think about it the same way that the American people do. You don’t — now, if Congress wants to have a debate about maybe we shouldn’t go out to dinner next time, maybe we should go to a more modest restaurant …”
Click here to watch the video.
Gallup: Deficit Worries Doubled in Past Two Years
POLITICO reports, “Worries about the federal budget deficit have doubled during the past two years, according to new polling released Monday. One fifth of Americans named the deficit as a top concern and 18 percent named dissatisfaction with government, placing them second and third, facing the United States in a Gallup poll released Monday. The economy in general was the top issue at 21 percent.”
Obama Warns Debt Limit Fight Puts Seniors’ Checks At Risk
The Associated Press reports, “Declaring ‘we are not a deadbeat nation,’ President Obama warned on Monday that Social Security checks and veterans’ benefits will be delayed if congressional Republicans fail to increase the government’s borrowing authority in a looming showdown over the nation’s debt and spending. Obama said he was willing to negotiate deficit reduction with GOP leaders but insisted that those talks be separate from decisions to raise the $16.4 trillion debt ceiling and avert a possible first-ever national default. … In addition to noting possible effects on older Americans and veterans, Obama recited a litany of possible consequences if Congress fails to raise the debt ceiling, including sending the economy back into recession. ‘We might not be able to pay our troops, or honor our contracts with small business owners,’ he said.
“Spin Meter: Obama And His Social Security Warning”
Calvin Woodward writes in The Associated Press, “No one doubts dire things will happen, and fast, if the government runs out of borrowing authority in coming weeks. But late SocialSecurity checks need not be among them. President Barack Obama’s blanket statement Monday that ‘Social Security checks and veterans benefits will be delayed’ if Congress doesn’t raise the debt limit masked the options open to the government if it is forced to operate in a severe fiscal pinch. There are many, although none pleasant. If Washington can’t keep borrowing to ensure all its bills are paid, it will need to decide which expenses to cover and which might have to slide until a deal comes together.”
The Budget Will Be Late, But How Late?
The Wall Street Journal reports, “The White House is going to miss the Feb. 4 deadline for its next budget proposal. But how late is it going to be? At the beginning of each year, the White House offers its budget, a lengthy blueprint of its tax and spending priorities for the fiscal year that begins Oct. 1. On Friday, White House Office of Management and Budget Deputy Director Jeffrey Zients notified House Budget Committee Chairman Paul Ryan (R., Wis.) that the next budget proposal, for FY 2014, would be late. … If the budget proposal slips much beyond the deadline, it will bump into President Barack Obama’s Feb. 12 State of the Union address to Congress. Complicating matters, the White House and Congress are likely to engage in intense fiscal negotiations in late February over both the debt ceiling and the across-the-board spending cuts known as the sequester that begin March 1. Whether the White House decides to offer a budget plan before those talks or after will likely be a major focus in the weeks ahead.”
Americans Support Cuts, Except When Cuts Affect Them
The Associated Press reports, “In the heated talk about deep spending cuts that will dominate Congress in the coming weeks, one thing is likely to be in short supply: details. The reason is simple. Americans embrace the general, abstract idea of reducing federal spending. Their support quickly fades, however, when specific programs are targeted. That’s why Republicans wrap their calls fordeep spending cuts in broad generalities, even as they call on President Barack Obama to propose more detailed cuts of his own. ‘Where are the president’s spending cuts?’ House Speaker John Boehner, R-Ohio, said last month in the ‘fiscal cliff’ debate, which did little to reduce federal outlays. … The White House seems in no hurry to help Republicans out of their awkward position. Obama notes that he already has offered more details for reduced spending than Republicans have, partly because he is obligated to propose a budget every year.”
$236 Billion in New Regulations Added Last Year
The Hill reports, “The Obama administration issued $236 billion worth of new regulations last year, according to a report from a conservative think tank. The analysis from the American Action Forum, led by former Congressional Budget Office Director Douglas Holtz-Eakin, found that the administration added $216 billion in rules and more than $20 billion in regulatory proposals in 2012. Complying with those rules will require an additional 87 million hours of paperwork, the report said. The group put the total price tag from regulations during Obama’s first term at more than $518 billion.”
“Budget Armageddon”: Pentagon Readies For The Reckoning
The Washington Guardian reports, “Warning of an increasingly intractable budget crisis, the Pentagon’s No. 2 official has ordered military chiefs to begin making drastic spending cuts ranging from freezing civilian hiring and eliminating all temporary jobs to canceling ship maintenance, the Washington Guardian has learned. Deputy Defense Secretary Ashton Carter sent the instructions to military leaders as the Pentagon faces the increasing possibility of billions of dollars in shortfalls because of two simultaneous storms. First, Congress has not approved a 2013 budget and is therefore funding the government through continuing resolutions (CRs) at 2012 spending levels, while some of the Pentagon’s strategies had called for higher spending levels this year. Secondly, some lawmakers are threatening to allow draconian spending cuts to take effect this spring under the fiscal cliff scenario known as ‘sequestration.’”
U.S. At Risk of Credit Downgrade Over Debt Ceiling
Reuters reports, “The United States faces a ‘material risk’ of losing its triple-A status if there is a repeat of the wrangling seen in 2011 over raising the country’s self-imposed debt ceiling, credit ratings firm Fitch said on Tuesday. … Despite December’s deal by U.S. politicians to avoid the so-called ‘fiscal cliff’ of spending cuts and tax hikes, Fitch’s head of sovereign ratings, David Riley, said pressure on the country’s rating was increasing. … Fitch currently assigns the United States its highest rating of AAA, but with a negative outlook.”
Spending and Taxes “out of whack” with Historic Norms
Charlie Cook writes in the National Journal, “Nearly everyone views the year-end fiscal-cliff fight as a debacle, but once that is accepted as a given, opinions tend to diverge. While one can say that the vast majority of Bush-era tax cuts were not just extended but made permanent—something that Republicans and conservatives should like—there were effectively no spending cuts, and in no meaningful way were entitlements trimmed or reformed. …. There’s a great chart, developed last year by the White House Office of Management and Budget… What jumps out on the chart is that most recently both the spending and tax percentages are way out of whack with historic norms. The chart shows 2011 spending at 24.1 percent, not just significantly higher than the five-decade average of 20 percent, but much higher over the past few years than ever before.” Click here to view the chart.