Spending Daily February 5, 2013

Spending Daily February 5, 2013

0 291

Spending Daily | February 5, 2013

Government Becoming “an entitlement machine”
Gerald F. Seib editorializes in The Wall Street Journal, “While the debate rages over the size of government, a funny thing has been happening: Quietly, government has been shrinking. Not dramatically, and not necessarily permanently. But in the ways most people think about government—employees on the public payroll running programs—it’s actually in decline. This reality has been masked by the fact that government spending isn’t declining, although the rate of increase has moderated. But the part of government that is really increasing right now is the part that churns out checks for people receiving Medicare, Medicaid and Social Security. … What’s happening, in short, is that government, particularly at the federal level, is turning increasingly into an entitlement machine, dispensing benefits to those who qualify, while a combination of recession, deficits and an aversion to new taxes is squeezing most remaining government activity.”

NYT: Problem Is Washington Has Been “Consumed With Deficit Reduction”
The New York Times editorializes, “In President Obama’s first term, the fiscal stimulus and the auto-industry rescue of 2009 created and preserved millions of jobs. But the stimulus ended years ago, replaced with temporary measures that have been insufficient to propel the economy forward. Health care reform in 2010 was a major step in the effort to support the middle class, but its broad effects will be felt only in the years and decades to come. In recent years, the administration and Congress have been consumed with deficit reduction, which is antithetical to job creation because it curbs government spending when the economy is weak. … What has been missing for years is a forceful labor agenda — one that calls for more jobs, but also has as its goal rising wages coupled with robust hiring.”

“The GOP’s ObamaCare Flippers”
The Wall Street Journal editorializes, “As D-Day looms for ObamaCare, one big question is how many states will sign up for its Medicaid expansion. The recent and spectacular flip-flop of Arizona Governor Jan Brewer is a case study in the political pressure and fiscal gimmicks designed to get states to succumb. … In March of that year, Ms. Brewer wrote to Mr. Obama calling the Affordable Care Act ‘a vast new entitlement program that our country does not have the resources to support’ and also one that ‘makes our situation much worse, exacerbating our state’s fiscal woes by billions of dollars.’ … The state supposedly no longer needs to spend “billions” but merely an extra $154 million in 2014—then bank $1.6 billion from Washington, which her budget documents call ‘a return on investment of more than 10-to-1.’ How can the state conjure such money from nothing? The answer is that Ms. Brewer and Arizona hospitals have cooked up a spending scheme to rip off national taxpayers to avoid even the $154 million the state would at first pay. The hospital lobby first floated this scheme in 2011 ‘for the specific purpose of generating matching federal Medicaid funds.’”

“Can Washington Break Its Addiction to Crisis Economics?”
Nancy Cook editorializes in the National Journal, “Politicians have stared down so many fiscal battles and economic near-calamities during the past six years that it’s unclear if they still know how to operate when they’re not approaching some sort of crisis. That question hung over the last two weeks, as Congress voted to temporarily suspend the debt ceiling and as Washington experienced a lull between fiscal battles. If we’re not in a crisis, then, really, what are we supposed to do now? The economic timeline since 2007 has conditioned us to think this way. We’ve become adrenaline junkies for the meltdowns and slap-dash solutions: from the credit crisis to the collapse of Lehman Brothers to the housing market dive to the recent battles over taxes and the budget. … The question for 2013 is: Can politicians and policymakers wean themselves off of the high of last-minute policy to create longer-term, less reactive plans to create jobs or boost the housing market or build better roads and bridges or overhaul the tax code or curb healthcare spending over the next two decades?”

Reid: Action on Spending Cuts Will Mean Tax Increases
Bloomberg reports, “A consensus is growing among U.S. Senate Democrats to seek a short-term replacement for the $1.2 trillion in automatic federal spending cuts scheduled to take effect March 1, two Democratic aides said. … There is no agreement on what options Democrats will choose or how big the plan should be, said both aides, who sought anonymity to discuss the private talks. One alternative would be a $50 billion package of spending reductions and higher revenue to cover a five-month delay of the automatic cuts, one of the aides said. … ‘We’re going to make an effort to make sure’ that action on the spending cuts ‘involves revenue,’ [Sen. Harry] Reid said.”

“House GOP thinks unthinkable on defense cuts”
Darren Samuelsohn writes in POLITICO, “The Republican mantra for decades has been: cut NPR, EPA and the National Endowment for the Arts.Now add the Pentagon to the list. In the modern history of the Republican Party, it would have been unthinkable. The GOP is built on two core tenets — small government and big defense spending — and for decades, the two ideas co-existed peacefully. Republicans wanted to cut the federal budget — everywhere except the Pentagon. No more. The reason: A new breed of conservatives in the House cares so much about cutting spending they’re willing to extend that to the budget for bullets and bombs, too — in this case, by letting $500 billion in across-the-board automatic budget cuts over 10 years take effect, alongside a similar number for domestic agencies.”

Hatch: “increased revenue alone cannot fix our crisis”
Sen. Orrin Hatch, R-Utah, editorializes in POLITICO, “American families are used to working with dollar amounts starting with hundreds and thousands. But the fiscal situation of our country requires us to act in terms of billions and trillions. The numbers are well-known — our national debt is nearing $16.5 trillion, with annual trillion-dollar deficits having become the norm. Despite claims to the contrary, increased revenue alone cannot fix our debt crisis. The only way to get a grip on our financial outlook is to address the largest contributors to our debt — our nation’s entitlement programs, specifically Medicare and Medicaid. Unfortunately, waiting until the last minute to stop a crisis has become standard operating procedure in Washington. But that isn’t how we should be tackling our debt or safeguarding Medicare and Medicaid.”

Budget Day Came And Went, Battle Over Spending Begins
Roll Call reports, “Budget day came without a fiscal 2014 budget proposal on Monday, but congressional Republicans didn’t let the occasion go by without a sharp attack against the White House on its priorities and its inability tocomplete a federal spending plan by the required deadline. ‘This was supposed to be the day that the president submitted his budget to the Congress. But it’s not coming. It’s gonna be late. And some reports say that it could be as long as a month late. I think that’s too bad. The economy could use presidential leadership right now,’ Speaker John A. Boehner said in a floor speech Monday. … Without an Obama administration budget to target, House Republicans instead trumpeted legislation introduced by Georgia Rep. Tom Price last week requiring the president to offer either a budget that balances in 10 years or a supplementary plan stating when the president’s budget would eliminate the deficit.”

“Ending Corporate Welfare One Program at a Time”
Bloomberg editorializes, “U.S. President Barack Obama took advantage of one of the largest audiences in television history to address the residents of Greenwich, Connecticut. Well, maybe it wasn’t that straightforward. But by using his pre-Super Bowl interview with CBS News to discuss tax reform, including the infamous carried-interest loophole that benefits hedge-fund and private-equity managers, he signaled a new willingness to do something about corporate welfare — whether it is embedded in the tax code or embodied by government policy. If only saying something about it were as easy as doing something. Some lawmakers have been trying to close the carried- interest loophole, which allows investment managers to pay tax of just 20 percent on their income, for years. Doing sowould raise a mere $2 billion a year, small change when the federal deficit is close to $1 trillion. Even more intractable are the bailouts, tariffs, monopolies, subsidies, no-bid contracts, occupational licenses and loan guarantees that governments routinely grant to businesses and industries. The federal government directly spends between $75 billion and $100 billion a year on everything from farm subsidies to research grants. Include indirect benefits from things like tariffs and corporate tax exclusions, and the favors granted by local and state governments, and the total is much higher — probably more than $1 trillion.”

SIMILAR ARTICLES