Spending Daily February 20, 2013

Spending Daily February 20, 2013

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Spending Daily | February 20, 2013

“Simpson: Obama Headed For ‘Failed Presidency’ Without Entitlement Reforms”
The U.S. News and World Report writes, “President Barack Obama’s presidential legacy hinges on whether he can significantly reform entitlement spending, says one top former Republican official. Former Republican Sen. Alan Simpson of Wyoming, who has paired with former Clinton administration Chief of Staff Erskine Bowles in a bipartisan push for deficit reduction, said Tuesday Obama will have a ‘failed presidency’ if he doesn’t take on his own party when it comes to Social Security and Medicare reform. ‘[Obama] knows what to do and if he doesn’t get a handle on entitlements and the solvency of Social Security, he will have a failed presidency,’ Simpson said at a Politico-sponsored event. ‘And if he wants to have a legacy of the new FDR or the second whatever that is that drives him that’s fine with me, but he will have a failed presidency unless he deals honestly with these programs without cutting the poor and the wretched and all the rest. I don’t think he wants that at all. He’s too smart.'”

New Video: Then and Now: The White House on the Sequester
March 1, the day the $1.2 trillion in sequester spending cuts will take effect, is fast approaching, but these cuts didn’t exactly sneak up on Washington. In fact, Washington has known they were coming for more than a year. While $1.2 trillion sounds like quite a chunk of change, the cuts boil down to about $85 billion this year.And based on last year’s nearly $3.6 trillion in spending, that means the sequester could be offset by cutting approximately three cents out of every dollar the government spends. Is it really impossible to find three cents on the dollar of Washington waste? Check out the mixed messages coming from the White House in Bankrupting America’s video “Then and Now On Sequestration.” 

Lawmakers On Recess Armed With Fact Sheets To Win The Blame Game
The Wall Street Journal reports, “With Congress in recess this week, Republican and Democratic leaders sent lawmakers home armed with fact sheets about the $85 billion in across-the-board federal spending cuts due to start March 1, and talking points on how to blame the other side. Meantime, the White House and lawmakers are making no progress toward forging a compromise to avoid the reductions, which are known in Washington as the sequester. President Barack Obama, who has proposed a deficit-reduction strategy that includes curbs on tax breaks for upper-income people, held a media event with firefighters, police officers and emergency medical technicians to ratchet up political pressure on Republicans to agree to delay the cuts. … GOP leaders, meanwhile, gave lawmakers a list of federally funded projects they portray as wasteful, such as a study of the cognitive impact of videogames on the elderly, and a program to provide cellphone service to low-income people.”

WSJ: The Washington Monument Ploy
The Wall Street Journal described President Obama’s posturing on the sequester as an “old ploy meant to stir public support” in an editorial, writing “Flanked by emergency medical personnel, Mr. Obama made his usual threat of Armageddon if automatic spending cuts go forward on March 1.  … ‘If Congress allows this meat-cleaver approach to take place,’ he moaned, ‘it will jeopardize our military readiness; it will eviscerate job creating investments in education and energy and medical research.’ … Americans need to understand that Mr. Obama is threatening that if he doesn’t get what he wants, he’s ready to inflict maximum pain on everybody else. He won’t force government agencies to shave spending on travel and conferences and excessive pay and staffing. He won’t demand that agencies cut the lowest priority spending as any half-competent middle manager would. It’s the old ploy to stir public support for all government spending by shutting down vital services first. … The $85 billion in savings is a mere 2.3% of total spending. The agencies that the White House says can’t save 5% received an average increase in their budgets of 17% in the previous five years—not counting their $276 billion stimulus bonus.”

Ten Days Before Sequester Deadline, Lawmakers On Recess and Negotiations Stalled
The Associated Press reports, “Ten days before a new deadline for broad, automatic government spending cuts, the sense of urgency that surrounded other recent fiscal crises is absent. Government agencies are preparing to absorb an $85 billion hit to their budgets, and politicians, at least for now, seem willing to accept the consequences. President Barack Obama, back from a Florida golfing weekend, warned Tuesday that ‘people will lose their jobs’ if Congress doesn’t act. But lawmakers weren’t in session to hear his appeal, and they aren’t coming back to work until next week. … Aides say Obama is ready to take his case more directly to the public in an effort to pressure Republicans … They say neither Obama nor White House officials are now engaged in direct negotiations with Republican leaders.”

Chances Of Offsetting Cuts Dwindle As Deal Unlikely
The Associated Press reports, “Chances seem to be dwindling for a deal in time to avert deep, automatic government spending cuts from beginning on March 1. The Republican-controlled House remains at loggerheads with the Democratic-led Senate and President Barack Obama over key issues. With no top-level talks under way and Congress off until next Monday, each side is blaming the other. The so-called sequester cuts ‘won’t help the economy, won’t create jobs, will visit hardship on a whole lot of people,’ Obama said Tuesday. ‘Congress didn’t come together, do their jobs. And so as a consequence we’ve got these automatic, brutal spending cuts that are poised to happen next Friday.’ … One reason there’s little progress toward a deal is that there’s yet another deadline ahead- March 27, when a temporary budget agreement expires and Congress must scramble to find funds to run the entire government. During those negotiations next month, the most damaging automatic sequester cuts could be repealed or softened, the thinking goes. That effectively buys more time. And lawmakers seldom miss chances to put things off.”

Congress Braces For Sequestration Cuts
POLITICO reports, “For members of Congress, the sequester will hit very close to home. With nine days to go until the massive across-the-board budget cuts take effect, all 535 members of Congress must also come up with contingency plans. From the office of House Speaker John Boehner (R-Ohio) to that of the most obscure freshman, lawmakers must start prepping their staff for the very real possibility of layoffs and salary cuts. ‘The sequester will in fact hit members and their offices, and leadership offices, and committees,’ Boehner told reporters last week. ‘And in addition to that, other Capitol offices — whether it be the Architect of the Capitol, or the chief administrative officer — all of those offices are subject to the sequester as well.’ … With negotiations nowhere in sight, lawmakers are playing something of a guessing game when it comes to making plans about their budgets for the rest of the year. Many members have opted to delay hiring new staff or cut back on expenses in anticipation of the sequester. ‘It’s going to be a strain,’ said Rep. Charles Boustany (R-La.). ‘My district has grown, I have three new parishes. I’d love to be able to hire an additional staffer to handle that new area. Rent’s going up We’re already pretty bare … it’s going to be tough but we’ll deal with it.’

Despite Bleak Predictions, Life Will Go On After Sequester
Reuters reports, “Just as computers worldwide did not crash on January 1, 2000, in the ‘Y2K’ scare and Earth itself did not shatter on December 21, 2012, as some interpreters of the Mayan calendar predicted, March 1, 2013, will not be remembered as the day the U.S. government disintegrated. The Obama administration and even some Republicans are warning of mass government layoffs and services collapsing when ‘sequestration’ begins in 10 days, unless a gridlocked U.S. Congress finds a way to circumvent the start of the $85 billion in federal budget cuts. But what actually happens on March 1? ‘Nothing.Nothing happens,’ said a senior congressional aide who is keeping a close eye on the looming budget cuts. While that might be somewhat of an exaggeration, the immediate impact is seen as minimal due to several safeguards, official and unofficial, that will keep the spending cuts from hitting Americans like a meat cleaver on March 1. … Unofficially, many members of Congress are betting that a few weeks into the automatic spending cuts, Democratic and Republican leaders will get serious about negotiating a replacement to the sequestration and the $85 billion in spending cuts will not have had time to really bite.”

Military States Will See Many Furloughs After Cuts
USA Today reports, “Budget cuts by the Air Force, Army and Navy scheduled to take effect March 1 will force almost $34 billion in wage and spending reductions and prompt furloughs or layoffs for millions of people, according to documents obtained by USA TODAY. The Army’s estimated cuts will force $15 billion in wage and spending reductions and prompt furloughs or layoffs for300,000 people nationwide, while the Navy could face $11 billion in similar cuts affecting a potential 186,000 employees, records show. The Air Force estimates $7.7 billion in lost pay for its civilian employees. Hardest hit states by the Army cuts include Alabama, Texas, Virginia and Pennsylvania. Among the least affected: Delaware, Wyoming, Montana and Rhode Island. … The cuts will affect every Army installation, according to the documents. States with large bases and military contractors are taking the biggest hits. Texas, for instance, would face a $2.4 billion economic loss from the Army’s budget cuts.”

“Obama’s Scare Talk On Spending Cuts”
The Washington Examiner reports, “During the summer 2011 debt ceiling battle, President Obama’s White House came up with the idea of sequestration. It is a mechanism designed to trigger automatic spending cuts in the event that a congressional ‘super committee’ couldn’t agree to at least $1.2 trillion in deficit reduction. … How times have changed. With the automatic spending cuts scheduled to go into effect March 1, it’s now Obama who is imploring Congress to undo them. As is his wont, he’s resorting to demagoguery to make his case. … In the real world, however, the sequester cuts are actually modest when viewed relative to the budget as a whole. As the accompanying graph demonstrates, the $85 billion in combined cuts to defense and non defense programs amount to just about 1 percent of money spent by federal, state and local governments. Over a decade, the $1.2 trillion in scheduled cuts are barely more than a rounding error when compared with the $48 trillion the federal government would otherwise spend, according to the Congressional Budget Office.”

“Boehner: The President Is Raging Against a Budget Crisis He Created”
Rep. John Boehner editorializes in The Wall Street Journal, “A week from now, a dramatic new federal policy is set to go into effect that threatens U.S. national security, thousands of jobs and more. In a bit of irony, President Obama stood Tuesday with first responders who could lose their jobs if the policy goes into effect. Most Americans are just hearing about this Washington creation for the first time: the sequester. What they might not realize from Mr. Obama’s statements is that it is a product of the president’s own failed leadership. … During the summer of 2011, as Washington worked toward a plan to reduce the deficit to allow for an increase in the federal debt limit, President Obama and I very nearly came to a historic agreement. Unfortunately our deal fell apart at the last minute when the president demanded an extra $400 billion in new tax revenue—50% more than we had shaken hands on just days before. … The president has repeatedly called for even more tax revenue, but the American people don’t support trading spending cuts for higher taxes. They understand that the tax debate is now closed. … Washington must get serious about its spending problem. If it can’t reform America’s safety net and retirement-security programs, they will no longer be there for those who rely on them. “