Spending Daily | September 27, 2012

GDP Revised Down to 1.3%, Economic Growth Even Worse Than Thought
The Associated Press reports, “The U.S. economy grew at an even more sluggish pace in the April-June quarter than previously believed as farm production in the Midwest was reduced by a severe drought. The overall economy grew at an annual rate of 1.3 percent in the spring, down from its previous estimate of 1.7 percent growth, the Commerce Department said Thursday. … About half of the downward revision to growth came from the decline in farm inventories. But other areas were weaker as well including slower consumer spending and less growth in exports. The 1.3 percent growth in the spring followed a sluggish 2 percent growth rate in the first quarter, rates too slow to lower unemployment. The unemployment rate was 8.1 percent in August. Most expect it to stay around 8 percent for the rest of this year because they anticipate little pickup in growth.”

“Taxpayers spent $1.4 billion on Obama family last year, perks questioned in new book”
The Daily Caller reports, “Taxpayers spent $1.4 billion dollars on everything from staffing, housing, flying and entertaining President Obama and his family last year, according to the author of a new book on taxpayer-funded presidential perks. In comparison, British taxpayers spent just $57.8 million on the royal family. Author Robert Keith Gray writes in ‘Presidential Perks Gone Royal’ that Obama isn’t the only president to have taken advantage of the expensive trappings of his office. But the amount of money spent on the first family, he argues, has risen tremendously under the Obama administration and needs to be reined in. Gray told The Daily Caller that the $1.4 billion spent on the Obama family last year is the ‘total cost of the presidency,’ factoring the cost of the ‘biggest staff in history at the highest wages ever,’ a 50 percent increase in the numbers of appointed czars and an Air Force One ‘running with the frequency of a scheduled air line.’”

Inherited or Not, We’re Still Spending Too Much
In a recent “60 Minutes” interview with President Obama, host Steve Kroft began with a statement: “Most Americans think we’re spending too much money.” When asked about the national debt (which has grown 51 percent under President Obama) the president went on to say he inherited the debt.  But inherited or not, the government is still spending too much.  Americans know what President Obama inherited, the question is what has he done to fix it?  This year will mark the fourth straight year with trillion dollar deficits. Since 2009 the national debt has increased 51 percent to more than $16 trillion, and at this rate we will reach $21.3 trillion by 2017.  Public Notice Executive Director Gretchen Hamel and Policy Director Lenwood Brooks are available to discuss why the president is missing the mark by placing blame rather than offering solutions.

Deficit and Tax Policy Striking Fear into Top Executives
Reuters reports, “Top U.S. executives have less confidence in the business outlook now than at any time in the past three years – and a key reason is fear of gridlock in Washington over the fiscal deficit and tax policy. The uncertainty, coupled with slowing demand in Asia and Europe, is forcing corporate leaders to postpone decisions on major investments and hiring, and hurting sales of everything from textbooks to telephone lines. ‘If we don’t deal with the fiscal cliff and don’t deal with predictability on taxes for both citizens and business, with the rest of the world in a struggling state, this is really bad for us,’ John Chambers, CEO of network equipment maker Cisco Systems Inc (CSCO.O), told Reuters on Tuesday.” The fiscal cliff would most directly effect the defense and health care sectors which would face direct cuts and create a domino effect for other sectors. “The companies that make up the broad Standard & Poor’s 1500 index .15GSPC had $1 trillion in cash and equivalent assets on their books at the end of the second quarter, according to Thomson Reuters I/B/E/S data. That is a hefty sum in comparison to total U.S. gross domestic product, which last year came to $15 trillion.”

Americans Want Solutions On Debt, Just Not Washington’s
Bloomberg reports, “The U.S. public is critical of both Republicans and Democrats in Congress for failing to resolve such issues as the national debt while rejecting the sacrifices that may be needed to fix it. According to a Bloomberg National Poll, Republicans in Congress have an unfavorable rating of 51 percent, and Democrats are only in slightly better shape, with 49 percent of poll respondents viewing them unfavorably. … With Congress recessing until after the Nov. 6 election, lawmakers left a pile of unresolved issues. Chief among them is a debt-reduction agreement that would address the expiring 2001 and 2003 tax cuts and $1.2 trillion in automatic spending reductions set to begin in January. … Even with the public’s frustration with Congress’s inability to address the national debt, there’s little appetite for the type of tax-and-spending measures budget experts say would be necessary to balance the nation’s long-term fiscal demands.”

“It’s Always the Economy, Stupid”
Daniel Henninger editorializes in the Wall Street Journal, “‘Stupid,’ in the famous quotation from 1992′s Clinton vs. Bush campaign—’It’s the economy, stupid’—is whoever thinks a U.S. presidential election is about something else. All presidential elections are about the economy. Yes, there are other issues, but it’s also true that a whale has pilot fish. Still, most politicians would rather talk about anything but the economy, which they see in one of two ways—as a personal piggy bank or a mystery. Neither is discussable in public. This is the sixth presidential election since ‘stupid’ was first identified, and nothing has changed.”

Lawmakers Press for Preserving Sales Tax Deduction
The Hill reports, “More than five dozen House members are pressing leaders of a tax panel to preserve a deduction for state and local sales taxes.  The bipartisan group of lawmakers say it would be unfair to voters in their states not to extend the sales tax deduction, given that taxpayers would still be able to deduct state and local income taxes. ‘If the deduction is not extended, millions of taxpayers living in states without an income tax will shoulder a larger share of the federal tax burden since they cannot claim the deduction for state income taxes,’ the lawmakers wrote to the top Democrat and Republican on the tax-writing Ways and Means Committee. … Eight states in all — Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming — currently use a sales tax, but either don’t have or have a very limited state income tax. The income tax deduction for state and local sales taxes expired at the beginning of 2012, like a host of other targeted tax breaks commonly known as extenders. Under the tax breaks, taxpayers can deduct local sales taxes in lieu of deducting state income taxes.”

Did The Check Get Lost In The Mail?
The Hill reports, “The Postal Service announced Wednesday that it would not make a scheduled $5.6 billion payment to the Treasury Department by the end of the month, officially throwing in the towel on a second large payment in as many months. The agency, which lost more than $5 billion in the most recently completed quarter, had been widely expected to default on the prepayment for future retiree benefits, and rushed on Wednesday to assure customers that business would continue as usual. … USPS has lost billions of dollars in recent years, both due to new technology and the downbeat economy. In all, the agency lost $5.1 billion in fiscal 2011, even without having to make a healthcare payment. The Aug. 1, 2012, default came only after Congress pushed back the due date on that particular payment, which was originally due at the end of September 2011. … The Senate measure would give the Postal Service more relief from the prepayment than the current House proposal, but would also not let the agency move as quickly on scrapping Saturday delivery, another key USPS priority.”