Zero Jobs Created in the Month of August: According to the Bureau of Labor Statistics, zero new jobs were added in the month of August, the first month since September 2010 that the economy has failed to add a single job and the first time since 1945 that the government has reported a net monthly job change of zero. The unemployment rate remained at 9.1 percent for the second straight month. Only 2 out of the last 28 months have seen unemployment below 9 percent (February and March 2011) and unemployment has been above 8 percent for 31 months, the longest such streak since the Great Depression.
CBO/OMB Project $1.3 Trillion Deficit for FY 2011: In newly updated estimates released over the past week, both OMB and CBO project a budget deficit of $1.3 trillion in FY 2011. The deficit marks the third straight year with deficits in excess of $1 trillion. Prior to 2009, the highest budget deficit in history was $459 billion.
Harvard Faculty on Pitfalls of Increasing Taxes to Pay for Medicare: In a recent New England Journal of Medicine article, Harvard professors Katherine Baicker and Michael Chernew explain “raising taxes to pay for public insurance exerts a structural drag on the economy even if the revenue is spent on care…Deficit spending on health care also carries an economic cost: taxes are required to pay back any borrowed money (with interest), and rising debt-to-GDP ratios may have calamitous effects on the country’s future ability to borrow. Moreover, increased spending on health care is not necessarily good for the economy even if it increases health care employment: spending on low-value health care diverts resources from other uses that could do more to boost the GDP and create jobs.”
From Hot Air:
We seem to hear this story on an annual basis, but this time they sound like they mean it. The United States Postal Service is teetering on the brink of financial collapse, with a $5.5 billion payment to retirees coming due which they can’t cover and a grand total of $9.2B in red ink for the year.
“Our situation is extremely serious,” the postmaster general, Patrick R. Donahoe, said in an interview. “If Congress doesn’t act, we will default.”
In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s deficit, which will reach $9.2 billion this fiscal year. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers — nearly one-fifth of the agency’s work force — despite a no-layoffs clause in the unions’ contracts…
At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.
And where is the Democrats budget……….?
‘Obama’s Budget Proposal Is A Remarkably Weak And Timid Document’
THE WASHINGTON POST’S DANA MILBANK: “Obama’s Budget Proposal Is A Remarkably Weak And Timid Document. He proposes to cut only $1.1 trillion from federal deficits over the next decade – a pittance when you consider that the deficit this year alone is in the neighborhood of $1.5 trillion. The president makes no serious attempt at cutting entitlement programs that threaten to drive the government into insolvency.” (“In His New Budget, Obama Kicks The Can One More Time,” The Washington Post, 2/15/11)
THE WASHINGTON POST: “At A Time When Republicans Are Demanding Sharp And Immediate Spending Cuts, However, The President’s Offer To Freeze Funding For Domestic Programs Would Produce Minimal Savings In The Short Term.” (“Obama’s Proposed Budget For Fiscal 2012 Focuses On Education, Energy, Research,” The Washington Post, 2/15/11)
THE WALL STREET JOURNAL: “Would Make Only A Modest Dent In Long-Term Deficits.” “The budget tees up the debate over the size and scope of government that is expected to dominate the presidential election campaign next year and would make only a modest dent in long-term deficits even in the unlikely event that it’s enacted in full.” (“Deficit Would Stay High For Years To Come,” The Wall Street Journal, 2/15/11)
THE WALL STREET JOURNAL: “President Barack Obama’s $3.7 Trillion Budget Plan Unveiled Monday Punts The Most Pressing Fiscal Issues Driving Up U.S. Debt To At Least Later This Year, when the white house and republicans are expected to meet behind closed doors to tackle deficit reduction.” (“GOP Denounces Absence Of Entitlements Overhaul,” The Wall Street Journal, 2/15/11)
- “The Budget All But Ignored The Recommendations Of Mr. Obama’s Bipartisan Debt Commission, but former Wyoming GOP Sen. Alan Simpson, the panel’s co-chairman, said Mr. Obama’s budget blueprint was largely irrelevant to the negotiations to come, and that all sides in Washington were playing their cards close to the chest.” (“GOP Denounces Absence Of Entitlements Overhaul,” The Wall Street Journal, 2/15/11)
THE HILL: “Yet Obama’s Budget Contains Neither The Entitlement Nor Tax Reforms Recommended By The Fiscal Commission.” (“Obama Frames $3.7T Budget As Thrifty, But With Responsible Investments,” The Hill, 2/15/11)
POLITICO: “Obama Appears To Have Hurt His Cause By Not Being More Bold In Approaching The Debt Problem Facing The Nation.” (“Budget 2012: Obama Vs. House GOP,” Politico, 2/15/11)
Editorials: ‘The President Punted,’ ‘He Whiffed’
THE WASHINGTON POST: “The President Punted. Having been given the chance, the cover and the push by the fiscal commission he created to take bold steps to raise revenue and curb entitlement spending, President Obama, in his fiscal 2012 budget proposal, chose instead to duck. To duck, and to mask some of the ducking with the sort of budgetary gimmicks he once derided.” (Editorial, “President Obama’s Budget Kicks The Hard Choices Further Down The Road,” The Washington Post, 2/15/11)
LOS ANGELES TIMES: “President Obama’s Budget For Fiscal Year 2012 Landed With A Thud Monday, Laying Out Short- And Long-Term Tax And Spending Plans That Disappointed Lawmakers On Both Sides Of The Aisle. The proposal was a remarkably tame response to Washington’s fiscal problems, not the bold statement about belt-tightening that the White House had suggested was coming. Yet the biggest shortcoming is that it all but ignored the most important long-term financial challenge, which is the growing cost of entitlements such as Medicare and Medicaid.” (Editorial, “Obama’s Overly Tame Budget,” Los Angeles Times, 2/15/11)
USA TODAY: “He Whiffed.” “President Obama likes to talk about those ‘Sputnik moments’ when the nation rises to difficult challenges like the one posed by the Soviet space program in the 1950s. On Monday, he had a chance to turn his federal budget proposal into his own such moment. He whiffed. … It’s becoming hard not to conclude that Obama doesn’t much care about the debt threat or has decided to wait until after the 2012 elections. Either would be a shame, and economically risky.” (Editorial, “Our View: Obama’s Budget Ducks Tough Choices,” USA Today, 2/15/11)
THE DETROIT NEWS: “What We’re Getting From The Obama Administration Is One Of Those Weight Loss Programs That Pretend It Can Shrink Your Waistline While Allowing You To Eat Whatever You Like. In this case, the president assures us we can gorge on Keynesian treats and still someday get back into our Clinton-era jeans.” (Editorial, “Obama’s Budget Slimming Too Mild,” Detroit News, 2/15/11)
THE DENVER POST: “Continues To Act As If Government Spending Is The Way To Prosperity.” “Obama called the proposal one of ‘tough choices and sacrifices,’ yet it does not confront entitlements and continues to act as if government spending is the way to prosperity.” (Editorial, “Obama Budget Still Falls Short,” Denver Post, 2/15/11)
Hoping You Forgot
Senate Democrats Are Hoping Nobody Remembers They’ve Embraced The President’s Budget, Calling It A ‘Wise’ And ‘Responsible Proposal’
President’s Budget: ‘A Credible Blueprint,’ ‘A Careful Evaluation Of What Our Nation Needs’
SEN. HARRY REID (D-NV): “President Obama’s budget is a serious attempt…” (Sen. Reid, Press Release, 2/14/11)
SEN. CHUCK SCHUMER (D-NY): “This is a responsible proposal… I believe this approach should have bipartisan support.” (Sen. Schumer Press Release, 2/15/11)
SEN. CHRIS COONS (D-DE): “I am encouraged … I applaud the President for remaining committed to innovation…” (Sen. Coons, Press Release, 2/14/11)
- COONS: “Wise” “…the willingness to make differing cuts, deep cuts in some areas but — and still sustain innovation, education and infrastructure investments I think is wise…” (U.S. Senate, Budget Committee, Hearing, 2/15/11)
SEN. TOM CARPER (D-DE): “The President’s budget is an important step forward…” (Sen. Carper, Press Release, 2/14/11)
SEN. MARIA CANTWELL (D-WA): “I applaud President Obama…” (Sen. Cantwell, Press Release, 2/14/11)
SEN. JEANNE SHAHEEN (D-NH): “…a responsible framework…” (Sen. Shaheen, Press Release, 2/14/11)
SEN. BILL NELSON (D-FL): “I personally think that the President’s budget is a step in the right direction.” (U.S. Senate, Finance Committee, Hearing, 2/16/11)
SEN. KENT CONRAD (D-ND): “The President’s budget gets it about right in the first year.” (Sen. Conrad, Press Release, 2/14/11)
SEN. BEN CARDIN (D-MD): “President Obama has given us a credible blueprint…” (Sen. Cardin, Press Release, 2/14/11)
SEN. KAY HAGAN (D-NC): “…a good start.” (Sen. Hagan, Press Release, 2/14/11)
SEN. HERB KOHL (D-WI): “The President’s budget is a good first step…” (Sen. Kohl, Press Release, 2/14/11)
SEN. KIRSTEN GILLIBRAND (D-NY): “… the President’s budget provides a good place to start the conversation.” (Sen. Gillibrand, Press Release, 2/14/11)
SEN. RICHARD BLUMENTHAL (D-CT): “…the President’s budget provides a good blueprint for achieving many of our shared goals.” (Sen. Blumenthal, Press Release, 2/14/11)
SEN. FRANK LAUTENBERG (D-NJ): “President Obama’s budget presents a careful evaluation of what our nation needs…” (Sen. Lautenberg, Press Release, 2/14/11)
SEN. MAX BAUCUS (D-MT): “The President’s budget… strengthens our economy…” (U.S. Senate, Finance Committee, Hearing, 2/16/11)
SEN. SHERROD BROWN (D-OH): “The President’s budget proposal will put us on track…” (Sen. Brown, Press Release, 2/14/11)
SEN. AL FRANKEN (D-MN): “The President’s budget proposal is headed in the right direction…” (Sen. Franken, Press Release, 2/14/11)
SEN. TOM HARKIN (D-IA): “…the President has proposed a balanced approach…” (Sen. Harkin, Press Release, 2/14/11)
SEN. TOM UDALL (D-NM): “… it’s a solid starting point.” (Sen. Udall, Press Release, 2/14/11)
Know thy Enemy!
As happens so often in politics, a group gains a little bit of influence (and being the political novices they are squander it by not seeing the forest through the trees) and is not able to properly identify the enemy – so they lash out at their own.
This is the case with some Tea Party Organizations that are out there ready to wage Jihad on the House Republican Leadership over an unjustified perceived notion of ineptitude. Immediately after the budget deal was announced Tea Party Nation founder Judson Phillips said that he and his organization were going to primary John Boehner and today they’re attacking Eric Cantor. Nothing could be more irresponsible in my opinion and nothing would guarantee victories for the Democrats more, in 2012, than for Tea Party Groups to lose sight of the main goal (which is to re-take the Senate on the White House) by wasting time, money, and the little political power we’ve obtained by infighting.
This is what we’re hearing from TPN and others: Shame on them for not magically erasing the last 6+ years in one fail swoop, “they must be against us,” let’s primary them next year and find every little discrepancy we can to cut their legs out and destroy them politically.
Conservative Republicans and Pundits don’t get a pass here either - once again you have conservatives chomping at the bit to take down one of their own (John Boehner) because he was unable to make everyone’s wish come true and reverse the last 6+ years in one fail swoop. This type of infighting is pervasive in the conservative movement and will continue to be reason we get beat politically if we don’t figure it out and unite.
Conservatives have a tendency to let the perfect become the enemy of the good and this needs to stop immediately if we’re to have any chance at fixing our current financial situation and pose a united front on the huge battles ahead. And I have one two words for pundits that continue to use an imperfect 2011 budget deal and liberal media spin to attack our own: STOP IT!!!
Cuts are Cuts and all facts that have been represented by the deal are exactly what they say the are — nothing has changed in last 24 hrs. at all!
Former CBO director Douglas Holtz-Eakin explains:
I sense a tempest in a teapot brewing over the continuing resolution for 2011, specifically the notion of “real” versus “fake” cuts. I confess I’m mystified.
A $1 cut in the appropriations process (of which there are now 28 billion versus FY 2010 enacted) does not cut outlays by $1. It cuts the authority to engage in outlays by $1 (which down the line presumably means fewer outlays).
A $1 “rescission” (roughly $8.5 billion from prior mandatory appropriations) does exactly the same thing. It cuts the authority to engage in outlays by $1 (which down the line presumably means fewer outlays). So rescissions are just as real as cuts to appropriations levels.
Weirdly enough, reforms to mandatory programs (changes to the Pell Grant alone come to $35 billion in cuts in ten years) immediately cut outlays and the reductions grow in perpetuity (since the program was running in perpetuity). Of course, most of the long-term mandatory program changes do not scorein this FY 2011 appropriations exercise (quirky Budget Act), so only $500 million of the Pell Grantsavings are reflected in the $1.049 trillion figure.
Ed Morrissey at Hot Air details the deal brokered by Speaker John Boehner and President Barack Obama on Friday night as House Republicans, today, released a summary of the final budget bill along with and itemized list of cuts by department wich you can view after Ed’s commentary below.
Four czars and two ObamaCare programs ended up getting the axe in the funding bill. That’s not a bad start. Here are the dollar figures stated in the summary for each department, in billions for apples-to-apples comparions:
- Agriculture: $3 billion cut from FY10 level, $3.2 billion less than Obama budget request
- Commerce/Justice/Science: $10.9 billion cut from FY10 level, $7.1 billion less than Obama request
- Defense: $5 billion increase from FY10
- Energy/Water: $3.6 billion cut from FY10, $1.7 billion less than Obama request
- Financial Services: $2.4 billion cut from FY10, $3.4 billion less than Obama request
- Homeland Security: $0.784 billion cut from FY10, $1.9 billion below Obama request
- Interior: $2.62 billion cut from FY10, $2.8 billion below Obama request
- Labor/HHS/Education: $5.5 billion cut from FY10, $13 billion below Obama request
- Legislature: $0.103 billion cut from FY10
- Military Construction/Veterans Affairs: $0.6 billion increase over FY10, $3.4 billion more than Obama request
- State/Foreign Operations: $0.504 billion cut from FY10, $8.4 billion below Obama request
- Transportation/HUD: $12.3 billion cut from FY10, $13.2 billion below Obama request
Summary – Final Fiscal Year 2011 Continuing Resolution
Boehner, Reid and Obama have reached a deal as soon as we learn all the details and if it passes the house we’ll bring you the details!
“We have agreed to an historic amount of cuts for the remainder of this fiscal year, as well as a short-term bridge that will give us time to avoid a shutdown while we get that agreement through both houses and to the President. We will cut $78.5 billion below the President’s 2011 budget proposal, and we have reached an agreement on the policy riders. In the meantime, we will pass a short-term resolution to keep the government running through Thursday. That short-term bridge will cut the first $2 billion of the total savings.”
Paul Ryan hit Fox News Sunday this morning to promote his new budget proposal due out Tuesday April 5 2011.
This is from The Hill.com:
While the budget for the current fiscal year remains in limbo, Paul Ryan, the chairman of the House Budget Committee, fired the first broadside of next year’s budget debate on Sunday.
Ryan spoke publicly — albeit without many details — about his budget proposal which is to be released on Tuesday.
Asked about the scale of his budget’s spending reductions, Ryan said they would exceed $4 trillion.
“We’re looking at more than that right now,” Ryan said on “Fox News Sunday.” “We’re fine-tuning our numbers with the Congressional Budget Office literally today, over the weekend. But we’re going to be cutting a lot more than that.”
President Obama’s fiscal year 2012 budget ignores the 800 pound gorilla in the room – our $14,000,000,000,000.00 national debt.
Paul Ryan: President Fails Leadership Test
President’s Budget Destroys Jobs with Record Taxes, Spending & Debt
WASHINGTON – House Budget Committee Chairman Paul Ryan issued the following statement in response to the release of President Obama’s FY2012 Budget:
“The President’s budget spends too much, taxes too much, and borrows too much – stifling job growth today and leaving our children with a diminished future. In this critical test of leadership, the President has failed to tackle the urgent fiscal and economic threats before us.”
“Failing to heed the warnings of economists and the demands of the American people, the President’s budget accelerates our country down the path to bankruptcy. Far from ‘living within its means,’ the President’s budget puts the government on track to nearly double in size since the day he took office – a direct result of his party’s reckless spending spree. His budget destroys jobs by imposing a $1.6 trillion tax hike, adding $13 trillion to the national debt and fueling uncertainty in the private sector.
“We cannot tax, spend and borrow our way to prosperity. Where the President has fallen short, Republicans will work to chart a new course – advancing a path to prosperity by cutting spending, keeping taxes low, reforming government, and rising to meet the challenges of our time.”
Key facts from President Obama’s Fiscal Year 2012 Budget:
- Spends Too Much
o $3.8 trillion in spending this year; 25.3% of GDP (highest since WWII)
o $46 trillion in spending over the decade; $8.7 trillion in new spending
- Taxes Too Much
o $1.6 trillion tax hike on families, small businesses, and job creators
o Revenues as a percent of GDP climb to 20%
- Borrows Too Much
o $1.6 trillion deficit for FY2012; a record third straight trillion dollar deficit
o Doubles and then triples debt held by the public since President took office
o $13 trillion added to the debt over the decade
For a bicameral budget analysis from the Senate & House Budget Committee Republicans: http://budget.house.gov/News/DocumentSingle.aspx?DocumentID=224882 (pasted below)
House Budget Committee & Senate Budget Committee Republican Summary of President’s FY2012 Budget
In challenging times, a chief executive must lead. But President Obama has failed to confront the fiscal and economic challenges before us. Instead, he continues down the same unsustainable path: growing the government, weakening the economy, and increasing the burden of debt on each and every American.
Spends Too Much: $8.7 Trillion In New Spending
Despite this year’s $1.6 trillion deficit, the President still refuses to change course and reduce spending. Under his budget, the size of government will nearly double since the day he took office. Ignoring both economists’ warnings and the public’s demands for restraint, the President’s explosive growth of government crushes private-sector investment, fuels uncertainty for job creators, and guarantees a less prosperous future for all Americans. The price tag of the President’s budget for the next ten years:
Total spending: $46 trillion; $8.7 trillion in new spending
New entitlement spending, beyond assumed growth: $404 billion
Increase in non-defense discretionary spending since 2008: 24% (excluding stimulus)Increase in discretionary spending above President’s own deficit commission: $353 billion
Spending this year under the President’s budget: Record $3.8 trillion; 25.3% of GDP (highest since WWII)
Taxes Too Much: $1.6 Trillion In New Taxes
The President’s big-government vision imposes a heavy cost: diminishing economic opportunity through massive tax hikes that depress wages and stifle job creation at a time when millions of Americans remain out of work. In total, the President’s budget imposes $1.6 trillion in new taxes on families, small businesses, and job creators, including:
Income tax hike: $919 billion
Death tax hike: $118 billion
Transportation tax hike: $435 billion
Borrows Too Much: $13 Trillion Added To The Debt
Despite the urgent need to rein in our runaway debt, the President’s budget doubles debt held by the public by the end of his term and triples it ten years after he was sworn in. Gross debt will eclipse the size of the entire economy this year and remain above 100% of GDP for every single year that follows. This crushing burden of debt is depressing economic growth today, yet the President’s budget fails to seriously meet this challenge and instead accelerates our country down the path to bankruptcy:
New debt: $13 trillion
Gross debt by end of decade: $26.3 trillion (107% of GDP)
Annual interest payments by end of the decade: $844 billion
Total interest payments on debt: $5.7 trillion
A Failure Of Leadership
The President’s budget represents an abdication of leadership by failing to address the drivers of our debt crisis and the unsustainability of our entitlement programs. He even ignores the recommendations of his own bipartisan fiscal commission while continuing to increase spending across the board. Instead of fulfilling his campaign promise to cut the deficit in half in his first term, the President’s budget doubles the debt over that same period of time. We are racing in the wrong direction and the President’s foot remains stuck on the pedal.
The unsustainable growth of government dims the economic prospects of millions of Americas by reducing jobs, discouraging new investments, and threatening our nation’s financial security. The true cost of the President’s budget goes beyond the trillions of dollars squandered – it also includes lost opportunities for future Americans because this President chose to hide from tough choices and retreat from the principles that have made America great.
Chairman Ryan on Fox News Sunday: “Presidents are elected to lead, not to punt. And this president has been punting.” – http://www.youtube.com/watch?v=ZipJpEMeyqg