RHETORIC: President Obama: “No Smart Way” To Cut $85 Billion: “The problem is, when you’re cutting $85 billion in seven months … there’s no smart way to do that. There’s no smart way to do that.” (“Obama on Sequester Cuts: ‘There’s No Smart Way To Do That,’” Real Clear Politics, 2/26/13)
REALITY: U.S. Military Camouflage An “Expensive Case Study In Federal Duplication”: “In 2002, the U.S. military had just two kinds of camouflage uniforms. One was green, for the woods. The other was brown, for the desert. Then things got strange. Today, there is one camouflage pattern just for Marines in the desert. There is another just for Navy personnel in the desert. The Army has its own ‘universal’ camouflage pattern, which is designed to work anywhere. It also has another one just for Afghanistan, where the first one doesn’t work. … In just 11 years, two kinds of camouflage have turned into 10. And a simple aspect of the U.S. government has emerged as a complicated and expensive case study in federal duplication.” (David A. Fahrenthold, “With 10 Patterns, U.S. Military Branches Out On Camouflage Front,” The Washington Post, 5/8/13)
GAO Finds The Pentagon Spent More Than $12 Million On Designing New Camouflage Patterns: “At the Pentagon, a GAO study commissioned by the Senate Armed Services Committee found that the military services have spent more than $12 million on designing new camouflage patterns. The cost of buying, stocking and shipping 10 different types of camouflage uniforms is believed to be millions more. Is anybody trying to fix this?” (David A. Fahrenthold, “With 10 Patterns, U.S. Military Branches Out On Camouflage Front,” The Washington Post, 5/8/13)
REALITY: Congress Forces Pentagon To Spend Billions On Tanks, Ships And Planes It Doesn’t Need. “Lawmakers have nixed several of the money-saving ideas, instead forcing the Defense Department to purchase or maintain equipment it says it doesn’t need. Take for instance the half-billion dollars in Abrams tanks that Congress ordered up for the next two years, or the seven obsolete ships the Navy is being forced to keep. The Pentagon says it doesn’t want them, or need them. But taxpayers will keep paying the price.” (Phillip Swarts, “Lawmakers force Pentagon to buy tanks, keep ships and planes it doesn’t need,” The Washington Guardian, 5/10/13)
REALITY: Billions Lost In Unemployment Fraud. “A study by the St. Louis Federal Reserve released last week found that of the $108 billion paid out in unemployment benefits in 2011, some $3.3 billion was paid out dishonestly The largest share of the fraud payments—$2.2 billion—went to people who were still working.” (Mark Koba, “$3.3 Billion Lost in Unemployment Fraud: Study,” CNBC, 4/29/13)
REALITY: Taxpayers Suffer Loss In Auto Company Investment: “Fisker Automotive Inc. spent more than six times as much U.S. taxpayer and investor money to produce each luxury plug-in car it sold than the company received from customers, according to a research report. … Fisker has spent $1.3 billion in taxpayer and venture capital money, or $660,000 for each car it sold, the report said.”(Angela Greiling Keane, “Fisker Spent $660,000 on Each $103,000 Plug-in Car,” Bloomberg, 4/18/13)
· The potential loss of $171 million would be largest loss of federal loan money since the 2011 failure of solar panel maker Solyndra, which declared bankruptcy and laid off all its workers after receiving a $528 million loan from the Energy Department.” (Matthew Daly, “Obama Adminsitration Had Advanced Warning On Fisker,” The Associated Press, 4/24/13)
REALITY: FAA Tech Upgrade Running Nearly Half A Billion Over Budget “With No End In Sight:” “For more than a decade the FAA has promised to modernize and make the civil aviation system more efficient and reliable, but the only things it has reliably generated are delays or cost overruns or usually both. The project, known as NextGen, is four years off schedule with no end in sight. … A 2011 investigation found that one part of NextGen ran $330 million over budget—or half of the FAA sequester—and then the FAA paid the contractor responsible $150 million in bonuses…. The overruns are now approaching $500 million, and that’s merely one item.” (The Wall Street Journal, “Flying the Government Skies,” 4/23/13)
REALITY: IRS Overpaid Upwards Of $13 Billion In Tax Credits: “The Internal Revenue Service (IRS) overpaid between $11.6 billion and $13.6 billion in tax credits designed to help low-income families in fiscal 2012 , the Treasury Department announced in a report released Monday.” (Julian Hattem, “IRS overpaid up to $13.6B in low-income tax credits, report finds,” The Hill, 4/22/13)
REALITY: Postal Service Hemorrhaging $25 Million A Day: “The U.S. Postal Service could become ‘a significant burden to the taxpayer’ if it does not get needed flexibility to change its business operations, Postmaster General Patrick R. Donahoe told Congress Wednesday. … ‘We are losing $25 million dollars every day and we are on an unsustainable path.’” (“USPS losing $25 million daily with ‘broken business model,’” The Washington Post, 4,17,13)
REALITY: Redundant Federal Programs Wasting Billions: “Redundant federal programs are leading to billions in waste, congressional auditors say, and the government is slow to adopt reforms to fix the problem. The White House says President Obama recognizes the problem and will propose eliminating redundant programs in the budget plan he releases Wednesday. … Over the past three years, the Government Accountability Office found 162 areas where agencies are duplicating efforts, at a cost of tens of billions of dollars. How many billions? No one knows.” (Gregory Korte, “Report: Redundant Federal Programs Waste Billions,” USA Today, 4/9/13)
· Billions For New Mapping Data: “Government agencies are spending billions on new mapping data — without checking whether some other government agency already has maps they could use.” (Gregory Korte, “Report: Redundant Federal Programs Waste Billions,” USA Today, 4/9/13)
· Duplicative Renewable Energy Programs: “At least 23 different federal agencies run hundreds of programs to support renewable energy.” (Gregory Korte, “Report: Redundant Federal Programs Waste Billions,” USA Today, 4/9/13)
· Lack Of Coordination Between Branches Of The Armed Services: “Each branch of the armed services is developing its own camouflage uniforms without sharing them with other services.” (Gregory Korte, “Report: Redundant Federal Programs Waste Billions,” USA Today, 4/9/13)
· Overlapping Research At The Department Of Homeland Security: “29 Department of Homeland Security contracts that partly or completely overlapped with research being done by another part of the same department. Five contracts funded research into the detection of the same chemical.” (Gregory Korte, “Report: Redundant Federal Programs Waste Billions,” USA Today, 4/9/13)
REALITY: Stimulus-Funded Condom Study Creates Zero Jobs. The details of a stimulus grant awarded to Indiana University to study condom use have now been released on a government website. The study, titled ‘Barriers to Correct Condom Use,’ is now completed, according to the website, and the university received $423,500 of stimulus funds to perform the study. The stimulus project yielded a total of 0.00 jobs created, according to the federal government. ‘No jobs created/retained,’ the form says under ‘Description of Jobs Created.’” (Daniel Halper, “$423,500 Stimulus Program on ‘Correct Condom Use’ Yields Zero Jobs,” The Weekly Standard, 4/4/2013)
REALITY: House Oversight and Government Reform Committee Report Finds Unimplemented Recommendations Could Have Saved Taxpayers $67 Billion. “The Committee’s review found that the backlog had grown to a high of 16,906 open recommendations. Using the most conservative cost-saving estimates, implementing these recommendations could save taxpayers $67 billion per year.” (House Oversight and Government Reform Committee Report, “Staff Report: Open and Unimplemented IG Recommendations Could Save Taxpayers $67Billion,” 3/5/13)
REALITY: Energy Department Approved $3.5 Million in Bonuses to 10 Employees, Some As Much As 82 Percent Above The Market Rate. “Federal employees are facing unpaid days off and salary cuts due to the sequester, but several contract workers inside the Energy Department are still raking in the cash. Ten individuals at the department’s Oak Ridge nuclear laboratory are set to make an extra $3.5 million above and beyond their normal pay, according to an Energy Department inspector general investigation that exposes a lavish bonus system. The 10 people are executives at the company UCOR, which the department hired for environmental clean-up. And despite watchdog warnings that the executives’ salaries are as much as 82 percent above the market rate, Energy Department officials continue to pay out the bonuses.” (Phillip Swarts, “Energy Department approves lavish bonuses: $3.5 million to 10 workers alone,” Washington Guardian, 3/29/13)
REALITY: IRS Video Production Unit Costs Taxpayers $4 Million A Year: “The Senate’s top tax-writer wants answers from the IRS about a ‘Star Trek’ spoof that the tax-collecting agency has now apologized for making. … Baucus also questioned why the IRS had a video production unit at all — especially at its reported $4 million a year price tag. The ‘Star Trek” parody and a separate takeoff on “Gilligan’s Island” cost around $60,000 in tandem, the IRS has said.” (Bernie Becker, “Baucus to IRS: How did the ‘Star Trek’ video happen? Who’s responsible?,” The Hill, 3/27/13)
REALITY: Energy Department Mismanaged More Than $90 Million In Stimulus: “The Energy Department’s (DOE) internal watchdog is attacking DOE management of a $1.5-billion stimulus program to help develop technology that captures industrial carbon dioxide emissions. An Office of Inspector General (IG) audit made public Tuesday examines $1.1 billion in funding for 15 projects. The audit notes three project recipients together received $90 million even though reviews of the proposals ‘identified significant financial and/or technical issues.’” (Ben Geman, “Report: Energy Department Mismanaged Stimulus-Backed Climate Program, The Hill, 3/22/13)
REALITY: “Pentagon Handed Out $419 Million In Improper Travel Reimbursements Last Year.” “While making improvements in some spending areas, the Defense Department was singled out this week for failing to trim unnecessary travel reimbursements. In fact, the Pentagon’s internal watchdog concluded that wasteful travel spending actually grew last year to a total of $419.3 million, accounting for roughly five percent of the Pentagon’s mammoth $8.4 billion travel budget.” (Phillip Swarts, “Pentagon Handed Out $419 Million In Improper Travel Reimbursements Last Year,” The Washington Guardian, 3/21/13)
White House: Tsarnaev to be tried in federal court
John Cornyn: Obama Took The ‘Low Road’ With Gun Control Remarks
More Offices Report Suspicious Mail After Tainted Letter Scare
“Hamel: No more taxes, Mr. President”
Public Notice Executive Director Gretchen Hamel editorializes in The Richmond Times Dispatch, “In business, you have to compete. The only way to attract new jobs and create economic growth is by cultivating a better environment for businesses to thrive. Virginians understand this, and so do their neighbors. North Carolina is considering legislation to drop its corporate tax rate to 4.9 percent, which would be the lowest in the Southeast. Why take that step? According to one of the bill’s primary sponsors, it will make North Carolina ‘more competitive for economic development’ and bring tax rates ‘in line with our neighboring states.’ So when President Obama issued his latest budget proposal on April 10, which included a pitch for some $580 billion in higher taxes, the first question most are asking is how higher taxes will make Virginia and America more competitive.”
“USPS losing $25 million daily with ‘broken business model’”
The Washington Post reports, “The U.S. Postal Service could become ‘a significant burden to the taxpayer’ if it does not get needed flexibility to change its business operations, Postmaster General Patrick R. Donahoe told Congress Wednesday. Appearing before a congressional hearing for the first time since the Postal Service had to back away from a plan to reduce delivery days from six to five, Donahoe told the House Oversight and Government Reform Committee that ‘the Postal Service is currently operating with a broken business model.’ ‘We are losing $25 million dollars every day and we are on an unsustainable path,” he added. … Donahoe announced in February that a five-day delivery schedule would save $2 billion annually and would begin in August. He had to change course, he said, after congressional action ‘specifically designed to prevent the Postal Service from changing its delivery schedule. According to this law, we are now required to deliver mail as if it were the year 1983.’”
IRS Caught Employees Stealing Unemployment Benefits
The Tennessean reports, “First it was the families of dead people and state employees. Now, authorities say Internal Revenue Service employees in Tennessee were stealing unemployment and other benefits while fully employed. On Thursday, 13 of those employees were indicted on federal charges that they lied to get unemployment, food stamps, welfare and housing vouchers. An additional 11 have been indicted on state charges of theft greater than $1,000. In all, authorities say the workers improperly received more than $250,000 in government benefits.”
What is Funding the Welfare State?
George Will writes in The Washington Post, “The regulatory, administrative state, which progressives champion, is generally a servant of the strong, for two reasons. It responds to financially powerful and politically sophisticated factions. And it encourages rent-seekers to exploit opportunities for concentrated benefits and dispersed costs (e.g., agriculture subsidies confer sums on large agribusinesses by imposing small costs on 316 million Americans). Such government inevitably means executive government and the derogation of the legislative branch, both of which produce exploding government debt. … Today’s government uses regulation to achieve policy goals by imposing on the private sector burdens less obvious than taxation would be, burdens that become visible only indirectly, in higher prices. Often the goals government pursues by surreptitious indirection are goals that could not win legislative majorities — e.g., the Environmental Protection Agency’s regulation of greenhouse gases following Congress’s refusal to approve such policies. And deficit spending — borrowing — is, DeMuth says, ‘a complementary means of taxation evasion’: It enables the political class to provide today’s voters with significantly more government benefits than current taxes can finance, leaving the difference to be paid by voters too young to vote or not yet born. … Funding the welfare state by vast borrowing and regulatory taxation hides the costs from the public. Hence its political potency. Until the implosion.”
Tax Code Needs Simplicity
Robert Samuelson editorializes in The Washington Post, “At this time of year, when most Americans have just filed their returns, exasperation with the income tax system reaches a peak. Hardly anyone denies that it is a complex mess. In 2010, calculating their taxes cost Americans $168 billion, estimates the Taxpayer Advocate Service of the Internal Revenue Service. That’s about 15 percent of taxes collected — a heavy overhead. Almost 60 percent of taxpayers pay accountants or other tax preparers. Public esteem for the tax system is low; in a 2011 Pew poll, 55 percent judged it unfair. Disaffection was fairly even politically: 47 percent among Republicans, 58 percent among Democrats and 56 percent among independents. … The value of tax breaks is roughly reckoned at about $1 trillion annually. There seems ample room for trimming. Guess again. Tax breaks have huge constituencies. The largest is the exclusion of employer-paid health insurance from the income tax. That’s worth an estimated $213 billion in 2014. If Congress tried to reduce it, there would be howls of protest — from affected workers and firms, insurance companies, hospitals. The next largest is the deductibility of home mortgage interest: $101 billion. Builders, real estate agents and homeowners would resist any cut. Charitable contributions ($54 billion) and individual retirement accounts ($19 billion) also involve big breaks. Politicians abet tax complexity, because dispensing preferences enhances their power. This helps explain why the Tax Reform Act unraveled. New tax breaks multiplied; rates were raised.”
“Rove: Steaming Toward the ObamaCare ‘Train Wreck’”
The Wall Street Journal reports, “In congressional testimony last week, Health and Human Services Secretary Kathleen Sebelius blamed Republican governors for her department’s failure to create a ‘model exchange’ where consumers could shop for health-insurance coverage in states that don’t set up their own exchange. Nice try, but GOP governors aren’t the problem. Team Obama’s tendency to blame someone else for its shortcomings is tiresome. The Affordable Care Act requires HHS to operate exchanges in states that won’t operate their own. Since the act became law in March 2010, it has been abundantly clear that the agency would have to deploy a model exchange. It is Ms. Sebelius’s fault there isn’t one. … Part of this problem stems from the way the law is crafted. For example, a subsidy to help small businesses provide insurance coverage while ObamaCare ramped up was so complicated and difficult to use that only 1% of its $40 billion budget was spent. Other provisions have been poorly executed or needlessly delayed. Ms. Sebelius’s HHS has missed dozens of deadlines for major rule-making or program start dates required by the law.”
Senate Appropriations Chair Plans To Ignore Sequester
Congressional Quarterly reports, “Senate Appropriations Chairwoman Barbara A. Mikulski, D-Md, reiterated Wednesday her plans to ignore the sequester in writing fiscal 2014 spending bills, setting up a likely confrontation with the House. ’I believe that it will be at the $1.058 trillion level that this full committee will be marking up,’ she said at a Commerce-Justice-Science Appropriations panel hearing. ‘In terms of dealing with sequester, we need a balanced approach, and we call upon the leadership and the president to help come up with that balanced approach so that we can cancel the sequester.’ House Republicans will use a $967 billion top line as required by the sequester in writing their spending bills. Obama’s fiscal 2014 budget request proposes a combination of new tax revenue and alternative savings to replace the sequester with $1.2 trillion in deficit reduction.”
“Fed: Economy still growing, but Washington a source of concern”
According to The Hill, “The Federal Reserve reported Wednesday that the economy was continuing to expand ‘at a moderate pace,’ but that several policies out of Washington were pinching growth. Fiscal tightening, including automatic sequestration cuts, as well as the continued implementation of the Affordable Care Act were cited by the Fed’s business contacts as reasons for concern about the trajectory of the nation’s economy. Businesses in several districts nationwide told the Fed they saw ‘uncertainty or weakness’ in military and defense-related businesses. In San Francisco, manufacturers with ties to the defense industry said they were issuing furloughs, laying off workers, and even closing some production plans. Business contacts in Chicago and Philadelphia were also taking steps to cut costs in anticipation of reduced government spending on defense. … Elsewhere, the expiration of the payroll tax cut was cited as a factor in holding back sales growth.”
EPA Agency Credit Cards Misused?
According to The Washington Guardian, “If Environmental Protection Agency workers went on a spending spree, investigators will find out soon. Government inspectors are looking at the EPA’s purchase card and convenience check programs to make sure agency workers have been making taxpayer funded purchases correctly and on things that are needed for the agency to conduct its business. Investigators noted the review is not in response to any specific tips or concerns, but is a required routine check-up. The EPA Office of Inspector General said it will evaluate whether the agency has controls to prevent ‘potentially illegal, improper and erroneous use of purchase cards.’ Investigators said they also want to ensure the EPA is getting the best deals and lowest prices for the things it buys.”
“More Children in Greece Are Going Hungry”
The New York Times reports, “As an elementary-school principal, Leonidas Nikas is used to seeing children play, laugh and dream about the future. But recently he has seen something altogether different, something he thought was impossible in Greece: children picking through school trash cans for food; needy youngsters asking playmates for leftovers; and an 11-year-old boy, Pantelis Petrakis, bent over with hunger pains. ‘He had eaten almost nothing at home,’ Mr. Nikas said, sitting in his cramped school office near the port of Piraeus, a working-class suburb of Athens, as the sound of a jump rope skittered across the playground. He confronted Pantelis’s parents, who were ashamed and embarrassed but admitted that they had not been able to find work for months. Their savings were gone, and they were living on rations of pasta and ketchup. ‘Not in my wildest dreams would I expect to see the situation we are in,’ Mr. Nikas said. ‘We have reached a point where children in Greece are coming to school hungry. Today, families have difficulties not only of employment, but of survival.’”
“Can European disintegration be reversed?”
Thomas Wright, a Managing Global Order fellow at the Brookings Institution, editorializes in The New York Times, “Throughout the euro crisis, observers have been asking if the euro zone will disintegrate — as if it is a decision that will be made by its leaders at some point in the future. This holds out the prospect of a great historic choice: Europeans can choose to properly unite and overcome their crisis or they can choose dissolution. We wait with bated breath for the next summit or the latest ‘most crucial month in the euro’s history,’ which now seems to come several times a year. But, this may be the wrong way of looking at the euro crisis. Integration and disintegration are not just the products of deliberate decisions. They are both processes, set in motion by actions regardless of the stated intentions of leaders. Once underway, each process takes several election cycles — probably a decade or so — to reach completion. Only one will prevail in the end, but it is possible that in the early stages these two processes can coexist even as each vies for supremacy. Looked at this way, the euro zone is in serious trouble. The events of the past six months are consistent with a process of disintegration, while the process of integration has steadily weakened. The question is no longer, ‘Will Europe unravel?’ We should be asking, ‘Can European disintegration be reversed?’”
Poll: Majority Says Wealth Should Be Redistributed
POLITICO reports, “Nearly 6 in 10 Americans say wealth is distributed unfairly in the United States, and a majority want the federal government to play Robin Hood to fix the problem, according to a poll released Thursday. Only 33 percent of Americans think the current distribution of wealth in this country is fair, according to the Gallup Poll, while 59 percent say it is not. Fifty-two percent said the United States should redistribute wealth through heavy taxes on the rich, while 45 percent disagreed. Nearly 6 in 10 Americans say wealth is distributed unfairly in the United States, and a majority want the federal government to play Robin Hood to fix the problem, according to a poll released Thursday. Only 33 percent of Americans think the current distribution of wealth in this country is fair, according to the Gallup Poll, while 59 percent say it is not. Fifty-two percent said the United States should redistribute wealth through heavy taxes on the rich, while 45 percent disagreed.”
Members of Congress are asking the USPS to justify its spending on an upcoming industry conference as it continues to look for ways to trim costs. The Postal Service cites revenue benefits from the face-to-face meeting.
Several lawmakers have requested a detailed justification for the U.S. Postal Service’s participation in a major industry conference next month, according to various news reports.
The Postal Service will spend about $2.2 million to send 400 executives, including Postmaster General Patrick Donahoe, to the four-day National Postal Forum March 17-20 in San Francisco, a local television station reported last week.
Here’s the latest news for Wednesday, Feb. 6th p: Scouts delay decision on admitting gays; French airstrikes target Islamic extremists in Mali; Postal Service reduces mail delivery days; Monopoly gets a new token
The financially struggling U.S. Postal Service said Wednesday it will stop delivering mail on Saturdays but continue to disburse packages six days a week, an apparent end-run around an unaccommodating Congress.
The U.S. Postal Service will stop delivering mail on Saturdays but continue to deliver packages six days a week under a plan aimed at saving about $2 billion, the financially struggling agency says.
The U.S. Postal Service has unveiled the Rosa Parks Forever Stamp to honor the civil rights icon on her hundredth birthday for her role in the civil rights struggles of the 1950′s and 60′s.
Spending Daily | September 28, 2012
Following Congressional Delays, “U.S. Postal Service to Default on Second $5.6B Payment”
The Associated Press reports, “The U.S. Postal Service, on the brink of default on a second multibillion-dollar payment it can’t afford to pay, is sounding a new cautionary note that having squeezed out all the cost savings within its power, the mail agency’s viability now lies almost entirely with Congress. In an interview, Postmaster General Patrick Donahoe said the mail agency will be forced to miss the $5.6 billion payment due to the Treasury on Sunday, its second default in as many months. Congress has left Washington until after the November elections, without approving a postal fix. For more than a year, the Postal Service has been seeking legislation that would allow it to eliminate Saturday mail delivery and reduce its $5 billion annual payment for future retiree health benefits. … ‘Absolutely, we would be profitable right now,’ Donahoe told The Associated Press, when asked whether congressional delays were to blame for much of the postal losses, expected to reach a record $15 billion this year. He said the two missed payments totaling $11.1 billion for future retiree health benefits – payments ordered by Congress in 2006 that no other government agency or business is required to make – along with similar expenses make up the bulk of the annual loss.”
America Faces Economic Crisis in November No Matter Who Wins
Bloomberg reports, “Whoever wins the presidency will contend with a budget on a trajectory dubbed unsustainable by Federal Reserve Chairman Ben S. Bernanke. Barack Obama or Mitt Romney will have to tame a deficit that has topped $1 trillion in each of the past three years, Bloomberg Markets magazine reports in its November issue. How the new president goes about it will influence the direction of financial markets and define the economy and society for his four-year term and beyond.” America has reached the “Reinhart-Rogoff” threshold which is when central government debt exceeds 90 percent of annual GDP. This threshold has historically been an indicator of trouble to come. “Gross federal debt has exceeded 90 percent of GDP for the past two years and is projected to remain above that level through 2017 at least, according to the White House’s Office of Management and Budget. Even publicly held debt, which excludes the special-issue securities held by the Social Security trust fund and other government agencies, reached 68 percent of GDP in 2011.” High unemployment, the fiscal cliff, and rising debt all add to an economic crisis that Americans will face regardless of who wins in November.
Economy Down But Confidence Up?
Robert J. Samuelson editorializes in the Washington Post, “With less than six weeks to the election, President Obama is benefiting from a curious paradox. Although the economy remains weak by most indicators, consumer optimism has registered a distinct, though modest, gain. … Economist Gail Fosler, a consultant who once headed the Conference Board, attributes the improvement to ‘the combination of [a higher] stock market and rising housing prices. People are beginning to see houses move in their neighborhood.’ … Still, downbeat economic indicators abound. On Thursday, the Commerce Department lowered its estimate of economic growth for the March-June quarter from an already-weak 1.7 percent to an anemic 1.3 percent. … As troubling, the government reported on Thursday a steep 13.2 percent drop in orders for durable goods — machinery, vehicles, computers, telecommunications equipment — in August. … And overall shipments to customers fell 3 percent, the largest decline since January 2009 at the depth of the Great Recession.”
Panetta Seeks “whatever the hell deal” Over Sequestration
The Hill reports, “Defense Secretary Leon Panetta on Thursday said he’d take any deal that would avoid across-the-board cuts to defense spending. Lawmakers have begun floating short-term agreements to stop the $500 billion in defense cuts known as sequestration from beginning in January amid concerns they won’t be able to strike a ‘grand bargain’ on taxes and spending. ‘I’ll take whatever the hell deal they can make right now to deal with sequestration,’ Panetta said. He said the problem now was Congress had ‘left town’ for the election. ‘All of this has now been put off into the lame-duck session,’ Panetta said.”
Economic Rain Delay
The New York Times reports, “The Commerce Department said Thursday that the United States economy grew at an annual pace of just 1.3 percent in the second quarter of the year, showing that the recovery came close to stalling in the spring. The revision was down from the 1.7 percent rate the government reported in August. The economy grew at a 2 percent pace in the first quarter of the year and 3 percent at the end of 2011. … Thursday’s report underscored that the recovery has proved insufficient to pull down the unemployment rate, which has been stuck between 8.1 percent and 8.3 percent all year. The renewed weakness this month spurred the Federal Reserve to act to support the economy, putting in place a third major round of bond purchases designed to aid the nascent housing recovery and to encourage employers to add jobs.”
Obama Comments on Deficit Found False
PolitiFact reports, ”In an interview with CBS’s 60 Minutes that aired on Sept. 23, 2012, President Barack Obama blamed the Bush administration for much of the nation’s recent debt. …To figure out what caused the accumulation of deficits over the past decade, CBO tracked the surplus it had projected back in 2001 and compared it to the actual cumulative deficits that resulted instead. Between 2002 and 2011, the government was projected to run a cumulative surplus of $5.6 trillion. Instead, the government ran a cumulative deficit of $6.1 trillion. That’s a swing of about $11.7 trillion. … Over this period, 38 percent of the swing comes from spending, 20 percent from tax cuts, 14 percent from interest increases and 28 percent from faulty CBO projections. Using Obama’s strict definition of what laws count as ‘Bush’s’ and ‘Obama’s,’ about 17 percent of this swing is attributable to Obama, not 10 percent.”
“Democrats make hay out of stalled farm bill”
According to The Hill, “Democrats are using the stalled farm bill to hammer their GOP opponents in congressional races across the country. The legislation, which provides subsidy and aid to farmers nationwide, as well as authorizes funding for a number of nutritional programs, expires on Sept. 30. The Senate was able to pass a bill, but House Speaker John Boehner (R-Ohio) said late last week that the House would have to wait until after the election to pick back up on the legislation, despite a flurry of last-minute activity from lawmakers on both sides of the aisle in an attempt to bring it to the floor. Democrats in states where agriculture plays a large role have been quick to launch attacks on their opponents that aimed to hang congressional inaction around their necks.”
Obama: Let’s Bail Out Every Industry
Politico reports, “President Obama, while villifying Mitt Romney for opposing the auto industry bailout, bragged about the success of his decision to provide government assistance and said he now wants to see every manufacturing industry come roaring back. ‘I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,’ he said. ‘Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.’”
U.S. Financial Markets “prettiest horse at the glue factory”
McClatchy reports, “Hiring picked up much faster in July than expected. Car sales remain solid. Home prices are climbing again in parts of the country. It all points to a strong second half of 2012, right? Not necessarily. Weighing against growth are the ongoing debt crisis in Europe, a clear slowdown in China and uncertainty over a bitter presidential election, expiring Bush-era tax cuts and the possibility of steep, across-the-board cuts in government spending. That’s led most economists to predict sluggish growth at best for the latter half of the year, and some even whisper that recession is possible next year…Given debt problems abroad, U.S. financial markets have been the prettiest horse at the glue factory.” Douglas Holtz-Eakin, a former director of the Congressional Budget Office said, ‘If you start to lose the beauty contest, you are still in the glue factory. You don’t have to be an economist to figure out what happens: You go south and the only question is for how long.’”
Sec. of Energy Fought Officials Questioning Solyndra Loan Agreement
The Wall Street Journal reports, “Secretary of Energy Steven Chu fought back opposition from some of President Barack Obama’s top economic advisers at a White House meeting last summer to ensure government backing of a $1.4 billion project slated to use solar panels made by now-bankrupt Solyndra LLC, according to newly released emails. … Two days after Mr. Chu visited the White House on June 14, 2011, an Energy Department official boasted to a colleague that Mr. Chu’s performance was ‘close to an annihilation’ of those who questioned the deal, according to the emails released Thursday. The skeptics included Jacob Lew, who was then the director of the White House Office of Management and Budget and is now White House chief of staff, and Treasury Secretary Timothy Geithner, according to the emails.
Postal Service Loses $5.2B, Calls on Congress for Help
Bloomberg reports, “The U.S. Postal Service’s announcement yesterday that it lost $5.2 billion in its third quarter added to calls for Congress to help the agency that’s supposed to run itself like a business and in many ways can’t. The Washington-based service yesterday reported its 11th consecutive quarter of losses and said it may lose $15 billion in the fiscal year that ends Sept. 30. The service said it still will make payroll for its workforce of 530,000 and pay suppliers when it temporarily runs out of cash in October… Postmaster General Patrick Donahoe called on Congress, which is in recess until September, to pass legislation that will help it cut costs. … ‘It’s going to take a calamity,’ said James O’Rourke, a University of Notre Dame management professor. ‘When the post office literally runs out of money to pay its employees and suppliers, that’s what it’s going to take to get Congress to act. They’ve shown little interest to this point.’ Resistance from Congress prompted the service to abandon plans earlier this year to close as many as 3,700 rural post offices, part of its strategy to reduce its size in an era of less hard-copy mail and more e-mail. In 2006, Congress passed a law requiring the service to pay now for future retirees’ health care, something the Postal Service says it can’t afford and that its unions say is unnecessary.”
U.S. Exports Grew in June
The Wall Street Journal reports, “U.S. exports bucked a world-wide trade slowdown in June but face serious headwinds from the recession throughout much of Europe and softening growth in Asia. The U.S. trade deficit with other countries narrowed to $42.9 billion in June from $48 billion a month earlier, the Commerce Department said Thursday, as imports fell and exports grew. Exports, which have been a pivotal contributor to the economic recovery, were strong almost everywhere except to Europe, where a recession and a protracted sovereign-debt crisis have sapped demand. Europe’s lackluster appetite for U.S. goods was more than countered by countries such as China, where reliance on U.S. exports continues to expand, even as that economy has slowed from double-digit growth… Thursday’s figures indicate that the U.S. remains as yet unscathed by—but in the path of—an economic downdraft affecting the rest of the world.”
Bowles Calls for “serious national debate about our debt”
Erskine Bowles editorializes in The Washington Post, “The most important lesson Al [Simpson] and I learned on the commission is that to fix the debt, everything must be on the table. … So although I give Romney credit for pledging to reform the tax code to reduce loopholes, his current proposal will not take us to the promised land. … Obama hasn’t gone as far in cutting spending, particularly in health care, as is necessary to stabilize the debt at a reasonable level and keep it on a downward path as a percentage of the gross domestic product. … Over the next four years, the United States will need to do much more to address its long-term debt than either party has been willing to do. This fall, the American people deserve a serious national debate about our debt, not easy promises. To avoid the most predictable economic crisis in history, we must let the numbers do the talking.”