Bankrupting America’s Spending Daily

| November 30 2012

Spending Daily | November 30, 2012

 

Skeptics on Both Sides of The Aisle Doubt Consequences of Cliff Dive
Bloomberg reports, “President Barack Obama says going over the fiscal cliff by missing the deadline for a deficit reduction deal by year’s end would be a ‘rude shock’ for Americans. Republican House Speaker John Boehner says it would be a ‘fiasco.’ Yet a small and potentially influential group of lawmakers in both parties is emerging as fiscal-cliff skeptics, willing — and some even arguing — to take the dive. Their attitude may make striking a compromise a messy and drawn-out process. … Senator Patty Murray of Washington, the fourth-ranking Democrat in the leadership, said her side is willing to push the debate into 2013 if Republicans refuse to raise taxes on high earners as part of the deal. … In the other party and on the other side of the Capitol, Representative Joe Walsh of Illinois said, ‘Nobody knows how bad or ugly it would get, so because nobody knows, we don’t want to do it.’” He added “’Doing what’s right over the next couple weeks is more important than doing something that would harm our economy in the name of meeting a silly deadline.’”

Boehner Rejects Obama’s Fiscal Cliff Offer
The Hill reports, “Speaker John Boehner (R-Ohio) on Thursday rejected a White House offer to avoid the ‘fiscal cliff’ that would include $1.6 trillion in tax increases, $400 billion in spending cuts and a more permanent increase in the debt ceiling, Republican aides said. … While the Obama administration described the offer as reducing the deficit by $4 trillion over 10 years, Republicans told The Hill its tax increases amount to $600 billion more than what the Democratic-led Senate passed earlier this year when it approved legislation that would allow tax rates on top earners to rise.”

Blowing The Roof Off The Debt Ceiling
The Wall Street Journal reports, “On Thursday, Treasury Secretary Timothy Geithner asked congressional leaders to give the White House permanent authority to unilaterally increase the government’s borrowing limit as part of a deficit-reduction deal, according to Republican aides. Such a move, if approved by Congress, would essentially upend legal constraints that have been in place since 1917. … Mr. Geithner is President Barack Obama’s lead negotiator in the current ‘fiscal cliff’ talks with Congress, and so the request could have taken on special importance with him. Loosely described, the plan would give the White House the power to raise the debt ceiling but Congress would retain the authority to block any increase through a vote.”

Krauthammer: Where are the spending cuts?
Charles Krauthammer editorializes in The Washington Post, “Why are Republicans playing the Democrats’ game that the ‘fiscal cliff’ is all about taxation? House Speaker John Boehner already made the preemptive concession of agreeing to raise revenue. But the insistence on doing so by eliminating deductions without raising marginal rates is now the subject of fierce Republican infighting. Where is the other part of President Obama’s vaunted ‘balanced approach’? Where are the spending cuts, both discretionary and entitlement: Medicare, Medicaid and now Obamacare (the health-care trio) and Social Security?”

Boehner to Obama on Cliff Talks: ‘Get Serious’
Bloomberg reports, “House Speaker John Boehner said President Barack Obama must ‘get serious’ about the fiscal cliff while the speaker remains ‘hopeful’ about talks to avert more than $600 billion in spending cuts and tax increases. Following a meeting today with Treasury Secretary Timothy Geithner and a telephone conversation with Obama last night, Boehner told reporters in Washington there has been no substantial progress in the discussions in the past few weeks. ‘This is a moment for adult leadership,’ he said. ‘Despite the claims that the president supports a balanced approach, the Democrats have yet to get serious about real spending cuts,’ said Boehner, an Ohio Republican. Without ‘serious’ discussion of spending cuts, ‘there is a real danger of going off the fiscal cliff,’ he said.”

“A much-needed Medicaid reform”
The Washington Post editorializes, “Medicaid has grown dramatically since its inception in 1965. It now accounts for 8.5 percent of all federal spending, and just under a quarter of all state spending. Between 1970 and 2010, the program quintupled from half a percent of gross domestic product to 2.7 percent. Federal forecasters expect Medicaid to reach 3.7 percent of GDP by 2020 — due in large part to increased enrollment under health-care reform. Any serious plan to reduce the federal debt has to deal with spending, and, given the foregoing numbers, any serious plan to deal with spending has to address Medicaid.”

Dems Confident That GOP Caves on Taxes
Politico reports, “Democrats are increasingly confident that rank-and-file Republicans will cave on taxes and force House GOP leaders to pass a tax cut plan for families who earn less than $250,000. It’s a risky gambit with about a month before the country hits the fiscal cliff of tax increases and spending cuts. But Democrats, feeling like they have serious leverage, believe the only path for a deal is to pass a middle-class tax cut package to pave the way for larger fiscal negotiations in 2013 over taxes and spending. Top Republicans in both chambers say that’s all wishful thinking, and the gap between the parties was laid bare Thursday. Republican leaders scoffed at an Obama administration proposal that they characterized as $1.6 trillion in tax hikes, $400 billion in cuts to entitlement programs, a permanent clean debt ceiling hike and $50 billion in infrastructure spending, calling it a major step back in the high-stakes talks. There was laughter in the room when it was presented to Senate Minority Leader Mitch McConnell, according to a McConnell aide.”

“CBO: Treasury Able to Fund Government Only to Early March”
The Wall Street Journal reports, “The U.S. Treasury will likely be able to continue funding government activities only as late as early March before requiring an increase in the federal debt limit, the nonpartisan Congressional Budget Office said Thursday. … The Treasury Department in late October said it expects to hit the $16.39 trillion cap by the end of this year, though emergency measures would allow it to keep borrowing into the first quarter of 2013. The CBO Thursday narrowed that window, saying in a report that it expects the Treasury will be able to continue funding government activities without an increase in the debt limit until mid-February or early March.”

Audit Uncovers Billions Paid In Unverified Medicare Spending
The Washington Post reports, “Medicare has paid doctors and hospitals billions of dollars to switch from paper to electronic health records without verifying that the new systems meet required quality standards, according to a federal audit released Thursday. The funds, which total $4 billion, have been distributed since 2011 under an incentive program aimed at encouraging various types of medical providers to computerize their record-keeping systems. Thereport by the inspector general of the Department of Health and Human Services identified a range of ways that the program is vulnerable to fraud, and recommended that the Obama administration introduce stronger safeguards. The program was adopted by Congress as part of the 2009 economic stimulus package, and is expected to distribute a total of $6.6 billion before it expires in 2016. Doctors can get grants of up to $44,000; hospitals can receive about $2 million.”

Chamber of Commerce Competes For Seat in Negotiations
The New York Times, “After months of sparring with President Obama in the heat of the campaign season, Chamber of Commerce executives came to the White House this week with a far more conciliatory tone, offering up suggestions to avert large budget cuts without having to raise taxes. … For the United States Chamber of Commerce, long the leading business voice in Washington, this month’s negotiations over the nation’s debt will be a key test of whether it can retain its influence and swagger in the capital even after a string of bruising political losses. Many business leaders are looking to the chamber as a bulwark against the White House’s push for higher taxes, but it is unclear if the century-old association has the clout it once did. Other business groups seen as more open to tax increases have become players in the negotiations,exposing rifts in the private sector.”

“Cliff Talks Send Parties Back to Old Corners”
Roll Call reports, “Talks over how to avert deep spending cuts and large tax increases took a bad turn Thursday, as both sides complained about a lack of trust and Republicans said the White House’s negotiating stance is jeopardizing any good will that may exist between the parties. Republicans said they were uncertain how to move forward after receiving a proposal from White House emissaries that GOP aides likened to a rehashing of President Barack Obama’s budget proposal. And they appeared stunned that the White House would not only ask for another stimulus measure but also request an end to Congress’ role in raising the debt ceiling. The disconnect between the parties was obvious, with Speaker John A. Boehner, R-Ohio, saying ‘no substantive progress’ had been made and Senate Majority Leader Harry Reid, D-Nev., saying at one point, ‘I don’t understand his brain,’ referring to the speaker.”

Eurozone Unemployment Worsens Yet Again
The Associated Press reports, “Another month, another record unemployment rate for the economy of the 17 European Union countries that use the euro. Figures released Friday by Eurostat, the EU’s statistics office, showed that the recession in the eurozone pushed unemployment in the currency bloc up to 11.7 percent in October, a new record since the introduction of the euro in 1999. While the eurozone’s unemployment has been inching upward since June 2011, the equivalent rate in the U.S. has fallen to below 8 percent as the world’s largest economy continues its recovery from recession. In October, it stood at 7.9 percent.”

BankruptingAmerica.org is an educational project of Public Notice, an independent, nonpartisan, non-profit, 501(c)(4) organization dedicated to providing facts and insight on the effects public policy has on Americans’ financial well-being.

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