Bankrupting America’s Spending Daily

| January 25 2013

Spending Daily | January 25, 2013

Sequestration Looking More Likely
The Wall Street Journal reports, “Congressional leaders sound increasingly resigned to the possibility that across-the-board government spending cuts could start taking effect on March 1, as scheduled, and continue for at least a few weeks. There is no publicly known congressional action under way to try to defer, replace or avoid the budget cuts, totaling $1.2 trillion over 10 years, with half affecting military spending and half affecting other domestic programs. The two parties are deeply divided on possible alternatives: Democrats want a combination of revenue increases and other spending cuts, while some Republicans call for canceling the defense cuts and increasing the reductions to other operations.”

“Fiscal fights: Who will blink first?”
POLITICO reports, “Congress’s next battle will be to keep the government open after March 27 while simultaneously stopping  massive spending cuts to the Pentagon and other government programs that take hold March 1. And that fight shows how steep the hill is to climb. The GOP wants to replace automatic spending cuts with changes to mandatory programs like Social Security, Medicare and Medicaid without any additional tax increases. Obama and Democrats, meanwhile, are pushing for additional revenue — which the GOP refuses to countenance after the fiscal cliff deal — and are serious about protecting entitlement programs. But there’s almost no way for both sides to get what they want — setting the nation on a course to a possible government shutdown or deep cuts to government programs that no one wants, unless someone blinks.”

Gallup Poll: Businesses Not Hiring from Fear of Healthcare Costs, Taxes
Gallup reports,  “More than half of U.S. small-business owners say healthcare costs (54%) and taxes on small businesses (53%) are hurting their operating environment ‘a lot,’ making these the top two concerns among eight issues tested in a January Wells Fargo/Gallup Small Business survey. They are followed by the price of energy, government regulations, and the federal debt ceiling. In a separate question, owners who say they are not hiring were asked to rate eight reasons why they are not doing so. Sixty-one percent of these owners point to worries about the potential cost of healthcare as the reason they are not hiring, making it fourth on the list. The top three reasons they gave are that they do not need additional help (81%); they are worried about revenues and sales (74%); and they are worried about the overall U.S. economy (66%).”

Report: Medicare Paid $120 Million to Ineligible Recipients
Politico reports, “Illegal immigrants and prison inmates received more than $120 million in Medicare services from 2009-2011 despite federal law that makes them ineligible for the program, according to two new reports from the HHS inspector general. The issue, according to the reports, is timing. When Medicare is alerted that someone is incarcerated or undocumented, its contractors help prevent payments from going out the door. But often, Medicare’s databases aren’t up to date, and improper payments go out. And Medicare lacks the tools to get the money back. Nearly 3,000 illegal immigrants made thousands of claims resulting in $91.6 million in services improperly covered by Medicare during the three-year period studied in the report. Over the same period, more than 135,000 Medicare beneficiaries were incarcerated, a second reportshows. The report says that 11,600 inmates submitted more than 75,000 claims and received services worth $33.6 million.”

DOJ Investigating U.S. Foreign Aid Bid Rigging
The Associated Press reports, “ The Justice Department is conducting an investigation into possible contract rigging by the general counsel at the government agency that distributes foreign aid, documents obtained by The Associated Press show. Memos from the inspector general of the U.S. Agency for International Development also reveal that there was evidence that Deputy Administrator Donald Steinberg tried to interfere with an internal investigation. The inspector general’s office told a House committee on Wednesday that the Justice Department investigation was ‘ongoing.’ An attorney for the USAID general counsel, Lisa Gomer, said Thursday night that he was told the Justice Department decided not to initiate a criminal investigation. Hedeclined to say who in the department informed him there was no probe.”

U.S. Economy Growth in 2013 “Dogged By Fiscal Policy Battles”
Reuters reports, “The U.S. economy will grow modestly this year, dogged by fiscal policy battles in the first half yet supported by an improving housing market, a Reuters poll showed on Wednesday. Most economists polled over the last week expect the Federal Reserve’s ultra-loose monetary policy, including the latest open-ended bond-buying program, to remain in place well into next year despite the general improvement. U.S. lawmakers managed to avoid automatic sweeping tax hikes and spending cuts at the start of the year – the fiscal cliff – whichwere hanging over the outlook last month. … Most agree that major business spending and hiring decisions are on ice until the big budget fights are over. That means that the economy will remain in low gear. ‘There’s not a lot of incentive to get ahead of these decisions, so business leaders are pretty much keeping things close to the vest,’ said Sam Bullard, senior economist at Wells Fargo in Charlotte, North Carolina.”

Geithner: “We’re Past The Seventh Inning Stretch”
According to POLITICO’s Playbook, discussing the state of the economic recovery, outgoing Treasury Secretary Timothy Geithner said, “The President makes fun of me of like always saying we’re only in the second inning. But in terms of the American economic recovery, … we’re past the seventh-inning stretch.”  Earlier this month Geithner described the economy as being in the “fourth quarter” of recovery.

Prolonging Debt Ceiling Debate Won’t End Threat to Economy
Nancy Cook writes in the National Journal, “Washington breathed a sigh of relief this week when the House passed a bill to temporarily suspend the debt ceiling through May 18—pushing off a massive fiscal fight for yet another day. To the Democrats, it seemed that House Republicans had finally realized that brinkmanship over the economy was bad for their brand. Politically, the delay bought the Republicans more time to develop astrategy to enact the deeper spending cuts they so desire. But no one should break out the bubbly or plan any summer vacations just yet. Pushing off thedebt-ceiling battle until mid-May still poses major risks for the economy and may even heighten the severity of the economic impact. Prolonging the debate and putting it at the end of the spring’s fiscal-fight queue, after the sequester and the question of funding the government, only keeps investors and markets nervous for a longer period of time.”

Some Senators Nervous About “No Budget, No Pay”
The Hill reports, “The Senate is often called the ‘millionaires’ club,’ but some of its members would feel the pain if a blown budget deadline costs them their paychecks. Provisions in the ‘No Budget, No Pay’ debt ceiling bill that is headed to the Senate floor would impound senators’ salaries if the upper chamber doesn’t approve a budget by April 15. For most of the upper chamber, the loss of the $174,000 annual salary would be no hardship. Many senators are millionaires many times over, having earned substantial fortunes outside of politics. But for a small group of senators whose net worth is measured in thousands instead of millions, the passage of ‘No Budget, No Pay’ would put their very livelihoods at risk.”

Why NASCAR Is a Barometer for the Economy
Dr. Justin Isaacs writes in Speedway Media, “For the better part of the 1990s, and into the early 2000s, NASCAR was the fastest-growing sport in North America. In 2005, NASCAR attendance and TV viewership were at record highs, and through 2007 it maintained a level success organizers only dreamed of a decade earlier—success that many local economies had come to depend on. All this changed, however, in late 2007. As Americans watched the employees of Lehman Brothers leaving New York offices laden with boxes and the nightly news continually reported on another set of layoffs, NASCAR fans and the businesses they support started to see empty seats.” Click here to read more.

Economist: Euro Crisis Far from Over
The Associated Press reports, “Is the euro crisis over? A leading U.S. economist says not by a long shot. Even as the head of the European Central Bank talked Friday of ‘positive contagion’ in the markets and predicted an economic recovery for the recession-hit eurozone later this year, economist Barry Eichengreen warned that the debt crisis that has shaken Europe to its core could easily erupt again this year unless European leaders move faster to solve their problems. … ‘Nothing has been resolved in the eurozone, where markets have swung from undue pessimism to undue optimism,’ Eichengreen told The Associated Press in an interview at the World Economic Forum in Davos, Switzerland. ‘They said all the right things last year … and they’ve been backtracking ever since.’ He warns that the crisis over too much debt burdening governments and banks in the 17-country currency group ‘is going to heat up again in 2013.'”

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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