Bankrupting America’s Spending Daily

| February 7 2013

Spending Daily | February 7, 2013

Sen. Baucus Pushes Back Against White House “Quick Fix”
Sen. Max Baucus, D-Mont., on Wednesday discussed the sequester at a Democratic retreat, calling for a review of the tax code, reports The Hill. “‘When it comes to tax reform, we must avoid the urge for the quick fix,’Baucus said in a statement Tuesday after Obama called on Congress to pay for the cuts with an even balance of tax increases and spending cuts. ‘We owe it to the American people to do a comprehensive review of the code to ensure it works for today’s economy and is flexible enough to adapt to the changing world.’ The White House has focused on tax reform primarily as a vehicle for raising revenues to pay down the deficit. Baucus has pushed back somewhat in an attempt to broaden that perception. ‘Tax reform is about more than revenues.  It is about simplifying people’s lives, encouraging businesses to invest and grow, and boosting innovation and education,’ he said.

“Uncle Sam gets an F in money management”
David Walker editorializes in The Washington Times, “Twelve years ago today, when I was comptroller general of the United States and head of the Government Accountability Office, I presented testimony to the Senate Finance Committee, ‘Moving From Balancing the Budget to Balancing Fiscal Risk.’ Unfortunately, the concerns I expressed on behalf of the Government Accountability Office went largely unheeded. We are now paying a huge price for the shortsightedness and imprudent actions of elected officials of both major parties. … Since 2000, we have been experiencing a recurring case of Democratic big-spending policies and Republican low-tax policies, combined with additional spending for a range of contingencies. The result has been huge deficits, rapidly mounting debt, and a total liability and unfunded debt burden of $71.2 trillion, up from $20.6 trillion at the end of fiscal 2000, and growing by $8.2 million a minute. Considering all of these developments, what fiscal grade do the Congresses and the presidents of both parties who have held power since 2001 deserve? In my view, they deserve an F.”

“Spending Cut Shenanigans: Why Washington Will Fail America Again”
Ron Fournier editorializes in the National Journal, “If ‘Sequester’ was a board game and not an existential crisis for the federal government, President Obama could claim credit for making a savvy move Tuesday. But it’s not a game. And, once again, both Democrats and Republicans are playing chicken with the nation’s future rather than leading. Here’s your scoring update. Obama urged Congress on Tuesday to quickly pass a new package of limited spending cuts and tax increases to avert across-the-board reductions to military and domestic spending set to begin on March 1. … White House advisers will tell you that the president is fighting hard politically because it’s the only way to force bull-headed Republicans to the negotiating table. Obama deserves credit for pursuing both tax hikes and cuts in entitlements beloved by his liberal base. His gamesmanship might prevail. But to most Americans, the sequestration fight is simply and sadly an extension of what the president on Tuesday aptly called Washington’s ‘political dysfunction.’”

No “atmosphere of doom or worry” Over Impact of Sequester
Reuters reports, “U.S. defense officials and their allies in Congress did their best on Wednesday to create a sense of crisis about steep impending budget cuts, but their warnings failed to produce any visible result. Instead, partisan divisions hardened over how to avoid the automatic spending reductions set for March 1, with Democrats and Republicans offering solutions that appeared irreconcilable and trading accusations designed to shift the blame across the aisle. … The positions are much the same as they were during the New Year’s ‘fiscal cliff’ drama: Republicans want to pay for a short-term delay with other spending cuts, while Democrats want the wealthy to pay more in taxes to help cover the gap. Missing is the atmosphere of doom or worry about a market reaction that pervaded the fiscal cliff controversy.”

U.S. Productivity Plummeted to Close in 2012
The Associated Press reports, “U.S. worker productivity shrank in the final three months of 2012 although the decline was caused by temporary factors. Productivity contracted at an annual rate of 2 percent in the October-December quarter, the biggest drop since the first quarter of 2011, the Labor Department reported Thursday. Productivity had risen at a 3.2 percent rate in the July-September quarter. Labor costs rose at a 4.5 percent rate in the fourth quarter, the fastest gain since the first quarter of 2012.”

“The Unscary Sequester”
The Wall Street Journal reports, “Washington is in a fit of collective terror over the ’sequester,’ aka the impending across-the-board spending cuts. Trying to explain the zero economic growth at the end of 2012, White House spokesman Jay Carney blamed Republicans for ‘talk about letting the sequester kick in as though that were an acceptable thing.’ He left out that President Obama proposed the sequester in 2011.Then on Tuesday Mr. Obama warned about “the threat of massive automatic cuts that have already started to affect business decisions.” He proposed tax increases and “smaller” spending cuts to replace the sequester until Congress and he can agree to another not-so-grand-bargain. It’s nice to see Mr. Obama worry about ’business decisions’ for a change, but listening to his cries of ‘massive’ cuts is like watching ‘Scary Movie’ for the 10th time. You know it’s a joke. … More troublesome are the cuts in defense, but for security not economic reasons. The sequester cuts the Pentagon budget by 7%. This fits Mr. Obama’s evident plan to raid the military to pay for social programs like ObamaCare.”

Delay On Sequester Won’t Do Much Good for DOD
POLITICO reports, “President Barack Obama’s new proposal to delay sequestration by a few months would offer the Pentagon some temporary relief in March, but it’s far from a silver bullet. … Delaying sequestration again would buy Carter some time before he would need to drastically scale back training and flying hours. But another delay does not come without costs. For example, it would very likely require the Pentagon to partially pay for the delay, as it did when Congress moved the deadline from Jan. 2 to March 1. It would also raise the stakes for the end of the fiscal year, giving the Pentagon and other federal agencies even less time to come up with the savings. But most important, it wouldn’t solve the Defense Department’s other big spending problem: It still has no budget for this fiscal year.”

Are the Days of Trusting Government Over?
The Washington Post reports, “It’s no secret that the American public views its elected officials with some combination of disgust, disappointment and distrust. Congress’s approval rating is in used-car-salesman territory, and with every legislative crisis it dips, somewhat amazingly, lower.” A Pew Chart notes attitudes towards government from “1958 to the present day. It documents the percentage of people who said they trust the government in Washington either ‘just about always’ or ‘most of the time.’ … There have been a fair share of legislative standoffs and scandals in recent years, but nothing nearly as heavily covered or broad as Watergate or the House bank. Instead, it appears to be a political death — or at least bloodletting — by a thousand cuts. No one event is to blame. Rather, something even more corrosive to government appears to be happening — a steady and growing belief that politicians in Washington are simply not to be trusted. … The depressing reality of Pew’s long-term trend on trust in government is that there is no obvious cure for what ails the body politic these days. Without a clear cause, a sure solution isn’t available.”

“Republicans Revive Alternative to Defense Budget Cuts”
Bloomberg reports, “Republican members of the House and Senate Armed Services committees revived a proposal to avert automatic spending cuts by reducing the federal workforce through attrition and freezing congressional salaries. The legislation would save $85 billion through Sept. 30, the same amount as the across-the-board cuts that would be divided between defense and domestic programs, said Senator Kelly Ayotte of New Hampshire. She was among lawmakers presenting the plan at a news conference today in Washington. Similar Republican proposals to halt federal hiring didn’t advance in Congress last year.”

“Teen Jeopardy! Contestant Wants to Be President to Bring Back ‘Competence and Accountability’”
NewsBusters reports, “A Teen Jeopardy! contestant had some harsh words for unnamed recent presidents Wednesday. Responding to host Alex Trebek’s question about what he’d ‘bring to the presidency that we haven’t had say in the last few decades,’ Lexington, Kentucky, high school senior Barrett Block said, ‘A sense of competence and accountability.’” Watch the clip here.

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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