Bankrupting America’s Spending Daily

| March 21 2013

Spending Daily | March 21, 2013

Bill to Avert Government Shutdown Gives More Flexibility in Sequester Cuts
Reuters, “The Senate on Wednesday approved legislation to avert a government shutdown next week, freeing Democrats and Republicans to spend the next few months arguing over deeply divided strategies to shrink longer-term budget deficits. The bill, which would keep government agencies and programs funded through the end of the fiscal year on September 30, must go back to the House of Representative for final approval on Thursday. House Appropriations Committee Chairman HalRogers said he was pleased with the bill and believes it can pass the Republican-controlled House. ‘It’s a great success,’ Rogers told reporters. He called the effort a ‘healthy start’ toward returning to a normal, bipartisan budgeting process. The measure, approved by a 73-26 vote, keeps in place $85 billion in automatic spending cuts, but it offers the military and some domestic agencies more flexibility to shift funds within these reduced budgets to higher-priority programs. … Without new government spending legislation enacted by March 27, federal agencies and discretionary programs ranging from the Department of Transportation to national parks would have faced a shutdown.”

“Paul Light: The Sequester Is an Overhaul Opportunity”
Paul Light editorializes in The Wall Street Journal, “With the advent of the trillion-dollar budget sequester two weeks ago, many Americans assumed that the government’s motley collection of furloughs, freezes and poorly planned cuts would result in even worse performance by the federal bureaucracy than they’ve come to expect. Congress and the president can make all the grand promises they wish, but Americans have almost no confidence that the bureaucracy will deliver their money’s worth.Yet the sequester has given Congress and President Obama a once-in-a-generationopportunity to close this ‘implementation gap’ and rebuild trust in government. They can do so by setting targets for the most aggressive bureaucratic overhaul since former President Herbert Hoover took the helm of a blue-ribbon commission in 1947 that streamlined or consolidated dozens of agencies and cut layers of fat between the top and bottom of the federal government. … Federal employees know that the system needs an overhaul. According to the government’s own 2012 survey of almost 700,000 employees, barely a third believe that promotions are based on merit. Fewer said steps are taken to deal with poor performers. Just one-fifth said pay raises are linked to performance. … Saving money through an amended sequester should not be an excuse for continuing wasteful domestic or military programs, discretionary or mandatory. Rather, saving money should be viewed as the product of continuous bureaucratic improvement.”

The War Over ‘Balanced’”
POLITICO reports, “Washington’s budget writers are waging war over a single word: ‘balanced.’ House Budget Committee Chairman Paul Ryan (R-Wis.) calls his new fiscal blueprint a ‘balanced plan.’ Senate Budget Committee Chairwoman Patty Murray (D-Wash.) said Wednesday that her version is a ‘truly balanced approach.’ Republicans are touting internal polling that suggests Ryan’s balanced budget will play well in competitive districts. But Democrats are confident that their approach will prove more popular because it was road-tested by President Barack Obama when he won re-election last fall. It’s hardly a new fight, but action on the House and Senate budgets this week has raised the stakes over whose version of balance is the right course for thenation. … Republicans are playing catch-up with Obama, who framed his ‘balanced approach’ formulation during the 2011 debt-limit debate and rode it straight through the election last fall. And they recognize that — as Obama would say — words matter.”

House GOP Looks to Pass Ryan Budget Blueprint
The Hill reports, “Republican leaders are poised to pass Rep. Paul Ryan’s (R-Wis.) budget on Thursday, having convinced centrists and conservatives to back the blueprint that Democrats believe is their road map back to the House majority.  As of late Wednesday, only three Republicans had publicly said they intend to vote against the Ryan plan, while 33 House GOP lawmakers were undecided or declined to comment, according to a whip count conducted by The Hill. Among the undecided lawmakers, several noted they would probably support the measure. … Ryan had floated changing some Medicare provisions in his new budget, but backtracked when centrists balked. … Despite conservative support for Ryan’s budget plan, some lawmakers worried that their leadership won’t offer the follow-up legislation to make good on the ideas put forth in the blueprint. A group of fiscal hard-liners is eyeing the next battle over raising the debt ceiling as an opportunity to enact reforms to entitlement programs that would begin the path to balance laid out in Ryan’s plan.”

Chen: Republicans Should Focus on Deficit-Reducing Changes to ACA
Lanhee Chen, former policy director for the Romney campaign and senior official at the Department of Health and Human Services under the Bush administration writes in Bloomberg, “Calculations based on a recent report by the nonpartisan Government Accountability Office show that the Affordable Care Act could add $6.2 trillion to U.S. deficits over the next 75 years. … And the GAO report is hardly an outlier: It notes that other nonpartisan sources, including the Congressional Budget Office, have questioned the assumption that the Affordable Care Act’s cost-containment mechanisms are sustainable. All this is cause for concern and a reason to overturn the law. But let’s be realistic: Full repeal isn’t happening as long as Democrats control the White House and Senate. So Republicans should focus instead on deficit-reducing changes that Obama and congressional Democrats might actually consider.”

“About That ‘Scalpel’”
The Wall Street Journal editorializes, “President Obama often claims he wants to cut the budget smartly, using a ‘scalpel’—not a meat axe, machete, cleaver or chainsaw, to list a few of his favorite metaphors. He’ll need a more inspired term to describe what he’s now doing to Medicare Advantage, perhaps napalm or WMD. The Affordable Care Act drained $306 billion from this growing version of Medicare that 29% of seniors use to escape the traditional entitlement and obtain modern private insurance, but the Administration is imposing the cuts in ways that are even more harmful than the law requires. The post-election timing is no accident. In 2012 only 4% of the Medicare Advantage cuts were scheduled under the law, but the folks who run Medicare at the Health and Human Services Department improvised a $3.8 billion nationwide ‘demonstration project’ that paid bonus subsidies to Medicare Advantage insurers to improve quality. The project couldn’t demonstrate anything because the payments went to 90% of insurers regardless of quality, but they did cancel out most of the 2012 cuts. That did the trick for voters in Scottsdale or Boca Raton who might have noticed higher costs or lost the coverage they have and prefer. Federal auditors suggested the project was illegal, but in any case it is now winding down and HHS is making up for lost time.”

Senate Passes Spending Measure But Partisan Divide Continues
The New York Times reports, “The Senate passed a spending measure on Wednesday to keep the government financed through the end of September, resolving one contentious budget fight as Congress moved quickly to the next. While the Senate dealt with the most immediate financial concerns, the House of Representatives engaged in an animated debate over the budget for the 2014 fiscal year that begins when the spending measure expires Sept. 30. … It was a day when members took to the microphones on the floor to make excessively partisan sound bites that seemed scripted for campaign commercials. Each side staged its own moments of political theater, forcing and casting votes designed to embarrass the other.”

Euro-Zone in Crisis Again After Cyprus Debacle
The Washington Post editorializes, “Could a full-blown European financial crisis begin in tiny Cyprus, with a population of just more than 1 million and a gross domestic product of only $23.6 billion? The idea is only slightly stranger than the notion that this Mediterranean offshore-banking center, partially occupied by Turkey since 1974, belonged in a currency union with Germany in the first place. But Europe’s leaders, in their wisdom, let Cyprus join the euro zone in 2008, and now the future of a continent hinges on bailing out the island and its insolvent banks. European policymakers, led by Chancellor Angela Merkel’s German government, have made a hash of things so far. Cyprus needs to recapitalize its financial system, which is badly damaged by exposure to the sovereign debt of neighboring Greece. The International Monetary Fund (IMF) and E.U. governments agreed to lend $13 billion of the necessary funds, in return for the usual austerity and a contribution of $7.5 billion from the Cypriot government. … For the Cypriot government, however, taxing fat cats risked alienating Russian Prime Minister Vladi­mir Putin, whose government Cyprus already owes $3.3 billion for a previous bailout.”

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