Bankrupting America’s Spending Daily

| April 4 2013

Spending Daily | April 4, 2013

Stimulus-Funded Condom Study Creates Zero Jobs

The Weekly Standard reports, “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.'”

“Misperceptions of Benefits Make Trimming Harder”

The New York Times reports, “President Obama had Senate Republicans nodding in agreement during a recent ice-breaking dinner as he described a basic problem for the nation’s fiscal future: For each dollar that Americans pay for Medicare, they ultimately draw about $3 in benefits. What’s more, he added, most people do not understand that. By his point that evening, the president was referring to the widespread and incorrect view, especially among older Americans, that Medicare recipients get only what they have paid for through taxes, premiums and medical co-payments. Now that misperception is making it all the harder for politicians to consider trimming those benefits or raising out-of-pocket expenses as they seek to restrain Medicare spending that is rising unsustainably while baby boomers age and medical prices increase.”

Obama Gives Up 5 Percent of Salary

The Associated Press reports, “Sharing a bit of budget pain, President Barack Obama will return 5 percent of his salary to the Treasury in a show of solidarity with federal workers smarting from government-wide spending cuts. Obama’s decision grew out of a desire to share in the sacrifice that government employees are making, a White House official said Wednesday. Hundreds of thousands of workers could be forced to take unpaid leave – known as furloughs – if Congress does not reach an agreement soon to undo the cuts. … A 5 percent cut from the president’s salary of $400,000 per year amounts to $20,000.”  The Washington Post notes the move is “sheerly symbolic and an overt act of political theater.”

Sequestration Hurting Your Budget? It Didn’t Stop a 13-Day Overseas Congressional Trip”

The National Journal reports, “Roughly 16 Senate Finance Committee staffers are wrapping up a whirlwind 13-day trip to Vietnam, Australia, and New Zealand, even as federal agencies have been forced by sequestration to limit employee travel and participation in out-of-town conferences. The trip by Republican and Democratic committee staffers, set to end Wednesday, was described by a Senate aide as important to preparations for the upcoming debate on the Trans-Pacific Partnership, a free-trade agreement being negotiated among the United States and 10 other countries. Pete Sepp, executive vice president of the National Taxpayers Union, said it is impossible to know from the outside the importance of the trip. It might make some sense for staffers to be going instead of lawmakers, he said, if they are more instrumental in drawing up agreements. ‘But every time one of these trips comes to light, questions are going to be asked,’ Sepp said.”

Hagel: More Defense Cuts Likely

According to U.S. News and World Report, “Defense Secretary Chuck Hagel put the Pentagon and Congress on notice Wednesday that he is considering fundamental changes to the size of the military’s management and command structures, requiring sweeping and dramatic spending cuts that are likely to hit programs favored by lawmakers. Hagel said in a speech to the National Defense University at Fort McNair that escalating spending to maintain benefits, existing military structures and replacements for aging weapons programs are devouring funding needed for critical operations, training and equipment. The Pentagon, he said, must reevaluate the size of its management and military command structures, which continue to grow even as the overall force numbers decline.”

A Failure to Govern?

Joe Klein writes in TIME Magazine, “Let me try to understand this: The key incentive for small businesses to support Obamacare was that they would be able to shop for the best deals in health care super-stores—called exchanges. The Administration has had 3 years to set up these exchanges. It has failed to do so. This is a really bad sign. There will be those who argue that it’s not the Administration’s fault. It’s the fault of the 33 states that have refused to set up their own exchanges. Nonsense. … [W]e are now seeing weekly examples of this Administration’s inability to govern. Just a few weeks ago, I reported on the failure of the Department of Defense and the Veterans Administration to come up with a unified electronic health care records system. There has also been the studied inattention to the myriad of ineffective job training programs scattered through the bureaucracy. There have been the oblique and belated efforts to reform Head Start, a $7 billion program that a study conducted by its own bureaucracy—the Department of Health and Human Services—has found nearly worthless. The list is endless.”

Small Businesses Could Be “Pissed Off” by New Healthcare Exchanges

CNNMoney reports, “Small businesses were no great fans of Obamacare — but at least they liked the promise of the health exchanges. Now, some of the benefits might not appear for at least a year. By 2014, two kinds of health exchanges are scheduled to be up and running: One for individuals and one for small businesses. Under the Small Business Health Options Program, business owners would choose a level of coverage, and their workers could pick among competing plans that qualify. Under a new proposal from federal regulators, each business owner would still have their pick of insurance from several providers. But businesses would be limited to choosing a single plan to cover all their employees. An expansion of more options would not come until at least 2015. It would limit employers who currently offer several plan options to their employees. That makes up about half of all small businesses, according to health insurance broker Jesse Smedley. ‘People who are used to having a choice and offering multiple plans are going to be pissed off,’ said Smedley, who owns iHealthBrokers.”

Washington Buying In to Medicare Buy-In?

POLITICO reports, “To get to a budget deal, could Washington buy in to a Medicare buy-in? That’s the question left hanging by a recent Urban Institute paper which maps out one path to bridge the partisan divide over Republican demands that the eligibility age for Medicare be adjusted upward from 65 to 67 so as to conform with Social Security. The GOP would get the higher age it wants. But in turn, it must agree to allow 65- and 66-year-olds — who would be left out in the cold — to buy in to Medicare until they are 67. ‘We begin with the understanding that life expectancy has increased since Medicare was established in 1965, and it’s reasonable to raise the eligibility age, just as we have with Social Security,’ says Dr. Robert Berenson, one of the authors. ‘But it’s not reasonable to leave people unprotected in the private market. So we think it’s best to allow them to buy in to the best deal, Medicare. And that establishes continuity for them when they reach 67 and are eligible.’”

Unemployment Applications Jump to a Four Month High

The Associated Press reports, “The number of Americans seeking unemployment aid rose to a four-month high last week, although the increase partly reflects seasonal distortions around the spring holidays. Weekly applications increased 28,000 to a seasonally adjusted 385,000, the Labor Department said Thursday. It was the third straight weekly increase and the highest level since late November. The four-week average, a less volatile measure, rose to 354,250. A Labor Department spokesman says it can be difficult to seasonally adjust the figures during the Easter holiday because the timing of the holiday varies from year to year. Economists warned before the report that the data could be volatile.”

Job Market Still a Question Mark

The Wall Street Journal reports, “As the U.S. economy picks up steam, the job market remains a question mark. A string of strong data points in recent days, especially from the housing and consumer sectors, have led economists to boost their growth estimates in the first three months of the year. Most now think output in the world’s largest economy expanded at a rate of about 3.5% to start the year, which would mark the fastest pace of growth since the end of 2011 and would represent a sharp turnaround from the near stall at the end of 2012. But it isn’t clear that rebound is translating into faster job growth. The payroll-processing firm ADP on Wednesday estimated the private sector added 158,000 jobs in March, a marked slowdown from the Labor Department’s official February tally of 246,000 jobs. Perhaps more worrisome, a mediocre jobs report on Friday would mean that despite relatively strong growth in February, the economy is adding jobs more slowly to start 2013 than it did early in 2012, when payrolls grew by an average of 262,000 jobs over the first three months of the year.” 

Nearly $700 Million in Katrina Relief Aid Unaccounted For

The Associated Press reports, “Federal investigators said Wednesday that as much as $700 million in federal aid intended to help some 24,000 Louisiana families elevate their homes after Hurricanes Katrina and Rita in 2005 may have been misspent. A report by the Housing and Urban Development Department’s inspector general said some homeowners who got grants of up to $30,000 used the money for something else, and that others didn’t provide sufficient documents to state officials to show that the work was done. ‘The state did not have conclusive evidence’ that $698.5 million in disaster recovery aid was used to elevate homes, the auditors wrote.” 

Fed Could Cut Back Bond Buying This Summer

Reuters reports, “The U.S. Federal Reserve could begin to cut back on its massive bond-buying program this summer if the economy continues to pick up steam, a top Fed official said on Wednesday, a sign of growing optimism within the Fed that its unprecedented policies are working. The Fed is buying $85 billion in Treasuries and mortgage-backed securities each month to push down long-term interest rates and encourage hiring, and has vowed to continue the program until there is substantial improvement in the labor market outlook. … [San Francisco Federal Reserve Bank President John] Williams repeated his earlier view that asset purchases will probably be needed well into the second half of the year, but also warned against over-stimulating the economy, and emphasized the need to “lighten up on the accelerator a bit” as headwinds to recovery wane. ‘Eventually, if we find ourselves picking up too much speed, we may need to apply the brakes,’ he said.”

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