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Bankrupting America’s Spending Daily

Posted: April 5, 2013 at 5:00 pm   /   by

Spending Daily | April 5, 2013

U.S. Economy Gained 88,000 Jobs in March, Smallest Gain in 10 Months

MarketWatch reports, “The economy generated just 88,000 jobs in March – the smallest gain in 10 months – and more people dropped out of the labor force, adding to a fresh pile of evidence that the pace of hiring in the United States has slowed. The unemployment rate fell a tick to 7.6% from 7.7%, the lowest rate since December 2007, but the decline stemmed from fewer Americans looking for work, according to Labor Department data. The jobs report fell well short of Wall Street forecasts. Economists polled by MarketWatch expected the number of new jobs to increase by 190,000 last month and for the unemployment rate to remain unchanged at 7.7%.”

“Self-Sacrifice Is All the Rage as Federal Furloughs Loom”

According to The New York Times, “The rush started on Tuesday when the flush new defense secretary, Chuck Hagel, announced that he would give back a share of his salary for each day that Pentagon employees are furloughed. On Wednesday, President Obama jumped in with his own show of solidarity by pledging to return to the Treasury 5 percent of his $400,000 salary. By Thursday, the Obama administration’s stampede to embrace the politics of self-sacrifice was on. Cabinet secretaries practically tripped over themselves to hand over parts of their paycheck as federal workers brace for furloughs because of the across-the-board budget cuts known as the sequester. Secretary of State John Kerry said he would give 5 percent of his $200,000 government salary to charity, and the Justice Department said that if its workers are furloughed, Attorney General Eric H. Holder Jr. would give up his pay for however many days his workers go without a paycheck. Of course, they can well afford it. Mr. Kerry has an estimated net worth exceeding $200 million and Mr. Hagel, Mr. Holder and Mr. Obama are all millionaires.”

“Less Gestures, More Action” 

News broke yesterday that President Obama will return 5 percent of his salary to the Treasury. The Washington Post called it “sheerly symbolic and an overt act of political theater.” The president is trying to show that he understands the plight of federal workers hit by the sequester, but it seems as though the symbolic gestures have taken the place of real action from the administration and members of congress. … While the president is giving back 5 percent of his salary to the Treasury, which equates to about $20,000 from the $400,000 he makes a year, he has yet to release his already late budget, which reportedly won’t be balanced. A balanced budget and a government that lives within its means would in the long run benefit Americans and the economy vastly more than $20,000 recycled back into the spending pot ever could.” Read More at Bankrupting

Obama to Cut Social Security, Other Entitlements in Exchange for Higher Taxes

Reuters reports, “President Barack Obama will offer cuts to Social Security and other entitlement programs in a budget proposal aimed at swaying Republicans to compromise on a deficit-reduction deal, a senior administration official said on Friday. Under a proposal that would cut the deficit by $1.8 trillion over 10 years, the president will offer to apply a less generous measure of inflation to calculate cost-of-living increases, the official said on condition of anonymity. That change would result in lower payments to some beneficiaries of the Social Security program for retirees and is staunchly opposed by many congressional Democrats as well as labor and retiree groups. Obama would agree to cuts to other so-called entitlement programs, the official said. However, the president will only accept these spending cuts if congressional Republicans, for their part, agree to higher taxes, the official added. “

“Obama’s Budget to Spare Medicaid from Deep Cuts”

According to The Associated Press, “President Barack Obama’s budget next week will steer clear of major cuts to Medicaid, including tens of billions in reductions to the health care plan for the poor that the administration had proposed only last year. Big cuts in the federal-state program wouldn’t go over too well at a time that Health and Human Services Secretary Kathleen Sebelius is wooing financially skittish Republican governors to expand Medicaid coverage to millions who now are uninsured. That expansion in the states is critical to the success of Obama’s health overhaul, which is rolling out this fall and early next year.”

“Obama Must Take The Lead On Medicare Reform”

 The Washington Post editorializes, “Reforming Medicare must be part of long-term deficit reduction. Alas, between House Budget Committee Chairman Paul Ryan’s (R-Wis.) plan to replace Medicare with a ‘premium support’ and President Obama’s refusal to countenance it, Washington is hopelessly deadlocked. Or maybe not. There are ways to generate meaningful savings that don’t involve either abolishing Medicare ‘as we know it’ or perpetuating the status quo. Among the best ideas is to revise Medicare’s illogical, fragmented structure, so as to present beneficiaries with a streamlined, transparent program thatboth protects them better and saves medical resources. … Combining Parts A and B and applying a single set of deductibles, co-insurance and co-pays — plus an overall cap on out-of-pocket expenditures — would render Medicare more intelligible to seniors while protecting those suffering from the most serious illnesses. It would also reduce the need for Medigap insurance. A 2011 Congressional Budget Office (CBO) report suggested that such a plan could save $32.2 billion over 10 years. Adding limitations on Medigap insurance would increase the savings to $93 billion over 10 years. Change would affect seniors in different ways, and the impact would be painful for some. But the sacrifices are modest, given the fiscal benefits to the nation as a whole. The CBO found that out-of-pocket costs for about half of Medicare beneficiaries would go up, while they would go down or stay the same for the other half.”

Obama’s Tax Break Cap Could Reduce Charitable Giving by More Than $9 Billion Annually

The Wall Street Journal reports, “The Obama administration appears likely to propose a 28% limit on tax breaks for the wealthy in its budget proposal next week, according to groups lobbying to avoid such a move. The 28% cap has been a feature of President Barack Obama’s tax proposals since he took office in 2009. But it has only recently started gaining support in Congress, as lawmakers look for ways to tackle the federal deficit. Groups that would be adversely affected by the move—including charities, home builders, pension-plan advisers and city and state leaders—are bracing for disappointment when the budget plan comes out. … Interest groups are warning of dire consequences if the change occurs. Some charities cite an estimate that a 28% cap could reduce charitable giving by more than $9 billion a year—a fraction of the $300 billion or so in annual giving in the U.S., but ‘think about how many nights in a homeless shelter, or assistance with utility bills or food in a food pantry’ could be covered, said Steve Taylor, senior vice president for United Way Worldwide.” 

$8.8 Million to Help Jobless Find Work Misused to Overpay Bureaucrats

The Washington Guardian reports, “A District of Columbia program misused $8.8 million in federal funds that were supposed to help the jobless find work, diverting the money instead to overpay bureaucrats or cover unrelated overhead expenses, investigators found. The grants provided by the U.S. Labor Department’s Employment and Training Administration (ETA) were  designed to support employment programs and unemployment insurance.  Instead, officials at the DC DOES program couldn’t keep track of their own expenses, investigators said. … Investigators analyzed $25 million the D.C. program received in federal grants and found that roughly a third of it had been wasted.  But their sample size was just part of the $89 million D.C. DOES received between 2008 and 2011.”

Report Finds HUD Money for Flood Victims Misspent

The Washington Guardian 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. In response, HUD officials said the state is responsible for making sure the money was spent properly. But after seeing similar results in previous audits, department officials helped Congress put tighter reins on the program in distributing aid to victims of last fall’s Superstorm Sandy in the Northeast.”

“White House warns agencies to protect core work from spending cuts”

Reuters reports, “The White House budget office on Thursday urged federal agencies to be aware of ways they may be able to shield their long-term projects while implementing the sharp budget cuts that went into effect March 1. Agencies should avoid cuts that would harm needed upkeep or unduly disrupt programs ‘essential to support the long-term execution of the agency’s mission,’ White House budget office controller Danny Werfel wrote in a memo. The budget office has already counseled flexibility, but Werfel has now provided agencies more detailed guidance about how to minimize long-term effects of the $85 billion in across-the-board spending cuts.”  The Washington Times notes that the move “surprised some lawmakers on Capitol Hill who said it seemed Mr. Obama was stressing flexibility now, while just weeks ago he had said he would veto a bill designed to give him more control over where to cut.”

“Napolitano says new budget may ease border impact”

The Associated Press reports, “Homeland Security Secretary Janet Napolitano says a new congressional budget should ease the need to furlough or cut overtime hours for border agents. Napolitano said Thursday after meeting with Houston law enforcement officials and business leaders the agency still is reviewing the numbers but it appears security will ‘get back to where we were before sequestration.’ Later Thursday, she issued a statement saying the number of border agents should be back to normal with the 2014 fiscal budget.” 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.