Bankrupting America’s Spending Daily
Spending Daily | April 11, 2013
“A Tale Of Two Charts: Busted To Balanced In One Year?”
POLITICO reports, “Tucked deep inside President Obama’s budgets last year and this year are charts extrapolating the effects on publicly held debt some 70 years in the future, but they paint vastly different pictures, going from out-of-control, exploding debt to dropping-like-a-stone, into-negative-territory debt. … One White House official said the new, rosier prediction is based on explosive economic growth that the administration predicts would ensue if the president’s budget is adopted. (The chart shows debt as a percentage of gross domestic product.) Also part of the picture: the deficit reduction already in place and the higher taxes included in the fiscal cliff deal.” Click here to see the breakdown.
Both Sides Contest Parts Of Obama Budget
The Associated Press reports, “President Barack Obama’s first budget of his new term is a political straddle, aimed at enticing Republicans into a new round of deficit negotiations while trying to keep faith with Democrats who favor higher taxes in service of more government spending. That gives everyone something to dislike if they are so inclined – and many in divided government are. Obama’s stated goal is otherwise, namely that his $3.8 trillion budget should lead to the completion of a slow-motion grand deficit-cutting bargain by offering to save billions from programs previously sheltered from cuts. Medicare, Social Security and even military retirement are among them. … The early public reaction from Republicans was generally predictable, and none too positive. House Speaker John Boehner, R-Ohio, said the president deserves ‘some credit for some of the incremental entitlement reforms that he has outlined in his budget.’ ‘But I would hope that he would not hold hostage these modest reforms for his demand for bigger tax hikes,’ Congress’ top Republican added, a repudiation of Obama’s insistence on higher taxes.”
Obama Estate Tax Hike Could Mean Headaches For Many
Bloomberg reports, “President Barack Obama wants to prevent people from accumulating too much money in their tax- advantaged retirement accounts or trusts for heirs, adding to pressure on the wealthy after raising tax rates in January. Obama’s 2014 budget proposal, released yesterday in Washington, would increase estate taxes and limit techniques used by the wealthy to transfer assets through trusts. The plan also caps at $3.4 million the amount individuals can amass in tax-preferred individual retirement accounts and requires those who inherit IRAs to take taxable distributions within five years instead of over their lifespan. Financial planners and tax professionals said such changes could mean big headaches for individuals, especially the wealthy, as they plan for retirement or strategize about passing on assets to their heirs. … The budget plan calls for returning the estate tax in 2018 to 2009 levels, which is a reversal from the so-called fiscal- cliff budget deal Obama signed in January. That law made the estate-tax terms permanent and indexed them for inflation.”
Presidents Budget Sets Up Debate With Progressives On Entitlements
The New York Times reports, “President Obama’s new budget has opened a debate over what it means to be a progressive Democrat in an age of austerity and defines him as a president willing to take on the two pillars of his party — Medicare and Social Security — created by Democratic presidents. By his gamble on Wednesday in proposing budgetary concessions to Republicans on Social Security, the 1935 creation of President Franklin D. Roosevelt, and Medicare, the legacy of President Lyndon B. Johnson, Mr. Obama has provoked angry supporters on his left to ask whether he is a progressive at all. … But to Mr. Obama, cost-saving changes in the nation’s fastest-growing domestic programs are more progressive than simply allowing the entitlement programs for older Americans to overwhelm the rest of the budget in future years. … The president’s views put him at the head of a small but growing faction of liberals and moderate Democrats who began arguing several years ago that unless the party agrees to changes in the entitlement benefit programs — which are growing unsustainably as baby boomers age and medical prices rise — the programs’ costs will overwhelm all other domestic spending to help the poor, the working class and children.”
AFL-CIO Chief Slams Obama’s Entitlement Cuts
The Hill reports, ‘The head of AFL-CIO on Wednesday assailed the proposed cuts to entitlement programs in President Obama’s budget plan as ‘wrong and indefensible.’ AFL-CIO President Richard Trumka said the White House plan wasn’t what people voted for in November when they reelected the president. ‘A president’s budget is more than just numbers. It is a profoundly moral document. We believe cutting Social Security benefits and shifting costs to Medicare beneficiaries — while exempting corporate America from shared sacrifice — is wrong and indefensible,’ Trumka said. … Other liberal allies of the president are up in arms about the proposed change to entitlements. A petition with more 2 million signatures opposing chained CPI was delivered to the White House on Tuesday.”
The Breakdown Of The President’s Budget–By Agency
The Associated Press reports, “President Barack Obama has proposed a $3.8 trillion budget for fiscal 2014 that aims to slash the deficit by a net $600 billion over 10 years, raise taxes and trim popular benefit programs, including Social Security and Medicare. The White House claims deficit reductions of $1.8 trillion, but Obama’s proposal would negate more than $1 trillion in automatic spending cuts that started in March. Those cuts average 5 percent for domestic agencies and 8 percent for the Defense Department this year.” Read more…
Hidden Nuggets In Obama’s Budget
Roll Call reports, “President Barack Obama unveiled his $3.77 trillion budget Wednesday, and a survey of CQ Roll Call beat writers turned up the following choice nuggets:
1. $78 million for asteroid retrieval. NASA wants to research robotic technology to move an asteroid closer to Earth, so that we can send astronauts to it.
2. $0 for abstinence-only sex education programs. Such programs got $5 million for grants in fiscal 2012, but the administration wants to zero them out.
3. A ban on horse meat inspections. The administration is assuming there will also be a ban on horse slaughter, and therefore no need to inspect horse meat.”
Read more here…
White House Furloughs Coming Next Month
The Hill reports, “The White House will begin implementing furloughs and pay cuts for all employees beginning in the first pay period in May. Members of the president’s staff who are commissioned officers, including top deputies and advisers, will see their paychecks docked the equivalent of one day’s pay. Other employees will be told to stay home for an unpaid day of leave. The cuts will affect all of the 468 employees on the White House payroll. ‘As we have said, as the impact of the sequester progresses, furlough notices and pay cuts are likely,’ a White House aide said in an email. The aide said the furlough notices have been sent to the White House Office, the Office of the Vice President, the Office of Management and Budget and the Council on Environmental Quality. Divisions will also look to reduce costs through pay cuts, hiring slow-downs, delayed back-filling of open positions, the scaling-back of supplies and equipment purchases, curtailing staff travel and reducing the use of air cards and subscriptions.”
Presidents Defense Budget Keeps Military Spending Steady
The Washington Post reports, “President Obama’s proposed $526.6 billion defense budget would keep military spending relatively steady in 2014, while calling on the Pentagon to find $150 billion in savings over the next decade as it wraps up an era of costly ground wars and invests to fight emerging threats such as cyber security. The plan’s biggest pitfall may be that it was drawn up under the assumption that automatic cuts mandated by Congress will somehow be averted by the end of this fiscal year, an assumption that analysts called foolhardy. Analysts said the budget also is problematic because the bottom line is predicated on initiatives that lawmakers have rejected, including base closures, cuts to health-care benefits and the elimination of weapons systems. The plan puts off decisions on steeper troop reductions and deep cuts to weapons programs — steps that would achieve bigger savings. The proposal amounts to a roughly 1 percent drop in spending compared with2013.”
Pentagon’s Budget Takes Unpopular Steps
Reuters reports, “The Pentagon proposed a $526.6 billion budget on Wednesday that calls for closing bases, slashing the civilian workforce and scrapping arms programs, holding out hope the Congress might still opt for an alternative to even more draconian cuts already on their way. The proposed 2014 fiscal year budget would let the Defense Department implement new spending reductions of $150 billion over the next decade rather than forcing it to carry out the $500 billion in automatic cuts known as sequestration that began on March 1. But defense analysts criticized the plan. One said it would be ‘dead on arrival’ in Congress because of the politically difficult steps it requires and could trigger new budget cuts that would extend the financial uncertainty that has caused turmoil at the Pentagon in recent months. … The budget includes $88.5 billion for the war in Afghanistan and other overseas operations, the same amount as requested last year. Comptroller Robert Hale said the figure was a placeholder and would ultimately be somewhat lower, but still high because of the cost of removing equipment from Afghanistan.”
“The President’s Priorities”
The Wall Street Journal editorializes, “President Obama is pitching his new budget proposal as a fiscal peace offering to Republicans, but the details suggest everyone should expect more conflict. The fiscal 2014 plan he released Wednesday is a very slightly modified version of his previous budgets that reduces the deficit by raising taxes and trading defense cuts for more domestic spending. The real news is that his budget ratifies much of the spending increase of the first term and tries to lock it in. He wants the feds to spend $3.78 trillion next year ($11,944 per American), which would still be 22.2% of national output nearly four years into an economic recovery. Before the financial panic in 2008, the government was spending about $1 trillion less, or closer to $2.7 trillion a year and an average of 20% of GDP—and President Bush was no slouch as a spender himself. … Even with this inflation change, federal spending would grow by more than if Mr. Obama simply let current law continue. This is because the President wants to eliminate the current caps on discretionary spending under the budget sequester that are set to save close to $1 trillion over the next decade. He wants to repeal the sequester that is providing the only spending cuts in at least a decade.”
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.