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BA Spending Daily December 20, 2012



Spending Daily | December 20, 2012

New Video: Santa Claus Inc. Fears Fiscal Cliff
Bankrupting America, a project of Public Notice, released a new video looking at how the uncertainty surrounding the fiscal cliff is impacting Santa Claus Inc., a large international toy manufacturer located in North Pole, but incorporated in Delaware.  Owned and operated for the last 1,700 years by long-time president and CEO Kris Kringle, Santa Claus Inc. is currently the largest employer north of Greenland, but now facing the possibility of another recession if Washington fails to reach an agreement on the fiscal cliff, that could all change. Click here to watch the interview.

Why Taxes Aren’t the Problem
Caroline Baum editorializes in Bloomberg, “If we could just restore those Clinton-era tax rates on top earners, why, happy days would be here again! Not exactly. The $1.2 trillion of revenue President Barack Obama hopes to generate by raising taxes on the rich, revised from an initial $1.6 trillion, represents only a small down payment on a budget solution. By minimizing the real source of the problem, which is runaway growth in entitlements, especially health care, Obama isn’t doing the country any favors. Yes, tax receipts have been depressed as a result of five years of recession and slow growth. But even if they were to revert to their historical average of 18 percent of gross domestic product, the dollar amount would be $2.8 trillion, 14 percent more than actual 2012 revenue. Meanwhile, spending has more than doubled since 1998…”

“Fiscal cliff: The lowest point”
Politico reports, “President Barack Obama and House Speaker John Boehner opened their negotiations last month by pledging to work constructively to avert the fiscal cliff. But on Wednesday, the two men at the center of the talks traded blame, not counteroffers. Obama and Boehner hit their lowest point yet during a day of sharp words and legislative confusion — and the outlook significantly darkened for reaching a deficit-reduction deal before the new year. The talks are stalled, and Boehner is scrambling to muscle his own bill through the House — a proposal the president has already promised to veto. With 12 days to go until the deadline, the president faulted Boehner for wasting time on a bill that will never reach the Oval Office. … Boehner responded with a curt statement from the Capitol, where he told the president to ‘get serious soon,’ or else Obama ‘can be responsible for the largest tax increase in American history.'”

Senate Republicans Aim To Cut ‘Slush’ From Sandy Bill
The New York Times reports, “ Republicans in the Senate, seeking to substantially trim a Hurricane Sandy aid package being sought by Democrats, are planning to unveil a $23.8 billion emergency spending plan to finance the recovery efforts of states devastated by the storm. The move byRepublicans comes as the Senate has opened debate on a $60.4 billion aid bill brought by Democratic leaders. But some Republicans are concerned that the emergency spending bill was cobbled together too quickly without the benefit of extended review, and that it consists of a few projects they say may not beneeded.

Feds Recover Only Fraction Of GM Loan 
The Wall Street Journal reports, “General Motors Co. took its biggest step yet to escape the shadow of bankruptcy and a government bailout, saying it would spend $5.5 billion to buy a chunk of its stock held by the U.S. Treasury, which now plans to unwind itself from the auto maker within the next year or so. The agreement moves the federal government’s bailout of U.S. auto makers into its final chapter and comes as the Obama administration works to wind down financial-crisis era programs—with mixed results. In the bailout of the automotive industry alone, the U.S. Treasury provided a total of $79.1 billion in loans to GM, GM’s former financing arm Ally Financial Inc., Chrysler Group LLC and Chrysler’s former lending arm Chrysler Financial. It has recovered a total of $45.6 billion.”

No Budget Deal Could Stall 100 Million Tax Returns
According to Bloomberg, “As many as 100 million U.S. households, or two-thirds of the total, may not be able to file their tax returns until at least late March 2013 if Congress doesn’t reach an end-of-year budget agreement, according to the Internal Revenue Service. … With less than two weeks left in the year, Congress hasn’t prevented expansion of the alternative minimum tax, or AMT, for 2012. Tax filing is scheduled to start in January and run through mid- April.”

Boehner Pushing Plan B in House
The Hill reports, “Fiscal-cliff talks deteriorated into dueling press conferences on Wednesday as Speaker John Boehner (R-Ohio) scrambled for enough Republican votes to pass his backup tax plan over a presidential veto threat.  … Boehner’s proposal would prevent much of the ‘fiscal cliff’ of tax hikes from going forward in January, but would allow tax rates on income over $1 million to increase. Under pressure from its members, GOP leaders decided late Wednesday to allow a separate vote on a measure replacing the automatic cuts from sequestration. Several members had said they might not otherwise support the measure.”

Kerry Holds Sandy Aid Hostage For $150 Million in Aid to Fisheries
The Hill reports, “Sen. John Kerry (D-Mass.) said the emergency-spending bill for Hurricane Sandy recovery efforts won’t pass unless money for fisheries is included. ‘This legislation is not going to pass without the inclusion of this money, point blank,’ Kerry said on the floor Wednesday. The Senate started consideration this week of H.R. 1 as a vehicle to provide $60.4 billion to Hurricane Sandy recovery efforts, but some conservatives have said the bill has unrelated and unnecessary spending measures, during a time when lawmakers are trying to make spending cuts. The bill includes $150 million for fisheries in states that have disaster declarations, including Mississippi and Alaska — states not hit by Hurricane Sandy. In October, Hurricane Sandy hit the Northeast hard, affecting several states and their infrastructure. Kerry, along with Sens. Jeanne Shaheen (D-N.H.), Sheldon Whitehouse (D-R.I.), Mark Begich (D-Alaska) and Barbara Mikulski (D-Md.), said Sen. Tom Coburn (R-Okla.) has introduced an amendment to the bill that would jeopardize the funding for these fisheries that have been hit by bad weather and reduced stocks this year.”

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