Spending Daily January 4, 2013

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Spending Daily | January 4, 2013

Debt Taking Down U.S.?
According to The New York Times, “Two years ago the departing chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, declared that ‘the most significant threat to our national security is our debt.’ After a decade in which the nation had chased Al Qaeda and invaded Iraq, Admiral Mullen was saying, in essence, that the biggest enemy was us. Now that Congress and President Obama have slipped past the latest budget deadline with a bill that does little to address the country’s long-term debt issues — and by some measures might worsen them — the worries of the national security establishment have been reignited. Most pointedly, military and diplomatic experts wonder whether the United States is at risk of squandering its global influence.” A state-run Chinese newspaper said of the U.S. fiscal crisis, “’The politicians have chosen to kick the can down the road. … The can will never disappear,’ it continued, warning that the United States was falling ‘into an abyss you can never come out of.’”

Gov’t and Union Leaders “Nervous” Over Looming Spending Cuts
The Washington Post reports, “The fiscal pact Congress reached hours into the new year will delay $109 billion in automatic across-the-board spending cuts for two months. But it will make a down payment on those reductions that will affect federal operations this year and next. The eleventh-hour agreement to avoid a ‘fiscal cliff’ of higher taxes put off the major cuts known as a sequester until March 1, when another showdown is expected over the federal debt limit and how much to reduce the size of government. Congress and the White House agreed to find $24 billion to pay for the delay… The remaining $12 billion in cuts to domestic and defense agencies will not take effect until at least March 27, when the stopgap budget funding the government expires. … The cuts will be rolled into budget deliberations on Capitol Hill, and no one knows what agencies and programs they will affect.  … On Wednesday, government and union leaders said that threat, just two months away, is making them nervous.”

Cliff Deal Included Nearly $1B Retroactive Tax Break for Biodiesel
The New York Times reports, “The Congressional budget deal brokered this week kept tax breaks in place for a variety of industries, but biodiesel got something even better: a retroactive reinstatement of a dollar-a-gallon credit going back to January 2012, when it lapsed. The retroactive portion of the credit, which will run through the end of 2013, represents a benefit to the blenders of about $1 billion. And the $1 per gallon of biodiesel amounts to roughly one-quarter of the fuel’s current wholesale price.” The Associated Press reports, “Tucked into the ‘fiscal cliff’ tax package approved by Congress are billions of dollars in tax breaks that should make the new year a lot happier for businesses of many stripes, including film producers, race track owners and the makers of electric motorcycles.  Click here to see a list of some of the more interesting tax breaks.”

“Time for leaders to delegate on the budget”
Bob Woodward writes in The Washington Post, “The agreement on the ‘fiscal cliff’ left the nation’s major economic problems — its federal deficit and debt, high unemployment and low growth — on the negotiating-room floor. What went wrong? Part of the problem may lie with the negotiating style, the procedures and methods of both the Obama administration and Congress. They all try to run it from the top.”

Unemployment Rate Unchanged in December
MarketWatch reports, “The U.S. economy created 155,000 jobs in December – matching its two-year average – and the unemployment rate was unchanged at 7.8%, the government said Friday. Economists surveyed by MarketWatch expected an increase of 160,000 jobs last month. The unemployment rate, originally reported as 7.7% in November, was changed to 7.8% after the Labor Department’s annual revision conducted each December. The unemployment rate over the course of 2012 was little changed, however.”

Tax Deal Is A Victory For Hollywood Cronyism”
Matthew Continetti editorializes in the Washington Free Beacon, “My least favorite political cliché—that liberal donors don’t ask for anything in return for campaign contributions—was exposed as laughably false by the Kick the Can Down the Road Act of 2012, also known as the American Taxpayer Relief Act, or the ‘fiscal cliff deal.’ Consider what the bill revealed about Hollywood’s relationship with the Democrats who run the Senate and live in the White House. It is a relationship fraught with denial, in which the gooiest rhetoric obscures the most self-interested acts. For example on May 11, 2012, filmmaker and actor Rob ‘Meathead’ Reiner appeared on ‘Hardball with Chris Matthews’. The previous day Reiner had attended one of several Hollywood fundraisers at which President Barack Obama raised a total of $15 million. Wasn’t it ‘interesting,’ Matthews said, that when individuals on ‘the Republican’ side ‘invest in a Republican candidate, they’re investing in their businesses.’ … All too revealing that well-heeled lobbyists, many of them liberal, are able to secure some $40 billion in tax breaks for connected interests while the elected representatives of the United States of America are unable or unwilling to stop a $100 billion payroll tax increase affecting 160 million people.”

Earmarks Live On In Hawaii, Despite Informal Ban
The Washington Guardian reports, “Congress showed us anew over the last year that an earmarking system that secures federal money for political pet projects is alive and well — despite a promised ban by lawmakers. In fact, such funding even can live on after the sponsoring lawmaker has died. Take the case of the East-West Center, a nonprofit center in Hawaii that for years received tens of millions of dollars in federal funding secured by its favorite homestate backer, the late Senate Appropriations Committee Chairman Daniel Inouye. … For creating a system that has sustained earmarks — and allowed them to outlive their sponsors — Congress earns this week’s Golden Hammer, a dinstinction awarded by the Washington Guardian to examples of spending that sting the fiscal funny bone. … Since 2009, the center has received roughly $81.6 million through the State Department budget. In 2011, for instance, it got another $23 million even though State had proposed half that amount a year earlier.”

Debt Ceiling Crisis Takes Foreground For Freshman Lawmakers
Roll Call reports, “Many new members approached their swearing-in day with giddiness and a sense of awe, but for the 95 new senators and representatives, the honeymoon is likely to be short. The final act of the 112th Congress — a last-minute deal to avert tax hikes on most Americans — only set up trickier budget decisions for the 113th to tackle. Though the tax question is largely settled, new members will almost immediately have to grapple with how to deal with automatic spending cuts now set to begin in March, the urgent need for another debt limit increase and a spending bill to keep the government from shutting down. But perhaps sensing the coming political perils, many incoming members argued like pros Thursday that they’d deal with it some other time.”

Bankrupting America this week launched a new campaign, “Talk is Cheap, Overspending is Not.” In the aftermath of the fiscal cliff deal, Bankrupting America wanted to remind lawmakers that spending caps are not spending cuts with this image:

 Click here to find out more about the “Talk is Cheap, Overspending is Not” campaign.