Spending Daily January 11, 2013
Spending Daily | January 11, 2013
“Bankrupting America releases new video about government overspending”
Red Alert Politics writes, “As the debt ceiling battle fast approaches, the organization Bankrupting America has released a YouTube video to convince Congress that government overspending must be stopped and the budget needs to be balanced. The video cues up footage of various politicians — from Reagan to Obama — promising to reduce the national deficit, while subtitling the images with the amount of debt at the time of the politicians’ words, showing the increase in debt over the years. … While President Obama claims “we don’t have a spending problem,” Bankrupting America is seeking to make sure Washington realizes it does, in fact, have a massive spending issue that needs to be addressed — now.”
Congress Won’t Allow Navy to Retire Ships, Save Money
Phillip Swarts editorializes in The Washington Guardian, “Government agencies are constantly being told to trim their spending. So, the U.S. Navy thought it would try to save taxpayers some money. Then Congress got in the way. … The danger of budget cuts led the Navy to propose retiring the ships rather than pay for expensive overhauls. But while the Navy seems willing to face the harsh reality of the nation’s fiscal situation, Congress does not. Worried that retiring the ships might leave gaps in national security, lawmakers put their collective foot down and forced the Navy to keep the ships in service.”
What Will Lew Pick Mean For The Budget?
The Wall Street Journal reports, “President Barack Obama’s nomination of close adviser Jacob Lew as the next Treasury secretary elicited little oppositionfrom Republicans Thursday, but many signaled they would use the confirmation process to grill him about the administration’s future tax and spending plans. One of Mr. Lew’s primary tasks is likely to be helping shape a deficit-reduction package with Congress in the coming months, followed by a tax-code overhaul later this year. The White House wants any deficit-reduction package to include both spending cuts and tax increases. Republicans oppose any tax increases—following the New Year’s Day deal to raise rates on upper-income Americans—and say any plan should consist entirely of spending cuts. Congress is already girding for a clash over whether to raise the government’s borrowing limit in February.” Click Here to read Bankrupting America’s latest Debt Wish looking into Lew’s track record on budgets.
Insurance Premiums on the Rise
POLITICO reports, “If you work for a small business, your next health insurance premium may give you sticker shock. Many of the small-business and individual insurance policies are working the health reform law’s 2014 fees into their 2013 bills, contributing to double-digit premium increases for some people. All those new consumer benefits packed into the health reform law — birth control without a co-pay, free preventive care and limits on when insurers can turn down a customer — had to be paid for somehow. … Everyone, even many of the law’s supporters, admit premiums are going to go up under the health law — although many people will get subsidies to help pay for coverage. Many of the costs — and the priciest benefits — were pushed beyond the 2012 election to 2014. But if the public revolts when they see 10 percent,15 percent or 20 percent rate hikes, already shaky support for the health law could suffer.”
“Editorial: $1 trillion in gimmicks”
The Washington Times editorializes, “Sometimes, instead of direct spending, lawmakers tack new provisions onto the tax code as a means of manipulating public behavior. In a report released Monday, the Government Accountability Office (GAO) calculated Congress has created $1 trillion worth of such tax code gimmicks. This is why the Internal Revenue Service (IRS) forms Americans dutifully fill out by April 15 are a confounding maze of exclusions, exemptions, deductions, credits, preferential tax rates and deferrals. One-by-one, the additions to the tax code are carefully tailored to meet the needs of particular groups, or in some cases, highly favored individuals. When it’s all combined together, it becomes a mess requiring 73,000 pages worth of the Federal Register and IRS documents to explain it all. Life would be much simpler if officeholders trusted the market to work on its own.”
Tax Reform Unlikely In Wake Of Cliff Deal
POLITICO reports, “This is supposed to be the year that Washington finally locks arms and tidies up the littered Tax Code. Don’t count on it. In a perfectly divided Washington, a mix of politics, policy and personality has made a comprehensive rewrite of the nation’s tax system — a top Republican priority — increasingly elusive in 2013, aides and lawmakers say. The fiscal cliff has deepened distrust between the two parties. The politics have become riskier and more complicated. Time is short. And Washington has to first endure battles over the debt ceiling and scheduled spending cuts before tax reform can come under serious consideration. … Tax reform would almost certainly have to come in 2013 to avoid the political pitfalls of an election year — but the year is quickly filling up. At a minimum, the next three months will be dominated by trying to solve the debt ceiling, government funding and the sequester.”
Pentagon Taking Steps To Freeze Hiring In Light Of Cuts
The Associated Press reports, “The Pentagon will begin taking steps to freeze civilian hiring, delay some contract awards and curtail some maintenance toprepare for drastic budget cuts if Congress can’t reach an agreement on a final spending plan, Defense Secretary Leon Panetta said Thursday. Speaking to reporters, Panetta said that department officials must also develop detailed plans to implement unpaid furloughs for civilian personnel. The furloughs would kick in if the automatic cuts are triggered. But Panetta said he has asked defense leaders to ensure that any initial moves they make now should be reversible if at all possible, and they must minimize harmful effects on military readiness. ‘The simple fact is that this fiscal uncertainty has become a serious threat to our national security,’ Panetta said during a Pentagon press conference. ‘We really have no choice but to prepare for the worst.’”
“The Myth of Government Default”
David B. Rivkin Jr. and Lee A. Casey editorialize in The Wall Street Journal, “Three false arguments, pushed hard by the Obama administration and accepted on faith by the media and much of the political establishment, must be laid to rest if the American people are to understand the issues at stake in the federal ‘debt ceiling’ debate. The first is that Congress’s failure to raise the debt ceiling—the amount of money the federal government is authorized to borrow at any given time—will cause a default on the national debt. The second is that federal entitlement programs are constitutionally protected from spending cuts. The third is that the president can raise the debt ceiling on his own authority.”
Sandy Aid In Trouble Again?
POLITICO reports, “Buckle up: The Hurricane Sandy disaster relief bill could be in trouble. Again. At least that’s what some House Republicans fear. Or hope, depending on whom you ask. Republican leadership plans some legislative jujitsu to pass the Sandy bill, and top Republican aides say they are likely to allow amendments that would call for offsets or spending reductions to a package expected to total around $50 billion. Northeastern Republicans and Democrats may be able to beat back those amendments — but if they can’t, that would complicate the bill’s hopes for swift passage through the Senate.”
“Medicare Must Change, Even If Its Eligibility Age Doesn’t”
Bloomberg editorializes, “One tempting idea for saving money on Medicare, a program that vacuums up some 15 percent of federal spending, is to raise the age at which Americans become eligible for it. We ourselves have succumbed to this temptation, on more than one occasion. Raising the eligibility age a couple of years, to 67, remains an attractive idea; it would save the program a lot of money. It’s just that there are a lot of other things Washington should try first. Before we get to those, allow us to explain our newfound hesitation: Raising the eligibility age is neither as simple nor as effective as many of its proponents claim. Just raise the age gradually, they say, and save as much as $113 billion over 10 years. As an added benefit, you would encourage some Americans to retire a bit later. After all, the average 65-year-old today can expect to live a few years longer than someone the same age could expect in 1965 when the Medicare age was set.”
Fed Policy Makers Sound Alarm Over Inflation
Reuters reports, “Two top Federal Reserve policymakers expressed discomfort on Thursday with the U.S. central bank’s easy monetary policy, suggesting Fed Chairman Ben Bernanke may face more dissent this year. In remarks that stamped her as a hawk on the Fed’s policy-setting committee, Kansas City Federal Reserve President Esther George warned that the Fed’s near zero interest-rate policy – aimed at boosting the economy – could spark inflation. ‘A prolonged period of zero interest rates may substantially increase the risks of future financial imbalances and hamper attainment of the 2 percent inflation goal in the future,’ she said in her most extensive remarks in a year on policy. ‘Monetary policy, by contributing to financial imbalances and instability, can just as easily aggravate unemployment as heal it,’ she said.”