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Spending Daily February 22, 2013

“Is President Obama overplaying sequestration hand?” Carrie Budoff Brown and Jake Sherman write in POLITICO, “President Barack Obama’s greatest adversary in the latest budget battle isn’t the Republican leadership in Congress — it’s his confidence in his own ability to force a win.



Spending Daily | February 22, 2013

Democratic Plan to Avoid Sequester Protects Corporate Jet Loophole
ABC News reports, Listening to the White House, you’d think the key to averting the across-the-board spending cuts (the dreaded ‘sequester’) set to in place on March 1 is closing the tax break for owners of private jets. Here was White House Press Secretary Jay Carney last week: ‘How do you explain to a senior that we’re doing this, asking you to sacrifice, but we’re not saying that corporate jet owners should lose their special tax incentive.’ … And President Obama in an interview Wednesday with KAKE-TV in Wichita: ‘What we don’t want to do is give somebody who’s buying a corporate jet an extra tax break.’ … Listening to the White House, you might think that the ‘balanced’ Democratic plan to avert the spending cuts would close that loophole for private jets. But you would be wrong. The Senate Democratic plan – which has been endorsed by the White House and is, in fact, the only Democratic plan actively under consideration right now – doesn’t touch corporate jets.

“Is President Obama overplaying sequestration hand?”
Carrie Budoff Brown and Jake Sherman write in POLITICO, “President Barack Obama’s greatest adversary in the latest budget battle isn’t the Republican leadership in Congress — it’s his confidence in his own ability to force a win. He has been so certain of his campaign skills that he didn’t open a line of communication with House Speaker John Boehner and Senate Minority Leader Mitch McConnell until Thursday, a week before the spending ax hits. And when they did finally hear from Obama, the calls were perfunctory, with no request to step up negotiations or invitations to the White House. … But there has been no discernible effort by the White House to work on a bill that might pass. Instead, Obama is putting his energy towards campaigning against the GOP’s cuts-only approach, concluding that he can win either way. Confident White House officials predict Republicans will fold just as they did on the payroll tax cut extension in 2011, the fiscal cliff in December and the debt limit increase this month. The officials believe Obama will get what he wants ahead of the deadline — or in the weeks after, as his leverage increases once the cuts become more real to average voters.”

“Medicare, Congress waste $334 million by overpaying for infusion drugs”
The Washington Guardian reports, “Because Congress locked some drug costs at 2003 prices, Medicare has wasted $334 million dollars over the last six years by failing to buy medication at the best possible discount, according to a new investigation that reinforces just how prevalent waste and abuse are inside the government’s main health program for senior citizens.  Investigators at the Health and Human Services Department Office of Inspector General said that Medicare Plan B purchased the drugs at an outdated average wholesale price, or AWP, as opposed to the manufacturing price the government is supposed to receive.”

Washington Passes Blame While Sequester Nears
Jonah Goldberg writes in the National Review, “We are just days away from a cataclysm of biblical proportions. The cuts foretold in the Budget Control Act of 2011 are young as far as prophecies go, but apparently they are every bit as terrifying as rivers of blood and plagues of locusts. Any day now we can expect White House spokesman Jay Carney to take to the podium and read a prepared statement: ‘And when he opened the seventh seal, there was a small decrease in the rate of increase in federalspending.’ … Both the president and Boehner agree that the across-the-board cuts required by the sequester make no sense, given that most agencies can find less painful ways to trim a few pennies out of every dollar. It’s unlikely that Obama will take such a deal, since he and the Democratic-controlled Senate twice rejected legislation that replaced sequester cuts with more reasonable ones. Obama wants more tax hikes and thinks he can convince the country to accept them if the choice is between what he calls reasonable revenue increases and catastrophic cuts that will let people die in the streets, leave children to go hungry and illiterate, and allow poisoned food to sit rancid on supermarket shelves.”

“Noonan: Government by Freakout”
The Wall Street Journal reports, “The president’s sequester strategy is like Howard Beale in ‘Network’: ‘Woe is us. . . . And woe is us! We’re in a lot of trouble!’ It is always cliffs, ceilings and looming catastrophes with Barack Obama. It is always government by freakout. That’s what’s happening now with the daily sequester warnings. Seven hundred thousand children will be dropped from Head Start. Six hundred thousand women and children will be dropped from aid programs. Meat won’t be inspected. Seven thousand TSA workers will be laid off, customs workers too, and air traffic controllers. Lines at airports will be impossible. The Navy will slow down the building of an aircraft carrier.Troop readiness will be disrupted, weapons programs slowed or stalled, civilian contractors stiffed, uniformed first responders cut back. Our nuclear deterrent will be indefinitely suspended. Ha, made that one up, but give them time.”

“Payroll Tax Whacks Spending”
The Wall Street Journal reports, “Wal-Mart Stores Inc.  on Thursday joined a parade of retailers, restaurants and consumer-goods companies worried about the economic impact of the recently restored federal payroll tax that has left Americans with less money to spend. The world’s largest retailer, Burger King Worldwide Inc., Kraft Foods Group Inc.  and others are lowering forecasts and adjusting sales and marketing strategies, expecting consumers with smaller paychecks to dine out less and trade down to less expensive purchases. The expiration of the payroll tax cuts that knocked 2% off consumers’ take-home pay is having an impact, these companies say. It will ding a household with $65,000 in annual income $1,300 this year, and shift $110 billion overall out of consumers’ hands, estimates Citigroup.”

Sen. Blunt to Obama: Use Discretion In Applying Cuts
Roll Call reports, “Sen. Roy Blunt, R-Mo., is suggesting the Obama administration use a scalpel instead of ax to implement spending cuts under the budget sequester. The vice chairman of the Republican Conference told a St. Louis radio program that President Barack Obama should embrace the idea of more discretion in implementing the spending cuts required to take effect March 1 under current law. ‘The compromise is to give the president authority that he should be willing to use as the leader of the country to target the cuts rather than to take the cuts on every line item,’ Blunt told KMOX. ‘These spending cuts are going to occur, and they should occur, and they should be done in the right way instead of the wrong way. … Blunt specifically wants to give the Defense Department a better chance to target the spending cuts to minimize disruptions to national security.”

“The D.C. Dubstep”
David Brooks looks at the “Permanent Campaign Shimmy” going on in Washington on the sequester, writing in The New York Times, Traditional presidents go through a normal set of motions: They identify a problem. They come up with a proposal to address the problem. They try to convince the country that their proposal is the best approach. Under the Permanent Campaign Shimmy, the president identifies a problem. Then he declines to come up with a proposal to address the problem. Then he comes up with a vague-but-politically-convenient concept that doesn’t address the problem (let’s raise taxes on the rich). Then he goes around the country blasting the opposition for not having as politically popular a concept. Then he returns to Washington and congratulates himself for being the only serious and substantive person in town. … Republicans also secretly love the sequester. It allows them to do their favorite dance move, the Suicide Stage Dive.  In this dance, the Republicans mount the stage and roar that they are about to courageously cut spending. In this anthem they carefully emphasize cuts to programs the country sympathizes with, such as special education, while sparing programs that actually created the debt problem, like Medicare.”

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