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Spending Daily February 27, 2013 “The Sequester Revelation”

“And when the Republicans opened the seventh seal of the sequester, there was a great earthquake; and the sun became black and the stars fell unto the Earth; and our nation’s ability to forecast severe weather, such as drought events, hurricanes and tornados, was seriously undermined. Lo, and the children were not vaccinated, and all the beasts starved in the zoos, and the planes were grounded. Or so President Obama and his Cabinet prophets have been preaching



Spending Daily | February 27, 2013

“The Sequester Revelation”
The Wall Street Journal editorializes, “And when the Republicans opened the seventh seal of the sequester, there was a great earthquake; and the sun became black and the stars fell unto the Earth; and our nation’s ability to forecast severe weather, such as drought events, hurricanes and tornados, was seriously undermined. Lo, and the children were not vaccinated, and all the beasts starved in the zoos, and the planes were grounded. Or so President Obama and his Cabinet prophets have been preaching ahead of the automatic budget cuts due to begin Friday. The bit about the weather is a real quote from the White House budget director. But if any of these cataclysms do come to pass, then they will be mostly Mr. Obama’s own creation. The truth is that the sequester already gives the White House the legal flexibility to avoid doom, if a 5% cut to programs that have increased more than 17% on average over the Obama Presidency counts as doom.”

Obama: “No Smart Way” to Offset Sequester Cuts
The Associated Press reports, “President Barack Obama brushed off a Republican plan Tuesday to give him flexibility to allocate $85 billion in looming spending cuts, wanting no part of a deal that would force him to choose between the bad and the terrible. … [Sen. Mitch] McConnell and other top Republicans were lining up behind a plan that wouldn’t replace the cuts but would give Obama’s agency heads, such as incoming Defense Secretary Chuck Hagel, greater discretion in distributing the cuts. The idea is that money could be transferred from lower-priority accounts to others that fund air traffic control or meat inspection. But Obama, appearing at a Virginia shipbuilding site that he said would sit idle should the cuts go through, rejected the idea, saying there’s no smart way to cut such a large chunk from the budget over just seven months – the amount of time left in the fiscal year.”  But not everyone in Washington agrees.  Click here to watch Bankrupting America’s new video, “Face Off.”

Dems, Fearing Blame, Oppose Giving Obama Discretion in Cuts 
The National Journal reports, “Top lawmakers spent Tuesday searching for leverage points in the coming public-relations war over the automatic spending cuts that almost everyone agrees will now occur even though they were neverdesigned to go into effect. For Senate Republicans, one such potential spot is in crafting an alternative to the so-called sequester that would lessen theblow of the cuts by giving the White House more flexibility as to where to reduce spending. But after Senate Republicans met for more than an hour at their weekly luncheon on Tuesday, Senate Minority Leader Mitch McConnell, R-Ky., said his conference remained divided into two factions: those who support giving the White House more flexibility to ease the coming cuts andthose who fear giving away any power to the Obama administration. … But some sources close to the administration have quietly expressed concern that when push comes to shove—after the sequester cuts have taken hold and appear to be sticking—some Democrats might eventually embrace the idea of giving more flexibility to agencies as a least-worst option to manage the pain.”

“Spending Cuts: It’s About to Get Weird”
CNN Reports, “When it comes to budgeting for the federal government, things are about to get strange. Starting Friday, federal agencies will be forced to make cuts to their programs without knowing what their actual budgets for this year will be. Why? Because Congress never passed a budget, just a stopgap funding measure that expires soon. Another unknown: Whether Congress will undo or lessen the impact of those forced cuts after they go into effect. … The White House budget office’s controller, Daniel Werfel, said on Feb. 8 that his office had calculated at that time that spending would need to be cut by 13% for defense programs and by 9% for nondefense programs. But agencies won’t officially learn the exact percentages of the cuts they must make until Friday, when the White House releases a formal sequestration order along with a report to Congress. It’s not clear whether anything the White House puts out Friday will be a surprise to the agencies. Nor is it clear how prepared agencies are for the cuts or any adjustments they might need to make going forward.”

Poll: Despite Split on Sequester, Americans Wants Deep Cuts
The Wall Street Journal reports, “Americans are sharply divided over the wisdom of the across-the-board federal spending cuts due to start Friday, with half saying they will be too severe and a slightly smaller share saying they arenecessary to reduce the deficit, a new Wall Street Journal/NBC News poll finds. Poll participants hold a diversity of views on the efficacy, timing and likely impact of the $85 billion in automatic spending cuts, which will be appliedbroadly to federal programs but hit military spending disproportionately. … But a large number of those who oppose the sequester nonetheless show strong support for deep cuts in federal spending.”

Economy Strengthening Despite Looming Cuts
The Associated Press reports, “Even with automatic spending cuts looming, the outlook for the U.S. economy brightened a bit Tuesday after reports showed that Americans are more confident and are buying more new homes. Home prices arealso rising steadily, and banks are lending more. Such improvements suggestthat the economy is resilient enough to withstand the deep government cuts that will kick in Friday. … The upbeat economic news contributed to a rally on Wall Street. The Dow Jones industrial average jumped more than 100 points. Consumers still face numerous burdens. Among them is a sharp increase in gas prices. The national average for a gallon, $3.78, has surged 44 cents in a month. And Social Security taxes rose 2 percentage points beginning Jan. 1. This year, the increase will cost a typical household that earns $50,000 about $1,000. Income taxes for the highest-earning Americans also rose. Both factors could reduce overall spending.”

Entitlement Reform Key to U.S. Future
Jon Cowan editorializes in POLITICO, “As the sequester blame game hits fever pitch this week, Republicans’ stance on taxes is simply indefensible, falling hundreds of billions short of even their own prior positions. But as Democrats, we also share a large portion of responsibility for the coming cuts to domestic discretionary spending, as the party has decided in both action and rhetoric that meaningful fixes to the major entitlement programs of Medicare, Medicaid and Social Security are off-limits. Think about it. Over the past three years, from debt ceiling deals to the supercommittee and the fiscal cliff, social insurance programs have escaped virtually unscathed while every other category of spending took some hit and revenue grew. And because of the sheer enormousness of the Big 3 entitlements, Democrats face a serious new crisis that is closer to home and will linger long past the sequester: There is now barely a farthing left in the budget for any new investments.”

“Obama And The Sequester Scare”
Phil Gramm editorializes in The Wall Street Journal, “President Obama’s message could not be clearer: Life as we know it in America will change dramatically on March 1, when automatic cuts are imposed to achieve $85 billion in government-spending reductions. Furloughed government employees, flight delays and criminals set free are among the dire consequences the president has predicted. If the Washington Monument weren’t already closed for repairs, no doubt it too would be shut down. Scare tactics such as these are similar to the ones that were made when I co-authored the first sequester legislation in 1985, the Gramm-Rudman-Hollings BalancedBudget and Emergency Deficit Control Act. The 1986 sequester was triggered anyway, but the predicted disaster never came. The nation survived then. Itwill now.”

“The Fever That Obama Has Not Broken”
Julie Pace writes in The Associated Press, “President Barack Obama promised this time would be different, that if he won re-election, a Republican ‘fever’ would break and legislative gridlock would ease. Yet just over a month into his second term, Washington is once again mired in a partisan budget battle. And rather than figuring out a way to work with Republicans, Obama is largely ignoring them, trying instead to build public support for his approach to averting automatic budget cuts – and perhaps overplaying his hand if the dire consequences he’s warning of are not quickly felt by many Americans.”

Sequester “a bullet we just may not dodge”
The Associated Press reports, “President Barack Obama is pulling out all the stops to warn just what could happen if automatic budget cuts kick in. Americans are reacting with a collective yawn. They know the shtick: Obama raises the alarm, Democrats and Republicans accuse each other of holding a deal hostage, there’s a lot of yelling on cable news, and then finally, when everyone has made their points, a deal is struck and the day is saved. Maybe not this time. Two days before $85 billion in cuts are set to hit federal programs with all the precision of a wrecking ball, there are no signs that the White House and Republicans in Congress are even negotiating. Both sides appear quietly resigned to the prospect that this is one bullet we just may not dodge.”

GAO Study: New Healthcare law Could Add $6.2 Trillion to Debt
The Washington Examiner editorializes, “A Government Accountability Office study from last month was released to the public for the first time Tuesday. It shows that if the cost-containment measures put in place by President Obama’s health care law prove unsustainable or ineffective, then the law will add substantially to the nation’s long-term debt. The report had been requested by the ranking Republican member of the Senate Budget Committee, Jeff Sessions of Alabama. It estimates that over a 75-year period, the health care law could add government debt equal to 0.7 percent of the nation’s economic output. Though the report itself doesn’t contain a dollar figure, Sessions’ office said the GAO confirmed to his staff that this would translate to $6.2 trillion. At a hearing Tuesday morning, Sessions said the report contradicted Obama’s pledge that health care legislation wouldn’t add a dime to deficits. In fact, it may add 62 trillion dimes.”

“Uncle Sam, Slum Lord”
The Washington Free Beacon reports, “The paint flakes off the walls, and white chips dot the floor and stairwells. The stairs’ railing is caked in grime while the radiator in the bathroom sits cockeyed, unconnected from any heating system. A light fixture lies on the floor beside an old water fountain. And the United States Department of Agriculture owns it all. This building, which sits on a 5,000-acre property near Washington, D.C., is just one example of the many dilapidated, vacant, or underused properties the federal government owns that a House subcommittee will discuss on Wednesday. The House Oversight and Government Reform Committee’s Government Operations Subcommittee will hold a hearing on the federal government’s management of its real estate assets on Wednesday morning. The hearing follows the Government Accountability Office’s (GAO) recently released high-risk list, which included federal property as one area within the federal government at risk of waste.”

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