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The Mythical Budget Deficit

— by Rich Dunn, NV Rural Democratic Caucus, 2nd Vice Chair

On Monday the treasury budget for December was released, and guess what. The federal government ran a surplus of $53.20 billion. Yes, I said surplus. It got little attention because budget surpluses have become relatively routine of late. Here are the treasury budgets for the previous seven months:

Jun +$116.5 billion
Jul -$97.6 billion
Aug -$147.9 billion
Sep +$75.1 billion
Oct -$91.6 billion
Nov -$135.2 billion
Dec +$53.2 billion

You’re seeing that right. The budget was in surplus in three of the last seven months of 2013.

The deficit for Fiscal Year 2013 totaled $680.3 billion, which was down from $1.09 trillion in 2012—the fourth consecutive year when deficits were over a trillion dollars. The Obama administration is now running annual deficits less than half the size of the one he inherited from Bush in 2009, and economists are already speculating that Obama’s budget for Fiscal Year 2016 could well be in surplus.

The government should not be running a fiscal surplus when aggregate demand is still lagging in the macro economy. The country’s infrastructure is falling apart and we should be fixing it right now because the money is there and isn’t being used to expand employment or investment in the private sector. Instead coporate balance sheets are hoarding cash and using it to pay special dividends and stock buybacks for the investor class. That money should be put to work investing in America!

22 Congressmen Demand Keeping Sequestration Budget Cuts That Leave Kids Out Of Classrooms And The Elderly Out Of Food

by Bryce Covert

Fiscal Cliff

Three Republican Representatives, Mick Mulvaney (SC), Jim Jordan (OH), and Steve Scalise (LA), sent a letter on Thursday to House Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA) advocating to keep spending in any agreement that results from the current budget conference at the sequestration level of $967 billion in 2014. Their letter has 19 other signatures so far and lawmakers can sign un until Monday.

Claiming that Democrats “want the diversion of another shutdown” to deflect from the troubles with Obamacare, they write, “[W]e encourage you to allow a vote as soon as practicable on a full-year ‘clean CR’ funding bill at the levels established in law by the Budget Control Act,” which set sequestration’s automatic cuts and “is the law of the land.” It also says, “Our Democrat colleagues are now threatening to shut the government down in order to change that. We should not permit that to happen.”

Other Republicans have been worried about sequestration’s cuts, particularly to defense spending. Reps. Jim Bridenstine (R-OK) and  introduced a bill this week that aimed to cancel sequestration cuts to the Department of Defense for the next two years. And Rep. Paul Ryan’s (R-WI) negotiations with Sen. Patty Murray (D-WA) look set to yield a higher spending level closer to $1 trillion for next year, which would cancel sequestration’s cuts to programs while keeping its deficit reduction through higher revenues from increased fees. “Most Republicans — conservatives and moderates alike — are hoping Ryan and Murray succeed, because they believe sequester level spending is unsustainable,” Jake Sherman writes in Politico.

But Mulvaney, Jordan, and Scalise aren’t the only Republicans who have come out in favor of keeping sequestration. While Republicans originally tried to pin the blame for the cuts on President Obama, at least eight others have said that they’re a good way to cut the budget and something they want to keep. House Republicans also released a budget plan in July with even deeper cuts, although when it came time to implement the specifics so many balked that it didn’t get a vote. Yet they again made sequestration a baseline leading up to the government shutdown by passing a continuing resolution at those levels in the House.

Sequestration’s damage had a wide-ranging effect this year, impacting the elderly, cancer patients, low-income renters, domestic violence survivors, the homeless, preschool and K-12 students, scientists, the long-term unemployed, and Department of Defense workers, among others. It also reduced economic growth and consumer spending. Yet things get even worse next year if the cuts stay in place, as many of the accounting gimmicks and emergency measures departments took to dampen the blow will no longer be available. The damage compounds the longer the cuts go on. On the other hand, the deficit would look better if the cuts were cancelled and the economy could add as many as 1.6 million jobs and 1.2 percent to GDP growth.


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.

Boehner: The Nation Will Be On ‘The Path’ To Default If Obama Doesn’t Accept GOP Demands

— BY IGOR VOLSKY ON OCTOBER 6, 2013

boehner_debtHouse Speaker John Boehner (R-OH) said the nation would default on its debt later this month if President Obama does not agree to GOP’s demands to cut spending and change parts of the Affordable Care Act.

Appearance on ABC’s This Week on Sunday, Boehner agreed that the risks of defaulting would be “catastrophic,” leading credit markets to freeze, the dollar to lose its value, and interest rates to skyrocket, precipitating another financial crisis. But, he insisted that “the president is putting the nation at risk by his refusal to have a conversation”:

GEORGE STEPHANOPOULOS (HOST): Let me press that. There have been some reports that you have told your own members that you would be willing to put a debt limit on the floor that would pass with democratic votes, even if it didn’t get a majority of the republican caucus. Is that no longer true?

BOEHNER: My goal here is not to have the United States default on its debt. My goal is to have a serious conversation about those things that are driving the deficit and the debt up and the president’s refusal to sit down and have a conversation about this is putting our nation.

STEPHANOPOULOS: He continues to refuse to negotiate, the country is going to default?

BOEHNER: That’s the path we’re on. The president canceled his trip to Asia. I assume — he wants to have a conversation. I decided to stay here in washington this weekend. He knows what my phone number is. All he has to do is call.

Since walking away from two so-called grand bargains in 2011 — which would have reduced the deficit by increasing revenue and lowering spending on certain entitlement programs — Boehner and other Congressional leaders met with Obama to discuss the standoff on Wednesday, though no deal was reached.

As Obama continues to insist that he will only negotiate with Republicans after they re-open the federal government by passing a clean continuing resolution and raise the debt ceiling, GOP lawmakers in battleground states are seeing their poll numbers drop and veteran Republican donors are becoming “increasingly alarmed by the defiant stance of hard-line conservatives.”


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.

Two Critics Of Government Spending Are Forcing The Army To Build Tanks It Doesn’t Want

By Annie-Rose Strasser on Apr 29, 2013 at 11:45 am

Credit: U.S. Army

Congress is forcing the Army to spend nearly half a billion dollars building tanks that Army officials insist they don’t want, with money they say could be better spent elsewhere, according to a new report from the AP.

Sen. Rob Portman (R-OH) and Rep. Jim Jordan (R-OH) are the two members of congress at the helm of the effort to spend $436 million on upgrading the Abrams tank, “a weapon the experts explicitly say is not needed.” The reason? Both represent Ohio, home to the nation’s only tank manufacturing plant, which would profit from the money.

The move is contradictory for the two politicians; both are also vocal advocates for fiscal austerity, and have made careers insisting that the government cut what they see as wasteful spending. It would seem that pushing for tank production against the will of the Army — as Army Chief of Staff Gen. Ray Odierno put it, “If we had our choice, we would use that money in a different way” — is in direct contradiction to that aim.

Still, Rep. Jordan defended his push for the funding, saying, “The one area where we are supposed to spend taxpayer money is in defense of the country.” This is a common line among Republicans. The House GOP’s proposed budget also seeks to restore funding the military says it doesn’t need.

Indeed, Republicans have pushed to maintain defense spending while pushing for cuts to mental health programs, cancer treatment, food safety inspectors, and preschool programs. They have repeatedly ignored or dismissed the assertion from military generals that President Obama’s budget, which would have made targeted cuts to military programs, was an acceptable path to spending reduction.

A cut to one specific program would by no means be a drastic setback for the military; between 2001 and 2011, military spending nearly doubled. American voters, much like the military’s generals, also support scaling back the military’s spending.


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.

What the American People Did NOT Choose

Mar 11, 2013 | By ThinkProgress War Room

6 Things Americans Did Not Vote for in 2012

Tomorrow, Rep. Paul Ryan (R-WI) will release the latest version of his infamous Republican budget plan — you know, the one that ends Medicare as we know it. As we await this plan, it’s worth considering a few things that voters did not choose in the 2012 election.

  1. Paul Ryan: In selecting Ryan as his running mate, Mitt Romney put Ryan and his ideas front-and-center in the election. Voters said thanks but no thanks to Ryan and his radical ideas. Ryan even lost his hometown of Janesville, Wisconsin.
  2. A Republican House of Representatives: President Obama was easily re-elected and Democrats expanded their majority in the Senate, so why are we stuck with a GOP-controlled House of Representatives? Gerrymandering. Democratic House candidates won more than a million more votes than Republican candidates, but districts drawn by Republicans for Republicans allowed the GOP to hold on to their majority. This isn’t even disputed by the Republicans. In fact, they brag about it.
  3. The Middle Class Footing the Bill: The centerpiece of Mitt Romney and Paul Ryan’s economic proposal was a tax plan that raised taxes on the poor and middle class in order to slash taxes for the wealthy. By contrast, President Obama proposed raising taxes on the wealthiest Americans. The GOP budget’s tax proposals is nearly identical to the Romney-Ryan plan rejected by voters in November.
  4. Ending Medicare: Mitt Romney not only chose Paul Ryan, he wholeheartedly embraced Ryan’s controversial plan to end Medicare as we know it and replace it with a voucher system that stands to double seniors’ out-of-pocket health care costs. Romney and Ryan lost key states with senior-heavy populations, including Florida, Pennsylvania, Iowa, and New Hampshire.  Ryan’s preparing to reintroduce his Path to Poverty plan complete with “premium supports” (vouchers) as a means to  “fix” Medicare.  Some fix!  He plans to take our money that we’ve paid into the system all  our working lives and use it to fund tax breaks for the uber-rich for things like deductions for their Yachts.
  5. Repealing Obamacare: Not only did voters not vote for the team that wanted to repeal Obamacare, Mitt Romney says that the president won because of Obamacare. Nevertheless, the GOP budget plan to be unveiled tomorrow will once again call for repealing Obamacare — except for its $716 BILLION in savings from Medicare. Despite demonizing the president for the cuts throughout the campaign, Ryan’s plan keeps those cuts in order to to pay for new tax breaks for the wealthy and special interests like Big Oil and Wall Street banks.
  6. European-Style Austerity: Mitt Romney and Paul Ryan proposed unrealistic draconian spending cuts, while the president proposed investments that will create jobs now and grow the middle class and our economy over the long run. The American people rejected the former and gave an Electoral College landslide to the latter. Nevertheless, the GOP budget plan will feature the kind of unrealistic draconian spending cuts that will make it impossible to make investments in the middle class.The GOP plan will slow down the economy and kill hundreds of thousands of jobs. It’s the same kind of austerity that has led to shrinking economies and record-high unemployment in Europe. Austerity isn’t working there and it won’t work here.

BOTTOM LINE: Paul Ryan and his policies were soundly rejected by voters last November. Instead of doubling down on extreme and unpopular ideas like ending Medicare as we know it and raising taxes on the middle class in order to slash taxes on the wealthy, Republicans should come back to the table and agree to deal with our fiscal challenges in a responsible, balanced manner.

Evening Brief: Important Stories That You Might’ve Missed


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.


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Sequestration, the Pentagon, and the States

Sequestration, the Pentagon, and the States offers selected state-level briefs focused on the local impact of looming automatic across-the-board federal spending cuts known as sequestration and historically high levels of Pentagon spending.

On March 1, unless Congress acts, billions of dollars will be cut from domestic programs and the Pentagon. But while these cuts will have a devastating impact on many domestic programs, the Pentagon is better positioned to absorb them due to the significant growth in military spending over the past decade.

Highlights of the release focus on critical domestic programs that could see their funding cut if sequestration goes into effect, and the impact that modest reductions in Pentagon spending could have to safeguard these programs, such as:

  • A $50 billion cut in Pentagon spending could fund five years of Community Development Block Grants AND five years of Low Income Home Energy Assistance Program (LIHEAP) AND four years of Homeless Assistance Grants.
  • Military spending has grown by 35 percent since 2002, 48 percent if you include war costs. Domestic discretionary spending grew by only 8 percent over that period.
  • Funding for FEMA’s Emergency Food and Shelter Program has been cut by 53 percent over the last three years. Sequestration would reduce the program’s $100 million FY2013 proposed budget by $5.1 million.
  • At the University of Virginia the Virginia share of total projected Pentagon spending for Fiscal Year 2013, $16 billion, would fund all in-state expenses of a four-year education for each incoming freshman class for the next 46.3 years.

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Read the full report published by the National Priorities Project

Why Use a Bludgeon When a Calculator Will Do?

Some lawmakers have an almost-mythical resistance to raising revenue at a moment when affluent individuals and big corporations have the lowest tax burden in more than half a century.

— by Jo Comerford

Jo Comerford is the executive director of the National Priorities Project

Sequestration is both ugly and hard to explain. As a budget wonk, I like to use this metaphor:

It’s as if the American people are being squeezed into the back of a dilapidated Chevy pickup. Careening down a dirt road, we’re headed for a brick wall. Try as we might to wake up from this nightmare, we can’t stop the truck.

That sounds frightening, and it is. Once sequestration kicks in, we’ll feel the impact of approximately $85 billion in automatic, across-the-board federal cuts focused almost exclusively on discretionary spending.

image

Designed as the ultimate penalty — a bludgeon when what’s called for is a calculator — sequestration was supposed to force members of Congress to work together within a deficit reduction paradigm. It failed as a disciplinary measure for our lawmakers and it’s looking more likely to fail us all, especially the most vulnerable and marginalized Americans.

Discretionary budget cuts aren’t equal. As legislated, sequestration slashes more or less evenly from what’s known as defense and non-defense discretionary spending. That sounds fair on the surface but consider that — at 57 percent of all discretionary spending —Pentagon-related federal expenditures have risen 35 percent since 2002, 48 percent when you include war costs. At the same time, non-military discretionary spending increased only eight percent, with notable reductions in funding for key social programs between 2010 and 2013.

Unlike the audit-dodging Pentagon, which has drawn bipartisan criticism for waste and bad management, there’s no excess to trim. Sequester cuts to depleted social initiatives will mean less money flowing into state and local budgets, job loss, and the termination of services in sectors where there are already aching gaps between what’s needed and what’s offered. The needs won’t evaporate. The costs will shift to cash-strapped state and local governments in the form of property tax hikes and budget overrides.

Consider the F-35 Joint Strike Fighter. While we’ve been splitting hairs over public dollars for food and roads, the F-35 has become the most costly weapons program in U.S. history due to setbacks and delays. The cost of just one of these jets (and 2,457 are on order this year) is nearly equal to the entire cut projected for Low Income Home Energy Assistance Program expected to take effect under sequestration.

Further, budgets are about revenue and spending. Many in Congress believe that the pot of money to be spent or saved is finite. It isn’t. Yet, some members have an almost mythical resistance to raising revenue at a moment when affluent individuals and big corporations have the lowest tax burden in more than half a century.

imagePrior to January 1, the top 1 percent of income earners got a bigger annual income-tax break than the bottom 99 percent earned on average each year. Members of Congress grudgingly let most of that benefit sunset at the end of 2012. As a result, we’ll see approximately $620 billion in additional revenue over the next decade.

There’s more available. What about ending the Bush tax cuts for the second-richest one percent? And what about corporations? Officially, large U.S. companies are slated to pay a 35 percent tax on their profits. In practice, they pay nothing like that. In 2012, for example, corporate givebacks, loopholes, and overseas tax havens cost the Treasury $165 billion.

We’d have a different national conversation right now if Congress would muster the political will to tackle tough questions like these.

The bottom line is that sequestration upends democracy. Americans deserve better than government by crisis. Through our taxes, we’re the nation’s major bill payers. Sequestration robs us — and our lawmakers — of our right and responsibility to make nuanced, thoughtful decisions about the fate of our nation. We need a federal budget by the people, for the people.


Jo Comerford is the executive director of the National Priorities Project. NPP is part of the Pentagon Budget Campaign, a broad national effort to rein in wasteful Pentagon spending. NationalPriorities.org  Distributed via OtherWords (OtherWords.org)

Hope and Change Fade, but War Endures—Seven Reasons Why We Can’t Stop Making War

— by William J. Astore

imageIf one quality characterizes our wars today, it’s their endurance.  They never seem to end.  Though war itself may not be an American inevitability, these days many factors combine to make constant war an American near certainty.  Put metaphorically, our nation’s pursuit of war taps so many wellsprings of our behavior that a concerted effort to cap it would dwarf BP’s efforts in the Gulf of Mexico.


Our political leaders, the media, and the military interpret enduring war as a measure of our national fitness, our global power, our grit in the face of eternal danger, and our seriousness.  A desire to de-escalate and withdraw, on the other hand, is invariably seen as cut-and-run appeasement and discounted as weakness.  Withdrawal options are, in a pet phrase of Washington elites, invariably “off the table” when global policy is at stake, as was true during the Obama administration’s full-scale reconsideration of the Afghan war in the fall of 2009.  Viewed in this light, the president’s ultimate decision to surge in Afghanistan was not only predictable, but the only course considered suitable for an American war leader.  Rather than the tough choice, it was the path of least resistance.

Why do our elites so readily and regularly give war, not peace, a chance?  What exactly are the wellsprings of Washington’s (and America’s) behavior when it comes to war and preparations for more of the same?

Consider these seven:

  1. We wage war because we think we’re good at it — and because, at a gut level, we’ve come to believe that American wars can bring good to others (hence our feel-good names for them, like Operations Enduring Freedom and Iraqi Freedom). Most Americans are not only convinced we have the best troops, the best training, and the most advanced weapons, but also the purest motives.  Unlike the bad guys and the barbarians out there in the global marketplace of death, our warriors and warfighters are seen as gift-givers and freedom-bringers, not as death-dealers and resource-exploiters.  Our illusions about the military we “support” serve as catalyst for, and apology for, the persistent war-making we condone.
  2. We wage war because we’ve already devoted so many of our resources to it.  It’s what we’re most prepared to do.  More than half of discretionary federal spending goes to fund our military and its war making or war preparations.  The military-industrial complex is a well-oiled, extremely profitable machine and the armed forces, our favorite child, the one we’ve lavished the most resources and praise upon.  It’s natural to give your favorite child free rein.
  3. We’ve managed to isolate war’s physical and emotional costs, leaving them on the shoulders of a tiny minority of Americans.  By eliminating the draft and relying ever more on for-profit private military contractors, we’ve made war a distant abstraction for most Americans, who can choose to consume it as spectacle or simply tune it out as so much background noise.
  4. While war and its costs have, to date, been kept at arm’s length, American society has been militarizing fast.  Our media outlets, intelligence agencies, politicians, foreign policy establishment, and “homeland security” bureaucracy are so intertwined with military priorities and agendas as to be inseparable from them.  In militarized America, griping about soft-hearted tactics or the outspokenness of a certain general may be tolerated, but forceful criticism of our military or our wars is still treated as deviant and “un-American.”
  5. Our profligate, high-tech approach to war, including those Predator and Reaper drones armed with Hellfire missiles, has served to limit American casualties — and so has limited the anger over, and harsh questioning of, our wars that might go with them.  While the U.S. has had more than 1,000 troops killed in Afghanistan, over a similar period in Vietnam we lost more than 58,000 troops.  Improved medical evacuation and trauma care, greater reliance on standoff precision weaponry and similar “force multipliers,” stronger emphasis on “force protection” within American military units: all these and more have helped tamp down concern about the immeasurable and soaring costs of our wars.
  6. As we incessantly develop those force-multiplying weapons to give us our “edge” (though never an edge that leads to victory), it’s hardly surprising that the U.S. has come to dominate, if not quite monopolize, the global arms trade.  In these years, as American jobs were outsourced or simply disappeared in the Great Recession, armaments have been one of our few growth industries.  Endless war has proven endlessly profitable — not perhaps for all of us, but certainly for those in the business of war.
  7. And don’t forget the seductive power of beyond-worse-case, doomsday scenarios, of the prophecies of pundits and so-called experts, who regularly tell us that, bad as our wars may be, doing anything to end them would be far worse.  A typical scenario goes like this: If we withdraw from Afghanistan, the government of Hamid Karzai will collapse, the Taliban will surge to victory, al-Qaeda will pour into Afghan safe havens, and Pakistan will be further destabilized, its atomic bombs falling into the hands of terrorists out to destroy Peoria and Orlando.

Such fevered nightmares, impossible to disprove, may be conjured at any moment to scare critics into silence.  They are a convenient bogeyman, leaving us cowering as we send our superman military out to save us (and the world as well), while preserving our right to visit the mall and travel to Disney World without being nuked.

The truth is that no one really knows what would happen if the U.S. disengaged from Afghanistan.  But we do know what’s happening now, with us fully engaged: we’re pursuing a war that’s costing us nearly $7 billion a month that we’re not winning (and that’s arguably unwinnable), a war that may be increasing the chances of another 9/11, rather than decreasing them.

Capping the Wellsprings of War

Each one of these seven wellsprings feeding our enduring wars must be capped.  So here are seven suggestions for the sort of “caps” — hopefully more effective than BP’s flailing improvisations — we need to install:

  1. Let’s reject the idea that war is either admirable or good — and in the process, remind ourselves that others often see us as “the foreign fighters” and profligate war consumers who kill innocents (despite our efforts to apply deadly force in surgically precise ways reflecting “courageous restraint”).
  2. Let’s cut defense spending now, and reduce the global “mission” that goes with it.  Set a reasonable goal — a 6-8% reduction annually for the next 10 years, until levels of defense spending are at least back to where they were before 9/11 — and then stick to it.
  3. Let’s stop privatizing war.  Creating ever more profitable incentives for war was always a ludicrous idea.  It’s time to make war a non-profit, last-resort activity.  And let’s revive national service (including elective military service) for all young adults.  What we need is a revived civilian conservation corps, not a new civilian “expeditionary” force.
  4. Let’s reverse the militarization of so many dimensions of our society.  To cite one example, it’s time to empower truly independent (non-embedded) journalists to cover our wars, and stop relying on retired generals and admirals who led our previous wars to be our media guides.  Men who are beholden to their former service branch or the current defense contractor who employs them can hardly be trusted to be critical and unbiased guides to future conflicts.
  5. Let’s recognize that expensive high-tech weapons systems are not war-winners.  They’ve kept us in the game without yielding decisive results — unless you measure “results” in terms of cost overruns and burgeoning federal budget deficits.
  6. Let’s retool our economy and reinvest our money, moving it out of the military-industrial complex and into strengthening our anemic system of mass transit, our crumbling infrastructure, and alternative energy technology.  We need high-speed rail, safer roads and bridges, and more wind turbines, not more overpriced jet fighters.
  7. Finally, let’s banish nightmare scenarios from our minds.  The world is scary enough without forever imagining smoking guns morphing into mushroom clouds.

There you have it: my seven “caps” to contain our gushing support for permanent war.  No one said it would be easy.  Just ask BP how easy it is to cap one out-of-control gusher.

Nonetheless, if we as a society aren’t willing to work hard for actual change — indeed, to demand it — we’ll be on that military escalatory curve until we implode.  And that way madness lies.


William J. Astore is a retired lieutenant colonel (USAF) and TomDispatch regular.  He has taught at the Air Force Academy and the Naval Postgraduate School and currently teaches History at the Pennsylvania College of Technology.  He may be reached at wjastore@gmail.com.

Copyright ©2010 William J. Astore

More Outright Lies Directly from the Mouth of Eric Cantor

“The president said we do not need a bigger government, but a smarter government, and I agree. But actions speak louder than words,” said House Majority Leader Eric Cantor (R-Va.). “For four years, we have seen record deficits and mountains of debt heaped on our children and grandchildren. And for four years we have seen little to no action from President Obama or his Democratic colleagues in the Senate to take our spending problem seriously,” Cantor added.

Really?  If that were the case, one would expect to see bar charts, on one web page after another, exploding ever upward.  But that’s absolutely NOT the case.  In fact, the opposite is true.  The Federal Budget Deficit is dropping!

Deficit-chart-02-06-13

Yes, I recognize there is a difference between “deficits” and “debt”.  Yes, the deficits are declining, but because there is still a “deficit” … that means that debt is still rising.  The federal budget deficit in 2013 is projected to be $845 billion, the first time the non-partisan Congressional Budget Office has forecast a deficit below $1 trillion under President Obama.

That reduction in the budget deficit comes after Congress finally approved higher tax rates on households with annual income above $450,000.

Mr. Cantor would like you to believe that cuts in spending are the ONLY remedy our nation needs to bring down the deficit.  He’s about to be proved absolutely and definitively WRONG.  You see, the sequester is now hanging out there ready to cut the living bejesus out of government spendin.  And, the Republicans want you to believe it’s Obama’s-quester —thus any bad effects are all his fault.  But, that’s simply NOT the case.  The GOP leadership in their stubborn stance failing to consider any form of compromise actually helped design the sequester’s inflexible and arbitrary across-the-board deep cuts. And, they were thrilled with that result.

Don’t believe me … then let’s go to tape … and listen to Boehner himself  declare just how happy he was with the resultant agreement:

The GOP’s hands are not only stained with the sequester’s nastiness, but they voted en masse to ensure its passage—after all, they thought of it as a means to get their way.  They should have been more mindful about what they wished for, because in 2 weeks, those draconian sequestration cuts are slated to take effect.

Apparently, they couldn’t care less.  By their actions, they’ve communicated that they view this as nothing more than some big game of “bluff” and they intent to see who’s gonna blink first. Why else would they be recessing Congress and heading home like their job was done?  They see absolutely nothing critical on the agenda — so they’re just gonna head home, put their feet up on the foot rest and swill down a few mint juleps during Marti Gras season.

These guys designed the sequester’s series of sudden, deep cuts in military and domestic spending to be so destabilizing and unthinkable that it would force Washington to work together on an alternative budget.  That clearly has NOT been the case.  And, the GOP’s disregard for the seriousness of our economic predicament is astounding.

Sequestration can only be avoided if Congress passes legislation that undoes the legal requirement in the Budget Control Act (BCA) and President Obama signs that legislation before March 1, 2013. So, what are they doing?  They’re headed out on RECESS like a bunch of 6 year olds in grade school.

Based on the across-the-board draconian cuts they designed into the sequester,  the American economy is poised to lose, at a minimum, 750,000 jobs, and that’s just this year alone.  $44B in cuts to federal outlays are set to start on March 1.  In simple terms, that’s an 8% cut for defense-spending and a 6% cut for non-entitlement, non-defense spending.

The Congressional Budget Office (CBO) estimated that, if no legislation originating from the deficit reduction committee was enacted, the automatic enforcement process (sequestration) specified in the BCA would mandate the following spending cuts between 2013 and 2021:

  • Reductions ranging from 10.0 percent (in 2013) to 8.5 percent (in 2021) in the caps on new discretionary appropriations for defense programs, yielding total outlay savings of $454 billion.
  • Reductions ranging from 7.8 percent (in 2013) to 5.5 percent (in 2021) in the caps on new discretionary appropriations for non-defense programs, resulting in outlay savings of $294 billion.
  • Reductions ranging from 10.0 percent (in 2013) to 8.5 percent (in 2021) in mandatory budgetary resources for nonexempt defense programs, generating savings of about $0.1 billion.
  • Reductions of 2.0 percent each year in most Medicare spending because of the application of a special rule that applies to that program, producing savings of $123 billion, and reductions ranging from 7.8 percent (in 2013) to 5.5 percent (in 2021) in mandatory budgetary resources for other nonexempt non-defense programs and activities, yielding savings of $47 billion. Thus, savings in non-defense mandatory spending would total $170 billion.
  • About $31 billion in outlays stemming from the reductions in premiums for Part B of Medicare and other changes in spending that would result from the sequestration actions.
  • An estimated reduction of $169 billion in debt-service costs.

Those deep spending cuts come at the expense of something.  They’ll come at the expense of public employee jobs, jobs of those with whom our government has contracted to provide services, and those who make goods sold for those government contractors to consume in providing goods/services directly to the government.  Thus, job losses will be incurred both directly and indirectly, as well publicly and privately, throughout our economy.  And, because those cuts are going to affect both Defense and Non-Defense spending, that also means that folks like teachers, fire-fighters, healthcare workers, et.al., all across our nation, are going to be impacted as well.

Have you figured out where I’m going yet?  You know how the GOP has been saying how they’re all about JOBS, JOBS, JOBS?  Well, most Americans thought the GOP meant they were all about “job creation.”  Surprise!  Not so!  Through their actions (and in-actions), it should now be ever more clear, the GOP is NOT about “job creation” … but they are seriously into job destruction and elimination.

Based on the sequestration cuts, the Congressional Research Services (CRS) looked at the overall economy and says we can expect much larger reductions in employment.  Considering both direct and indirect losses throughout the U.S. economy, they expect the losses on the order of 2.1 million jobs in FY2013:

  • 746,000 were direct jobs (277,000 federal civilian jobs and 469,000 prime contractor jobs),
  • 433,000 indirect jobs at suppliers and other firms that depend on prime contractors for business, and
  • 959,000 will be related to “induced jobs” (i.e., jobs throughout the economy supported by workers in direct and indirect jobs spending a portion of their paychecks).

Already, the Air Force, Army, and Navy have implemented immediate hiring freezes on civilian employees. The Pentagon not only has begun to lay off many of its 46,000 temporary employees and contractors, but also is expected submit a request to Congress to authorize furloughing its 800,000 civilian employees.

So where is all this leading?  Since 2.1 million people will no longer be “working” — those 2.1 million workers will not be paying taxes.  Hence, revenues necessary to fund government and our insatiable need to wage war throughout the world will be insufficient to cover the costs.  That means the GOP will once again mount their soapbox and rail as loudly as they can, how we need to make even deeper cuts!  It will be come an ever deeply spiraling circle bringing about our nation’s demise.

So, here’s my question.  While your Congressman/woman is home on recess (vacation), have you made your plans yet to bend his or her ear and try to convince them of the errs of their ways?  Or, are you content to just let everything go on as usual and let them destroy our nation?

References and related posts: