Archive for debt limit

Memo to GOP: Federal deficit shrinking at surprising rate, long-term debt stabilized for next decade #BlameObama

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chart budget deficit shrinks 4 year low Steve Benen Maddow Blog Oct 2012

Another Republican talking point is biting the dust in a big way. Previously I posted U.S. budget surplus biggest in 5 years; federal deficit is down 32% so far this fiscal year and Congressional Budget Office: Federal budget deficit declining; $231 billion less than 2012 #BlameObama.

Now, the Los Angeles Times has two reports that buttress those. It’s good news for President Obama and America, bad news for GOP whiners and obstructionists:

The federal deficit is shrinking more quickly than expected, and the government’s long-term debt has largely stabilized for the next decade, the Congressional Budget Office said Tuesday in a report that could strengthen the Obama administration’s hand in the budget battles with congressional Republicans. [...]

The deficit projection for this year — $642 billion — is almost 25% less than the deficit the budget office had forecast as recently as February. At the new level, the annual deficit would be back to where it was before President Obama took office. It would continue to fall for the rest of Obama’s tenure, the budget office now projects.  [...]

By 2015, the budget office forecasts, the deficit will fall to just over 2% of GDP, a level that most economists would consider relatively insignificant.

What?! Why, that’s positively unpatriotic! Here are the reasons for the shrinkage:

1. A better economy. Let’s repeat that: A better economy.

2. The rate of medical inflation is slowing down — which reduces the cost of Medicare and Medicaid.

3. Congress approved higher taxes, remember? That was when the dreaded “fiscal cliff” was the topic du jour.

I appreciated this very clear, concise explanation of the deficit and debt:

The federal deficit is the gap between what the government spends each year and its revenue, mostly taxes. The government has run a deficit almost every year for the last half-century. The federal debt represents the accumulated money that the government borrows to cover that deficit. [...]

Underscoring the political dynamic, Republicans, who trumpeted news of higher deficits during Obama’s first term, fell largely silent in reaction to the new figures.

 Of course they did. They always do when their political attacks get destroyed by pesky facts.

And then there’s this, also from the L.A. Times:

American families reduced their debt load in the first three months of the year by 1%, bringing it down to pre-recession levels after an uptick in the last quarter of 2012, the Federal Reserve said Tuesday.

What a scandal!

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What I will not write about today

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frustrated24

Sometimes I get so frustrated and/or disheartened and/or annoyed by some of the news stories of the day that I can’t bring myself to write about them. Here are a few recent reports that made my blood pressure hit the roof. I am avoiding delving into them at length out of concern for my physical and mental health.

 bush embassies dead smaller

There is no there there. This is nothing but a partisan politics, embarrassing conspiracy theories, and a witch hunt. Now stop wasting our time.

Need a palate cleanser? Me too! Majority In Virginia Supports Stricter Gun Laws. So there.

See what I mean? So who’s up for a couple of Margs or a trough of wine?

drunk wine classy

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Congressional Budget Office: Federal budget deficit declining; $231 billion less than 2012 #BlameObama

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oy

First let me share a few headlines, then I’ll get into some detail. All of these are from The Hill, including the blog headline about the CBO showing a decline in the budget deficit:

So to recap: The federal budget deficit is shrinking, Mitch McConnell and his Merry Band of Loons are doing their usual obstruction dance, the White House will veto if the GOP insists on continuing their “the debt limit is just default by another name” b.s., and the likelihood of an agreement on anything in the world ever is shrinking as fast as the deficit.

Can this get any more frustrating?

Check this out, keeping the new Republican-opposed tax increase in mind:

The Congressional Budget Office reported Tuesday that the federal budget deficit is declining this year compared to fiscal 2012.

For the first seven months of 2013, the deficit was $489 billion. That is $231 billion less than the budget shortfall for the comparable period last year.

The decrease is almost entirely due to revenue increases. Revenues rose $200 billion and spending decreased only $11 billion.

And McConnell continues to insist that Republicans will block an increase the debt limit if it is not attached to legislation to reduce the federal deficit. They don’t want us to pay our bills. Sorry, I lost control and lapsed into a larger font. 

The White House:

“American families do not get to choose which bills to pay and which ones not to pay, and the United States Congress cannot either without putting the Nation into default for the first time in its history.”

There’s that. And Mitch? The federal deficit is already shrinking… Remember?

chart budget deficit shrinks 4 year low Steve Benen Maddow Blog Oct 2012

Harry Reid said, “We’ve known for years that the Tea Party has full control of the House, but now we understand they have full control of the Republican caucus here in the Senate.”

Reid noted the most outspoken Republican on the issue of moving to a budget conference has been Sen. Ted Cruz (R), whom he called the “very junior senator from Texas.”

it's crazy in here

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“The Republicans and Democrats bet they can make each other blink first.”

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you blinked

Another guest post is by our pal and regular TPC contributor, David Garber:

Wanna Bet?

From time to time, on this very site, Laffy and Paddy post very interesting bar bets. Sure ways you’ll win a free drink if you can find a sucker to take them. I love those as there’s always a catch. A gimmick. A “trick” either with words or with actions. Some of these simply amaze me. Others cause you to slap your forehead and make you ask, why didn’t I see that?

But once in a while, you do “see that” or you amend the challenge so it goes in your favor. The sequester is just such a bar bet.

Here’s how. The Republicans and Democrats bet they can make each other blink first. That’s the misdirect. They have you thinking about blinking, when really what this is all about is getting some budget cuts — with or without increased revenue — depending on your point of view.

So the gauntlet is tossed. It’s called sequestration. The Democrats make a go of it by playing Chicken Little. They say the sky’s falling. The Republicans counter playing Rope-A-Dope. They say we need even deeper cuts and no revenue increase. We don’t want to touch taxing yachts, private jets, or cutting write-offs for third and fourth houses. (Some might call this the 2% rule as it affects only the top 2% of the country) — and while we’re at the cutting stage, let’s drop a bunch of  our social safety nets, just to be on the “safe” side and get the Dems to blink. (That’s called sticking it to the 98%)

The cocky Congress accepts the bet. Sequestration, the challenge, begins. But neither side blinks. So who wins? The Republicans say they do. “Look at all those cuts we got in sequestration ” The Democrats are saying, “Not so fast. Look at all the jeopardy you’re causing by weakening our defense, gumming up our air travel and putting our health and food safety at risk!”

The payoff is about to come. And just like hearing an old joke, you know the punchline before it comes — but also like an joke, it’s only old if you’re heard it before. And we have. The Republicans say we’re not weak on defense, we’re strong. And they pull out the old, “Let’s create a new spending bill and only address those things we want put back in the budget and even increase defense spending to show our steel balls. We have the majority in the House. We can pass it and save the day.” The Republicans to the rescue.

They’ll force Obama and the Democrats to look weak on defense and border protection if they don’t go along. They calculate that the Democrats will blink. The House is in Boehner’s pocket on this one. And the Senate won’t have enough Democrats who are strong enough to vote against national security to stop the new spending bill to make it to Obama’s desk.

Blink.

But wait! It’s a bar bet after all. And there’s always a gimmick.

The Democrats counter, taken directly from the Republican play book — load the bill down with totally unrelated additions. Tack on teaching, research, first-responders, air traffic controllers, airport security, FDA funding, et al — maybe even a new bridge to nowhere– everything else that has been cut under sequestration, forcing the spotlight on the Republicans as they try to pare those additions from the bill.

The spotlight moves off of the Dems and onto the Repubs, making them look like obstructionist weaklings — and who can argue with that description — Bobby Jindal? Newt Gingrich? Maybe call in Jeb Bush? It’s called the double end around play. Reconciliation between House and Senate bills.

The point of this lesson is that the trick is in the details — and by trying to make the Democrats look weak, they can turn the table and make the Republicans look even weaker by having passed these cuts to begin with. Sure some Dems voted for it — with a gun put to their head to get an increased debt ceiling so we didn’t default on our obligations. Not going into sequestration to start would have been the smart move. But who can accuse these cronies of being smart?

Fortunately, there’s still time before irreparable damage has been done to pass a simple bill rescinding the sequestration portion of the 2011 budget bill — called the 2013 Budget Adjustment Bill. It may take a week or so — right now Congress has no skin in this fight. Their salaries are guaranteed not to be touched. So they’re not in any hurry. We Americans are, but we’ll have to wait it out for the bar bet to be called a draw, and then we go right back to where we were. Both sides blinking at the same time.

So let’s patiently watch this bet play out. If done right, the status quo will return. If done wrong, the Democrats lose and we along with them. So grab a bar stool and let’s see if I’m right. Wanna bet?

For the past 25 years, David Garber has been serving as the show runner and or writer on some of television’s biggest hits… Saved By The Bell, Power Rangers, 227, Bill Cosby Show and many other network series. His writing and producing have also netted David two very prestigious awards:the PRISM AWARD and the TV CRITICS AWARD – TV SPECIAL OF THE YEAR. Currently he’s authoring a short story series called “A Few Minutes With…”

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“People have figured out what Republicans want: Cut taxes for the rich and if the country goes to the dogs, it is Obama’s fault.”

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blame obama

Today’s L.A. Times letters to the editor, because our voices matter:

Re “Obama’s dangerous experiment,” Opinion, Feb. 28

Rep. Howard P. “Buck” McKeon (R-Santa Clarita), the chairman of the House Armed Services Committee, fails to mention that he himself voted for the “sequester” in 2011.

Two conclusions can be made: that he agreed with these cuts at the time, or that he negotiated in bad faith, planning to undo the cuts that he didn’t like at a later date.

McKeon infers from President Obama’s behavior that the administration wishes to “hollow out” the U.S. military.

I infer from McKeon’s behavior that he wishes to protect a small number of defense contractors (that donated large sums to his campaign) at the expense of the large number of average citizens in his district who benefit from social programs.

Richard Olmstead
Van Nuys

***

McKeon mentions the president’s proposals to avert sequestration, then goes on to blame Obama for all the ills that sequestration will visit on the military. Huh?

He also whines about previous cuts to the military budget, despite the fact that one GOP-initiated war has been wound down and the second is in the process of being ended.

The Republicans can’t have it both ways — either focus on the budget cuts and suck up the pain, or work with the president to find alternatives.

Enough with the hypocrisy.

Brent Vanderwood
Mission Viejo

 ***

Dear Congressman: You may be absolutely right about what may happen to the military and to civilian jobs because of the sequester. You may also be absolutely right that it really was a “dangerous experiment.”

But I did not think that Republicans would care so much for cutting budgets that they would rather destroy the country.

People have figured out what Republicans want: Cut taxes for the rich and, in that fight, if the country goes to the dogs, it is Obama’s fault.

I am a small-business owner. Can you tell me what you have really done for us? If more people had money, I would have more customers. I do not make money when only the rich can afford my products and there are not enough people in the middle who can.

Sam Mookerjee
Canoga Park

***

If one were to look at the yea and nay votes in the House on the sequestration bill, one would see that McKeon voted in favor.

If civics were still taught in our schools, we’d see that the president can create no laws; that is the job of Congress — the Senate and the House of Representatives.

So now my elected representative is blaming the president for the sequestration problem? Doesn’t sound to me like the party of “personal responsibility” is capable of taking any.

Doug Kimball
Lancaster

***

The sequester is wrong, but McKeon’s solution is absurd.

The Republican bill passed in the last session would cut deeply into programs for the poorest in our country to maintain a level of military spending that dwarfs the rest of the world’s.

Now, while we are in a recovery period from the recession, is not the time to be cutting spending. We should have a short-term stimulus package coupled with a long-term tax reform and spending package.

We do need to do something to control the cost of Medicare in the long term; the healthcare law is starting to address this issue.

Michael Ubell
Oakland

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Hey America, guess what! Paul Ryan still wants to kill Medicare!

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medicare poster paul ryan, eric cantor, boehner

privatization

Austerity does not work. Just ask Europe. Privatization doesn’t either, it just widens the wealth gap and creates more inequality. In fact, because of budget cuts, “even police protection is more accessible to those with cash.”

Steve Benen at The Maddow Blog:

The unemployment rate was effectively unchanged at 7.9%, and as is often the case, austerity measures undermined the employment landscape — while America’s private sector added 166,000 jobs in December, the public sector lost 9,000 jobs. Indeed, over the last three months, the nation’s private sector added 624,000 jobs, while 24,000 government jobs were lost.

It’d be easy for Washington to improve the latter number and lower the unemployment rate, but congressional Republicans won’t allow it.

By the way, GOP, you can scratch more talking points off your list, because three-quarters of deficit reduction has been via spending cuts, and we have the slowest spending in decades.

The L.A. Times:

Fired up as once-unimaginable spending cuts start to slice the federal budget, Republicans are launching a new phase in their austerity campaignresurrecting the party’s cost-cutting plan to turn Medicare into a voucher-like system for future seniors.

Read that first part again. Republicans are “fired up” over the nation going down the sequester toidy, and they actually believe they have momentum. And by momentum, they mean every poll showing disagreement with their policies:

poll cuts taxes ed showpoll sequester ed show

In fact, GOP Sen. Rob Portman was protested at panel discussion for supporting Medicare, Social Security cuts.

And Michael Hiltzik wisely asks: Cut Medicare and Social Security? What’s the rush?  There’s a good reason why Republicans refuse to provide details.

Did I mention that those “future seniors” who Republicans speak of so dismissively may not realize it yet, but they won’t like what’s coming down the ol’ voucher pike?

So what do they do with their imaginary momentum? Clearly, something constructive to get us out of the ditch their party created, right?

Ryan’s approach would transform the benefits program into one that would provide a fixed amount of money in a voucher that future seniors could apply to the cost of buying private health insurance or to buying coverage through traditional Medicare.

Again, that “fixed amount of money” is a drop in the bucket compared to the costs of even one medical procedure… which would be covered by Medicare. And how many seniors can or want to switch from Medicare– a program that works so well and has a proven track record– to spending a fortune on premiums to Big Insurance which cares nothing about them but cares a whole lot for their damned bottom line?

What part of “This plan has never gotten American support” doesn’t Ryan get? Read our lips, Paul: That would shift healthcare costs from the government to seniors.

Ryan’s budget proposal is expected to lock in $1.2 trillion in sequestration-linked cuts over the next decade, while also reducing growth in the costs of Medicare and Medicaid — the health program for the poor, disabled and seniors in nursing homes. Other safety net programs, including food stamps and school lunches, also would be targeted.

See how the GOP is changing their ways in order to appeal to more voters? Me neither.

Oh, and to anyone out there who still thinks Chris Christie is worthy of praise and would make a swell Dem, think again. Chris Christie supports the Ryan Budget.

Finally, just for good measure, a couple of L.A. Times letters to the editor, because our voices matter:

Re “Seniors vs. kids claim is a sham,” Business, Feb. 27

As a senior, I am concerned about my Social Security and Medicare benefits. However, I am also concerned about the future prosperity of my children and grandchildren.

Your writer correctly points out that the chatter about “generational theft” in the debate over national fiscal policy is an intentional distraction. This false proposition that we must choose between spending on seniors’ benefits or spending on our children’s futures diverts attention from the national economic policies of the last 30 years, which have damaged the economic security of most Americans. These flawed policies caused an immense transfer of wealth to the top 1% while most Americans’ incomes stagnated.

We don’t need excessive wealth languishing in private hands and corporate slush funds. Our country has enough wealth to serve the needs of all our seniors, our families and our children. We need more of this wealth redirected to serve all Americans.

John D. Kelley
Santa Barbara

***

The argument that Social Security is causing a generational rift is just as false as the use of the term “entitlements” to describe both Social Security and Medicare.

The generational theft is a scam created by those who are trying to kill these programs. The truth is that the benefits from these programs may be greater for young people than they are to the old.

Consider this: When Social Security and Medicare pay for the cost of caring for your parents and grandparents (and that is who the old people are), it relieves the young of that obligation. The point is, if those programs do not pick up those costs, who do you think will have to? The children and grandchildren.

Sanford Thier
Marina Del Rey

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Hysteria kill: Experts say that U.S. debt woes are not so dire

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Nuke War Kids Under Desk

One of my biggest pet peeves is when someone tells me to calm down when I haven’t been un-calm. Saying, “Calm down” just makes me less calm, in fact.

But there are times, clearly, when advice like that is entirely appropriate. This is one of those times. So, America– calm down. Panicking over the country’s debt issues is so GOP ago.

And in case there was still any doubt: We. Are. Not. Greece. Clear? Unless, of course, Republicans continue to insist on austerity measures and block common sense legislation.

But for now, we still have time and we can do this.

The L.A. Times:

Listening to the political shouting match and seeing Washington lurch from one fiscal crisis to another, one might think the federal budget deficit is the economic equivalent of a giant meteor hurtling toward America, about to hit any day.

The reality is quite different. In fact, the debt is probably not even the country’s biggest economic challenge, most experts say, and certainly not the most urgent.

The evidence shows that the country is on a course of spending and debt accumulation that could lead to serious trouble not today or tomorrow but probably 10 to 20 years down the road.

What the evidence does not show is that such a crisis is close at hand or that the U.S. is in any imminent danger of turning into an economic basket case like present-day Greece.

Moreover, financial experts agree that although America’s burgeoning healthcare costs pose huge long-term challenges for the budget, the nation’s debt could most likely be controlled for at least the next decade by making a series of relatively moderate policy changes. Those changes, although perhaps unwelcome, would not require drastic adjustments in the lives of most Americans.

As the article notes, the economy is still growing and inflation is under control, plus our credit standing is still strong and we have control over our currency, unlike the Eurozone.

So breathe, America. Breathe.

we are not greece

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