Yesterday, our lawmakers allowed us the privilege of $85 billion worth of spending cuts. Republicans promise that this will help put the United States back on solid fiscal footing. I don’t see it that way. The sequester looks to me like a lot of pain without much, if any, gain.
The recession battered the budget, driving down tax revenues and swelling outlays for unemployment insurance, food stamps, and other safety net programs. We calculate that changes in the economic outlook since the summer of 2008 account for over $400 billion of the deficit in both 2009 and 2010 and smaller amounts in later years. We estimate that the downturn has pushed up deficits by $2.5 trillion (including the associated interest costs) over the 2009-2018 period.
We have slightly revised our estimates of the automatic budget cuts — known as sequestration — scheduled to begin March 1 under the “fiscal cliff” deal reached at the start of the year. The table below lays out what will happen if sequestration, required by the 2011 Budget Control Act, takes effect as scheduled.
The fiscal cliff deal lowered the 2013 sequestration by $24 billion, from $109.3 billion to $85.3 billion. This shrinks the percentage cuts in full-year funding for most programs subject to the automatic cuts. However, the fiscal cliff deal did not affect the Medicare cut, which remains capped at 2 percent.
“So if we don’t see an agreement between the two leaders in the Senate,” the president said, “I expect a bill to go on the floor — and I’ve asked Senator Reid to do this — put a bill on the floor that makes sure that taxes on middle class families don’t go up, that unemployment insurance is still available for 2 million people and lays the groundwork then for additional deficit reduction and economic growth steps.”
Here’s how that threat would play out. Taxes will automatically go up on all income earners next week if a deal isn’t struck. Senate Majority Leader Harry Reid (D-NV) will put forth legislation to bring taxes back down for middle incomes. That’ll leave Senate Republicans with a choice: either let it move forward and pass, or go on record filibustering a middle class tax cut as the nation watches. Both bad choices.
Just because it looks as if the Keystone Pipeline is dead, don’t think that this fight is over. Some very powerful people stand to make tons of money for this project to simply die. It will be back, I promise.
For the second time in as many months, the Obama administration has rejected the Keystone XL pipeline—a hugely controversial project that would traverse the length of the country from Nebraska to the Gulf of Mexico, carrying heavy and dirty tar sands oil from deep in Canada.
You’ll recall that, following a summer of protests and civil disobedience, the administration announced in November that it was delaying the project for at least a year, until a less disruptive route around a key aquifer in Nebraska could be studied and proposed. (Many believe this delay would kill the project entirely).
But Republicans successfully revived the project during the end-of-year negotiations on the payroll tax cut and unemployment insurance. Democrats desperately wanted these measures, and the final bill included a provision that would force the State Department to issue a decision on Keystone within two months. (more…)
Oh, btw, I don’t buy the GOP argument that the pipeline would make 2500 or 100,000 jobs. Media Matters clearly shows how the media pumped up the jobs numbers.