discretionary spending Archives - Where Is The Outrage?

The Sequester from a business prespective

With the Dow Jones hitting all-time highs, I thought that it would be instructive to see what Wall Street thought about the sequester.

A few thoughts from Goldman Sachs:

In 2011, Congress passed and the President signed the Budget Control Act, which raised the debt limit by $2.1 trillion and cut $2.1 trillion from projected spending over the following ten years. Caps on discretionary spending levels were estimated to reduce spending by $900bn compared with baseline projections that assumed spending would growth with inflation. The remainder of the savings was to be achieved by the congressional “super committee.” To motivate the super committee, and to ensure deficit reduction even if it failed, the legislation established $1.2 trillion in automatic cuts through 2021 by means of sequestration if the super committee could not agree on at least that much in deficit reduction. The super committee failed to agree on a deficit reduction package, leaving sequestration to take effect….

The cuts are not that large in the context of the $3.5 trillion federal budget, but sequestration will nevertheless cause real disruptions because the law to implement the cuts is very prescriptive and because they must be phased in relatively quickly once triggered …

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By ecthompsonmd|2013-03-09T12:33:22-04:00March 6th, 2013|Economy, Obama administration|Comments Off

Friday Morning News Roundup

There are many lessons to be learned and studied from the disaster that is characterized generally as Hurricane Sandy. One of these lessons that I’ve been studying has to do with the two hospitals which were evacuated. One of the best articles that I’ve read so far was published in the New England Journal of Medicine. This is clearly worth a read.

For weeks, I’ve said that there really is no fiscal cliff. The heightened rhetoric that we’ve seen in the media by pundits and politicians can only be categorized as nauseating. First of all, Congress is already cutting $1.5 trillion in fiscal spending over the next 10 years. Secondly, non-defense discretionary spending is projected to fall to historically low levels if Congress does what it does best, which is nothing. All of the thoughtless yammering over the “devastating” impact of allowing the Bush tax cuts to expire is typical Washington hype. The percentage of small businesses which will be affected is minuscule. Yet, we are led to believe that hundreds of thousands of mom-and-pop businesses will instantly go belly up if the Bush tax cuts were allowed to expire. Horse hockey. I’m afraid that the Democrats on Capitol Hill seemed to have little or no capacity to articulate reasonable and thoughtful positions on the budget. Our argument has to consist of more than the fact that the wealthy can afford to pony up a little bit more money.

A complete Internet and cell phone blackout in Syria shows the extent that some governments will go to in order to suppress the free flow of information.

Once again, the “Stand Your Ground” law is in the news. It appears that a 45-year-old Florida man shot and killed Jordan Russell Davis over some loud music. From reports that I’ve read, it appears that Michael David Dunn approached Davis and his friends at a convenience store, asking them to turn their music down. An argument ensued and eight to ten shots were fired. Davis ended up dead. Michael David Dunn is claiming that he felt threatened and was therefore justified in using lethal force under the Stand Your Ground law. If you think aspects of this sound familiar, I think you’re exactly right. (more…)

By ecthompsonmd|2012-11-30T20:25:20-04:00November 30th, 2012|Economy, Foreign Affairs, Healthcare, Living wage, Party Politics|Comments Off

I’m not hopeful

I never liked that old story of the Engine That Could. There are some things that the power of positive thinking simply won’t fix. Several weeks ago, I was sort of hopeful that some sort of deal would be made. The deal might be crappy, yes, but at least the economy wouldn’t implode. With each day, as reasonable and downright awful deals have all ended up in file 13, I’m getting less and less hopeful that our dysfunctional Congress can do anything that really helps the American people. So I went from I think they can to I think they are morons. I think that they are morons.

Rumors of a new, new deal have been circling since this morning.

From TPM:

The deal works like this:

It guarantees the debt limit will be hiked by $2.4 trillion. Immediately upon enactment of the plan, the Treasury will be granted $400 billion of new borrowing authority, after which President Obama will be allowed to extend the debt limit by $500 billion, subject to a vote of disapproval by Congress.

That initial $900 billion will be paired with $900 billion of discretionary spending cuts, first identified in a weeks-old bipartisan working group led by Vice President Joe Biden, which will be spread out over 10 years.

Obama will later be able to raise the debt limit by $1.5 trillion, again subject to a vote of disapproval by Congress.

That will be paired with the formation of a Congressional committee tasked with reducing deficits by a minimum of $1.2 trillion. That reduction can come from spending cuts, tax increases or a mixture thereof.

If the committee fails to reach $1.2 trillion, it will trigger an automatic across the board spending cut, half from domestic spending, half from defense spending, of $1.5 trillion. The domestic cuts come from Medicare providers, but Medicaid and Social Security would be exempted. The enforcement mechanism carves out programs that help the poor and veterans as well.

If the committee finds $1.5 trillion or more in savings, the enforcement mechanism would not be triggered. That’s because Republicans are insisting on a dollar-for-dollar match between deficit reduction and new borrowing authority, and $900 billion plus $1.5 trillion add up to $2.4 trillion.

However, if the committee finds somewhere between $1.2 and $1.5 trillion in savings, the balance will be made up by the corresponding percentage of the enforcement mechanism’s cuts, still in a one-to-one ratio.

I’m not sure how this is much different than what we have seen before. I just don’t understand how even thinking about cuts to the social safety net helps the American people. Do you?

By ecthompsonmd|2011-07-31T19:04:40-04:00July 31st, 2011|Budget, Congress, Obama administration|5 Comments