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Bankrupting America’s Spending Daily

Posted: January 3, 2013 at 5:00 pm   /   by

Spending Daily | January 3, 2013

“Analysis: Cliff Deal is Another Pain-Free Punt” 
Charles Babington writes for the Associated Press, “Congress’ hectic resolution of the ‘fiscal cliff’ crisis is the latest in a long series of decisions by lawmakers and the White House to do less than promised – and to ask Americans for little sacrifice – in confronting the nation’s burgeoning debt. … It puts off the toughest decisions about spending cuts for military and domestic programs, including Medicare and Social Security. And it does nothing to mitigate the looming partisan showdown on the debt ceiling, which must rise soon to avoid default on U.S. loans. In short, the deal reached between Obama and congressional Republicans continues to let Americans enjoy relatively high levels of government service at low levels of taxation. The only way that’s possible, of course, is through heavy borrowing, which future generations will inherit.”

“Obama’s debt problem”
Glenn Thrush and Reid J. Epstein write in POLITICO, “President Barack Obama won’t be able to enjoy much of a victory lap from his win over congressional Republicans on the fiscal cliff fight.  There are about 16.4 trillion reasons why.   The staggering national debt — up about 60 percent from the $10 trillion Obama inherited when he took office in January 2009 — is the single biggest blemish on Obama’s record, even if the rapid descent into red began under President George W. Bush.   Obama has long emphasized Bush’s role in digging the immense hole. But he owns it now, and it’s a significant political liability as he girds for a fast-approaching brawl with the GOP over how to deal with converging deadlines of a new debt ceiling fight and the need to come up with $1 trillion in deficit reduction mandated by the so-called ‘sequester.'”

Business Leaders Disappointed Deal Didn’t Include Significant Deficit Cutting
The Hill reports, “Economists and business groups say the ‘fiscal cliff’ deal will provide some help to the economy, but is overall a missed opportunity to put the nation’s fiscal health on track. hile stocks soared Wednesday on news of the deal and the Dow Jones closed the day up 308 points, business leaders expressed disappointment Congress and the White House again put off work on a significant deficit-cutting deal.  … ‘If you were to rank outcomes from 1 being the greatest to 10 being the worst, we’re about an 8.5 to a 9,’ said Steve Bell, senior policy director for the Bipartisan Policy Center, which had pushed for a comprehensive deficit deal. ‘There’s nothing to compel action now … it’s an extraordinary opportunity missed.'”

Fiscal Cliff Deal “includes almost no spending cuts”
The New York Times reports, “The deal significantly raises taxes on the rich, with no expiration date. It extends tax credits for the poor and the middle class. It provides more jobless benefits. Largely overlooked, it extends an alternative-energy tax credit that has helped create a clean-energy boom. And it includes almost no spending cuts. For President Obama and his Democratic allies in Congress, the fiscal deal reached this week is full of small victories that further their largest policy aims. Above all, it takes another step toward Mr. Obama’s goal of orienting federal policy more toward the middle class and the poor, at the expense of the rich.”

Debt Ceiling Fight Taking Shape
The New York Times reports, “With the resolution of the year-end fiscal crisis just hours old, the next political confrontation is already taking shape as this city braces for a fight in February over raising the nation’s borrowing limit. But it is a debate President Obama says he will have nothing more to do with. Even as Republicans vow to leverage a needed increase in the federal debt limit to make headway on their demands for deep spending cuts, Mr. Obama — who reluctantly negotiated a deal like that 18 months ago — says he has no intention of ever getting pulled into another round of charged talks on the issue with Republicans on Capitol Hill.”

“A Pep Rally For Tax Increases”
POLITICO reports, “The fiscal cliff deal established an important precedent for negotiations, according to Maryland Rep. Chris Van Hollen, the top Democrat on the Budget Committee. The legislation, he noted, delays the so-called sequester for two months and pays for the postponement by both raising revenue and cutting spending. And though President Barack Obama’s speech on New Year’s Eve on the fiscal cliff deal was mocked roundly as a pep rally for tax increases, Van Hollen said it was an important event because the president highlighted that principle and said it must be honored going forward. … But if higher tax rates are off the table, Democrats will need alternative sources of revenue. They say they’re moving their focus to money that can be gained by closing so-called loopholes in the Tax Code and limiting the amount that can be claimed in deductions — provisions that tend to benefit top earners disproportionately.”

In Cliff Deal: “Crony Capitalist Blowout”
The Wall Street Journal editorializes, “In praising Congress’s huge new tax increase, President Obama said Tuesday that ‘millionaires and billionaires’ will finally ‘pay their fair share.’ That is, unless you are a Nascar track owner, a wind-energy company or the owners of StarKist Tuna, among many others who managed to get their taxes reduced in Congress’s New Year celebration. There’s plenty to lament about the capital and income tax hikes, but the bill’s seedier underside is the $40 billion or so in tax payoffs to every crony capitalist and special pleader with a lobbyist worth his million-dollar salary. Congress and the White House want everyone to ignore this corporate-welfare blowout, so allow us to shine a light on the merriment.”

Fiscal Cliff Fallout: Businesses Remain Wary
Why don’t economists foresee stronger growth and job creation in 2013 after the fiscal cliff deal?  The Associated Press reports, “Part of the answer is what Congress’ agreement did (raise Social Security taxes for most of us). And part is what it didn’t do (prevent the likelihood of more growth-killing political standoffs). By delaying painful decisions on spending cuts, the deal assures more confrontation and uncertainty, especially because Congress must reach agreement later this winter to raise the government’s debt limit. Many businesses are likely to remain wary of expanding or hiring in the meantime.”

New Cover Of The Economist: America Turns European
A broken system, a lousy deal and no end in sight … is an educational project of Public Notice, an independent, nonpartisan, non-profit, 501(c)(4) organization dedicated to providing facts and insight on the effects public policy has on Americans’ financial well-being.

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Bankrupting America's Spending Daily