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Bankrupting America’s Spending Daily

Posted: February 1, 2013 at 3:30 pm   /   by

Spending Daily | February 1, 2013

Unemployment Rate Rises to 7.9% from 7.8%
ABC News reports, “The U.S. economy added 157,000 jobs in January, as the unemployment rate ticked up to 7.9 percent from 7.8 percent, according to data from the U.S. Labor Department. … Employment numbers for November were revised higher to 247,000 from 161,000. For December, they were also revised higher to 196,000 from 155,000.”  The New York Times added that “The monthly jobs numbers were close to what economists had forecast, although many had been hoping for an upside surprise. Recent weeks have brought a slew of gloomy economic data, showing that the nation’s output unexpectedly shrank at the end of 2012 and that consumers were becoming increasingly pessimistic about their finances and job prospects. Dysfunction in Washington over the fiscal budget and higher tax rates that kicked in last month could further dampen consumer confidence and hiring early this year.”

Obama Shutting Down Jobs Council
Fox News reports, “As new weekly jobs numbers emerged Thursday showing a jump in unemployment claims and a report released the previous day showed the economy shrinking in late 2012, President Obama is effectively laying off his jobs council. The layoff — which comes in the form of the administration not renewing the council, which sunsets Thursday — takes off the table a first-term panel set up to field ideas from the business community for spurring growth. But the administration was accused all along of never taking full advantage of the group at a time when the economy desperately needed those ideas.”

Senate Passes Debt Ceiling Increase and “No Budget, No Pay” Act
POLITICO reports, “With little fanfare Thursday, the Senate agreed to suspend the nation’s $16.4 trillion debt ceiling until May 19, postponing the specter of default that threatened the nation as early as February.The vote was 64-34. It now heads to the White House for President Barack Obama’s expected signature. It would also tie lawmakers’ salaries to whether their respective chambers pass a budget. If the House or the Senate do not pass a budget by April 15, the pay for members in that chamber will be held in an escrow account until they pass a budget or until the last day of the 113th Congress. Senate Democratic leaders have said they will pass a budget this year – the first time since 2009. Twelve Republicans voted for the bill; only one Democrat, Sen. Joe Manchin of West Virginia, opposed it.”

Gov’t Spends Millions On Chimp Resort
The Washington Guardian reports, “As the government exits the business of using chimpanzees for scientific research, taxpayers just might go bananas over the animals’ retirement tab. The National Institutes of Health, the government’s medical research arm, is spending about $12 million annually to care for the chimps formerly used for research, some of it for a retirement sanctuary in Louisiana where the animals are housed. And the agency is soon in danger of reaching a $30 million cumulative spending cap that Congress set for the retirement home, dubbed Chimp Haven. That means NIH will need to go to Congress or another source for more money. Adding to the complication, the costs to taxpayers are rising. In 2011, taxpayers supported 713 animals at a cost of $11.6 million, according to NIH records. But last year the price tag rose to $12.4 million, even though NIH supported 40 fewer chimps.”

How Can Government Spending Both Rise and Fall?
The Wall Street Journal reports, “Federal spending took the sharpest nose dive in 40 years during the fourth quarter of 2012, according to Wednesday’s GDP report, but that didn’t jive with earlier Treasury Department data that showed outlays increased by nearly $100 billion during the same three months compared with the third quarter. … So how can two seemingly comparable numbers tell vastly different stories? Accounting, of course. The GDP report measures how much the government contributes to the economy, specifically by gauging what Washington spends on goods, services and investments — be it buying a tank or paying an electric bill. That amount declined by an annualized 15% in the fourth quarter, a major reason why the economy as a whole contracted. But that calculation doesn’t include some huge budget items — the transfer payments. Paying interest on the national debt, writing seniors Social Security checks and making Medicare payments don’t directly contribute to the economy because its only moving money around, not producing new output.”

“Americans Rip Up Retirement Plans”
The Wall Street Journal reports, “The American workplace is about to get grayer. Nearly two-thirds of Americans between the ages of 45 and 60 say they plan to delay retirement, according to a report to be released Friday by the Conference Board. That was a steep jump from just two years earlier, when the group found that 42% of respondents expected to put off retirement. The increase was driven by the financial losses, layoffs and income stagnation sustained during the last few years of recession and recovery, said Gad Levanon, director of macroeconomic research at the organization and a co-author of the report, which is based on a 2012 survey of 15,000 individuals. … The labor force has been getting older for decades for reasons that range from longer life spans and better health to companies’ replacement of defined-benefit pensions with higher-risk 401(k) plans.”

“Pay No Attention to That Anemic Economy”
Charlie Cook writes in The National Journal, “Immigration and gun control have dominated the issue agenda for the past few weeks, pushing away, for a time, the previously dominant worries about fiscal issues and their impact on the overall health of the U.S. economy. But Wednesday morning’s news that the economy, as measured by real gross domestic product, had declined in the fourth quarter of 2012 by one-tenth of a percentage point—surprising economists who had expected the economy to grow by 1 percent—brings these issues back to the forefront. In the third quarter of 2012, real GDP grew by 3.1 percent. The release of numbers showing the economy contracting slightly in the last quarter hardly constitutes a hair-on-fire event, and they could be revised upward next month when the second estimate is released. But Wednesday’s report follows two surveys indicating that consumers have unexpectedly turned pessimistic.”

Debt Continues to Grind European Recovery to Halt
The Wall Street Journal reports, “The moving boxes were in Emer O’Grady’s bedroom, waiting to be packed with the contents of a home she can no longer afford. But selling her three-bedroom brick house in the north of Dublin hasn’t ended her financial bind: The 34-year-old psychotherapist and her former partner still owe some $340,000 on their mortgage. Ms. O’Grady is a member of Europe’s Generation Negative Equity, homeowners in their 30s, 40s, and 50s who bought houses during a property bubble that burst after the global financial crisis struck in 2008. They live in Ireland and Spain—two of Europe’s hardest-hit economies—but also in places like the Netherlands and Denmark that have so far weathered the continent’s financial troubles relatively well. Like their brethren in the U.S., they borrowed big during boom times when credit was easy and home prices were rising. Now their efforts to repay mortgage debt could stunt growth for years to come in a region already hurting from government-debt crises in Greece, Portugal and elsewhere.” 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