Category Archives: sequestration

It’s the Middle Class v. the Wealthy, Still

 
Do not covet. Isn’t that one of the Ten Commandments? After watching Ali Velshi on CNN this morning and all day Saturday, it became clear that everyone has their eyes on safety net money and they covet it. They have $ signs in their eyes and have had for some time.

Well my response is, “You cannot have that money, it is already promised! Find another way to finance your budget cuts.”

Mr. Velshi is an economist, I guess, or he specializes in economic commentary, but his solutions will only work if you take humanity out of the equation. He is a numbers man. He says that rich people are paying more and more. Not true. What is true is that a greater percent of what they pay is going to pay for safety net programs which to them means they are supporting us, we are taking a free ride on their coattails, but which to me only says that most Americans are poorer than they were. To the wealthy this means that we, the people, are getting lazy and shiftless, but to me this means that all the money is rising to the top.

Rich folks – stop whining, start hiring and the % of safety net costs paid with your taxes will decrease and shift back in the other direction.

Just because some expert says something on CNN with charts and graphs does not mean it is true or that the data cannot be interpreted in another way. The wealthy need a new perspective. They are not paying for us; they are paying for a civilized, peaceful, orderly society (which is already showing cracks and will totally disintegrate unless we maintain our safety net programs throughout our troubles). You who were the business leaders may not need us anymore because you have taken your business elsewhere, but you need order and you need a healthy and free society and you need it in America because you are America through and through. You could follow Gerard Depardieu’s lead and ask for Russian citizenship, or you could become a Brit, or Canadian, or live in one of the Virgin Islands with the hurricanes, but you will always feel like an exile, even though no one asked you to leave. Stop moaning, stop trying to undo the social safety net, and invest in the things America needs to prosper once again. Our wealthiest Americans are apparently very wealthy and can afford to contribute most to America’s future.

Obama is trying to save the American middle class from those who want to balance the budget by cutting middle class programs. They say that they do this in the name of smaller government, but if we were still needed in their factories I doubt that those who favor small government (the GOP) would be making it such a key issue as they have in recent years. Obama has recommended a program called American Family Economic Protection according to John Avlon writing in The Daily Beast this morning, February 25, 2013. His plan recommends cuts of $110 billion, split between actual spending cuts and new tax revenues. $55 billion in cuts would be split between defense and agriculture and $55 billion would come from revenues gained by implementing the “so-called Buffet rule” which would raise the tax rate to 30% for those with incomes over $1m. Notice Obama’s recommendations do not require any contributions from middle class families by messing with safety net programs. Obama’s plan attempts to avoid “kicking us while we’re down” which the Republicans gleefully recommend.

Perhaps this is now or never time. Obama feels that he must stand firm for tax revenues from tax reforms, which, by the way, Republicans offered up over and over again before the election. Republicans have crossed their loser arms and pursed their loser lips and have said that the door to any new tax revenues is closed, and apparently locked. They are apparently America’s self-appointed doormen, acting like they are protecting us from ourselves, but really acting on behalf of powerful lobby groups and wealthy businessmen.

What the sequester battle comes down to is whether we support Obama to stand firm in his quest for more tax revenues through tax reforms and his unwillingness to raid the social networks in these difficult days; or whether we support those who say that we must make sacrifices and we must back those who have the bucks so that they will generate jobs for us (jobs that pay a living wage we assume)(the GOP in case you didn’t know who I was referring to).  I thought we already decided this one. I thought we decided that trickle down sucks; it never trickles all the way down to us and I thought we decided that we would go with the guy who wants to try to grow the economy from the middle out. The Republicans are making us decide issues already decided in 2012 over and over again because they still intend to call the shots and continue their bloodless coup.

Stand firm Obama! Fight, fight fight! Win, win, win.!

 

Count Down – Eight Days to Sequester

 

Sequestration will begin in March 1st unless Congress and the President call it off or make a more considered agreement about cuts and revenues. That puts us in countdown mode. Counting today, sequestration will happen in 8 days. Everyone seems most upset about cuts to the military and to national security, but the real killer here to me is more cuts to schools.

Our schools have borne the brunt of budget cuts every year for far too long. Teachers and staff have been cut so drastically that some schools are becoming dangerous places. Teaching children with special needs often depends on a complicated team of teaching staff, aides and even, sometimes, requires one-on-one supervision. Schools are cutting back on the numbers of staff on the team because of budget cuts. Teachers have no back up. When stressed teachers get sick or take “mental health” breaks schools have to scramble to find good subs to take their places. Sometimes, in situations where the staff members who are present every day have a tenuous hold on control, placing a substitute teacher, who has no history with the situation, can put the student, the sub, and even others in the school in actual danger. Teachers in our schools are injured by students “acting out” more often than you would think. If we cut our schools anymore than we have already we might as well send our students home, hold a giant conference and come up with a new way to teach our children because we will not be able to sustain current schooling patterns.

In today’s Daily BeastI read an article called 8 Ways the Sequester Could Ruin Your Life by Caitlin Dickson which describes some other areas of our lives which could become problematic under the sequester. However, news commentators have been accused of choosing “worst case scenarios” and others say that these agencies will not necessarily have to cut the services that are mentioned, that they are using fear tactics to try to rile up Americans so that they will fight the sequester. We, the American citizens, appear uninterested. Or perhaps we welcome the sequester. Or it could just be that we have reached a point where the activities of the clowns in Washington have little or nothing to do with our everyday lives.

Anyway, here is the list of 8:

·         Cuts in the Food Safety and Inspection Service will put the safety of our food supply in greater jeopardy.  We are talking here about “the people paid to make sure your burger is made of beef and not horse”.

·         Small business loan guarantees will be cut by up to $902 million, causing greater stress for small businesses.

·         Cuts would impact national parks.

·         Cuts of 10% of the FAA’s workforce such as air traffic controllers will make travel a nightmare

·         “If you’re a parent, a student, or a teacher, there’s a good chance you’re going to get screwed.”

·         Cuts to FEMA will make it dangerous or at least expensive to live in disaster-prone areas.

·         The AIDS Drug Assistance Program will be cut – fewer tests, fewer drugs, more HIV – Yikes!

·         Cuts to OSHA will jeopardize workplace safety.

Republicans will not do anything to avoid the sequester because they are adamant that America cannot have any more increases in revenue, especially increases that target the wealthy. Although they loudly called for tax reform throughout the election they now inform us that they are so disgusted with the tax rate increase on those who make more than $400,000 a year that they are done with revenues and will not even discuss tax reform. In other words, although they did not win the election, they want their way and they want it now and they are willing to let the rest of us “dangle over the pits of hell” in order to get their way (OK, perhaps a bit dramatic, but basically true). I am willing to go with the sequester because it leaves our safety net completely alone, but I do see that this is quite selfish, especially when I think about the effects on our schools. While it makes me very angry that Republicans are once again using the numbers they have in the House to bully everyone, what makes me angrier is their refusal to entertain some tax reforms, which they favored, just from spite. If we stop paying them will they go home and take their tedious stonewalling with them. It is clear that our economy need stimulus as well as cuts, but we cannot make that happen because the party that lost is controlling policy.

David Brooks, who skews Republican, wrote an article this morning Feb. 21, 2013) in the New York Times about the sequester. He obviously feels the sequester is a bad idea. Here is some of what he had to say in his article called The D. C. Dub Step:

On July 26, 2011, Jack Lew, then the White House budget director, went to Harry Reid’s office for a budget strategy session. According to Bob Woodward’s book, “The Price of Politics,” Lew told the Senate majority leader that they had come up with a trigger idea to force a budget deal.

 “What’s the idea?” Reid asked.

“Sequestration,” Lew responded.

Reid folded himself over with his head between his knees, as if he were going to throw up. Then he came upright and gaped at the ceiling. “A couple of weeks ago,” he exclaimed, “my staff said to me there is one more possible” enforcement method: sequestration. Reid said he had told his staff at the time, “Get the hell out of here. That’s insane. The White House surely will come up with a plan that will save the day. And you come to me with sequestration?”

Sequestration may have seemed insane back then. But politicians in both parties are secretly discovering that they love sequestration now. It allows them to do the dance moves they enjoy the most.

These two dance moves, the P.C. Shimmy and the Suicide Stage Dive, when combined, are beautifully guaranteed to cause maximum damage to the country. What’s America’s biggest problem right now? It is that business people think that government is so dysfunctional that they are afraid to invest and spur growth. So what are the parties going to do? They are going to prove that government is so dysfunctional that you’d be crazy to invest and spur growth.

In a normal country, the politicians would try some new moves. For example, if they agreed to further means test Medicare they could save a lot of money. Democrats would be hitting the rich. Republicans would be reforming entitlements.

But no. Both parties love their current moves. It’s enough to make Harry Reid put his head between his legs and throw up.

 

Paul Krugman, who skews left, also wrote an article about sequestration in today’s NYTs called Sequester of Fools:

They’re baaack! Just about two years ago, Erskine Bowles and Alan Simpson, the co-chairmen of the late unlamented debt commission, warned us to expect a terrible fiscal crisis within, um, two years unless we adopted their plan. The crisis hasn’t materialized, but they’re nonetheless back with a new version. And, in case you’re interested, after last year’s election — in which American voters made it clear that they want to preserve the social safety net while raising taxes on the rich — the famous fomenters of fiscal fear have moved to the right, calling for even less revenue and even more spending cuts…

The right policy would be to forget about the whole thing. America doesn’t face a deficit crisis, nor will it face such a crisis anytime soon. Meanwhile, we have a weak economy that is recovering far too slowly from the recession that began in 2007. And, as Janet Yellen, the vice chairwoman of the Federal Reserve, recently emphasized, one main reason for the sluggish recovery is that government spending has been far weaker in this business cycle than in the past. We should be spending more, not less, until we’re close to full employment; the sequester is exactly what the doctor didn’t order.

Unfortunately, neither party is proposing that we just call the whole thing off. But the proposal from Senate Democrats at least moves in the right direction, replacing the most destructive spending cuts — those that fall on the most vulnerable members of our society — with tax increases on the wealthy, and delaying austerity in a way that would protect the economy…

House Republicans, on the other hand, want to take everything that’s bad about the sequester and make it worse: canceling cuts in the defense budget, which actually does contain a lot of waste and fraud, and replacing them with severe cuts in aid to America’s neediest. This would hit the nation with a double whammy, reducing growth while increasing injustice.

I say it sure would be nice to see our Congress compromise and make the sequester go away or I could also go along with “Let’s Call the Whole Thing Off”.

Eight days – we’re going there, the place we did not think we would ever go and our only comfort is that everyone says it will not be all that bad and we will not have to live with it all that long. We shall see, won’t we?

 

 

 

Avert the Sequester Cuts



It looks like Republicans and the Democrats have decided to let the sequester budget cuts happen. If some budget cuts are not made by March 1st the sequester will automatically go into effect. Many economists believe that letting the sequester cuts dictate austerity will hurt our economy and send us back into high unemployment and possible recession. I can’t imagine why anyone would want to reverse the modest gains we currently are seeing in our economic health. Republicans have certainly stressed that they want to see smaller government, less spending and deficit reduction. Although I am not a fan of small government, I do not have a problem with less spending and deficit reduction, however, I agree with Paul Krugman that cuts should not be made until our economy is much stronger. We do need to spend some money in order to make some money. We need to invest in education at all levels, we definitely need to update our infrastructure; we need our government to try to stimulate job development, investor confidence, and consumer confidence. Obama has offered to put his “grand bargain” back on the table, but it seems there are no takers. Are Republicans playing chicken again, or trying to somehow divert blame for the sequester cuts to Obama? Have the Democrats disappeared again?  I don’t see any of these strategies ending in success for the GOP or for the Democrats.

In The Daily Beast for February 6, 2013, Eleanor Clift writes an article entitled, Sequester Looms as Democrats and GOP Make Little Effort to Resolve Impasse. She agrees with Krugman that the sequester could be disastrous for our fledgling economic recovery. She mentions a group called The Third Way which has come up with an alternate plan. Here is some of what Clift had to say:

“Our economy right now is headed in the right direction and it will stay that way as long as there aren’t any more self-inflicted wounds coming out of Washington,” he [Obama] said, urging Congress to come up with a smaller package of spending cuts and tax reforms “to delay the economically damaging effects of the sequester for a few more months” to give lawmakers time to come up with an alternative. It’s what Congress just did with the debt ceiling extension, putting it off for three months until mid-May.

What’s most striking about the looming sequester is the lack of any real activity on either side, Democrat or Republican, to resolve the impasse. Instead, both parties seem to be sleepwalking their way to sequester, calming themselves with the rationale that letting it happen might not be that big a disaster. And they’re right—up to a point. “Sequestration is a disgrace, a congressionally made disgrace,” says Jim Kessler, of Third Way, a centrist Democratic group. “But it’s not the fiscal cliff—it can happen and life goes on.”

Going over the fiscal cliff would have meant the U.S. defaulting on its debts and precipitating a global financial meltdown. Sequester takes a chunk out of defense spending and a chunk out of discretionary domestic spending, but it spares Social Security, Medicare and Medicaid, and Pell grants. Republicans would rather accept deep cuts in defense spending than give Obama any more tax revenue, and with Democratic priorities protected, how bad can it be? Obama seems to be taking the same approach he did on the debt ceiling, leaving it up to Congress to figure a way out, but Congress so far is punting.”

“Third Way is a policy shop, and it’s been quietly shopping a budget plan that would replace the sequester with an equal amount of spending cuts, but done in a different way. The defense cuts would go through the orderly legislative process of putting together a budget, “using a scalpel and not an ax.”

The discretionary cuts would be eliminated and replaced with entitlement cuts. The theory here is that domestic discretionary spending has been battered enough and it’s where all the investing in the future is done—education, health research, energy, roads and bridges. Why should the government jump through hoops to make sure Warren Buffettdoesn’t pay more for Medicare while kids pay more for school lunches?

Republicans, having swallowed a tax hike on the wealthy, have been adamant about no more new revenue, but Third Way would reach back to the presidential campaign and borrow Mitt Romney’s idea of eliminating loopholes in the individual tax code. Romney suggested capping deductions for people who make more than $250,000. The Third Way plan would cap deductions at $35,000 for high earners, with an exemption for charitable deductions. That would raise $400 billion and affect just the top 2 percent.”

I’m thinking about making a magnet to put on my car that says Do Your Job: Avert the Sequester. Write your congressional representatives. Pester Washington every day until they do something. They are threatening to cut the pay for our soldiers. Is this another strategy to get people involved in this sequester issue? Do you think the sequester cuts are a good idea? I know we are all sick of the nonsense perpetrated by Congress of late, but they should not govern in a vacuum; they should have to hear from us, their constituents, constantly.

Should We Go Over the Cliff: The Numbers

What does sequestration mean in terms of cuts – how much and to whom?

·         $900 billion in cuts in discretionary programs over the next decade

·         Would impose further automatic across-the-board spending cuts in many programs, unless Congress enacts an additional 1.2 trillion in deficit-reduction measures by Jan. 15, 2012

·         Would take effect in Jan., 2012

·         9% annual cuts in non-defense programs

·         9% cuts in defense programs for each year from 2013-2021

·         New Budget Control Act which implements the debt limit deal

o   Raises debt limit by 2.1 trillion in steps

o   Establishes binding “caps” on annual appropriation bills covering non-entitlement spending – e.g. defense, education, National Parks, FBI, EPA, low-income housing assistance, medical research, etc.

o   Requires Congress to vote on balanced budget amendment this fall

o   Establishes a Joint Select Committee to draft, vote on by Nov. 23rd and report by Dec. 2nd this year – definite reductions through 2021 beyond the $900 billion – if they fail that will touch off automatic cuts known as sequestration

·         Cut 54.7 billion from defense each year from 2013-2021

·         Cut 54.7 billion from non-defense programs each year from 2013-2021 from both mandatory (entitlements) and discretionary programs

Mandatory cuts:

·         Cuts Medicare payments to providers and insurance plans (limited to 2%)

·         5.2 billion to other mandatory programs like farm price supports

·         Social Security, Medicaid, CHIP, SNAP (food stamps), child nutrition, SSI, refundable tax credits, like Earned Income Tax Credit, veterans benefits and federal retirement are exempt from sequestration

That leaves 38.6 billion in non-defense cuts which would come from

·         Across-the-board cuts for discretionary programs except Veteran’s Medical Care and Pell Grants

·         2014 – 2021 – reduction in statutory caps on total funding

I guess what I didn’t realize that these cuts would happen every year for 10 years, although years 2-10 would be configured in a different way. Yikes!