The Latest from Bruce Bartlett: "The worst possible way to cut spending"

Bartlett's columns are always a good read.

A preview of his newest work, from Tuesday's New York Times...

The Worst Possible Way to Cut Spending

By BRUCE BARTLETT

One big problem in the sequestration debate is that both sides have been talking past each other, with unstated assumptions underlying their statements and positions. There is also a great deal of posturing going on that disguises more agreement than the public knows.

Contrary to popular belief, Democrats don’t disagree that many programs could be cut substantially without harming government’s core mission. The problem is twofold. First, they disagree with Republicans on which programs are wasteful. Second, Republicans tend to believe that any program they disagree with, philosophically, is, per se, money wasted.The guiding Republican premise is that there is a vast amount of fat and waste in the federal government. Just as when individuals are overweight, a diet will improve their health.

Click here to read his entire column.... 

Source: http://economix.blogs.nytimes.com/2013/03/05/the-worst-possible-way-to-cut-spending/

Washington's Ground Hog Day

Here we go again...

Washington's Ground Hog Day

By Tim Dickinson

The current Sequester issue is the third occurrence in a Groundhog Day-like cycle of mostly futile attempts to address some basic budgeting and financial issues. This cycle epitomizes our dysfunctional government: polls show that more than 8 out of 10 disapprove of Congress while long term issues go un-addressed and no one comes out looking good. Unfortunately, there is little hope in sight of the situation improving.

The cycle kicked off with the debt limit crisis of 2011, which resulted in the Budget Control Act of 2011. This piece of legislation had a clear winner: President Obama. The legislation provided an immediate solution for the looming debt limit crisis while deferring other contentious issues past the 2012 election.

However, this victory came at a significant cost. First, the increasingly apparent ineffectiveness of our government led to the Standard & Poor’s downgrade of federal debt. Second, it led to Acts 2 and 3 of the Capitol drama, the so-called fiscal cliff and sequester.

Last week, this dysfunction was on full display, with one side blaming the other and no progress towards a solution. There’s been fussing about which party is responsible for the current situation (answer: both), overstatements and outright untruths about the immediate impacts and victims, and exchanges about who did and didn’t do what. The fact checkers have had a field day.

Budgetary negotiations have been at a World War I-like stalemate for a while now. The Republicans want to cut social programs but are strongly opposed to any tax increases, while the Democrats are unwilling to forego elective gains and agree to proposals that don’t generate new revenue.

The best area of common ground for generating revenue – tax overhaul – apparently isn’t viable as an immediate solution. In Bob Woodward's "The Price of Politics", the Administration rejected this option reasoning that the analysis required to identify revenue generating tax reforms requires significant time – perhaps a year or longer. Thus, such gains can only be promised and not committed to, rendering them as the legislative equivalent of vapor ware, and thus a non-starter in balancing out more specific and immediate budget cuts.

Of course, there have been 18 months since the Budget Control Act to work on tax reform, but that wasn’t going to happen with a lame duck Congress in a Presidential election  year.

Having experienced this situation for several years now, it is apparent that we have in place a perfect recipe for dysfunction: a Republican party handcuffed by a proudly non-cooperative faction, Democrats with no incentive to concede election gains, and a President who has not demonstrated strength in legislative consensus building.

The end result is that the Obama Administration is committing valuable time and energy to mostly deferred issues that would be better spent in taking advantage of their 2012 victories. The Republicans are modest winners here, with Congressional stalemate delaying progress on a partisan Democratic issues such as gun control, the minimum wage, climate change, etc.

The next Acts in this drama are coming soon. March 27 is when current funding for the federal government runs out and May 19 is when the debt ceiling legislation expires. Do we already have the scripts?

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Sequestration: What really happens...

Reuters has a nice write-up on what actually happens should the sequestration kick in on March 1st...(H/T Politico Playbook)

An excerpt:

"U.S. government won't fall apart on 'sequester' day of reckoning," by Reuters' Richard Cowan and David Lawder : "While some furlough notices will be issued to government workers, there will be few outward signs on March 1 that the cuts have been launched. Under the law, retirees are shielded and so their Social Security checks will arrive on schedule at the beginning of March and every month thereafter. Similarly, the elderly and the disabled will not see their federally backed Medicare healthcare curtailed at all over the seven months. Every U.S. soldier will get paid and the Defense Department will be allowed to shift funds to ensure that combat operations and 'critical military readiness capabilities' are not degraded, according to the Obama administration. Unofficially, many members of Congress are betting that a few weeks into the automatic spending cuts, Democratic and Republican leaders will get serious about negotiating a replacement to the sequestration and the $85 billion in spending cuts will not have had time to really bite. ...

"On March 1 and in the days immediately after , while no dramatic shakeup is anticipated, there will be some early tremors. * Government agencies are likely to issue 30-day warnings of impending furloughs of government workers. They could be told that starting on April 1 they will have to stay home for a maximum of 22 days between March 1 and Sept. 30. * New government contracts could slow in anticipation of no deal being reached to replace the sequestration. This would hit defense contractors and road and bridge builders alike. * Members of Congress, who are not exempt from the spending cuts, will be advised to begin preparing their staffs for either salary cuts or layoffs if they have to shave funds from their approximately $4 billion in annual appropriations." 

Source: http://reut.rs/13dW3GN