Monday, March 07, 2011

"Political Games" As Budget Crisis Looms

Mar 4: While Congress bought 2-weeks of time when it approved a short-term extension to the Continuing Resolution (CR) that extends funding for the government and avoids a shutdown until March 18 [See WIMS 3/2/11], the major differences that existed between Republicans and Democrats continue. The Senate will be debating and  voting on a budget bill this week.
    Senator Harry Reid (D-NV) said, ". . . when you have to make the tough decisions that go into any budget, those decisions have to be practical, not political. They have to be realistic, not ideological. . . As careful as we must be not to waste the American people's money, we must be just as mindful not to waste their time. Regrettably, though, the budget debate has turned into a political exercise, and little more. That's counterproductive. We need to be as serious as the challenge before us. I'm much more concerned with actually keeping our country running and investing smartly in our future than I am in this political game. When they wake up in the morning, the American people want to send their children to a good school and then go to a good job. They want their families to come home to a safe neighborhood at night and they want to go to sleep knowing our country is safe from those who want to harm us. They don't care who gets credit for it. They don't care who thought of how best to do it -- they just want us to do it."

    Senator Reid outlined the Republican and Democratic plans as follows:
    The Republican Plan: "First, the reckless Republican plan that the Tea Party has pushed through the House. That irresponsible proposal slashes investments, cuts jobs, and sacrifices security and education. Yes, it cuts a lot of money today, but America would lose so much more tomorrow because these cuts are made arbitrarily, without regard for consequences. That's why leading independent economists agree that it will hurt our recovery, slow growth and cost jobs. We can't afford that. We can't afford to be blinded by the big numbers in the House Republicans' plan. We have to scrutinize how they came to cut $61 billion. And the truth is that it adds up to $61 billion through significant subtraction of program the American people don't want to lose [See WIMS 2/22/11]:
  • It slashes more than a billion dollars from Social Security, which means half a million seniors who paid into Social Security their entire lives will be waiting for benefits their country promised them.
  • It cuts $700 million from education, which means a million disadvantaged students could lose funding and more than 10,000 teachers, aides and school staff could lose their jobs. It would even take 200,000 children out of Head Start.
  • It closes poison-control centers and cut $100 million from food-safety inspections. That means the food we eat could be both less safe and more expensive – and that's a lose-lose proposition.
  • It cuts three-quarters of a billion dollars from renewable energy investments, which will cost us jobs, threaten our energy independence and delay the day America lives and works in a clean-energy economy.
  • It cuts hundreds of millions of dollars from border security, port security and FEMA. Even some Republican Congressmen readily admit it's not so smart to pinch pennies on the backs of our national security and first responders.
    "That's just the tip of the iceberg. Federal Reserve Chairman Ben Bernanke said these cuts – and many more like them – will cost a significant number of jobs. Mark Zandi, the chief economist at Moody's, put that number at 700,000 jobs.

    The Democrat's Plan:
"We know that we have to make cuts. But we also know that when we cut, we have to cut in a way that strengthens our economy -- not in a way that weakens it. We know we have to look carefully at the quality of these cuts and not get blinded by the quantity. After all, as I've said before, you can lose a lot of weight by cutting off your arms and legs -- but no doctor would recommend it. Our plan cuts $51 billion from President Obama's budget, but in a much more responsible way. We're eliminating redundancies, ending unnecessary bureaucratic programs and cutting funding for earmarks.  [Note: analysts indicate that using the "same baseline," Democratic cuts amount to only $6-$10 billion].

    "Our plan recognizes that we're not in a competition to determine who can cut the most, without regard for the consequences. Rather, we need to cooperate to figure out where we can cut the smartest. While the House-passed plan is based in ideology, ours is based in reality. These are decisions about real money that solve real problems that affect real lives. Our budget affirms and reflects our values. We see our modestly recovering economy, including today's news that employers are hiring at the fastest pace in almost a year, and the national unemployment rate fell to a nearly two-year low. We can't squander this cautiously optimistic news with counterproductive cuts."
    Senate Minority Leader Mitch McConnell (R-KY) commented on March 4 and said, "House Republicans have proposed a plan. It would reduce spending by $61 billion in this year's budget. Earlier this week, we voted on a two-week piece of that bill that reduces spending by $4 billion. The White House's proposal, as outlined by the President's economic advisor yesterday, is to cut another $6 billion and call it a day. Even more outrageous, they say that this proposal meets us 'halfway.' I won't get into their tortured justification. Suffice it to say that Politico says it requires Americans to 'suspend disbelief.' The Washington Post was equally unmoved by the White House's logic. They said Democrats are disingenuous in suggesting they've worked hard to reduce spending. And they agree that calling this latest proposal an effort to meet us halfway is nonsense.
    "So amid all the fanfare yesterday, what the White House is proposing is little more than one more proposal to maintain the status quo — to give the appearance of action where there is none. This latest proposal is unacceptable, and it's indefensible.
"The American people are tired of hearing the same tired talking points from our Democrat friends. They want action. They want to cut spending to help create a better environment for job creation. It's time for Washington Democrats to get serious."
    President Obama said on March 5, "Just as both parties cooperated on tax relief that is now fueling job growth, we need to come together around a budget that cuts spending without slowing our economic momentum. We need a government that lives within its means without sacrificing job-creating investments in education, innovation, and infrastructure. The budget I sent to Congress makes these investments, but it also includes a 5-year spending freeze, and it will reduce our deficits by $1 trillion over the next decade.  In fact, the cuts I've proposed would bring annual domestic spending to its lowest share of the economy under any president in more than 50 years.

    "Over the last few weeks, Members of Congress have been debating their own proposals.  And I was pleased that Democrats and Republicans in Congress came together a few days ago and passed a plan to cut spending and keep the government running for two more weeks. Still, we can't do business two weeks at a time. It's not responsible, and it threatens the progress our economy has been making. We've got to keep that momentum going. . . Getting our fiscal house in order can't just be something we use as cover to do away with things we dislike politically.  And it can't just be about how much we cut.  It's got to be about how we cut and how we invest.  We've got to be smart about it.  Because if we cut back on the kids I've met here and their education, for example, we'd be risking the future of an entire generation of Americans.  And there's nothing responsible about that. . ."

    Access the statement from Sen. Reid (click here). Access a release from Sen. McConnell (click here).Access the statement from President Obama (click here).

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