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IMF Chief: U.S. Dance with the Debt Limit is ‘Very, Very Concerning’

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Photo Credit: AP/Alex BrandonBy Tom Howell Jr.

The chief of the International Monetary Fund says the U.S. government’s stalemate over spending and its debt limit is “very, very concerning” and could roll back economic progress around the world.

Christine Lagarde, who took over the financial watchdog-and-rescue organization in 2011, said global finance ministers assembled for meetings in Washington last week feeling like Japan had finally turned the corner and that economies in the U.S. and Europe were on the upswing.

“And then they found out that the debt ceiling was the issue,” she said Sunday on NBC’s “Meet the Press.” “They found out that the government had shut down and that there was no remedy in sight. So it really completely transformed the meeting in the last few days.”

Ms. Lagarde, a lawyer from France, added a global perspective to the standoff that has roiled Washington for weeks and befuddled overseas investors who typically view the U.S. as a paragon of financial rectitude.

Instead, Senate leaders are trying to forge a deal that would extend the federal debt limit and end a government shutdown about to enter its third week.

Read more from this story HERE.

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Budget Talks at Impasse; Democrats Won’t Agree on Spending Cuts

By The Associated Press.

Senate Republicans and Democrats hit an impasse Sunday over spending in their last-ditch struggle to avoid an economy-jarring default in just four days and end a partial government shutdown that enters its third week.

After inconclusive talks between President Barack Obama and House Republicans, Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., took charge in trying to end the crises although no resolution seemed imminent.

“Americans want Congress to compromise,” Reid said at the start of a rare Sunday session in the Senate in which he pressed for a long-term budget deal.

The two cagy negotiators are at loggerheads over Democratic demands to undo or change the automatic, across-the-board spending cuts to domestic and defense programs that the GOP see as crucial to reducing the nation’s deficit.

McConnell insisted that a solution was readily available in the proposal from a bipartisan group of 12 senators, led by Sens. Susan Collins, R-Maine, and Joe Manchin, D-W.Va., that would re-open the government and fund it at current levels for six month while raising the debt limit through Jan. 31.

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Hagel: Budget Cuts Could Force Navy to Sideline 3 Aircraft Carriers

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By Associated Press. Defense Secretary Chuck Hagel warned Wednesday that the Pentagon may have to mothball up to three Navy aircraft carriers and order additional sharp reductions in the size of the Army and Marine Corps if Congress doesn’t act to avoid massive budget cuts beginning in 2014.

Speaking to Pentagon reporters, and indirectly to Congress, Hagel said that the full result of the sweeping budget cuts over the next 10 years could leave the nation with an ill-prepared, under-equipped military doomed to face more technologically advanced enemies.

In his starkest terms to date, Hagel laid out a worst-case scenario for the U.S. military if the Pentagon is forced to slash more than $50 billion from the 2014 budget and $500 billion over the next 10 years as a result of Congressionally-mandated automatic spending cuts.

The Pentagon has been ratcheting up a persistent drumbeat about the dire effects of the budget cuts on national defense, and as Congress continues to wrangle over spending bills on Capitol Hill. Read more from this story HERE.

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Photo Credit: APHagel: Smaller budget means smaller military

By Kristina Wong. A smaller Army and Marine Corps, consolidated combatant commands and a “decade-long modernization holiday” will befall the U.S. military if defense cuts known as sequestration remain in place, Defense Secretary Chuck Hagel said Wednesday.

Mr. Hagel unveiled Wednesday the results of a department-wide fiscal review that identified budget items that would be cut to accommodate $500 billion in reduced defense spending over the next decade.

If Congress does not reverse the cuts, the Army could shrink to 380,000 troops from its target strength of 490,000. Similarly, the Army Reserves, which has been mostly saved from sequestration, would face reductions.

In addition, the Navy’s aircraft carriers could be reduced from 11 to eight or nine, the Corps could field as low as 150,000 Marines instead of 182,000, and combatant commands — headquarters dedicated to a region or specific function — could be merged.

“This strategic choice would result in a force that would be technologically dominant but would be much smaller and able to go fewer places and do fewer things, especially if crisis occurred at the same time in different regions of the world,” Mr. Hagel said. Read more from this story HERE.

Sequestration Destroying Naval Readiness

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Photo Credit: APDefense budget cuts have reduced the number of Navy forces that would respond to an emergency in the Persian Gulf and the Western Pacific, the chief of naval operations said.

“A year ago I would tell you we had three [aircraft] carrier strike groups and three amphibious ready groups ready to surge. And if there were a contingency, that we had to take on a large operation, the surge force would be a concern,” Adm. Jonathan Greenert told reporters at the Pentagon…

Until this year, the Navy had maintained two carrier groups in the Gulf. Only one is maintained there now because of spending cuts known as sequestration that will require the Pentagon to trim its spending by $500 billion over the next 10 years.

After sequestration kicked into effect, the Navy withdrew all combat ships from its Southern Command, curtailed training and deployments, halted restoration and modernization projects, and minimized base operations.

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In Welfare We Trust: One-Sixth of Federal Budget is Now Welfare

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Photo Credit: Wikipedia

Yes, it looks like a wedding announcement out of The Onion, but when it comes to making a killing off the never-ending “War on Poverty,” the marriage of convenience between the financial services industry and federal bureaucrats is no laughing matter.

The idea that government welfare programs could eliminate poverty, rather than temporarily alleviate its worst impacts during hard times, took root during Lyndon Johnson’s Great Society initiative. From modest beginnings, a panoply of federal welfare programs expanded and multiplied to the point where they now consume one-sixth of the federal budget—some $588 billion last year, according to the Congressional Budget Office.

This is a lot of spending—even by contemporary standards—and this figure doesn’t even include the current explosion in unemployment benefits, as these are considered social “insurance” payouts rather than welfare. Nor does it include Social Security or Medicare, our largest and most rapidly growing federal expenditures. To make matters worse, these programs, which were designed to keep the elderly out of poverty, are entitlements not yet subject to means testing, so payments go to rich, middle class, and poor alike.

With anti-poverty programs enjoying meteoric growth thanks to the economic policies of the current and previous administrations, we may someday look back fondly on the days when we “only” had to fork over half a trillion a year to support the longest and least successful “war” in American history, with no sign of stopping.

How many civil servants with good pay and benefits does it take to do all this poverty fighting? Try as I might to discover the answer I finally gave up, surprised that I couldn’t locate a definitive study enumerating the number of federal, state, and government-funded private employees whose livelihood depends on administering the ever expanding stream of tax dollars flowing to the poor. Is it any wonder that these entrenched bureaucrats have managed to slowly expand the definition of poverty to include a standard of living that would have been considered middle class back when the war on poverty started?

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Obama Budget to Include Cuts to Programs in Hopes of Deal

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President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say.

In a significant shift in fiscal strategy, Mr. Obama on Wednesday will send a budget plan to Capitol Hill that departs from the usual presidential wish list that Republicans typically declare dead on arrival. Instead it will embody the final compromise offer that he made to Speaker John A. Boehner late last year, before Mr. Boehner abandoned negotiations in opposition to the president’s demand for higher taxes from wealthy individuals and some corporations.

Congressional Republicans have dug in against any new tax revenues after higher taxes for the affluent were approved at the start of the year. The administration’s hope is to create cracks in Republicans’ antitax resistance, especially in the Senate, as constituents complain about the across-the-board cuts in military and domestic programs that took effect March 1.

Mr. Obama’s proposed deficit reduction would replace those cuts. And if Republicans continue to resist the president, the White House believes that most Americans will blame them for the fiscal paralysis.

Besides the tax increases that most Republicans continue to oppose, Mr. Obama’s budget will propose a new inflation formula that would have the effect of reducing cost-of-living payments for Social Security benefits, though with financial protections for low-income and very old beneficiaries, administration officials said. The idea, known as chained C.P.I., has infuriated some Democrats and advocacy groups to Mr. Obama’s left, and they have already mobilized in opposition.

Read more from this story HERE.

Even In Afghanistan, A Focus On Budget Battles Of Washington

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Photo Credit: Secretary of Defense

The new defense secretary, Chuck Hagel, arrived at this rugged security outpost situated along a ratline of insurgent infiltration from Pakistan to talk to American troops about the war.

Instead, the soldiers wanted to hear only about the budget battle back in Washington – in particular, how steep reductions in spending for the Pentagon would affect their careers, their salaries and their health care benefits, and their eventual retirements. Perhaps that could be viewed as a positive sign of the status of combat operations in Afghanistan.

As Afghan forces take the lead in securing their own country, members of the 101st Airborne Division’s First Brigade Combat Team were not so concerned about the quality of their body armor, or the details of counterinsurgency tactics, or whether there was a slackening of support for the war back home. Those are the sorts of things that usually come up when a defense secretary convenes a town-hall-style meeting with troops in the combat zone.

In his opening remarks delivered this weekend at the forward operating base, located in Jalalabad, a strategic crossroads in eastern Nangarhar Province, Mr. Hagel discussed the war effort, of course, and thanked the troops for their service to the nation. And he pledged to always keep at the forefront the needs of America’s service personnel and their families.

Then he opened up the dialogue to questions. Not a single one was about the war effort.

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ABC Poll: Americans Are Totally Fine With Spending Cuts

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Photo Credit: Intel PhotosPresident Obama and company have been beating the drum about the supposed coming disasters of sequestration, but Americans aren’t buying it. Proof: a poll out from ABC news today reveals that the vast majority of Americans are just fine with budget cuts. At the same time, most are not in favor of military cuts, indicating they’d like to see the money come from other places. Some of the numbers:

The public by nearly 2-1, 61-33 percent, supports cutting the overall budget along the lines of the sequester that took effect last Friday. But by nearly an identical margin, Americans in this ABC News/Washington Post poll oppose an eight percent across-the-board cut in military spending.

These views come before the $85 billion in cuts this year have taken hold, leaving open the question of how the public will respond once the reductions hit home. Nonetheless, the results suggest that warnings about the nation’s military readiness have resonated, while the public is more skeptical about the damage the sequester poses to federal programs more generally.

Support for a five percent reduction in federal spending crosses party lines in this poll, produced for ABC by Langer Research Associates; it includes 57 percent of Democrats, six in 10 independents and three-quarters of Republicans. Shaving eight percent off the military budget, on the other hand, is opposed by 73 percent of Republicans and 63 percent of independents, with Democrats split down the middle.

Now, before we all start celebrating, there are a few matters of note. The ABC article also points out that, in a similar poll conducted during the height of fiscal cliff hysteria, Americans were largely opposed to cuts to some of the most expensive programs we run (including Social Security).

Read more from this story HERE.

Getting Wise To Government Lies

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Photo Credit: Andrew BirajTake President Obama and his Cabinet of Liars, please. We all know what dirty tricks they played to try and stop the sequester’s automatic budget cuts from happening.

They spent weeks trying to frighten the America people into believing the country would collapse into chaos and suffering if the federal government’s sequester-forced spending cuts went into effect. The campaigner in chief and his chorus of toadies did everything they could to make sure the puny spending cuts — which would have merely taken the federal budget back to its 2012 level — would cause the most pain to the most people.

Supposedly the cuts were going to decimate the ranks of our local police forces and firefighters, throw hundreds of teachers into the streets, create long lines at airports and maybe even leave the United States vulnerable to a military invasion by Greece.

Of course, most of Big Media played right along with Obama’s dirty political game. Like the dupes they are, they publicized every sequester scare-story like it was going to mean the end of America as we know it.

(Too bad the MSN don’t devote the same level of hysteria to covering some of our real problems, like Obama’s runaway federal spending and our unpayable future debt load.)

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Money On The Table: Government Wastes Billions By Not Listening To IGs, Report Says

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Photo Credit: APFederal agencies are forfeiting billions of dollars by failing to implement the recommendations of their inspectors general, according to a House Committee on Oversight and Government Reform report.

The report, released Tuesday, estimates that executive agencies could have saved more than $67 billion in 2012 by implementing thousands of recommendations from their inspectors general.

The report notes that the number of unimplemented recommendations rose by about 50 percent over the past four years, while the potential savings lost more than doubled. Almost 11,000 recommendations, at a potential savings of almost $30 billion, were left on the table in 2009; in 2012, close to 17,000 recommendations were neglected at a potential loss of more than $67 billion.

The report comes as mandatory, across-the-board budget cuts totaling $85 billion for the fiscal year are beginning to take effect. The Oversight Committee keyed the release of the report to a Tuesday morning hearing on the implementation of recommendations by the Transportation and Education Departments’ inspectors general.

“With my partners on both sides of the dais, today we’re starting a much greater dialogue with our IGs, a much greater dialogue with the changes that need to be made if in fact government, outside of this body in the executive branch, can do better, do quicker, to save the taxpayers money,” Oversight Committee Chairman Darrell Issa (R., Calif.) said in his opening statement.

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Armed Services Chair: Never Seen Such Lack of ‘Truth-Telling’ from Commander in Chief

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photo credit: realtor action centerHouse Armed Services Committee Chairman Howard “Buck” McKeon (R-Calif.). (AP) (CNSNews.com) – Chairman of the House Armed Services Committee Howard “Buck” McKeon (R-Calif.) said on Friday that he has never seen such a lack of honesty from President Barack Obama over the sequester budget cuts, adding, “I don’t know what extent this White House will go to, but it’s got to end.”

“I have never in my lifetime seen such a lack of leadership and truth-telling emanating from the White House and from our commander-in-chief,” McKeon said during a press conference on Capitol Hill as the across-the-board spending cuts, known as the sequester, apparently were going into effect.

The cuts, which constitute $44 billion less in increased spending in 2013, constitute about 1.2 percent of the federal budget for this year.

Watch video here:

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