The Day of Doom is Upon Us

I’m writing these words from deep inside my sequestration bunker – bracing for the impact of a three percent budget cut that President Obama said would cause our nation to fall into ruin.

Why Are We Not Talking About America’s $123 Trillion In Unfunded Liabilities?

Most Americans know that our nation is spending more than it is taking in (the deficit). Though many on the Left do not seem to understand (or care about) the consequences of out of control spending, most Americans do know that the nation has America has over $16.5 trillion in debt–or, nearly $53,000 of debt for every man, woman and child.

While $16.5 trillion of debt is clearly unsustainable, what is even more alarming is what we are not talking about: The fact that, in addition to the $16.5 trillion of debt we currently have, every man, woman, and child in America also is on the hook for nearly $400,000 in unfunded liabilities–or, over $1 million for every household.

Though their numbers appear to vary slightly (not including the unfunded liabilities of ObamaCare, for example), in their November Wall Street Journal article, writers Chris Cox and Bill Archer explain the lack of knowledge about the unfunded liabilities as:

The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.
Why haven’t Americans heard about the titanic $86.8 trillion liability from these programs? One reason: The actual figures do not appear in black and white on any balance sheet.

To be sure, the nation’s fiscal problems are a bi-partisan issue, caused by years of buying votes among specific constituencies. As a result, those constituencies are now entitled to the benefits which have yet to be paid for.

Today, while those politicians wrestle with Obama’s self-induced sequestration deal, (which slashes defense spending while barely nibbling at the fat that has become the national budget), no one wants to deal with the real issue at hand: Politicians in Washington have enslaved future generations with the costs of various entitlement programs.
Perhaps it’s time we raise it to their attention–seriously.

By: LaborUnionReport (Diary)

Obama’s Cowardly Mendacity Over Sequestration

 

In August 2011, Obama hatched a deal to grant himself a free $2.1 trillion increase in debt, which would take him past the 2012 elections, thereby sparing him the embarrassment of another debt limit request during the campaign season.  He knew that such a request was so bold it needed to be ensconced in a deal that would give voters the impression he was committed to cutting spending.  To that end, the Budget Control Act called for the creation of a super committee to identify $1.2 trillion in baseline cuts and tax increases.  Given that the committee would be evenly split between Republicans and Democrats, Obama knew that this would trigger the sequestration.  And that is exactly what he wanted.
Nobody could accuse Republicans of designing the sequester.  Only a leftist like Obama would ensure that the one mechanism to actually cut spending would disproportionately cut defense.  For example, this year’s sequester will cut $42.7 billion from defense, $28.7 billion from non-defense discretionary spending, and $14 billion from mandatory spending, most notably, to healthcare providers.  Obama figured that Republicans would be so scared of the defense sequester that they would come to him begging for a reprieve.  That way Obama would be saved from cutting one penny of spending from any account, and could possibly leverage more tax increases in exchange for letting them off easy with defense spending cuts.
A free $2.1 debt limit increase in exchange for nothing but defense cuts and possible leverage to raise taxes…..sounds like a nice plan, doesn’t it?
In 2011, Republicans went along with this insane plan.  As a result, we burned through the $2.1 trillion in new debt in just 17 months.  We actually increased spending during that time period.  Now the time to pay the infinitesimal price of spending cuts has come due.  Conservatives decided to draw a line in the sand and not fall into Obama’s trap.  While we don’t like the fact that 50% of the cuts will come from the most important part of the budget, which only represents 20% of total outlays, we will not pass up an opportunity to cut non-defense discretionary spending; nor will we be suckered into more tax hikes.
Before it became clear to Obama that conservatives were willing to stand on principle even in the face of defense cuts, he actually threatened to veto any repeal of the sequester.  Now that we are calling his bluff, he is saying the world will come to an end if we don’t repeal it.  The reality is that Obama couldn’t care less about defense.  All he cares about is the non-defense spending.  The federal budget sans base defense spending is roughly $3 trillion.  A $42.7 billion cut is approximately 1.4% of the rest of the federal budget.  If you can’t handle a 1.4% cut off your record high baseline after concocting this plan in exchange for your debt limit increase, you are nothing but a coward, Mr. President.
This needs to be the message emanating from Republicans.  Instead of buying into Obama’s message of doom, Republicans need to pocket this victory.  They should let the American people know that they are willing to let go of their scared cow; now it’s time for Obama to man up and accept his own spending cuts, which are smaller than the defense cuts.
The real concern for conservatives is that too many Republicans are refusing to take yes for an answer, and accept the sequester.  Instead, they are trying to fight it, even though most of them voted for it, while squandering their political capital to fight Obamacare in the upcoming continuing resolution.  Some “anonymous” aids have already suggested they will never fight the CR.
With such poor messaging over the sequester, as so astutely noted by Byron York, it’s no wonder conservatives like Jim Bridenstine are smelling another capitulation.
Boehner and McConnell need to put out one more statement challenging Obama to keep his word on his own deal, just like they are (hopefully) willing to uphold their end of the deal on defense spending.  Then, they must move on and immediately begin assailing Obamacare every day for the next month.
Obama is on the run.  Republicans are the only ones who can save him.


By: Daniel Horowitz (Diary)

Obama administration tries to block sequester layoff notices

The latest durable-goods orders report must have the Obama administration — and the Obama campaign — more worried than they publicly let on.  According to the National Journal, the White House will press government contractors to hold off on issuing layoff notices in October in anticipation of the sequestration cuts, afraid of the political backlash that will ensue.  In fact, the Obama administration is offering to indemnify government contractors for losses and fines for delaying those notices:

The White House moved to prevent defense and other government contractors from issuing mass layoff notices in anticipation of sequestration, even going so far to say that the contracting agencies would cover any potential litigation costs or employee compensation costs that could follow.
Some defense companies—including Lockheed Martin, BAE Systems and EADS North America—have said they expect to send notices to their employees 60 days before sequestration takes effect to comply with the Worker Adjustment and Retraining Notification Act, which requires companies to give advance warning to workers deemed reasonably likely to lose their jobs. Companies appeared undeterred by a July 30 guidance from the Labor Department, which said issuing such notices would be inappropriate, due to the possibility that sequestration may be averted. The Labor Department also said companies do not have enough information about how the cuts might be implemented to determine which workers or specific programs could be affected should Congress fail to reach a compromise to reduce the deficit, triggering $1.2 trillion in spending cuts, half from defense, half non-defense. For 2013, that would amount to $109 billion in spending cuts.

Yesterday, the OMB went a little farther in wheedling contractors into playing ball:

So the Office of Management and Budget went a step further in guidance issued late Friday afternoon. If an agency terminates or modifies a contract, and the contractor must close a plant or lay off workers en masse, the company could treat employee compensation costs for WARN Act liability, attorneys’ fees and other litigation costs as allowable costs to be covered by the contracting agency—so long as the contractor has followed a course of action consistent with the Labor Department’s guidance. The legal fees would be covered regardless of the outcome of the litigation, according to the OMB guidance issued by Daniel Werfel, controller of the Office of Federal Financial Management, and Joseph Jordan, the Administrator for Federal Procurement Policy.

In other words, taxpayers will cover the costs of these layoffs through more spending, even though the point of sequestration was to force cuts in government spending.  Instead of paying contractors — mainly defense workers — to work, we’ll start paying them not to work.  And why?  Because the White House doesn’t want massive numbers of layoff notices coming in the last few days ahead of the election.  And make no mistake — with overall durable goods orders dropping 13.2% in a month and defense orders dropping 40%, those layoff notices would otherwise be coming, and sooner rather than later.
In other words, the White House wants taxpayers to pay to cover up the inevitable outcome of sequestration to keep Barack Obama from suffering the political consequences of his own deal.  Unless those funds are coming from Team Obama, this looks pretty corrupt — which is undoubtedly why Obama chose to have this OMB edict issued late on Friday afternoon, when few would be paying attention.

by Ed Morrissey