Sequestration - The Fiscal Cliff - The "Grand Bargain" between parties will never happen

President Obama and Speaker of the House John Boehner are acting like the Democrats and Republicans are going to come to a "Grand Bargain" before we go over the Fiscal Cliff... yeah, right.

I want some of what they have been smoking.

Anybody want to bet me a steak dinner at Coach-'N-Four that they'll bury the partisan hatchet and come to an agreement? I say that the automatic cuts will happen for lack of an agreement in Congress.

We are headed to another recession and higher unemployment... but if it puts us back on track toward fiscal responsibility, so be it. Sequestration, a fancy name for the Fiscal Cliff, has to happen. It will come in the form of automatic cuts or an agreement in Congress on cuts/tax increases (or repealing of previous tax cuts). I just say that partisanship is so entrenched that there's no way they will agree to anything.

I believe the Republicans will cave prior to the end of the year on additional taxes on those making $250k+.

If that counts as burying the hatchet and coming to an agreement, I'd like to take you up on your Coach-'N-Four dinner bet.

Regards,
Grayson

Nosyarg wrote:

I believe the Republicans will cave prior to the end of the year on additional taxes on those making $250k+.

If that counts as burying the hatchet and coming to an agreement, I'd like to take you up on your Coach-'N-Four dinner bet.

Regards,
Grayson

That is just PART of the Fiscal Cliff, Nosyarg. The Republicans will not want to cave on the increased funding by eliminating Bush-era tax cuts... and they won't want to budge on reducing our out-of-control Defense spending. The Democrats won't want to touch entitlements... welfare, Social Security, Medicare.

Just an update. Washington Post says today ‘Fiscal cliff’ talks at a stalemate over tax hikes

Quote :

As the White House and Republican leaders enter the final month of negotiations to avoid a year-end “fiscal cliff,” both sides struck an uncompromising tone Sunday, as warnings mounted that they will be unable to forge an agreement to stop an automatic series of deep spending cuts and large tax hikes that could push the economy into recession.

Following private meetings last week, the senior negotiators for the White House and the Republicans took to the airwaves Sunday to accuse the other side of intransigence and to demand that the opposition concede on the central question of how much to raise taxes on the wealthy.

“Right now, I would say we’re nowhere, period. We’re nowhere,” House Speaker John A. Boehner (R-Ohio) said on “Fox News Sunday.” Boehner added that the Republicans have offered a way to break the stalemate — by compromising on an overhaul of the tax code that would limit deductions that disproportionately benefit the rich.

But Treasury Secretary Timothy F. Geithner rejected that proposal Sunday, insisting that the wealthy pay higher tax rates and that Republicans come forward with a plan that meets that requirement. “There’s no path to an agreement that does not involve Republicans acknowledging that rates have to go up on the wealthiest Americans,” he said on NBC’s “Meet the Press.”

While it had always seemed likely that the two sides would reach a stalemate before finally coming to agreement — as has been the pattern over the past two years — lawmakers and congressional aides tracking the back-and-forth said there’s a growing probability that no deal will be reached in time to avoid the fiscal cliff.

“I think we’re going over the cliff,” Sen. Lindsey O. Graham (R-S.C.) said on CBS’s “Face the Nation.”

Geithner appeared on five Sunday morning news shows — and Boehner on one — amid an intensifying public-relations blitz related to the fiscal cliff. President Obama took his first domestic trip since winning reelection to the Philadelphia suburbs on Friday to press Republicans, which was followed by a Boehner news conference.

This week, Obama will gather with governors and make a speech to the Business Roundtable, a lobby group representing big business, to urge lawmakers to embrace his tax proposals. Boehner will meet with governors and rally with small-business owners against tax increases.

The debate over how to raise taxes on the wealthy is part of the broader discussion over how to reduce federal borrowing over the next decade. At the end of the year, tax rates are scheduled to increase on nearly all Americans, raising hundreds of billions of dollars of new tax revenue but costing the average family about $2,000 a year in take-home pay.

Obama wants to freeze tax rates for most Americans while allowing them to rise as high as 39.6 percent for the wealthiest people — defined as earning over $250,000 per year. That will reduce federal borrowing by about $1 trillion over a decade.

“There’s just no reason why 98 percent of Americans have to see their taxes go up because some members of Congress on the Republican side want to block tax rate increases for 2 percent of the wealthiest Americans,” Geithner said Sunday.

Then next year, Obama wants to overhaul the tax code to clean out deductions and loopholes that benefit the rich and some sectors such as the financial industry. That, the administration estimates, would generate about $600 billion in savings over a decade.

Republicans, meanwhile, do not want to raise taxes on anyone. But in the wake of their electoral defeat last month, they have acknowledged that the wealthy will have to pay more. They want to raise about $800 billion in new revenue over the decade through an overhaul of the tax code that limits deductions. Higher rates, they say, will dissuade work and investment and hurt small businesses, and thus be a drag on economic growth.

Both sides agree that as a principle, keeping tax rates low while eliminating deductions is better than increasing tax rates. But Democrats say it’s not possible to preserve enough spending on government programs without raising well over $1 trillion in new tax revenues during the next decade — and they don’t believe it’s possible to do that without raising rates on the wealthy, raising taxes on the middle class, or dramatically scaling back worthwhile deductions such as the one for charitable giving.

Last week, in a private meeting with Boehner, Geithner made the Obama administration’s opening bid in the fiscal cliff talks — largely a reprisal of policies the administration has already advocated. In addition to $1.6 trillion in new tax revenue, the proposal called for $600 billion in spending cuts, a majority of it from Medicare and Medicaid, as well as a new policy to allow the president to raise the statutory limit on federal borrowing without a majority of Congress approving.

That would come on top of $1 trillion in spending cuts that were agreed to in 2011 and $800 billion in savings from the end of the wars in Afghanistan and Iraq.

Republicans dismissed the proposal as laughable. “I was flabbergasted. I looked at him and said, ‘You can’t be serious,’ ” Boehner said Sunday. “I’ve just never seen anything like it. You know, we’ve got seven weeks between Election Day and the end of the year, and three of those weeks have been wasted with this nonsense.”

The White House also has opened the door to a compromise that would increase rates on upper-income earners by less than the full amount they are scheduled to rise next year, when the top brackets rise from 33 to 35 percent and 35 to 39.6 percent. But Republicans have not agreed.

“It’s welcome that they’re recognizing that revenues are going to have to go up, but they haven’t told us anything about how far rates should go up, how far revenues should go up,” Geithner said.

Beyond openness to new revenues through an overhaul of the tax code, Republicans insist on significant savings from the nation’s health-care entitlements, as well as Social Security.

In talks with Boehner in the summer of 2011 over a deal to slow borrowing, Obama was willing to adopt a stingier formula for making cost-of-living adjustments to Social Security. But in this round of talks, the White House says it won’t make any changes to the program.

“We are prepared to, in a separate process, look at how to strengthen Social Security, but not as part of a process to reduce the other deficits the country faces,” Geithner said.

At my husband's office, they are planning for sequestration. 22 weeks of it. It means a 4 day work week for 22 weeks. It won't affect the military but since many DOD jobs involve military work it most certainly will affect the military's operations. For example, my husband is a test engineer. The pilots are military pilots. If my husband isn't there to do his job, the pilots will be grounded. So I guess the pilots will be sitting there at work often doing nothing while my husband is at home one day of week, without pay. Now how in the world does this make sense?

I am fed up with ALL of them. Obama and Democrats and Republicans. They all suck.

nekochan wrote:

At my husband's office, they are planning for sequestration. 22 weeks of it. It means a 4 day work week for 22 weeks. It won't affect the military but since many DOD jobs involve military work it most certainly will affect the military's operations. For example, my husband is a test engineer. The pilots are military pilots. If my husband isn't there to do his job, the pilots will be grounded. So I guess the pilots will be sitting there at work often doing nothing while my husband is at home one day of week, without pay. Now how in the world does this make sense?

I am fed up with ALL of them. Obama and Democrats and Republicans. They all suck.

I am in strongest agreement with you that they all suck, Neko. Hence my dedication to 3rd Party politics.

Yet another example (actually SEVERAL examples!) of the government's stupidity. If they knew anything at all about actual cost-savings (and granted, I realize this doesn't address the whole pilot debacle unless they changed to the same sked, and I know nothing of the feasibility of that) they would know that they could achieve *SIGNIFICANT* cost savings by changing entire facilities over to a 4-days/week, 10-hours/day work week. Concurrently, mandatory plant-wide shutdown during a period of highest energy consumption (we always had them during the week of Independence Day), and opt-out of three or four (if memory serves) "personal days" each year then doing another plant-wide shutdown that spanned from Christmas until after the New Year. In addition, cutting people's hours and/or layoffs causes people to be unhappy and dissatisfied in their jobs and with their employers, resulting in significant loss of productivity. Above are the sorts of things that the smartest, most profitable corporations and businesses in industry do in order to avoid having to lay people off and/or cut their hours.

I realize that week-long shutdowns would not likely be feasible in your husband's line of work, but most CERTAINLY the above solutions would work in MANY government facilities.

I despise Jeff Immelt for many reasons, but since he and Obama are in bed together maybe they should have some pillow-talk on the subject. Immelt could certainly educate Obama on this subject.

In any case I am really sorry to hear that your household will lose out on 22 DAYS of pay this year, which comes to 176 man hours; roughly 4.4 WEEKS of pay, just to illustrate the loss in plain numbers. Fricking pisses me off!

My husband would not mind a 4 day/10 hr workweek. You're right, that would save money and no one would lose pay. Actually, the government could reduce the federal workforce (which needs to be done) by attrition and/or offering early retirement or incentives to retire for those with over 20 years of service...all without laying people off or cutting pay during hard economic times.

Neko... I'm sorry that it would affect your family and so many others adversely. But I have to admit that I hope it happens. There just seems to be no political will to cut govt spending in any meaningful way. Remember what happened in 2009 with the banking contraction? It squeezed out all of those frauds like Madoff... there is just so much waste in govt.

That said I highly doubt it will happen... this is like a sequel that breaks no new ground. They create a crisis then pretend to save us.

It probably will not happen but what's so bad is that there is no good reason to have gotten to this point. I don't want to see the can kicked further down the road either. I just want our elected officials to do their damn jobs! I don't know that sequestration would result in cutting the budget in any meaningful way.

Honestly, I don't think either side has the guts to do what needs to be done.

nekochan wrote:

Honestly, I don't think either side has the guts to do what needs to be done.

I watched a program on PBS the other night on The Grand Bargain. It almost happened.

Obama and Boehner had a deal and then a bipartisan group called The Gang of 8 came up with a different plan that included more revenue generation (taxes, I guess). Obama jumped on the additional revenue... above what Speaker Boehner agreed to, and held up the process to squeeze Boehner for more concessions.

Then House Majority Leader Eric Cantor jumped into the fray by denunciating Boehner for negotiating with Obama and loudly proclaiming that there would be no new taxes. Cantor insisted he sit in on future negotiations and when he showed his ass in one of the meetings, Obama walked out of the meeting. Cantor was widely blamed for throwing the proverbial monkey wrench into the process and he toned down his rhetoric.

It appears that Cantor wants Boehner's Speaker position... and may get it eventually.

It should be a crime to put personal gain ahead of what is best for the country.

nekochan wrote:

My husband would not mind a 4 day/10 hr workweek. You're right, that would save money and no one would lose pay. Actually, the government could reduce the federal workforce (which needs to be done) by attrition and/or offering early retirement or incentives to retire for those with over 20 years of service...all without laying people off or cutting pay during hard economic times.

I have worked both 4 10s and "first forty" work schedules (first forty is where you work as long a day as you like or need to and as soon as you get your 40-hrs in you're either done for the week or start making OT. I've never met a single person who did not LOVE both work schedules. Heck, getting done with your work week early Wednesday?? Can't beat that with a stick!

That's one of the cost cutting measures I forgot to include above, Neko (no doubt there are more, those are just the ones that came to mind at the moment). I have seen above referenced businesses offer The Golden Handshake to long-term, high-pay employees who were nearing or past retirement age but had not yet taken that step. In addition, yes, annually they cull the shitbirds from the flock and dammit, there is NO TIME LIKE THE PRESENT for the government to do so!

I subscribe to several Military.com newsletters and am a little behind in my reading but just found this in my queue, which you might have already read, but which is interesting nonetheless:

Quote :

Top Officers Issue Urgent Warning Over Budget Cuts
Feb 13, 2013
Associated Press| by Richard Lardner

WASHINGTON -- Pending automatic spending cuts have put the U.S. armed forces on a path to being so unprepared for combat that it would be "immoral" to use them, the Defense Department's top leaders told lawmakers Tuesday in their most dire warning yet of how looming budget reductions could undercut military readiness.

Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, said in response to a question during a Senate Armed Services Committee hearing that neither he nor any of the four-star officers in charge of the military services have considered resigning to protest the billions in dollars in cuts that will begin on March 1 unless Congress acts to stop them.

"But I will tell you personally, if ever the force is so degraded and so unready, and then we're asked to use it, it would be immoral to use the force unless it's well-trained, well-led and well-equipped," Dempsey said.

"Are we on the path to creating that dilemma?" asked Sen. Lindsey Graham, R-S.C.

"We are on that path," Dempsey said.

The uniformed leaders of the Army, Navy, Air Force and Marine Corps agreed with Dempsey's assessment.

The potential for the automatic cuts, called a sequester, to kick in on March 1 is the result of Congress' failure to trim the deficit by $1.2 trillion over a decade. The Pentagon faces a $46 billion budget reduction in the seven months starting in March and ending in September, and additional cuts would come in future years as long as the sequester remains in effect. The automatic cuts would be in addition to a $487 billion reduction in defense spending over the next 10 years mandated by the Budget Control Act passed in 2011.

Further complicating the military's fiscal picture is the lack of a budget for the current fiscal year. Congress hasn't approved one. Lawmakers have instead been passing bills called continuing resolutions, which keep spending levels at the same rate as the year before. That means the Pentagon is operating on less money than planned, and that compounds the problem, defense officials said. A freeze on hiring is already in place and the military has cut back on maintenance at bases and facilities, they said.

Defense Secretary Leon Panetta said last week that the United States is at risk of becoming a second-rate military power if the sequester isn't prevented. If the reductions are allowed to stand, Panetta said he would have to throw the country's national defense strategy "out the window."

Dempsey, the service chiefs and Deputy Defense Secretary Ashton Carter added greater detail during Tuesday's hearing, held as President Barack Obama called North Korea's third nuclear test in seven years a "highly provocative act" that threatens U.S. security and international peace.

Dempsey said "military readiness is in jeopardy due to the convergence of unprecedented budget factors." If the situation isn't fixed, he said, the armed forces "will have much less of everything and therefore be able to provide fewer options to our nation's leaders."

Sen. Kelly Ayotte, R-N.H., asked Dempsey to rate the dangers of sequestration on a scale of one to 10, with 10 being the most severe.

"From where I sit today, it sure feels like a 10," Dempsey said. None of the other witnesses disagreed.

Sen. John McCain, R-Ariz., described the military's financial situation as "kind of an Orwellian experience" because it's occurring when North Korea has tested a nuclear weapon, Iran remains a threat in the Persian Gulf region, and Iraq, Libya, Egypt, Mali and Tunisia all are in a state of unrest.

"We are probably in a more unsettled period since the end of the Cold War that certainly I have ever seen," McCain said. No one at the witness table disputed McCain's assessment.

The Defense Department announced last week it is cutting its aircraft carrier presence in the Persian Gulf region from two carriers to one, a move that represents one of the most significant effects of the sequester. The U.S. has maintained two aircraft carrier groups in the Gulf for much of the last two years.

The deployments of the USS Harry S Truman and the USS Gettysburg, a guided-missile cruiser, are being delayed as part of the Navy's plan to deal with the budget uncertainty.

If a 2013 budget isn't passed, the Navy will have to stop the refueling overhauls to two other carriers, the USS Abraham Lincoln and the USS Theodore Roosevelt, and delay the construction of other ships, Adm. Mark Ferguson, the vice chief of naval operations, told the committee. The Navy will have to shut down four of its air wings on March 1 unless a sequester is averted, he added.

Gen. Raymond Odierno, the Army chief of staff, called the budget situation "dire" and "unprecedented." The Army's top priority, he said, is to ensure that soldiers serving in Afghanistan and Korea and those next to deploy are prepared and ready. But close to 80 percent of the force -- those not in Afghanistan or Korea or deploying this year -- will have their training curtailed, he said.

"I began my career in a hollow Army," said Odierno, using a term to describe a force that looks good on paper but lacks adequately trained troops and modern equipment. "I do not want to end my career in a hollow Army."

By the end of 2013, less than half of the Marine Corps' ground units will be trained to the minimum readiness level required for deployment, said Gen. James Amos, the Marine Corps commandant. Gen. Mark Welsh, the Air Force chief of staff, said a sequester will force an involuntary 22-day furlough for up to 180,000 civilian airmen. That deprives the Air Force of over 31.5 million hours of productivity and will result in loss of over 200,000 flying hours, Welsh said.

Carter, the deputy defense secretary, urged lawmakers to put aside their partisan differences and head off the sequester, which he said is "purely the collateral damage of political gridlock."

http://www.military.com/daily-news/2013/02/13/top-officers-issue-urgent-warning-over-budget-cuts.html?ESRC=topstories.RSS

The DOD has already been under a lot of stress for the last few years. People aren't being hired for civilian positions that need to be filled, training is being canceled or cut for both military and civilians. My husband has seen this going on for the past several years.