The Onion’s American Voices: Should sugar be regulated?

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“A woman in Illinois is auctioning off a 2005 Chrysler that once belonged to President Obama. You could tell it was Obama’s car because it gets off to a fast start and then stalls for the next three years.” –Jimmy Fallon

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“It’s being reported that California needs to raise $3 billion by March. This according to California State Treasurer Nicolas Cage.” –Conan O’Brien

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Cartoon: State of the Deficit

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“A new report found that Facebook has created more than 450,000 jobs. Unfortunately, photos posted on Facebook have ended 550,000 jobs.” –Jimmy Fallon

Though the unemployment drop is a sign of improvement, the economy still has a lot of work to do. Numbers prior to the beginning of the recession in 2007, show a deficit of 5.6 million fewer jobs today. With so much more to go, we can wonder why our leaders are only focusing on the .2% decrease in jobs over one month. The Associated Press reports that at this moment 12.8 million Americans are out of work, with another 11 million either working part time and would like to work full time, or have given up looking for work all together. When you take into account these numbers we reach a real unemployment rate of around 15%.

While our elected leaders focus on a small decrease in the reportable unemployment rate, Americans are feeling the effects of a $15 trillion national debt and a slowly rebounding jobs market. With economists expecting a slower rate of growth this year, we can only hope that our representatives take action soon.

The Bureau of Labor Statistics reported this morning that the unemployment rate dropped to 8.3% in last month. This marks the fifth straight month the nation’s jobless rate has declined.

ABC News reports on Republican lawmakers’ plans to avoid the automatic defense spending cuts mandated by the Budget Control Act. The Hill says Republican senators have a plan to cut the federal workforce instead of defense spending.

Bloomberg, The Wall Street Journal and The Washington Post provide overviews of Federal Reserve Chairman Ben Bernanke’s Capitol Hill testimony yesterday on the budget deficit and overall economy.

Politico updates readers on negotiations to extend the 2011 payroll tax cut for one more year.

The New York Times examines the President’s plan to help the manufacturing industry.

Politico looks at the prospects for passing infrastructure reauthorization and spending bills this legislative session.

But in Washington, it seems like everyday is Groundhog Day. It seems like everyday we hear about plans to cut spending and restore fiscal responsibility. But every time we end up disappointed. This week, the Congressional Budget Office released its Budget and Economic Outlook that projected the deficit for fiscal 2012 would exceed $1 trillion for the fourth year in a row.

In the latest manifestation of lawmakers’ unwillingness to make the difficult decisions, a group of Senators is exploring ways to put off the automatic cuts triggered by the supercommittee’s failure. This morning, Senators Jon Kyl (AZ), John McCain (AZ), Lindsey Graham (SC), John Cornyn (TX) and Kelly Ayotte (NH) introduced a plan to “delay for a year more than $1 trillion in mandatory cuts – half of which would come from the Pentagon — by trimming the federal workforce and extending a pay freeze for federal employees imposed by the Obama administration.”

The automatic cuts that are currently scheduled to go into effect in January 2013 have raised concerns among some that it would hollow out the Pentagon’s budget and put our national security at risk. While we agree cuts to defense spending must be done carefully, there are few that will argue there is no room for cutbacks in the DoD’s budget.

Furthermore, it’s important to remember why the automatic cuts were put into place – to provide some incentive for the bipartisan supercommittee to produce a credible deficit reduction plan. And the automatic cuts can still be reversed if lawmakers are able to put together a proposal to reduce the deficit by $1.2 trillion over the next 10 years. Consider that our deficit for the next year alone is projected to reach $1.08 trillion and that requirement doesn’t seem quite so insurmountable.

It’s time for Washington to get serious about fixing our economy. Congress must stop playing politics with the nation’s bottom line and start proposing real solutions that will lead to real growth.

Roll Call reports Senate Republicans will offer a plan today that replaces upcoming automatic defense spending cuts with cuts to other programs.

On Wednesday the U.S. voted to freeze pay for federal workers. The Hill, National Journal, Politico have the details.

Also on Wednesday, President Obama offered a plan to help homeowners refinance their mortgages. CNN, The Hill, The New York Times, Reuters, USA Today, The Wall Street Journal and The Washington Times have the details of that plan.

Politico says forces are already lining up against a massive transportation spending reauthorization bill that could come up this year.

The Hill reports eight House members returned about $1.4 million to the U.S. Treasury from their office budget.

The Associated Press previews Federal Reserve Chairman Ben Bernanke’s testimony today on the economy and the budget deficit. Fox News reviews the Congressional Budget Office Director’s dim view of the same issues.

The Associated Press has the details of a House Republican plan to offer tax cuts to small businesses.

Opponents slam earmarks as a way to push through pet projects, wasting already scarce taxpayer money. Supporters contend they only represent less than 1% of federal spending and say earmarks are an important way secure funding for essential projects all across the country.

Most recently, Senators Claire McCaskill (D-MO) and Pat Toomey (R-PA) introduced a permanent earmark ban as an amendment to an insider-trading bill. The bipartisan amendment quickly received a bipartisan lukewarm reception. Sen. John Cornyn (R-TX) non-committedly remarked, “I am not sure we need it, but I am open to it.” Senate Minority Leader Harry Reid contended, “I’ve done earmarks all my career, and I’m happy I’ve done earmarks all my career. They’ve helped my state, and they’ve helped different projects around the country.”

Explaining the reasoning behind a permanent ban, Sen. Toomey said, “There is an opportunity for corruption. A process like that is badly flawed and should be remedied.”

The amendment could be voted on this week.

Do you think earmarks should be permanently banned in an effort to reduce wasteful spending? Or should they be maintained as a way to fund necessary projects across the country? Let us know in the comments!

Federal spending increased by four percent in 2011, to $3.6 trillion. Spending is projected to increase by $3 billion in 2012.

Federal revenues increased by $140 billion, or six percent in 2011.

The cost of the stimulus has grown. CBO originally projected it would cost $787 billion. It is now projected to cost $831 billion.

Interest spending is expected to rise significantly – from $224 billion projected in 2012 to $624 billion projected in 2022.

The number of people age 65 or older will increase by about one-third between 2012 and 2022 (from 14 to 17 percent of the population). This will greatly impact Social Security and health care spending.

“Because of the aging of the population and rising costs for health care, the set of budget policies that were in effect in the past cannot be maintained in the future.”

Over the next ten years, spending is expected to rise “because of increasing expenses generated by the aging of the population and rising costs for health care.”

“A significant worsening of the banking and fiscal problems in Europe could lead to further turmoil in international financial markets that could spill over to those in the United States and greatly weaken the economy here.”

The Congressional Budget Office said Tuesday it expects the deficit for fiscal year 2012 to be above $1 trillion. The Associated Press, Bloomberg, The Wall Street Journal and The Washington Post report. The Washington Post’s Ezra Klein attempts to decipher who is responsible for the high deficits and increasing national debt.

The New York Post reports that if current tax laws are allowed to expire, Americans’ tax bills will go up about 30 percent in the next few years.

The Hill says the U.S. House is trying to prevent welfare payments from going to strip clubs.

Roll Call reports the U.S. Senate is again exploring a permanent ban on earmarks. According to Politico, Senate Majority Leader Harry Reid defended the earmarking process.

BusinessWeek reports that small business’ share of the economy has declined over the past few years. Bloomberg reports a recent downturn in consumer confidence could indicate the overall economy is slowing.

Check it out below!

Be sure to check back to see Gretchen’s other appearances on The Balancing Act.

Because of this, the CBO creates an alternative baseline, which assumes many temporary provisions are permanent.  This year’s alternative baseline assumes, among other things, that “temporary” provisions such as the 2001 tax cut are extended, the automatic spending cuts in the Budget Control Act never take effect, and payments to doctors under Medicare remain constant.  In general, the numbers of the alternative baseline are much more important than the actual baseline because the alternative baseline is more likely to reflect policies that Congress actually passes into law.

But regardless of how you look at the numbers – the baseline or the alternative baseline – they aren’t good.  Under the CBO baseline, the deficit grows by $3.1 trillion over the next ten years.  Under the alternative baseline, the deficit grows by a staggering $10.98 trillion.  Considering the current national debt is over $15 trillion, both baselines represent a dangerous growth in the national debt – with the country running unsustainable deficits for the foreseeable future.

On a positive note, it’s reassuring to see the CBO warn Congress about the effects of digging deeper into an economic hole, something we’ve been doing for years at Bankrupting America.  In the report, the CBO says:  ”A rising amount of federal debt would increasingly restrict policymakers’ ability to use tax and spending policies to respond to unexpected challenges, such as economic downturns or financial crises. Burgeoning debt also would boost the likelihood of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget and the government would lose its ability to borrow at affordable rates.”

Washington must take note.  While the numbers may be hard to put into perspective, the consequences are all too real. We only have to look to Greece to see what happens when investors lose confidence in a government’s ability to manage its budget – and subsequently lose its ability to borrow at affordable rates.

The time to act is now. Americans need real solutions that lead to real economic growth.