WASHINGTON (AP) — The White House is aggressively pushing the idea that, contrary to widespread belief, President Barack Obama is tightfisted with taxpayer dollars. To back it up, the administration cites a media report that claims federal spending is rising at the slowest pace since the Eisenhower years.
“Federal spending since I took office has risen at the slowest pace of any president in almost 60 years,” Obama said at a campaign rally Thursday in Des Moines, Iowa.
The problem with that rosy claim is that the Wall Street bailout is part of the calculation. The bailout ballooned the 2009 budget just before Obama took office, making Obama’s 2010 results look smaller in comparison. And as almost $150 billion of the bailout was paid back during Obama’s watch, the analysis counted them as government spending cuts.
It also assumes Obama had less of a role setting the budget for 2009 than he really did.
Obama rests his claim on an analysis by MarketWatch, a financial information and news service owned by Dow Jones & Co. The analysis simply looks at the year-to-year topline spending number for the government but doesn’t account for distortions baked into the figures by the Wall Street bailout and government takeover of the mortgage lending giants Fannie Mae and Freddie Mac.
The MarketWatch study finds spending growth of only 1.4 percent over 2010-2013, or annual increases averaging 0.4 percent over that period. Those are stunningly low figures considering that Obama rammed through Congress an $831 billion stimulus measure in early 2009 and presided over significant increases in annual spending by domestic agencies at the same time the cost of benefit programs like Social Security, Medicare and the Medicaid were ticking steadily higher.
A fairer calculation would give Obama much of the responsibility for an almost 10 percent budget boost in 2009, then a 13 percent increase over 2010-2013, or average annual growth of spending of just more than 3 percent over that period.
So, how does the administration arrive at its claim?
First, there’s the Troubled Assets Relief Program, the official name for the Wall Street bailout. First, companies got a net $151 billion from TARP in 2009, making 2010 spending look smaller. Then, because banks and Wall Street firms repaid a net $110 billion in TARP funds in 2010, Obama is claiming credit for cutting spending by that much.
The combination of TARP lending in one year and much of that money being paid back in the next makes Obama’s spending record for 2010 look $261 billion thriftier than it really was. Only by that measure does Obama “cut” spending by 1.8 percent in 2010 as the analysis claims.
The federal takeover of Fannie Mae and Freddie Mac also makes Obama’s record on spending look better than it was. The government spent $96 billion on the Fannie-Freddie takeovers in 2009 but only $40 billion on them in 2010. By the administration’s reckoning, the $56 billion difference was a spending cut by Obama.
Taken together, TARP and the takeover of Fannie and Freddie combine to give Obama an undeserved $317 billion swing in the 2010 figures and the resulting 1.8 percent cut from 2009. A fairer reading is an almost 8 percent increase.
Those two bailouts account for $72 billion more in cuts in 2011. Obama supported the bailouts.
There’s also the question of how to treat the 2009 fiscal year, which actually began Oct. 1, 2008, almost four months before Obama took office. Typically, the remaining eight months get counted as part of the prior president’s spending since the incoming president usually doesn’t change it much until the following October. The MarketWatch analysis assigned 2009 to former President George W. Bush, though it gave Obama responsibility that year for a $140 million chunk of the 2009 stimulus bill.
But Obama’s role in 2009 spending was much bigger than that. For starters, he signed nine spending bills funding every Cabinet agency except Defense, Veterans Affairs and Homeland Security. While the numbers don’t jibe exactly, Obama bears the chief responsibility for an 11 percent, $59 billion increase in non-defense spending in 2009. Then there’s a 9 percent, $109 billion increase in combined defense and non-defense appropriated outlays in 2010, a year for which Obama is wholly responsible.
As other critics have noted, including former Congressional Budget Office Director Douglas Holtz-Eakin, the MarketWatch analysis also incorporates CBO’s annual baseline as its estimate for fiscal years 2012 and 2013. That gives Obama credit for three events unlikely to occur:
—$65 billion in 2013 from automatic, across-the-board spending cuts slated to take effect next January.
—Cuts in Medicare payments to physicians.
—The expiration of refundable tax cuts that are “scored” as spending in federal ledgers.
Lawmakers are unlikely to allow the automatic cuts to take full effect, but it’s at best a guessing game as to what will really happen in 2013. A better measure is Obama’s request for 2013.
“You can only make him look good by ignoring the early years and adopting the hope and not the reality of the years in his budget,” said Holtz-Eakin, a GOP economist and president of the American Action Forum, a free market think tank.
So how does Obama measure up?
If one assumes that TARP and the takeover of Fannie and Freddie by the government as one-time budgetary anomalies and remove them from calculations — an approach taken by Holtz-Eakin — you get the following picture:
—A 9.7 percent increase in 2009, much of which is attributable to Obama.
—A 7.8 percent increase in 2010, followed by slower spending growth over 2011-13. Much of the slower growth reflects the influence of Republicans retaking control of the House and their budget and debt deal last summer with Obama. All told, government spending now appears to be growing at an annual rate of roughly 3 percent over the 2010-2013 period, rather than the 0.4 percent claimed by Obama and the MarketWatch analysis.
WASHINGTON (AP) — The White House is aggressively pushing the idea that, contrary to widespread belief, President Barack Obama is tightfisted with taxpayer dollars.
To back it up, the administration cites a media report that claims federal spending is rising at the slowest pace since the Eisenhower years.
The problem with that rosy claim is that the Wall Street bailout is part of the calculation.
The bailout ballooned the 2009 budget just before Obama took office, making Obama’s 2010 spending look smaller in comparison. And as almost $150 billion of the bailout was paid back during Obama’s watch, it’s counted as government spending cuts.
Obama rests his claim on an analysis by a financial information and news service owned by Dow Jones & Co., MarketWatch.
WASHINGTON (AP) — The Obama administration is sidestepping an election-year confrontation with the hotel industry and other pool owners to give them more time to comply with access rules for the disabled.
The rules have been in the works since the early 1990s, but the Justice Department created an uproar among hotels, waterparks, health clubs and the like earlier this year when it said it will require many such facilities to install fixed, permanent lifts to comply with the Americans With Disabilities Act.
After initially setting a March 15 deadline — and telling the industry it wouldn’t budge — the department has granted two extensions. After first saying it might grant a reprieve until September, Justice announced last week that pool owners won’t have to comply with the new requirements until early next year, a move that gets the controversy safely past the election.
At issue is whether hotels and other facilities will have to install fixed, permanent lifts to assist disabled people getting in and out of their pools, a move that requires hiring a contractor and tearing up the pool deck at a cost of as much as $6,000.
Many pool owners were hoping to comply with the rules by purchasing less costly portable lifts that could be wheeled out to poolside as needed. Hotel owners who already have lifts say few of their customers ever ask for them.
Advocates for the disabled are frustrated by the delay, saying it means another summer swim season without lifts at most pools. They accused the hotel industry of creating an 11th hour tempest to undo rules that have been in the making since the Clinton administration.
“It’s a little disingenuous to say that came out of nowhere,” said Heather Ansley, a lawyer with United Spinal Association.
But they’re pleased that Justice isn’t caving to demands that everybody be allowed to get by with portable lifts.
“They’ve been trying to duck it for 10 years, and the agency keeps putting it off, putting it off,” said Rep. Jerold Nadler, D-N.Y. “Enough already.”
Disabled people complain that in cities where lifts are already required, portable lifts are often stowed away and that not all employees know how to operate them. And they say that the hotel and motel industry has a long record of trying to evade access rules for the disabled, sometimes waiting to be sued before complying.
The issue gets even trickier. There’s a longstanding exemption in the law which says existing facilities can avoid an ADA requirement if they determine compliance is not “readily achievable.” That’s pretty ambiguous, but as defined in the law it basically means you’re eligible for the exemption if you determine that it’s too difficult or expensive. Figuring out whether one qualifies for the exemption can be difficult.
The rules always had been going to require that newly constructed pools be required to have built-in lifts. But in January, Justice issued technical guidance that for the first time required fixed pool lifts at existing pools, said Minh Vu, a Washington lawyer representing the hotel industry. That took many pool owners by surprise, upending their plans.
The guidance created a new set of potential problems and concerns. Among them was that children might climb on the lifts — which would be built at the shallow end of the pool — and potentially hurt themselves by falling or diving off.
The January directive put hotel owners in a real bind. Over the horizon they saw themselves being hit with government penalties and private lawsuits for failing to comply with the rules. Some hotels announced they would have to close their pools. Community and municipal pools risked being out of compliance as well.
The uproar quickly made its way to Capitol Hill. Several members of Congress prepared legislation to roll back the fixed lift requirement. At the same time, hotels flooded the Justice Department with complaints about being unable to meet the deadline.
A week ago, Justice announced that pool owners now have until Jan. 31, 2013, to comply with the rules.
“We got such an overwhelming response indicating the widespread misunderstanding of the law and indicating that the pool lift manufacturers are having trouble meeting the demand, so we wanted to make sure people had enough time,” Eve Hill, a senior attorney in the Justice Department’s civil rights division, said.
On Thursday, Justice said pool owners who bought a portable lift before the original March 15 deadline two months ago would be considered in compliance as long as the lift is in place whenever the pool is open.
The department also hopes to clear up confusion among hotel operators about whether their circumstances qualify them to get by with a somewhat less expensive portable lift or win exemption from the requirement altogether.
Hotel industry lobbyists, meanwhile, succeeded in getting the House to block the Justice Department from implementing the new regulation requiring permanent pool lifts as part of a spending bill for next year. The idea could get a Senate vote next month.
WASHINGTON (AP) — A Democratic-controlled Senate panel Tuesday approved a $2.50 increase in airline security fees that would double the per-passenger fee for those taking nonstop flights.
The move by the Senate Appropriations Committee would increase the fee on a nonstop round-trip flight from $5 to $10. Fees on a one-way, nonstop ticket would increase from $2.50 to $5. Passengers who change planes to reach their destinations would continue to pay $5 each way.
A similar move last year failed because of opposition by Republicans controlling the House and the current effort faces long odds in an election year.
A move by panel Republicans to kill the higher fee — which is attached to a homeland security measure funding the Transportation Security Administration — failed on a 15-15 vote.
The author of the proposal, Sen. Mary Landrieu, D-La., said that the current fee structure only covers about one-fourth of TSA’s airport security costs and that people who fly should bear a greater cost of TSA’s $7.6 billion budget — rather than taxpayers as a whole.
Supporters of the fee point out that airlines are layering fee after fee upon their customers and that baggage fees in particular place a greater strain on TSA resources since people are checking far more luggage that needs to be screened at TSA checkpoints.
“The fee has not been increased in 10 years and of course the expenses for TSA continue to go up and it is a question of whether the general taxpayer should pay this or whether the people that actually use the airlines (should),” Landrieu said.
But Republicans led by Kay Bailey Hutchison of Texas said the fee would hurt an airline industry already reeling from a weak economy and high fuel prices. She noted that multi-passenger families would bear the greatest burden.
“Aviation is already taxed at the highest rate of any industry in the country,” Hutchison said. “The industry’s federal tax burden on a typical $300 round-trip ticket has nearly tripled since 1972 from $22 to $61.”
WASHINGTON (AP) — A new government study released Tuesday says that allowing Bush-era tax cuts to expire and a scheduled round of automatic spending cuts to take effect would probably throw the economy into a recession.
The Congressional Budget Office report says that the economy would shrink by 1.3 percent in the first half of next year if the government is allowed to fall off this so-called “fiscal cliff” on Jan. 1 — and that the higher tax rates and more than $100 billion in automatic cuts to the Pentagon and domestic agencies are kept in place.
There’s common agreement that lawmakers will act either late this year or early next year to head off the dramatic shift in the government’s financial situation. But if they were left in place, CBO says it would wring hundreds of billions of dollars from the budget deficit that would “represent an additional drag on the weak economic expansion.”
CBO projected that the economy would contract by 1.3 percent in the first half of 2013, which would meet the traditional definition of a recession, which is when the economy shrinks for two consecutive quarters.
“Such a contraction in output in the first half of 2013 would probably be judged to be a recession,” CBO said.
At issue is the full expiration of two rounds of major tax cuts enacted during the Bush administration and automatic spending cuts on the Pentagon and domestic programs that are scheduled to take effect as punishment for the failure of last year’s deficit “supercommittee” to produce a deficit-cutting agreement last year.
Last summer’s debt and budget agreement imposed almost $1 trillion in cuts to agency budgets over the coming decade and required automatic cuts — dubbed a sequester in Washington-speak — of another $1 trillion or so over the coming decade.
The CBO study came as Capitol Hill is hopelessly gridlocked over spending and taxes in advance of the fall elections. The White House and top Democrats like Senate Majority Leader Harry Reid of Nevada say they will refuse to act on the expiring tax cuts and automatic spending cuts unless Republicans show greater flexibility on raising taxes.
“We’re open to a balanced alternative plan for deficit reduction,” Reid told reporters. “But if we can’t do that, a deal’s a deal.”
Republicans are pressing to deal with the problem now. But they’re not showing any more flexibility on tax increases.
“You can call this a fiscal cliff. You can call it Taxmageddon as others have done,” said Sen. Orrin Hatch, R-Utah. “Whatever you call it, it will be a disaster for the middle class. And it will be a disaster for the small businesses that will be the engine of our economic recovery.”
The results of the elections will have a lot to do with the ultimate solution, but several top lawmakers predict the current Congress will punt the issue into 2013 for the newly-elected Congress and whoever occupies the White House to deal with.
CBO is the respected nonpartisan agency of Congress that produces economic analysis and estimates of the cost of legislation.
WASHINGTON (AP) — Even as they press cuts to food stamps and a host of other domestic programs, Republicans running the House of Representatives are leaving their own office expense accounts unchanged.
In draft legislation supported by Republicans and Democrats alike, the House Appropriations Committee would instead freeze the $574 million budget for lawmakers’ staff, travel and office expenses.
The spending freeze announced Thursday comes as Republicans are rewriting last summer’s budget accord to press cuts to non-defense agency budgets by about 5 percent on average. The overall $3.3 Capitol Hill funding bill would absorb a 1 percent cut that comes from cutting back the budget for repairing the iconic Capitol Dome, which dates to the Civil War.
“I’d prefer the dome remain a monument to our nation’s greatness and not become a symbol for short-sighted austerity,” said Rep. Norm Dicks, D-Wash.
Congress’ approval rating rose to 17 percent in a Gallup poll last month, up from a record low 10 percent approval rating in February.
An Appropriations subcommittee is scheduled to approve the measure Friday before lawmakers exit Washington for a week-long vacation.
In two earlier rounds of appropriations bills for 2011 and 2012, Republicans imposed a 10.5 percent budget cut on the House. Their office budgets — officially called the “members’ representational allowance,” have been cut by a total of 13 percent from the record $660 million approved by a Democratic-controlled Congress for 2010.
“The nation’s budget challenges are far from over, and Congress must continue to lead by example and hold the reins on spending wherever possible, including in our own Capitol complex,” said Appropriations Committee Chairman Harold Rogers, R-Ky. “At the same time, we must maintain the efficacy of the people’s House, and ensure the safety and security of the thousands of people who work in and visit our historic buildings every day. This bill balances both of these needs.”
In March, the House passed a budget plan that would force non-defense cuts of $27 billion below levels agreed to in the budget and debt pact forged by President Barack Obama and House Speaker John Boehner, R-Ohio. Since then, Rogers has revealed plans that generally shield some Cabinet departments — like Justice and Homeland Security — from the cuts, while the departments of Labor, Health and Human Services, Education and Housing and Urban Development will bear a much larger share.
In implementing the GOP budget, authored by Rep. Paul Ryan, R-Wis., Republicans earlier this month passed legislation cutting food stamps, pension benefits for federal workers, health care and social services programs like Meals on Wheels for the elderly.
“For the most part … this bill has been protected from Ryan budget austerity,” Dicks said in a statement.
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President Barack Obama speaks at a campaign grassroots event at the Iowa state fairgrounds, in Des Moines, Iowa, Thursday, May 24, 2012. (AP Photo/Nati Harnik)(Credit: AP) 