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Hugin

(33,164 posts)
Fri Mar 1, 2013, 01:16 AM Mar 2013

Sequestration Watch -- Swirling the Drain Edition.

I've taken the liberty of reviewing the two main "Sequestration Avoiding" Bills sloshing around in the Senate today.

The Republican Bill... Well, I won't insult you with that one other than to refer you to a graphic making it's way around the social networking sites which says something to the effect of "Remember how all of the elderly, infirm, teachers, union members, veterans, and federal employees made the country go broke?" Only, the thing is that the Sponsors of the Republican Bill thought it was seriously those groups who were responsible and set out to MAKE.THEM.PAY.

The Democratic Bill was a very different story, however.

It includes some real gems like the following:



"SEC. 280I. OUTSOURCING EXPENSES.

` (a) In General- No deduction otherwise allowable under this chapter shall be allowed for any specified outsourcing expense.
` (b) Specified Outsourcing Expense- For purposes of this section--

`(1) IN GENERAL- The term `specified outsourcing expense' means--

`(A) any eligible expense paid or incurred by the taxpayer in connection with the elimination of any business unit of the taxpayer (or of any member of any expanded
affiliated group in which the taxpayer is also a member) located within the United States, and
`(B) any eligible expense paid or incurred by the taxpayer in connection with the establishment of any business unit of the taxpayer (or of any member of any
expanded affiliated group in which the taxpayer is also a member) located outside the United States,

if such establishment constitutes the relocation of the business unit so eliminated. For purposes of the preceding sentence, a relocation shall not be treated as failing to occur merely because such elimination occurs in a different taxable year than such establishment.



Which attempts to make the expenses incurred by a business offshoring a tax revenue generating venture... Not deductible. Genius!

You might want to take a look at this Bill for yourself... [link:http://www.cbo.gov/publication/43960|
S.388 American Family Economic Protection Act of 2013]
http://thomas.loc.gov/cgi-bin/query/z?c113:S.388:

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Warpy

(111,277 posts)
1. I hardly think it's the end of life as we know it
Fri Mar 1, 2013, 02:17 AM
Mar 2013

I sincerely doubt most managers will do many layoffs. They'll expect attrition to the job, not replacing employees who quit, retire, or become disabled. Then the rest of them will be expected to do their jobs and the jobs of the departed, which will likely accelerate the process.

If it were hitting corporations, they'd lay off employees indiscriminately, hoping to goose the stock price and turn lemons into lemonade for management, at least. Government doesn't work that way, not yet, and layoffs won't do anything but destroy morale and make the jobs less attractive in the future.

Hugin

(33,164 posts)
2. Using a little of "The Math" that the GOP Congress is so allergic to.
Fri Mar 1, 2013, 07:50 AM
Mar 2013

What you say is true, no doubt. But, there's some demographics to consider.

Let's see...

First of all, in the DoD alone there's going to be 800,000 furloughs for 1 day a week or a single furlough for 22 days. That's quite a few people who are getting their pay cut by 20% for the first 6 months and then 10% for the foreseeable future. Also, it means there's going to be almost a million people who have nothing to do, but, hate on Congress for 20% of their time.

But, wait! There's more... None of these people are "wealthy", so they tend to spend their money almost as fast as it comes in.

They say each $1 turns over 3 to 5 times before it lands in some Hoarder's musty old vault. That means that 3 to 5 people are not getting a chance to spend that $1.

So, now we're up to between 2,400,000 to 4,000,000 people who are getting 20% less to spend. Some of those people are smart and know where their money comes from and they too will be hating on Congress. Now, we're starting to get into some scary election changing numbers. (Especially, in some rural Districts I'm familiar with.)

That's hardly the end of it... A little known fact is that also the Executive Branch of the Govt spends it's money almost as fast as it's appropriated. So, extend these numbers out to the tune of the $85 Billion (down from $102 Billion in the original Sequester amount) that will vanish at the stroke of a pen. There's to be some hurting going on out there and it's not just in the public sector.

Now, it's all about blame and where it lands. I was sent a mailer from Moveon.org yesterday that implied that Rove, The Koch's, and several other GOP mouthpieces will open up a campaign today to start hanging this Albatross around the neck of the Democrats in general and President Obama in particular. It'll be interesting to see where that goes.

Warpy

(111,277 posts)
5. I notice you're using the Pentagon as your example
Fri Mar 1, 2013, 06:51 PM
Mar 2013

and this is largely an error.

You see, the Pentagon is trying desperately to hang on to its funding by pretending every useless military project is vital. So they're kicking their people in the gut.

Contrast this with the Business Week article that proposes fixing the whole mess by cutting just five projects for hardware that do not work: http://www.businessweek.com/articles/2013-02-25/five-military-cuts-that-would-fix-sequestration not work: http://www.businessweek.com/articles/2013-02-25/five-military-cuts-that-would-fix-sequestration Likely just cutting one of these useless things would solve the Pentagon's funding shortfall.

The Pentagon is trying not to make the hard decisions, the decisions that would turn them from a welfare office for arms contractors and the Congressmen who dwell in their pockets into a streamlined defense agency. They're taking the easy way out, announcing furloughs that probably won't last as long as they say they will because the work still has to get done.

You're right about how cutting worker dollars sucks money out of the economy, the economy has always worked from the bottom up and always will. However, picking the Pentagon as an example of what the sequester will do as a whole is a bad example.

The Pentagon is the one government agency that desperately needs to be cut and cut again. We can't afford them and their bottomless pit for congressional pork projects.

Hugin

(33,164 posts)
6. I deliberately chose the Pentagon as my example due to the fact conventional wisdom would think...
Fri Mar 1, 2013, 07:13 PM
Mar 2013

That the DoD would be the most resilient to cuts. When in fact, the cuts within the DoD are being directed toward the Federal Employees. This is no accident. It is a deliberate move by the Congress who is simultaneously NOT ALLOWING the Pentagon to reprogram money. Yes, if it were allowed to reprogram funds from one account to another The Pentagon could be more proactive with where the cuts are made and probably remove waste. However, they can't. Congress has directed that the cuts come from the pockets of the Civilian Workforce. (Not all Military Civilians in a country where supposedly the Military are under Civilian control are Contractors.) Congress also specifically included a provision to fund Uniformed Military Pay. It's not the Pentagon gut punching the Civilians. It was most assuredly Congress doing the punching.

I smell Union Busting.

I did mention later in my post the whole $85 Billion caboodle of the cuts. Which, I've been posting about the effects of for days.

Hugin

(33,164 posts)
7. An Example: Army: 78% Of Combat Brigades Will Skip Training Due To Sequester, CR
Fri Mar 1, 2013, 07:36 PM
Mar 2013

From AOL Defense:



"[UPDATED] WASHINGTON: Rarely have such pretty slides told such an ugly story. While Army Chief of Staff Ray Odierno tries to talk up "The Force of Tomorrow," Army briefing documents obtained today by AOL Defense lay out the near-term impact of sequestration, the Continuing Resolution, and unresolved overseas contingency operations needs: an enormous $18 billion shortfall for the service that will be borne almost entirely by federal workers and military readiness.

...

Personnel: Soldiers' salaries are exempt from sequestration cuts (although not their healthcare program), but the Army will have to put every single one of its 251,000 employees on unpaid leave for the legal maximum of 22 days. And even that may not be enough without congressional permission to "reprogram" money from one account to another, the detailed talking points state: "Without reprogramming authority, multiple commands at risk of not supporting payroll even after 22-day furlough."



Taken from here: http://defense.aol.com/2013/02/05/army-sequester-cr-mean-78-of-brigades-must-skip-training/

Who grants reprogramming authority? Congress.

westerebus

(2,976 posts)
8. They essentially did the same thing to the Postal Service.
Fri Mar 1, 2013, 08:15 PM
Mar 2013

This is just a continuation of hack politics at its worst.

westerebus

(2,976 posts)
10. It is curious that $85 billion is the yearly cut...
Fri Mar 1, 2013, 09:18 PM
Mar 2013

given the FED pumps that into the friends of god network on wall street on a monthly basis. And yet, the entire operations of the government is held hostage which serves no purpose but to fill dead air time in the media's propaganda blitz.

I'm jaded. I see a future in which I'm not all that hopeful.

Hugin

(33,164 posts)
11. Rep. Tammy Duckworth, D-Ill is a good soldier.
Fri Mar 1, 2013, 09:40 PM
Mar 2013

"Rep. Tammy Duckworth, D-Ill.: Duckworth said in a statement she will take an 8.4 percent pay cut to match the reduction on most discretionary programs."

However, here's a great idea... Congressperson Duckworth might consider donating the 8.4% to a charity of her choice.

"Del. Eleanor Holmes Norton, D-D.C.: The non-voting representative from Washington, D.C., said she will donate a day’s pay for each day federal employees are furloughed -- matching the highest number of furlough days by any agency -- to the Federal Employee Education and Assistance Fund."

siligut

(12,272 posts)
3. Obama just spoke, saying that the sequester will hurt us but . . .
Fri Mar 1, 2013, 01:18 PM
Mar 2013

Once Rs come around we will make good progress. He says we shouldn't be making dumb cuts right now.

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