“In a few days,” President Barack Obama told workers at the Newport News Shipyard in Virginia Tuesday, “Congress might allow a series of immediate, painful, arbitrary budget cuts to take place — known in Washington as the sequester.”
Instead of cutting out the government spending we don’t need — wasteful programs that don’t work, special interest tax loopholes and tax breaks — what the sequester does is it uses a meat cleaver approach to gut critical investments in things like education and national security and lifesaving medical research.
“So these cuts are wrong,” Obama said. “They’re not smart. They’re not fair. They’re a self-inflicted wound that doesn’t have to happen.”
“First,” as Examiner reported Aug 1, 2012, “little background:”
Remember the $1.2 trillion debt ceiling hike to avoid a government shut-down?
To appease reticent Republicans — in what CBS News described as a “last-minute compromise” — Obama signed the Budget Control Act of 2011 (BCA) on August 2, 2011.
The BCA — passed by the Republican-controlled House — provided Obama with a three-step permission slip by which Republicans would agree to raise the federal debt limit — by as much as $2.4 trillion – in order to maintain government operations at least through the 2012 elections.
Those three steps:
- Reinstated a $917 billion cap on discretionary spending.
- Required a vote on a balanced budget amendment to the US Constitution.
- Created the Joint Select Committee on Deficit Reduction — more commonly known as the “Super Committee” – which was tasked with A) reducing the federal deficit by $1.5 trillion, B) coming up with “at least” $1.2 trillion in spending cuts to off-set the debt ceiling hike by Nov. 23, 2011, C) presenting the plan to Congress by Dec. 2, after which Congress was to D) approve the measures by Dec. 23.
First, the Obama administration clearly over-shot the $917 billion spending cap because — as reported six months later by Market Watch — House and Senate leaders had to strike another deal “to fund the government” for another six months in order to avoid another government shut-down.
Second – the “balanced budget amendment” never came to fruition.
Third – The “Super Committee” failed to deliver the $1.2 trillion in spending cuts, which “triggered” the automatic equivalent spending cuts established by Obama’s Office of Management and Budget, (OMB).
According to the OMB website:
The core mission of OMB is to serve the President of the United States in implementing his vision across the Executive Branch.
“As the implementation and enforcement arm of Presidential policy government-wide, OMB carries out its mission through five critical processes that are essential to the President’s ability to plan and implement his priorities across the Executive Branch,” including:
Budget development and execution, a significant government-wide process managed from the Executive Office of the President and a mechanism by which a President implements decisions, policies, priorities, and actions in all areas (from economic recovery to health care to energy policy to national security).
In other words, the “painful, arbitrary budget cuts” – described by Obama as a “self-inflicted wound that doesn’t have to happen” – were established by Obama himself.
As noted by The Huffington Post Tuesday, half of those cuts targeted the defense budget.
“All told,” Obama warned the workers at Newport News Shipyard, “the sequester could cost tens of thousands of jobs right here in Virginia.”
To avoid mass layoffs caused by Obama’s “self-inflicted wound” just prior to the November elections, Assistant Labor Secretary Jane Oates of Obama’s Labor Department issued a message of “guidance,” informing federal contractors that a federal law – the Worker Adjustment and Retraining Notification (WARN) Act — which requires a 60-day notice of pending mass layoffs – doesn’t apply to the layoffs that “may occur among federal contractors, including in the defense industry as a result of sequestration.”
According to the terms of the WARN Act – as outlined in the “U.S. Department of Labor Employment and Training Administration Fact Sheet” — Oates was wrong.
WARN requires employers to notify either the individual employees affected by a plant closing or mass layoff or their representatives at least 60 calendar days prior to any planned plant closing or mass layoff.
An employer who fails to provide the required notice to the unit of local government is subject to a civil penalty not to exceed $500 for each day of violation.
In October, Examiner further reported that — to calm federal contractors who feared being sued for failing to comply with the 60-day requirement — Obama’s OMB issued new “guidance,” telling the contractors not to worry, because the OMB would use taxpayer money to cover any legal expenses if any employee sued them.
As Bob Woodward reported Feb. 22 for The Washington Post, Obama’s sequester shuffle began during the third presidential debate on Oct. 22, when he blamed Congress.
“The sequester is not something that I’ve proposed,” Obama said. “It is something that Congress has proposed.”
“Two days later,” Woodward noted, Obama’s White House chief of staff at the time, Jack Lew — who served in President Clinton’s cabinet as the Director of the OMB from 1998 to 2001 and as “budget director during the negotiations that set up the sequester in 2011″ — “backed up the president.”
“There was an insistence on the part of Republicans in Congress for there to be some automatic trigger,” Lew said while campaigning in Florida in October, adding that it “was very much rooted in the Republican congressional insistence that there be an automatic measure.”
“The president and Lew had this wrong,” Woodward wrote, citing the “extensive reporting” in his book — “The Price of Politics,” which “shows that the automatic spending cuts were initiated by the White House and were the brainchild of Lew and White House congressional relations chief Rob Nabors — probably the foremost experts on budget issues in the senior ranks of the federal government.”
“We have moved a bill in the House twice,” The Hill quoted Republican House Majority Leader John Boehner telling reporters in a press conference Tuesday morning. We should not have to move a third bill before the Senate gets off their ass and begins to do something.”
“I think he should understand who is sitting on their posterior,” Democrat Senate Majority Leader Harry Reid said in response. “We’re doing our best here to pass something. The Speaker is doing nothing to try to pass anything over there.”
“And what I’ve said is if the Republicans in Congress don’t like every detail of my proposal, which I don’t expect them to, I’ve told them my door is open,” Obama said in Virginia Tuesday. “I am more than willing to negotiate. I want to compromise.”
On Oct. 17, The Washington Post reported that Obama vowed to “veto legislation to block year-end tax hikes and spending cuts” unless Republicans “bowed to his demand to raise tax rates for the wealthy.”
On Dec. 19, The Huffington Post reported that Obama said he “would veto House Speaker John Boehner’s `Plan B’ proposal for extending tax cuts for people making up to $1 million.”
“It’s important to understand why the sequester is going to go into effect,” The Washington Post quoted Dan Pfeiffer, an Obama senior adviser saying Monday. “The Republicans are making a policy choice that these cuts are better for the economy than eliminating loopholes that benefit the wealthy.”
“All we’re asking is to consider closing tax loopholes and deductions that the Speaker of the House, John Boehner, said he was willing to do just a few months ago,” Obama reiterated Tuesday.
All we’re asking is that they close loopholes for the well-off and the well-connected — for hedge fund managers, or oil companies, or corporate jet owners who are all doing very well and don’t need these tax loopholes — so we can avoid laying off workers, or kicking kids off Head Start, or reducing financial aid for college students.
“Well, he did it again,” Real Clear Politics quoted Charles Krauthammer saying in response to Obama’s speech. “He went back to the corporate jet loophole.”
Well, I did the math on the way over. If you collected for the hundred years, it will not cover a month of Obama spending, the corporate jet loophole. If you collect it for a century it is less than what Obama spends in a month. It’s a joke, it’s a way of making a point. It’s the old class war stuff, it’s meaningless.
“Obama wants to close loopholes not so he can encourage economic expansion with lower rates of taxation,” Krauthammer concluded. “He wants it so he can spend it on entitlements.”
Additionally, according to a Jan. 10 report published by the Congressional Research Service –“Budget Sequestration and Selected Program Exemptions and Special Rules”– Obama’s salary is exempt from sequestration cuts.
While an executive order issued by Obama on Dec. 27 gave members of Congress a pay raise, the salaries and expenses of Senate and the House of Representatives — as well as those of United States Supreme Court justices — are “sequesterable.”