Yesterday, the Congressional Budget Office (CBO) released its 2011 Long-Term Budget Outlook showing that the federal government’s publicly held debt is scheduled to eclipse our entire economy (as measured by gross domestic product) by 2021. The response on the right was largely uniform: we need to cut automatic spending programs to bring overall spending levels in line with historic revenue levels.
The response on the left was a bit different. The New York Times chose to bury their head in the sand, placing the story on page A-17 of today’s paper. The Washington Post’s Ezra Klein called for massive trillion dollar tax hikes far above the revenue levels President Obama submitted in his last budget. Meanwhile, Senate Democrats held a press conference and demanded a stimulative payroll tax cut be part of and debt limit deal.
Around the Bigs
The Washington Post, Obama announces plan to bring home 33,000 ‘surge’ troops from Afghanistan: “In a prime-time address from the White House, Obama said he will bring home 10,000 U.S. troops by the end of the year and 23,000 more by next summer, a withdrawal window that will conclude two months before voters decide whether to give him a second term.”
The Washington Post editorial board, The president may be sabotaging his own Afghanistan strategy: “President Obama failed to offer a convincing military or strategic rationale for the troop withdrawals from Afghanistan that he announced Wednesday night. … By setting September 2012 as a deadline for withdrawing all of the 33,000 reinforcements he ordered in late 2009, the president risks undermining not only the war on the ground but also the effort to draw elements of the Taliban into a political settlement; the militants may prefer to wait out a retreating enemy.”
The Wall Street Journal, Federal Reserve, acknowledging slowdown, reins in forecasts for economic growth: “Federal Reserve officials see the U.S. economy settling into a disappointingly weak recovery this year and next, and say they have done all they are prepared to do to spur growth for now. The bleak picture contrasts with the booming global economy.”
The Hill, Dems call for stimulus in debt deal as CBO offers warnings: “Senate Democrats on Wednesday said stimulus measures should be included in a debt-ceiling deal … Sen. Charles Schumer (D-N.Y.) and other Democrats said the slowing economy demands a deficit-reduction package that includes provisions to create jobs. … He and other Democrats mentioned an expanded and extended payroll tax reduction as one measure that would boost an economy the Federal Reserve says is slowing, but offered no specifics on the proposal.”
The Wall Street Journal, GM Stock Impedes U.S. Exit: “The U.S. Treasury’s exit plan has become less clear as GM shares remain below the $33 price of GM’s November IPO. Shares closed up 38 cents at $29.97 in 4 p.m. New York Stock Exchange trading on Wednesday. However, the price is lower than either Wall Street or Treasury officials had anticipated.”
Associated Press, Planned Parenthood stops seeing Medicaid patients: “Planned Parenthood began turning away Medicaid patients who couldn’t pay for its medical services Tuesday, one day after private donations that had paid those patients’ bills ran out. A state law that took effect May 10 denied Planned Parenthood the Medicaid funds it uses to pay for general health services it provides to low-income women at its 28 Indiana clinics.”
Reuters, $1400 Tax Hike Needed to Fund US Pensions: ” U.S. state and local governments will need to raise taxes by $1,398 per household every year for the next 30 years if they are to fully fund their pension systems, a study released on Wednesday said. The study, co-authored by Joshua Rauh of Northwestern University and Robert Novy-Marx of the University of Rochester, both of whom are finance professors, argues that states will have to cut services or raise taxes to make up funding gaps if promises made to municipal employees are to be honored.”
The New York Times, In Battle Over Subsidies, Some Farmers Say No: “With budget cuts all the rage in government, Craig Lang, a dairyman and president of the Iowa Farm Bureau, proposed something that would have been unthinkable in farm country a few years ago: ending direct payments to farmers for crops. … A growing number of politicians agree with Mr. Lang, including many from agricultural districts, like Representative Paul D. Ryan of Wisconsin, whose fiscally conservative proposals have been a centerpiece of House Republican policy. Mr. Ryan’s plan calls for huge cuts in agricultural spending.”
The Hill, House sets up Friday vote on limiting funding for Libya mission: “The House is expected to vote Friday on legislation to limit funding for the U.S. military mission in Libya … The original plan was to vote on both Thursday, but after a closed-door conference meeting on Wednesday GOP leaders set out to revise the second measure so that it restricts funding for the mission in the current fiscal year without ‘undercutting our NATO allies.’”
AFP, Italy breaks ranks over NATO’s Libya mission: “Italy called for a suspension of hostilities in Libya on Wednesday in the latest sign of dissent within NATO as the civilian death toll mounts and Moamer Kadhafi shows no signs of quitting power.”
Gallup, Majority of Americans Urge Gov’t Action on Border Control: “More than half of Americans — 53% — say the need for government action this year to halt the flow of illegal immigrants at the borders is “extremely important,” the first time a majority have held this view in the four times Gallup has asked this question since 2006. Another 29% call it “very important” and 12% “moderately important,” while 7% say it is “not that important.”"
The Wall Street Journal, op-ed by Karl Rove, Why Obama Is Likely to Lose in 2012: “President Barack Obama is likely to be defeated in 2012. The reason is that he faces four serious threats. The economy is very weak and unlikely to experience a robust recovery by Election Day. Key voter groups have soured on him. He’s defending unpopular policies. And he’s made bad strategic decisions.”