Budget News Nov.22-24

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News
TUESDAY
Portugal New Focus of Europe Debt Fears .
Hopes that the rescue plan being worked out for Ireland would stop pressure building on other European governments were set back Monday as retreating financial markets turned the spotlight to Portugal as the next potential domino to fall.
Pork Really Stinks: $1.8 Million to Study Pig Odor
Rep. Jeff Flake of Arizona waged a lonely battle against congressional spending earmarks for years, but now he’s got plenty of company as President Obama and House and Senate Republican leaders all support a moratorium.
Euro-Zone Private Sector Grows Despite Debt Woes
Growth in the euro-zone's private sector expanded sharply in November, boosted by a strong expansion in France and Germany, despite heightened concern about the rising debts of some euro-zone member states, particularly Ireland.
In European Debt Crisis, Some Call Default Better Option
Ireland has finally taken its medicine, accepting the financial rescue package European officials have been pushing for several weeks.
IMF: Greece Needs More Reforms
A delegation of European and International Monetary Fund officials said Tuesday that Greece was "broadly on track" with its efforts to cut its budget deficit, but warned the country would need to take tough structural reforms in the months ahead.
Irish Debt Crisis Forces Collapse of Government
Confronted with high-level defections from his governing coalition, Prime Minister Brian Cowen said he would dissolve the government after passage of the country’s crucial 2011 budget early in December.

MONDAY
Some States Weigh Unthinkable Option: Ending Medicaid
Elected and appointed officials in nearly a half-dozen states, including Washington, Texas and South Carolina, have publicly thrown out the idea.
GOP Ranks Fray on Vote to Raise Debt Limit
The government is authorized to borrow $14.3 trillion and is expected to hit that amount within a few months. If the limit is not raised, it could signal to the markets that the U.S. isn't prepared to meet its obligations and send tremors through the financial system.
State Tests Limits of Spending Cuts
Many within the state are now worrying about 2012, which is expected to be the toughest budget year yet as federal stimulus dollars dry up.

Economist Comments
WEDNESDAY
Why We Should Be Thankful for the Fiscal Commission
In my own opinion, the probability that 14 commission members would sign onto a consensus report was zero all along; so was the probability that we would get a comprehensive deficit reduction deal out of the 112th Congress, absent a sovereign debt crisis or other economic crisis that forces the hands of elected officials.

TUESDAY
Deficit reduction pleas fall on deaf ears
Their leadership has learned well the lesson of that earlier episode: deficit reduction requires painful tradeoffs and bipartisan compromise, and while the long-term economic benefit may be significant, the short-term political dividend is negligible at best.
US Budget Cutting Options Are Plentiful:Concrete Action Needed
Bowles and Simpson released a discussion draft about two weeks ago that they are now reworking in an attempt to come to an agreement next week.

MONDAY
CORRAO: It's the spending, stupid
Raising taxes just enables spendthrift government.
The 'Build America' Debt Bomb
The state and city fiscal mess is getting worse, yet the Obama administration wants Congress to make new taxpayer-subsidized bonds permanent.

Blogs
WEDNESDAY
Five Ways to Cut Military Spending Today
The U.S. military has an important purpose, protecting Americans, but that purpose has been distorted over the years. Here are five military spending cuts Congress and the President can make today while they undertake the harder task of rethinking the true purpose of the military and then restraining its use.
Defending Defense: A Response to Recent Deficit Reduction Proposals
The Center for Defense Studies issued a statement in response to the deficit commission co-chair's recent proposals.
Desperately Seeking Revenues in Michigan
Michigan’s municipal governments are on the hunt for revenues. Mayor Demsey sent out a letter asking tax-exempt organizations to make a voluntary contribution to the general fund.

TUESDAY
Which States are Earmark Magnets?
Cato’s Tad DeHaven has a great piece in The New York Post on what the earmark ban means for New York. Not much, it turns out. New York taxpayers contribute 8.2% on average to the overall federal tax burden and receive only 2.1% of all earmarked funds, making them the last state in the earmarks line.
Bad Arguments for Earmarks, Good Arguments against Them
One of the things I find most disturbing about earmarks is how they contribute to vote-trading between members, which probably increases spending significantly, too. My guess is that fewer bills would go through if lawmakers had to get their colleagues to vote yes based purely on bills’ merits.
Will Republicans Get Serious on Spending?
It is tempting to think the Tea Partiers will force the party to finally live up to their promises of frugality. But the evidence suggests they are engaged in a task akin to plowing the sea.

MONDAY
Political Morality and the SS Trust Fund
The U.S. budget is not "tight." It is unsustainable. It is a lie. Politicians have made a set of future promises that under the most commonly-believed economic scenarios cannot be kept.
Earmarks
The knowledge that they were going to have a chance to start shoveling pork a little bit later in the process affected how much they appropriated at the beginning.
What is wrong in this picture?
"State governments are borrowing heavily from the federal government to keep paying unemployment-insurance benefits and, even with the weak job market, most states are raising payroll taxes to pay off the loans."
When Do City Pension Plans Run Dry?
Actuary John Bury has an analysis of when city pension plans are scheduled to run out of assets. Philadelphia, Chicago, and Detroit have about seven or eight years left.
Earmarks Are the Gateway Drug to Big Government Addiction
Members who otherwise might want to defend taxpayers are lured into becoming part of the problem.

Reports
MONDAY
Fiscal Commission Factsheet
...even if 14 of the 18 commissioners agree on policy recommendations, Congress is not required to act.