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Paul Ryan Says Sequester Likely To Take Place

Tyler Durden's picture




 

When the Republican party agreed last week to a push back on the debt ceiling discussion by three months to May 19, virtually without a fight in a move that may presage what is set to become a quarterly can kicking exercise on the US credit card max, some were curious what the quo to this particular quid may be. Earlier today on Meet the press Paul Ryan explained: the pound of spending flesh demanded by the GOP in exchange for caving on yet another key GOP hurdle is, as our readers have known for over two weeks, the Sequester, which is set to hit on March 1 and possibly the stop-gap government funding on March 27, after which various government agencies will start shutting down. Both programs are set to kick in automatically as incremental spending cuts, chopping away even more basis points from the 2013 US GDP, unless the GOP votes affirmatively to extend them in what would then be seen as a move that destroys any last trace of leverage and credibility that GOP may have had.

From The Hill:

Rep. Paul Ryan (R-Wis.) predicted Sunday that “the sequester is going to happen,” and blamed Democrats for not producing an alternative set of spending reductions to circumvent the across-the-board cuts.

 

“We think these sequesters will happen because the Democrats have opposed our efforts to replace those cuts with others and they’ve offered no alternative,” Ryan said on NBC’s Meet the Press.

 

The sequester cuts, delayed by the “fiscal cliff” deal reached at the beginning of the year, are now slated to take effect on March 1.

 

Ryan added that the cuts needed to happen because Republicans can’t risk losing the only leverage they have when it comes to cutting spending.

 

“I think the sequester is going to happen, because that $1.2 trillion in spending cuts, we can’t lose those spending cuts, that was to pay for the last debt-ceiling increase, let alone any future increase.”

Ironically it is the military - so dear to the republicans - that may be impacted most acutely by the sequester, as Reuters explains:

Some Republicans have called for delaying the planned spending cuts in defense while increasing cuts in other areas of the federal government. The Pentagon said on Friday it had begun laying off most of its 46,000 temporary and term employees and cutting maintenance on ships and aircraft in an effort to slow spending before nearly $50 billion in new cuts are due to go into effect on March 1.

In addition to the sequester, there is also the stop-gap government funding measure, which is set to take place on March 27, and following which various government agencies will begin shutting down without much if any clarity as to what happens next:

March 27 is the expiration date for a stop-gap government funding measure. If Congress does not authorize a new spending bill by that date, government agencies and programs would have to start shutting down. In such a scenario, military activities could be curtailed and federal employees put on unpaid leave.

 

While Republicans in the past have threatened similar shutdowns to press for spending cuts, the tactic could backfire. Republican-led government shutdowns in 1995 and 1996 met with strong public disapproval.

 

Ryan played down a potential fight with Democrats over the stop-gap spending measure.

 

"No one is talking about shutting the government down," Ryan said.

 

The House last Wednesday passed a Republican plan to allow the government to keep borrowing money through mid-May, clearing it for quick enactment after the top Senate Democrat and White House endorsed it.

 

The measure includes a measure requiring the House and Senate to pass a formal budget resolution by April 15. Under the provision, if either chamber fails to meet this deadline, lawmakers' pay would be suspended until they pass a budget.

Ryan's interview can be seen in the clip below.

Visit NBCNews.com for breaking news, world news, and news about the economy

The one topic that has been left untouched is what the impact on US growth as a result of the sequester will be, because while it is known that the expiration of the payroll tax cut extension will cut 1% of GDP, few have discussed the impact of the sequester. Luckily, some ten days ago we covered just this. We repost that analysis in its entirety now that the sequester is more than a fleeting possibility.

Here Comes The Sequester, And Another 1% Cut To 2013 GDP

Several days ago we showed an analysis that indicated that the elimination of the payroll tax cut would likely eat into 1.5% of 2013 US GDP and subtract as much as 3.5% of 2013 growth based on one submodel - a deduction to overall US growth which already puts US GDP forecasts in borderline recession territory. We also added the caveat that "no estimates take into account spending cuts, which may happen, and which will serve as a double whammy to consumption in addition to already enacted tax hikes." Today, we present the flip side to the GDP calculation, namely what may and likely will happen to US growth once the pound of flesh is extracted by the GOP in exchange for raising the debt ceiling, which will eventually be raised even if it means a shutdown in the government for an indefinite period of time.

The reason: the sequester, whose implementation most thought would be delayed until well into 2014, is now starting to loom as the logical counterpoint to the debt ceiling compromise. And here comes Goldman with the first shot across the bow on what this quid pro quo would likely mean for US GDP: "Allowing the sequester to hit would, in our view, have greater implications for growth than a short-lived government shutdown, but would not be as severe as a failure to raise the debt limit. Although Republicans in Congress generally support replacing the defense portion of the sequester with cuts in other areas, there is much less Republican support for delaying them without offsetting the increased spending that would result."

And in bottom line terms: "Sequestration would reduce the level of spending authority by $85bn in fiscal year (FY) 2013 and $109bn for subsequent fiscal years through 2021. The actual effect on spending in calendar 2013 would be smaller--around $53bn, or 0.3% of GDP--since reductions in spending authority reduce actual spending with a lag. The reduction in spending would occur fairly quickly; the change would be concentrated in Q2 and particularly Q3 and could weigh on growth by 0.5pp to 1.0pp."

In other words: payroll tax eliminates some 1.5% of 2013 GDP growth; on the other side the sequester cuts another 1%: that's a total of 2.5%. So: is the US now almost certainly looking at a recession when all the fiscal components to "growth" are eliminated? And what will the Fed do when it is already easing on "full blast" just to keep US growth barely above 0%?

Of course, don't tell the market, whose only illogical response to what is an increasingly ugly fundamanetal picture would be to... sell vol, and push the ES to new 5 year highs.

Full note from Goldman:

Spending Cuts Under the Sequester: A Question of When, Not If

  • Failure to raise the debt ceiling would have severe economic consequences, but for this reason Congress seems likely to increase it. By contrast, a temporary government shutdown would have a limited effect on growth if it were resolved quickly, and this lack of severe consequences makes it more likely to occur. In the middle of these two extremes lie the spending cuts under sequestration--allowing them to take effect in full could impose a meaningful drag on growth, but the effect might not be severe enough to dissuade Congress from allowing it to occur.
  • Our forecast assumes that $15bn in sequestration-related spending cuts will take effect in 2013, with the remainder implemented in 2014 and 2015. But while we have been assuming that the sequester will be allowed to take effect eventually, that moment may come sooner than we had expected, for two reasons: (1) many members of Congress dislike the sequester, but reversing it amounts to a spending increase, which would be politically difficult; and (2) the sequester takes effect March 1, and Congress may not have resolved the two other fiscal issues by that point.
  • While there is a growing risk that some of these cuts are allowed to take effect, we suspect that Congress will reverse at least some of them, potentially replacing them with phased-in savings elsewhere in the budget. The Dept. of Defense has already announced that it will have to undertake several disruptive steps, including employee furloughs, if the cut is implemented on schedule. Delaying it until the start of the coming fiscal year would avoid most of this disruption, but would not have that significant an effect on the 10-year budget projections.

Once again, the White House and congressional Republicans find themselves with seemingly irreconcilable differences on key fiscal issues. Speaker Boehner has insisted that an increase in the debt limit must be matched with spending cuts of an equal amount (when measured over ten years), while President Obama reiterated today that he will not negotiate on any other policy changes in return for the increase. Settling this disagreement will be harder than it was in 2011, when the debt limit was increased by $2.1 trillion in return for $2.1 trillion in spending cuts over ten years. Further budget savings would need to come mainly from entitlement programs or tax increases, which are much more controversial.

President Obama is unlikely to accept entitlement cuts without a second tax increase. Republicans are therefore looking for a way to convince the administration that agreeing to entitlement cuts will be better than what would occur if no agreement is reached. To be successful, the mechanism Republicans use to force the issue must have severe enough consequences that the White House will want to reach an agreement instead, but not so severe that no one believes it could be allowed to happen. They have three options to choose from:

Debt limit - severe effects but low likelihood: The Treasury has indicated it expects to exhaust its borrowing capacity "between mid-February and early March," similar to our previous projection of March 1. There is little risk to Treasury's ability to make scheduled interest or principal payments, in our view, given their small size relative to Treasury's overall cash flows. But there still would be two important consequences: first, the inability to borrow would force the Treasury to immediately eliminate the budget deficit, leading to a delay in payments to federal employees, federal contractors, and beneficiaries of entitlement programs, among others; second, rating agencies might downgrade the US rating following a failure to raise the limit in a timely manner. Even Speaker Boehner has described potential failure to raise the debt limit as a "financial disaster." The upshot is that since leaders of both parties accept the need to raise it and recognize the negative consequences of a failure to do so, opposing an increase in the debt limit is no longer as credible a threat as it was in 2011.

A government shutdown -- modest effects but increasingly likely: Congress opted in September 2012 to extend spending authority for six months, until March 27, 2013. This has been done frequently in recent years when lawmakers cannot agree on full-year spending levels. If spending authority is not extended further, the Obama administration will lose its authority to carry out activities funded by appropriations and will be forced to shut down non-essential government operations. This is not as bad as it sounds, for a few reasons: first, only 40% of federal spending relies on congressional appropriations; the remainder is unaffected by a failure to extend spending authority. Second, about two-thirds of that 40% is deemed "essential" and continues even without a renewal of spending authority. This includes defense functions and services "essential to protect life and property." The upshot is that a one-week shutdown of these activities would reduce federal spending by $8bn to $12bn (annualized). Since a shutdown that begins on March 27 would straddle the end of Q1 and the start of Q2, the effect on quarterly growth is hard to estimate but might be around 0.1pp in each quarter. (For more discussion of the effects of a government shutdown, see our April 8, 2011 US Economics Analyst).

Sequester -- meaningful effects and quite possible: Allowing the sequester to hit would, in our view, have greater implications for growth than a short-lived government shutdown, but would not be as severe as a failure to raise the debt limit. Although Republicans in Congress generally support replacing the defense portion of the sequester with cuts in other areas, there is much less Republican support for delaying them without offsetting the increased spending that would result.

Among these three options, the sequester may present the greatest risk to growth in 2013 because it might actually happen--unlike a debt-limit induced default which is very unlikely--and because it would have longer lasting effects, unlike a government shutdown, which would be reversed quickly.

Sequestration would reduce the level of spending authority by $85bn in fiscal year (FY) 2013 and $109bn for subsequent fiscal years through 2021. The actual effect on spending in calendar 2013 would be smaller--around $53bn, or 0.3% of GDP--since reductions in spending authority reduce actual spending with a lag. The reduction in spending would occur fairly quickly; the change would be concentrated in Q2 and particularly Q3 and could weigh on growth by 0.5pp to 1.0pp.

The sequester would weigh on growth mid-year

Unlike the other two issues noted above, the sequester is not a "cliff." There would be few spending cuts implemented in the days immediately following March 1 if Congress allows the sequester to take effect on schedule. It would probably take federal agencies several weeks to put the cuts into effect. Moreover, the law provides federal agencies 120 days to take "administrative regulations or similar actions implementing sequestration." So it is possible for Congress to allow the sequester to be implemented on schedule, but to "turn off" the sequester a few weeks later without a significant effect on spending.

If the sequester were fully implemented, it would have very disruptive effects in some areas of the budget, particularly defense. In order to fulfill the requirements of the sequester, the Department of Defense (DoD) would need to reduce spending authority by around 9% for FY2013. The administration would have little flexibility in how to implement this cut, so every program, project, and account would need to be cut by the same amount. This would mean, for example, furloughing most civilian DoD employees for a full month before the end of the fiscal year, and cutting basic activities like healthcare for active-duty military and aircraft maintenance. On the non-defense side, the cuts would be similarly disruptive though the political effects might not be as salient.

Sequestration would be much more disruptive in 2013 than it would be in 2014 and beyond. The budget agreement that Congress reached in the summer of 2011 cut spending through two mechanisms: (1) annual caps on congressional appropriations and (2) the sequester, which cuts the level of spending authority by $109bn below the cap just mentioned. Since the 2011 law called for sequestration to take effect January 1, 2013--three months into the fiscal year--it was structured as an across the board cut to the spending level already in place. For 2014 and beyond, the sequester simply lowers the cap mentioned earlier by an additional $109 billion. That means that instead of across the board cuts, for FY 2014 and beyond Congress can appropriate funds as it sees fit as long as it stays below the caps. Delaying the sequester to the start of the coming fiscal year would not simply "kick the can" on fiscal restraint but it would also allow a less disruptive and more efficient cut to be implemented.

However, the cost of a delay could be a problem. Delaying the entire sequester until the next fiscal year starts (October 1, 2013) would increase projected spending over the next ten years by $85bn. Finding savings elsewhere in the budget to offset that increase in spending would be difficult, particularly if Republicans insist that the new deficit reduction measures used to replace the sequester should come entirely from domestic spending like entitlement programs. If the budget effects of a delay become prohibitive, Congress might opt to reduce but not eliminate the sequester for FY2013.

Even if Congress does manage to delay the onset of the sequester past March 1, the cuts are likely to be implemented eventually. As noted above, our forecast assumes that $15bn of the cuts will be implemented in 2013 (versus $53bn if Congress takes no further action) with the remainder implemented in 2014. This is based on the premise that although neither party likes the sequester, the entitlement spending cuts and tax increases that would be necessary to replace the sequester over the longer term are even less popular.

Ultimately, it is only a matter of time before the sequester will be implemented. While we have assumed that Congress would delay part of the sequester until 2014, when it could be implemented with much less disruption to the military and other federal activities, it is very possible that some or most of it could take effect earlier than expected, in 2013.

 

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Sun, 01/27/2013 - 19:11 | 3189644 Muppet Pimp
Muppet Pimp's picture

If the Republicans cave I will personally go Obama (Become a lying cheating thieving SOB because apparently that is the only way to pay the bills in our Bubblnomiconomy)

Sun, 01/27/2013 - 19:15 | 3189650 Stackers
Stackers's picture

Let's all keep in mind that this is $1.2 trillion over 10 years or less than 10% of the deficit on a yearly basis.

Sun, 01/27/2013 - 19:30 | 3189690 Zer0head
Zer0head's picture

Muppet Pimp says "If the Republicans cave"

 

LOL

Sun, 01/27/2013 - 19:46 | 3189728 economics9698
economics9698's picture

"The reduction in spending would occur fairly quickly; the change would be concentrated in Q2 and particularly Q3 and could weigh on growth by 0.5pp to 1.0pp."

If there are cuts in the federal budget it will result in economic growth, not a reduction in GDP.

Fricking Keynesian idiots.

The growth, if there is a real reduction and not the fake Washington dc kind, will be about 2% for ever 1% reduction in federal GDP consumption.

The best time of growth was after WWII when the federal government STOPED SPENDING.

Sun, 01/27/2013 - 20:04 | 3189774 espirit
espirit's picture

It's a dog and friggin' pony show for the unwashed masses.

Get over it... move along.

Sun, 01/27/2013 - 21:12 | 3189937 CH1
CH1's picture

It's a dog and friggin' pony show for the unwashed masses.

Yes, a cricus for suckers.

Sun, 01/27/2013 - 21:45 | 3190022 Pure Evil
Pure Evil's picture

For fun and giggles, let's just say that money that was being spent on visible projects will be cut back resulting in real job losses, but that money will more than likely be funneled into black projects not accounted for in the Federal budget, if a Federal budget were to ever exist again.

In fact, we're gonna need that money to fund NATO operations in Africa to stop the spread of Chinese communism so that we can bring good ole American fascism to the people of North Africa.

Sun, 01/27/2013 - 21:58 | 3190059 Bicycle Repairman
Bicycle Repairman's picture

Republicans move one step closer to oblivion.

Sun, 01/27/2013 - 22:38 | 3190167 economics9698
economics9698's picture

The easiest way to create economic growth is for the federal government to MYOB and cut spending.

Y = C +I – G +  NX

And for the Federal Reserve to stop the printing.

There is your fucking macro economic policy for the ages.

Fucking parasites will not give up. 

Mon, 01/28/2013 - 07:01 | 3190775 wisefool
wisefool's picture

Correct. The Bhengazi hearings proved this. 80% of that farse was hillary explaining that the State department needs more money, and that they can not use existing billions in certain accounts, nor can they use DOD resources for their "mission" Made it easier for her to dance around the facts she easter egg dropped in that same hearing. "We have 70,000 dedicated employees" "We have almost unlimited resources" "The people of the USA are generous with us"

But she did not have time or staff to read the cables starting weeks ahead and urgently during the massace "They are attacking us, send help"

In the movie Contact, the dying defense contractor magnate explains to Jodie foster how the government works. "First rule in government spending, why build one when you can build two at twice the price? ... except this one kept secret ..."

http://www.youtube.com/watch?v=Et4sMJP9FmM

Skip to 2:05 in this clip. and then pay your taxes.

Sun, 01/27/2013 - 20:49 | 3189880 trav777
trav777's picture

ROTFL...you think this government and its spending has anything to do with growth?

It's all a fucking cargo cult.  Oil supply dictates growth.

Sun, 01/27/2013 - 21:06 | 3189917 akak
akak's picture

 

Oil supply dictates growth.

Which I guess is why the entire world huddled in caves, living a primitive hunting-gathering lifestyle, without writing, agriculture, wheels, water systems, or any sort of civilization, until 1859.

Yeah, that's how it was without petroleum.

Sun, 01/27/2013 - 22:41 | 3190170 economics9698
economics9698's picture

trav Hover had the West Texas crude in 1931 reducing oil cost 90% and he still pissed it away.  Energy is key but even if you have energy the politicians can still fuck things up.

Mon, 01/28/2013 - 00:09 | 3190392 Renewable Life
Renewable Life's picture

Paris in the 1780-1850 and London from 1720-1880 where hardly living in caves, without agricultur, wheels, and water systems!!

And shit, MINUS the barbarian nature and reality of slavery, I could make a case for the MOST intellecturally enlightened America EVER was, was between 1760-1840's! There's a fucking reason, that there has never been anything more perfect then the US Constituation, Bill of Rights, and Declaration of Independence, either before or after that period of time!

Oil, the catalyst of civilization???????? Only if your a Saudi Prince!

Mon, 01/28/2013 - 09:03 | 3190899 trav777
trav777's picture

the ONLY possible way you can go from what I said to what you replied is by being a complete fucking idiot...I mean this is the mother of all non sequiturs

Sun, 01/27/2013 - 19:53 | 3189748 Banksters
Banksters's picture

The vast majority of CONgress are caught in illegal activity.   It goes something like this, Phone ring, Hello?  "WE HAVE THE PHOTOS OF YOU AND THE DOG VOTE YES TOMORROW.   CLICK

 

Now that the NSA monitors it ALL, who the fuck needs watergate?

Sun, 01/27/2013 - 20:16 | 3189814 fonzannoon
fonzannoon's picture

"Sequestration would reduce the level of spending authority by $85bn in fiscal year (FY) 2013"

That is one month of QE. Can't Ben throw in an extra month like they throw an extra bagel in there for you? Problem solved.

Sun, 01/27/2013 - 20:59 | 3189903 DoChenRollingBearing
DoChenRollingBearing's picture

@ Zer0head

Yeah, I'll believe it when I see any cuts too.

Mon, 01/28/2013 - 09:34 | 3190969 Watauga
Watauga's picture

"Ironically it is the military - so dear to the republicans - that may be impacted most acutely by the sequester." 

This should read:

Ironically, it is the national defense, the one clear responsibility of a central government, that may be impacted most acutely by the sequester.

Mon, 01/28/2013 - 18:29 | 3192850 dizzyfingers
dizzyfingers's picture

Watauga:

THEY (you know who I mean) DO NOT CARE ABOUT NATIONAL DEFENSE OR ANY OTHER DEFENSE. At least one person out here in realibyland  notices and challenges them as they should be challenged:

Elected Officials Are Fundamentally Dishonest

Letter to Editor: Newtown Bee

The following is a short letter-to-the-editor of a Newtown, CT newspaper. It is wonderfully encouraging to read this man's opinion and note that his entirely accurate thoughts were...apparently...actually printed. (nothing on snopes yet-1/28/13)    

1/10/2013

To the Editor:

I live in Sandy Hook, CT. My family and close friends weren't harmed on December 14. That day impacted 26 families with an indescribable, staggering pain and anguish. For most of Sandy Hook, it merely affected us with an inescapable intensity of sadness and grief.   Gun control has long been a focus of many in this country. Though I'm not knowledgeable of all the nuances of the Second Amendment, based on the Founding Fathers' circumstances, it had far more to do with enabling the citizenry to protect themselves against tyrannical government than against local psychopaths. It is about providing a balanced firepower so when King George's successor came knocking on your door, you could fight back. Government today is no less inclined to abuse its authority than it was then. Based on the absurd and ongoing power grab that is present day Washington, it's as threatening as ever.   That so many of you view the NRA with its resistance to further restrictions on firearms as intransigent lunatics has far more to do with how you conduct yourselves in office than it does with the NRA's actions. You in public office are fundamentally dishonest people. You lead lives of deception at every turn, structuring your lives as comfortably as you can while governing with an indifference and arrogance that is absolutely maddening. When the country is reeling from financial disaster, you waste a trillion dollars on a health care bill we can't afford and you've never read. You claim it's critical because health care costs are killing this country... no they're not, you are! You are killing this country. You endorse the ongoing slaughter of millions of unborn children and whine when terrorists are water boarded. You can't lecture us right in Newtown High School about not doing enough to keep our children safe, while simultaneously slaughtering the unborn. You fabricate the intense, media laden drama of the fiscal cliff and lack the courage to do anything about truly reforming the obscene gluttony of government. You know you'll be out of office before the bill comes due… you don't care and have no integrity nor honor.   You lie whenever and wherever you need to to move forth your agenda. Were you able, you would purge the US of guns… every last gun in the country, if you could. So please forgive Wayne LaPierre and those of us who don't trust you as far as we can spit. You're a dishonest lot, motivated by a distorted worldview. If mass murder prevention were truly your goal, you would welcome armed security wherever needed. It is outrageous that we protect our money with far more firepower than we protect our children.   I have never owned a gun, nor wanted to as intensely as right now. You'll stop restricting guns when only you have them.   Brendan Duffy 4 Chestnut Knoll Drive, Sandy Hook January 8, 2013     This letter was forwarded to Barack Obama, John Boehner, Chris Murphy, Dick Blumenthal, Elizabeth Esty, and Harry Reid

 

Sun, 01/27/2013 - 19:23 | 3189661 King_of_simpletons
King_of_simpletons's picture

Sequestration will take place until the splintered GOP decides to cut a 11th hour deal and cave.  Their action will then proceed to become fodder for conservative talk shows who will proceed to blame the Democrats ... who by the way are ruling this country like thugs with absolutely no fiscal responsibility ... who will then proceed to blame the GOP of being obstructionists. The circle masturbation fest is thus complete. The sheep will get a hot load on their heads and pretend like there is indeed a difference between the two parties. The sheep will then proceed to buy into this current bubble in the stock market and lose a bundle of their hard earned cash to the bankster thugs who control Washington DC and policy makers regardless of the party affiliation.

Sun, 01/27/2013 - 22:22 | 3190124 bigkahuna
bigkahuna's picture

DC is full of sociopaths.

These idiots cannot stop with money, they crave power - and then enjoy the inducment of suffering on the "masses".

Their perpetual greed and never-ending blood lust will be their undoing.

Mon, 01/28/2013 - 00:20 | 3190413 Raymond Reason
Raymond Reason's picture

Their perpetual greed and never-ending blood lust will be their undoing.

Agreed.  We give these psychopaths way too much credit.  Privileged inbred scions with overweening sense of guile, craftiness and chutzpah, lacking in fortitude, wisdom, and self-control.  What could go wrong? 

Sun, 01/27/2013 - 19:13 | 3189646 cossack55
cossack55's picture

The GOP has credibility? Now thats news.

GOP = Goofy Oligarchchical Punks?

          Greedy Obnoxious Pricks?

Sun, 01/27/2013 - 19:23 | 3189664 Muppet Pimp
Muppet Pimp's picture

OT:

 

Why is the US mint out of silver while HSBC buys it no problemo from the poles?  Is US .gov complicit in allowing a known money launderer to secure supply (presumbaly to cover short positions) while they hold out on their own people?

Sun, 01/27/2013 - 19:30 | 3189695 DosZap
DosZap's picture

Why is the US mint out of silver while HSBC buys it no problemo from the poles? Is US .gov complicit in allowing a known money launderer to secure supply (presumbaly to cover short positions) while they hold out on their own people?

 

By law, (I know,LOL), the silver must be US silver, from US sources.

Since there is only one pure silver mine left in the US(Nevada), maybe this is the reason.

Otherwise they would pay market rates.

Sun, 01/27/2013 - 21:00 | 3189910 DoChenRollingBearing
DoChenRollingBearing's picture

That is my understanding as well, DosZap.

Sun, 01/27/2013 - 19:15 | 3189649 youngman
youngman's picture

I agree...lets start cutting..sure the military is going to get hit hard.....but lets do it in Blue states...that will hit em where it hurts...then they will open up to other cuts...and cuts is what we need....lets start correcting...not deflecting...

Sun, 01/27/2013 - 19:17 | 3189655 Freddie
Freddie's picture

Cut everything 15%.  Then cut it another 5% each quarter until it is balanced.   The GOP in the House will be undermined by cowards and RINOs in the GOP in the Senate.  They want amnesty and gun control. What evil.

Sun, 01/27/2013 - 19:44 | 3189723 kaiserhoff
kaiserhoff's picture

My new favorite Jew is Eric Cantor, on CKGB Friday, finally pointing out that federal pensions are a crime against humanity.

Sun, 01/27/2013 - 20:52 | 3189888 trav777
trav777's picture

his overarching question is the same as the rest of theirs:  "is it good for the jews?"

Nothing will transpire by his hand that is bad for them.

This austerity that's coming is in effect trying to force the nation to pay back the banksters plus interest.  Fuck that, I would rather see us just inflate into oblivion than to actually try to pay these fucking con artists their joobux back plus vig.

Usury is a historical crime and so many of the idiot ZHers are in a king of the hill contest to bleat the loudest about how we simply NEED to pay our debts with interest.

Sun, 01/27/2013 - 21:37 | 3189974 fonzannoon
fonzannoon's picture

 

"This austerity that's coming is in effect trying to force the nation to pay back the banksters plus interest."

Trav the banksters are snapping up every home in America. They are the new landlords in town. That is how they will collect their interest. The austerity would be icing on their sick twisted cake.

Sun, 01/27/2013 - 22:03 | 3190079 Bicycle Repairman
Bicycle Repairman's picture

"They are the new landlords in town."

LOL.  This brings them right down to street level and I can tell you right now this "landlord" gig is not going to work out for them.

Sun, 01/27/2013 - 22:32 | 3190153 fonzannoon
fonzannoon's picture

i hope u are right. somehow i don't see them at street level.

Sun, 01/27/2013 - 22:11 | 3190100 lincolnsteffens
lincolnsteffens's picture

If it were only the bankers that at fault suffered I would agree with you (except your jewophobia, asshole). The problem is there are millions of future and current retirees that would suffer (they already have started) with a loss in their means of food and shelter. But hey, you couldn't care about them so, what the fuck, let them starve. Right Trav??

 

Mon, 01/28/2013 - 09:42 | 3190994 Watauga
Watauga's picture

Frankly, I don't know how "the Jews" figure into any of this, but it is odd that anyone who is honest would conclude that "federal pensions are a crime against humanity" when, in fact, federal pensions are merely earned, but deferred, income.  In other words, the federal employee took, for 30 years, reduced income to secure for his future a small income often described as a pension.  Thus, he deferred income in the present to perserve some portion of it for the future. 

If you want to elect representatives who will put a stop to this deferral of income, you should do so.  I am all for it.  It would be simple (but not easy): propose legislation that states: "No employee of the federal government, from X day of 2013, shall receive any pension, retirement contribution, or deferred income; his sole compensation for his labor shall be his salary." 

 

Sun, 01/27/2013 - 19:46 | 3189727 Tijuana Donkey Show
Tijuana Donkey Show's picture

Sorry fast Freddie, the shadow budget will be untouched. NRO, NSA, CIA, they won't feel a thing. Also GOP, democrats, they are both puppets to the lobbists, so while I value your input around here, the idea that CONgress might act on party lines only works if you accept the fact that there is only one party, the "fuck everyone else in America until they bleed" party. If your looking for an investment strategy on their platform, be long herpes, and short lube. 

Sun, 01/27/2013 - 19:16 | 3189652 TwoJacks
TwoJacks's picture

republicans will cave in. No way this sequester happens.

Sun, 01/27/2013 - 19:31 | 3189700 Zer0head
Zer0head's picture

Obama wants and has always wanted the sequester, imagine free hand to cut military and all thanks to Mitch and the Boner, Obama's two favorite democrats

Sun, 01/27/2013 - 19:48 | 3189726 kaiserhoff
kaiserhoff's picture

How about all those pissed off, well armed men, who gots his back?

Sun, 01/27/2013 - 20:09 | 3189794 Jena
Jena's picture

And it was primarily Jack Lew's idea, according to Bob Woodward.

Sun, 01/27/2013 - 21:02 | 3189914 DoChenRollingBearing
DoChenRollingBearing's picture

THAT is an interesting fact, Jena, + 1 for letting us know.

Sun, 01/27/2013 - 21:08 | 3189927 trav777
trav777's picture

maybe Lew is somehow related to those who dominate banking and thereby own all of the debt "We the People" ostensibly owe.

Sun, 01/27/2013 - 19:17 | 3189654 Rustysilver
Rustysilver's picture

Cossack,

I only gave one up arrow becaue that is all the system can handle.

In my book GOP and dems have the same level of credibility. There're scum.

Sun, 01/27/2013 - 19:17 | 3189657 tony bonn
tony bonn's picture

<p>the question is not if the gop (elephant turds) will fold but when. they will fold like a cheap onion skin mini dress</p>

Sun, 01/27/2013 - 19:19 | 3189662 knukles
knukles's picture

Now you've got my attention.  Keep going....

Sun, 01/27/2013 - 19:36 | 3189709 gould's fisker
gould&#039;s fisker's picture

Indeed, what is under that onion mini?

Sun, 01/27/2013 - 19:48 | 3189729 Tijuana Donkey Show
Tijuana Donkey Show's picture

Nancy Pelosi! BLEEEEECCCHH!

Sun, 01/27/2013 - 20:00 | 3189761 wee-weed up
wee-weed up's picture

Projectile vomit!

Sun, 01/27/2013 - 20:11 | 3189801 Jena
Jena's picture

Hey! Try not to look but she's commando!

you guys started it

Sun, 01/27/2013 - 19:21 | 3189659 Motorhead
Motorhead's picture

Sequestration, bitchez (like it or not)!

(Really, the running of this gov't of the USA is simply an embarassment.  Like the old [paraphrased] saying, 'what a way to run a railroad'.)

 

Sun, 01/27/2013 - 19:19 | 3189660 clara-to-market
clara-to-market's picture

Paul Ryan is just another fucking stooge.

He's a friend of the banksters.

How people can get excited over this punk is beyond me.

http://www.angrysinner.blogspot.kr/2013/01/sunday_27.html

Sun, 01/27/2013 - 19:21 | 3189667 Motorhead
Motorhead's picture

He and about other 534 chumps on Capitol Hill.

Sun, 01/27/2013 - 19:25 | 3189682 Whiner
Whiner's picture

Did you see all the pork ladled in the extension bill? Amgen picked up a half billion slipped in by Mitch McConnell and Co. This was a nice offset to its 3/4 B fine paid last year for selling mislabeled drugs. The beat goes on and on. These jackasses have a 90%+ reelection rate. They have moneyed in their positions as oligarchs and all trust is broken. You have to buy your Senate seat now and provide. 100 fold return to your corporate donors. They aren't Repuplicans or Democratz. They is crooks on the Greek-Italian-Sicilian scale.

Sun, 01/27/2013 - 19:33 | 3189704 Zer0head
Zer0head's picture

These jackasses have a 90%+ reelection rate.

That says a great deal about the American population on both sides of the imaginary aisle

Sun, 01/27/2013 - 20:02 | 3189766 Terminus C
Terminus C's picture

I would say it has more to do with the "electoral" process. Banana Republic dictators have 90% re-election rates... It is true that there are a lot of useful idiots who buy into the system, but I wonder how much of the system itself determines who gets elected.

Diebold, bitchez!

Sun, 01/27/2013 - 20:28 | 3189840 smlbizman
smlbizman's picture

i think it has more to do with a rigged system...hard to produce that kinda success legitimately

Mon, 01/28/2013 - 09:10 | 3190908 Ace Ventura
Ace Ventura's picture

BINGO. For details see 'Mr. Diebold' and his merry band of Electronic Voting Machines, now with full-range custom appearances (from LCD touch-screen to optical scanners)! All you need to know to understand the whole 'election' system is rigged is this:

You are NOT given a certified receipt of your vote.

Picture gets ALOT clearer once that's understood.

Sun, 01/27/2013 - 19:33 | 3189702 lolmao500
lolmao500's picture

Ryan (and his budget) is a total hack.

Sun, 01/27/2013 - 19:34 | 3189705 gould's fisker
gould&#039;s fisker's picture

Oh Lord, here we go again.

Sun, 01/27/2013 - 19:42 | 3189719 TulsaTime
TulsaTime's picture

The Repubs 'think' if it actually happens it will save their ass, but if the year is any teacher, it will expose a even more of the utter vacum that is their lack of coherent thought about any policy.  Look at how well the election panned out, all those memes catching fire and voters being co-opted by the millions.  DID NOT HAPPED, did it?

And besides, the corporate play callers will not want anything percipitious to mess with the cash flow of spring.  What if congress got serious and cut something besides domestic programs?  There are ugly noises out there about programs and contracts that are best left alone.  We can go another few months to put together another script, a new 'situation' to play to the press till next time.

Sun, 01/27/2013 - 20:09 | 3189788 espirit
espirit's picture

Watson's working on it.

Sun, 01/27/2013 - 19:52 | 3189745 DavidJoshimisk
DavidJoshimisk's picture

They may cut social security ... but ...I'll believe they will cut haliburton, raytheon and the other defense contractors when I see it.

Sun, 01/27/2013 - 20:04 | 3189772 Banksters
Banksters's picture

Exactly.  Now that the Africa campaign has commenced and the war on Iran is back- go to Haaretz to see what I mean, there will be endless causes to promote record pentagon budgets.

Sun, 01/27/2013 - 23:54 | 3190347 Bandit und Buster
Bandit und Buster's picture

OR FOREIGN  AIDE!! ISRAEL FIRST! OR CLOSE THE BASES IN SOME OF THE 160 COUNTRIES !  Never heard of CONgress suggest cuts to foreign aide!

Sun, 01/27/2013 - 20:02 | 3189768 spanish inquisition
spanish inquisition's picture

on March 27, after which various government agencies will start shutting down

Thank God. Finally a useful proposal. If they can not agree for a few months, enough will be shut down for long enough so people don't notice......

Sun, 01/27/2013 - 20:58 | 3189901 hawk nation
hawk nation's picture

We only wish they would shut down. Neither side wants to allow this since it would prove that most of the government functions we dont need

 

Sun, 01/27/2013 - 20:13 | 3189806 joego1
joego1's picture

Shut down the whole evil empire.

Sun, 01/27/2013 - 20:23 | 3189828 djsmps
djsmps's picture

Tonight, on 60 Minutes, the puppet masters have revealed their dynastic plans.

Mon, 01/28/2013 - 00:31 | 3189844 Lucius Corneliu...
Lucius Cornelius Sulla's picture

I can't think of anything that might make our nation more secure than slashing the "Department of War" spending.

...well maybe cutting The State Department by 50% would be pretty close.

Sun, 01/27/2013 - 20:44 | 3189855 Lucius Corneliu...
Lucius Cornelius Sulla's picture

If military spending were cut 50% then the USG would still be spending more than the China, Russia and the UK (the next 3 highest spenders) combined.  

 

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/07/everything-ch...

 

Sun, 01/27/2013 - 21:16 | 3189954 CrashisOptimistic
CrashisOptimistic's picture

The wealth of the US is defended by that defense spending and that wealth exceeds the total of China, Russia and the UK combined.

Sun, 01/27/2013 - 21:31 | 3189983 Lucius Corneliu...
Lucius Cornelius Sulla's picture

I disagree.  Aircraft carriers in the ME and troops in Europe and Japan do nothing to protect the citizens of the USA's wealth.  They have everything to do with protecting the profits of multi-nationals that don't give a rats ass or have any loyalty whatsoever to the USA electorate.

Sun, 01/27/2013 - 22:26 | 3190137 tip e. canoe
tip e. canoe's picture

i think what he's trying to say is that the defense spending is what is keeping the GDP afloat which is all that's "defending the wealth" at this point.   when you realize that wealth = debt, it makes perfect sense.

Sun, 01/27/2013 - 20:47 | 3189872 Everyman
Everyman's picture

Hey, your freakin' hack of a "journalist", you forgot this is already "passed law" that was passed as a prior agreement.  It is NOT as you say on the GOPs plate. 

Both programs are set to kick in automatically as incremental spending cuts, chopping away even more basis points from the 2013 US GDP, unless the GOP votes affirmatively to extend them in what would then be seen as a move that destroys any last trace of leverage and credibility that GOP may have had.

The GOP and the DEMS have ALREADY voted n this spending reduction and they both agreed the last time, and they all did NOTHING, so stop laying this at the GOPs feet.  The DEMs have as much blood on their hands.

 

 

Sun, 01/27/2013 - 20:50 | 3189884 FleaMarketPete
FleaMarketPete's picture

ah back focusing on the evil republican minority and even resurrecting hailburton conspiracy theories.  Hey look over there!  IT’S GEORGE BUSH and he's drinking baby unicorn blood!!!111

Sun, 01/27/2013 - 20:54 | 3189896 TheMayor
TheMayor's picture

These cuts are not nearly enough but they are better than nothing.

Get the truth at www.truthinaccounting.org


 

Sun, 01/27/2013 - 21:00 | 3189908 gatorengineer
gatorengineer's picture

Does anyone not understand here that there are NO cuts whatsoever.  They are decreases in the rate of increase......  Not cuts.....

 

I learned about the decrease in the rate of increase when my salary stopped going up in real dollars about 15 years ago.......

Sun, 01/27/2013 - 21:39 | 3190009 Meatballs
Meatballs's picture

Same with EVERY municipal, school, etc. budget in existance...

Sun, 01/27/2013 - 21:22 | 3189966 AldoHux_IV
AldoHux_IV's picture

Cuts or no cuts, debt ceiling raise no raise-- it doesn't matter. The only real way to maintain sanity is not to listen or pay attention to these crazy people we call politicians. Build your own community, create your own infrastructure, bank with credit unions, find your own trade networks, fuck paying taxes-- giving money to these psychopathic assholes is the definiation of insanity. Crash or no crash letting them think they have power over you is the true crime and fraud.

Sun, 01/27/2013 - 21:34 | 3190002 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I think we know somebody that won't be voting on sequestration.

http://www.policymic.com/articles/24209/bob-menendez-sex-scandal-senator...

Senator Bob Menendez (D-N.J.) is being investigated by the FBI for allegedly hiring underage prostitutes on the Dominican Republic

 

He replaced everyone's favorite vaporizer Corzine in the senate.

Sun, 01/27/2013 - 21:38 | 3190003 syntaxterror
syntaxterror's picture

Odds of the US Federal Government cutting a single dollar in spending are about 1 in a Quadrillion. Oh, and Quadrillion is the next number after Trillion. And just like Trillion is the new Billion, Quadrillion will be the new Trilion.

Sun, 01/27/2013 - 21:37 | 3190006 Meatballs
Meatballs's picture

Fuck Paul Ryan.

Sun, 01/27/2013 - 22:29 | 3190150 phoolish
phoolish's picture

Despite all his tough words, exactly how many time has Ryan actually voted to lower spending, reduce the deficit, or do something akin?

 

Exactly; Zero.

 

 

Sun, 01/27/2013 - 22:56 | 3190196 newengland
newengland's picture

No. Really? Get outta here. Joking or what? Sequester...the jerks name for theft.  Really. No sane person believes this bill $hit. This political theater.

The blue pill and the red pill are both poison for the Republic.

Sun, 01/27/2013 - 23:31 | 3190247 helping_friendl...
helping_friendly_book's picture

I just love the way the douche bag says "the Prez. hasn't produced a budget in 4 years" when, in fact, that is Congress' constitutional duty.

Is Paul Ryan unaware of his duty? 

Why does he expect the executive branch to preform his duty?

He appears to suffer from Microcephaly.

His head looks very small compared to his body.

He hides his retardation well but, I can spot a microcephalic, a mile away.

Poor lad!

That is the best Wisconsin can offer?

Sad!

Mon, 01/28/2013 - 03:39 | 3190664 RichardP
RichardP's picture

I just love the way the douche bag says "the Prez. hasn't produced a budget in 4 years" when, in fact, that is Congress' constitutional duty.

From here:  http://en.wikipedia.org/wiki/United_States_federal_budget

The Budget of the United States Government often begins as the President's proposal to the U.S. Congress which recommends funding levels for the next fiscal year, beginning October 1. However, Congress is the body required by law to pass a budget annually and to submit the budget passed by both houses to the President for signature. Congressional decisions are governed by rules and legislation regarding the federal budget process. Budget committees set spending limits for the House and Senate committees and for Appropriations subcommittees, which then approve individual appropriations bills to allocate funding to various federal programs.

Each year, the President of the United States submits his budget request to Congress for the following fiscal year as required by the Budget and Accounting Act of 1921. Current law (31 U.S.C. § 1105(a)) requires the president to submit a budget no earlier than the first Monday in January, and no later than the first Monday in February. Typically, presidents submit budgets on the first Monday in February. The budget submission has been delayed, however, in some new presidents' first year when the previous president belonged to a different party.

Mon, 01/28/2013 - 00:06 | 3190379 polo007
polo007's picture

http://www.auburn.edu/~johnspm/gloss/sequestration

Sequestration

Originally a legal term referring generally to the act of valuable property being taken into custody by an agent of the court and locked away for safekeeping, usually to prevent the property from being disposed of or abused before a dispute over its ownership can be resolved. But the term has been adapted by Congress in more recent years to describe a new fiscal policy procedure originally provided for in the Gramm-Rudman-Hollings Deficit Reduction Act of 1985 -- an effort to reform Congressional voting procedures so as to make the size of the Federal government's budget deficit a matter of conscious choice rather than simply the arithmetical outcome of a decentralized appropriations process in which no one ever looked at the cumulative results until it was too late to change them. If the dozen or so appropriation bills passed separately by Congress provide for total government spending in excess of the limits Congress earlier laid down for itself in the annual Budget Resolution, and if Congress cannot agree on ways to cut back the total (or does not pass a new, higher Budget Resolution), then an "automatic" form of spending cutback takes place. This automatic spending cut is what is called "sequestration."

Under sequestration, an amount of money equal to the difference between the cap set in the Budget Resolution and the amount actually appropriated is "sequestered" by the Treasury and not handed over to the agencies to which it was originally appropriated by Congress. In theory, every agency has the same percentage of its appropriation withheld in order to take back the excessive spending on an "across the board" basis. However, Congress has chosen to exempt certain very large programs from the sequestration process (for example, Social Security and certain parts of the Defense budget), and the number of exempted programs has tended to increase over time -- which means that sequestration would have to take back gigantic shares of the budgets of the remaining programs in order to achieve the total cutbacks required, virtually crippling the activities of the unexempted programs.

The prospect of sequestration has thus come to seem so catastrophic that Congress so far has been unwilling actually to let it happen. Instead, Congress has repeatedly chosen simply to raise the Budget Resolution spending caps upward toward the end of the legislative session in order to match the actual totals already appropriated, thus largely wiping out the incentives that the reformed budget procedures were expected to provide for Congress to get better control of the budget deficit.

Mon, 01/28/2013 - 03:28 | 3190654 TheObsoleteMan
TheObsoleteMan's picture

The GOP has NO CREDIBILITY. The same party that has promoted illegal immigration, unconstitutional wars, bailed out the TBTF financial institutions, uncontrolled gubmint growth and spending, passage of the Patriot Act and voter fraud in the case of Ron Paul. To hell with the GOP, it is just as bad as the democraps, Look who their nominee was, have you forgotten? I will give them one thing, they made a libertarian out of me! Voted for Gary Johnson and didn't look back.

Mon, 01/28/2013 - 09:25 | 3190943 Ace Ventura
Ace Ventura's picture

I can see some of these comically laughable 'sequestration cuts' coming for the DoD, but very little will actually be imposed in the way of cuts on the veritable LEGIONS of useless gubment social-engineering type expenditures, which are nothing more than metastasizing jobs-farms for certain favored minority groups.

Just last month I was in D.C., and the sheer number of massive federal buildings (with hundreds/thousands of contained 'workers') was astonishing. On my way to the Lincoln Memorial to say hi to that ol' tyrant Abe, I saw one particularly large modern office building with the name: 'Institute of Peace'. WTF? Do I even want to know how much those people make, and who pays their salaries?

Then on my way to check out the Smithsonian, I walk past this MASSIVE work under construction: The National Museum of African American History and Culture. Are you fucking KIDDING ME? We're $16+ trillion in the whole, but there's money for THAT sort of rayciss bullshit?

 

Mon, 01/28/2013 - 09:39 | 3190988 Kingkongballs827
Kingkongballs827's picture

Don't Wait. Burry your Guns, Gold, Ammo, and Food Now. Can be sealed with Nitrogen to keep moisture out for life. 

http://www.ebay.com/itm/160963721916?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649

And if you think you can go buy all the Stuff in Home Depot, go do it!

 

Do NOT follow this link or you will be banned from the site!