Monday, December 31, 2012

Mandatory Spending Cuts (Could) Kick In Wednesday

At the Wall Street Journal, "Unthinkable Cuts Almost a Reality":
Mandatory federal spending cuts designed to be prohibitively drastic will become a reality on Wednesday if negotiators remain unable to reach an agreement to avert the reductions.

The cuts would hit a broad array of departments and programs, from the military's purchase of mine-resistant vehicles to government food inspections. They would slash funding for Secret Service details and cut rental housing subsidies in rural areas.

Secretary of Defense Leon Panetta delivers a speech at the National Press Club in Washington on Dec. 18.

Illustrating the gravity of the cuts, the Pentagon plans to notify 800,000 civilian employees that they could be forced to take several weeks of unpaid leave in 2013 if a deal isn't struck, and other agencies are likely to follow suit.

The cuts, which members of both parties have referred to as a "meat ax," are the product of a hastily designed 2011 law that required $110 billion in annual spending reductions over nine years to reduce the deficit. Their severity, representing close to 10% of annually appropriated spending, was intended to force Democrats and Republicans to come together on a broader package of deficit-reduction measures, which would replace the cuts. That effort failed, raising the prospect of the cuts' taking place.
That sounds stupid, especially so since Washington rarely ever cuts spending.

But continue reading.

Also, "Congress Meets Cliff's Edge: Senate Budget Talks Bear Little Fruit; McConnell and Biden Carry On Discussion."