Roughly 40,000 FAA employees, 5,000 border patrol officers and agents, 1,300 correctional officers, 1,000 federal law enforcement officers, and an unspecified amount USDA food safety inspectors, will be forced to take furloughs of two weeks or more if Congress allows the massive, across-the-board spending cuts to slash the federal budget on March 1. The Senate Democrats on the Appropriations Committee released a memo this morning outlining what the $85 billion sequester cuts will mean for the U.S. economy. - See the memo here
IS THE SEQUESTER AS SCARY AS IT SOUNDS? The Wall Street Journal editorial board doesn’t think so. In fact, the WSJ writes that the sequester “will help the economy by leaving more capital for private investment…” The Journal adds that while the cuts would likely result in worker furloughs and cutbacks, most of the layoffs would happen in the nation’s capitol, which was mostly immune to the economic hardships facing the rest of the country during the Great Recession. While lawmakers sound the alarms about how dire the cuts will be, The WSJ calls the hysteria “baseless” saying that “programs are hardly starved for money… In Mr. Obama's first two years, while private businesses and households were spending less and deleveraging, federal domestic discretionary spending soared by 84 percent with some agencies doubling and tripling their budgets.” - Read more at The Wall Street Journal
SEN DEMS STUMPED ON SOLUTION Less than a month to go before the massive spending cuts slash the federal budget, and Senate Democrats are still unsure how to stave off the sequester cuts slated to take effect March 1. - Read more at The Hill
MILITARY FAMILIES FRET OVER MASSIVE CUTS The U.S. military has warned soldiers and their families that the upcoming sequester cuts would likely lead to longer deployment, as there would be less money for training and preparing new crews. The Washington Post reports that should the cuts take place, the Navy will deploy fewer ships to fewer places and those that go out would likely spend longer stints at sea. On top of that, military families are also concerned about how the cuts would affect support programs that assist families dealing with deployment among other things. - Read more at The Washington Post
RAISE EFFECTIVE TAX RATE: A WIN-WIN FOR LAWMAKERS? “Congress could easily respond to the popular clamor to lower the actual tax rate on corporations while still boosting its corporate tax income by ensuring that more businesses are paying a higher effective rate,” Suzanne McGee writes in The Fiscal Times. Companies talk about the top marginal rate of 35 percent rate, but they have a “host of deductions available to them” that makes their actual tax rate just 12.1 percent. - Read more at The Fiscal Times
KRUGMAN: WE SHOULD FIX ENTITLEMENTS... Wait, what? When Henry Bloget, editor-in-chief of Business Insider, asked left-leaning economist and New York Times columnist Paul Krugman today if something must be done to get entitlement spending under control, the liberal Times’ columnist who’s usually quick to pounce on deficit-hawks for making a fuss about long-term deficit spending—specifically entitlements--surprisingly agreed. "Somewhere, not in the next decade, but somewhere beyond that, we will have a situation that if nothing is done, we will have a serious mismatch between revenue and expenses.”
Read more at Business Insider
