"Use It or Lose It" Plaguing Washington D.C. By NewsMax.com Oct. 10, 2013

 'Use It or Lose It' Plaguing Washington

On the last day of the 2013 fiscal year, Sept. 30, the Department of Agriculture spent $144,000 on ink toner cartridges — but that was business as usual for the federal government.

"It's a Washington phenomenon referred to as 'use it or lose it,'" according to a report from the Cost of Government Center.

"Agencies typically have to give back what they don't spend at the end of the fiscal year, prompting them to blow it on, say, three years' worth of staples instead of returning their surplus."

Also, agencies are allocated funds in large part based on what they spent the previous year, and they fear having their budget cut if they don't spend all they can.

So in the last week of September, the Department of Veterans Affairs spent $562,000 on artwork designed to "enhance clinical operations" — including $27,000 on photographs of sunsets — while the Coast Guard spent $178,000 on "Cubicle Furniture Rehab."

"Use it or lose it has been around for 30 years with budget-busting consequences," the center observed.

The most notorious example of the practice came in 2010 when the Internal Revenue Service, which had millions of dollars left in an account to hire new personnel, funded a lavish "Star Trek"-themed conference, which included a parody video filmed on a "Star Trek" set the IRS paid to build.

In 2012, the federal government spent $45 billion on contracts in the last week of September, The Washington Post reported. That was more than in any other week — 9 percent of the year's contract spending money allocated in 2 percent of the year.

A study by two university researchers found that during a recent five-year period, spending in the last week of the fiscal year was nearly five times higher than in the average week during the rest of the year.

Moreover, their data showed a sharp drop-off in the quality of information-technology projects at the end of the year.

Dean Sinclair, a former State Department employee who is urging a change in the system, suggests giving bonuses to managers who return leftover money to the Treasury at the end of the year. He told the Post: "It takes time and effort to waste money."

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BS.Ranch Perspective: 

Let me see, this old money plan is not a very wise budget plan!! This leads to Federal Department's spending money on things that it doesn't necessarily need or would never purchase in ordinary situations, but since they had money in a budget that was set aside to purchase a predetermined product, and the targeted spending on that product was not met by the Purchasing Agent for that Department... The fact that they would just go out and spend it on something that they could someday use, is not wise... There should be a way to turn that money into a savings account or some kind of an account to use on the following year.. The monies saived doing this will lower the following amount's Budgeted for the next year, but that is only because the money that they needed is already in the account, since it wasn't spent the previous year! Makes perfect sense to do it that way, rather then go out and spend it on something that nobody in the federal Government needs or would use.. this leads to total Government Waste which is one thing that seems to make Americans Upset, espeically when the object purchased is nothing that they could or would ever need or use!! 

It is also a great way to start lowering spending in this country!!! 

BS.Ranch.. 

President Obama's 2013 Budget Draws Fire From Agriculture Posted by Cowboy Byte Feb. 15, 2012

Obama budget draws fire from agriculture

Posted on February 15, 2012 by Cowboy Byte

Agriculture funding is not getting a fair shake in the President’s proposed 2013 budget, according to U.S. farm proponents. In the budget released Monday, President Obama proposed slashing agriculture subsidies by $32 billion over the next decade, just as Congress is getting set to create the new U.S. 2012 Farm Bill.

Obama’s plan includes eliminating the $5 billion a year in direct payment to farmers, an idea that has support among U.S. lawmakers, according to Reuters. In negotiations last fall, U.S. Senate and House agriculture committees identified $23 billion in proposed savings over 10 years.

Obama’s proposed 2013 budget is seen by some as unsupportive to agriculture- one of the top performing sectors in a struggling U.S. economy. “The President’s budget demonstrates that neither rural America nor fiscal discipline is a priority for this administration,” said Rep. Frank Lucas, R Okla., Chairman of the House Agriculture Committee. “Raising taxes on small businesses and ignoring the real drivers of trillion dollar deficits is a failure of leadership.”

$16,400,000,000.00 ($16.4 Trillion) in Debt by End of Year.. Posted by Daniel Horowitz ~ Friday, January 27th 2012...

$16.4 Trillion in Debt By End of Year

Posted by Daniel Horowitz (Diary)

Friday, January 27th at 12:02PM EST

28 Comments

So this is what the "age of budget austerity" looks like?

Yesterday, the Senate voted against a measure to disapprove of Obama's request for an additional $1.2 trillion of debt.  Every Democrat (except for Ben Nelson and Joe Manchin) voted against the resolution.  Consequently, pursuant to the Budget Control Act (the "debt ceiling deal"), Obama will automatically get his new credit card.  Our debt will increase by another $1.2 trillion, topping $16.4 trillion by the end of the year.

Here are the relevant numbers that should define Obama's presidency, yet they will not be disseminated in the major media.  When Obama took office, the total federal debt stood at $10.6 trillion.  By the end of his first term, the debt will be at least $16.4 trillion, an increase of $5.8 trillion.  To put that in perspective, it took us until late 2001 (from our nation's founding) to accrue $5.8 trillion in debt.  Even President Bush, who was a big-spending Republican, racked up "only" $4.9 trillion over 8 years.

Let's now explicate the debt figures as a percentage of our economy.  Our total federal debt and our GDP stand at parity.  The debt is $15.281 trillion, while our GDP is 15.294 trillion.  It is unlikely that our economy will grow by more than a 2-2.5% annualized rate in the coming year.  On the other hand, with the additional $1.2 trillion of debt, our national debt will grow by 7.9%.  In other words, our GDP will remain below our gross debt indefinitely.

Unfortunately, the Republicans are not innocent from reproach in this debt crisis.  While every Republican except for Scott Brown voted for the resolution of disapproval, most of them supported the debt ceiling deal that engendered this disaster in the first place.  Only19 of the 47 Senate Republicans opposed the debt deal, which gave Obama a defacto blank check to raise $2.1 trillion in debt without any transformational budget reforms.  We have already raised the debt ceiling by $900 billion since passage of the Budget Out of Control Act.  Today, by default, Obama was granted the rest.

This just underscores the need to focus on congressional races.  We might win back the Senate in November; however, if we continue to elect those who will vote for similar inane legislation, it will be worthless.

Cross-posted from The Madison Project

Make No Mistake, This is NOW Obama's Economy (Aug. 12, 2011)

It is an understatement to say that President Obama now owns the bad economy. He and his minions are actually creating and perpetuating it, policy by policy, decision by decision.

At an Aug. 4 press briefing, White House spokesman Jay Carney said: “The White House does not create jobs.” That may be strictly true, but the guy who lives there can cause jobs to be lost and make the recovery more difficult — at which President Obama has excelled.

There is a fundamental principle that seems to have eluded the president and his men: A recovering economy that creates jobs needs to encourage innovation and the creation of wealth.

The president and his minions are going to learn some lessons the hard way.

First, that policies have consequences. In his study of the 1,000 years of the world’s economic growth, the late British economist Angus Maddison observed that the “golden age” for worldwide growth was from 1950 to 1973, with per-capita GDP increasing 3% per year.

In 1973 growth slowed in Western Europe and Japan: “Some slowdown in these countries was warranted, but policy failings made it bigger than it need have been.”

Second, that as my mother used to say, actions speak louder than words. Merely saying that you’re not hostile to business doesn’t make it so.

And although redistribution of income might satisfy liberals’ desire for “social justice,” it doesn’t stimulate the economy or create private-sector jobs.

Ben Bernanke Signals Fed. Dissenters Won't Impede Additional Asset Purchase (by Scott Lanman & Joshua Zumbrun Bloomberg News Aug. 10, 2011

Bernanke Signals Fed Dissenters Won’t Impede Additional Asset Purchases

By Scott Lanman and Joshua Zumbrun - Aug 10, 2011

Federal Reserve Chairman Ben S. Bernanke signaled he may expand record monetary stimulus over the most opposition of his tenure to revive the faltering recovery and reduce unemployment stuck around 9 percent.

The central bank said yesterday that officials “discussed the range of policy tools” to strengthen growth and are “prepared to employ these tools as appropriate” while pledging to keep the benchmark interest rate near zero until at least mid-2013. Three policy makers dissented from the decision for the first time since Bernanke, 57, became chairman in 2006.

“Bernanke will push through QE3 if the economic conditions warrant it,” said Steve Lear, who helps manage $150 billion at J.P. Morgan Asset Management. The first two rounds of so-called quantitative easing totaled $2.3 trillion yet have left the Fed with a recovery that officials yesterday judged to be “considerably slower” than anticipated.

Treasury yields plunged to record lows, stocks soared and the dollar fell on the Fed’s first move to bolster stimulus since November 2010, when officials agreed to the $600 billion second round of asset purchases.

“The chairman will do the right thing for the economy regardless of what people might say,” said Randall Kroszner, a professor at the University of Chicago’s Booth School of Business who served on the Fed board under Bernanke from March 2006 to January 2009. “Bernanke has shown his skin is elephant- thick.”

The Standard & Poor’s 500 Index rose 4.7 percent to 1,172.53, the biggest gain since March 2009, one day after the worst drop since December 2008. The two-year government-bond yield dropped 0.07 percentage point to 0.19 percent after touching a record low of 0.16 percent, while the 10-year yield reached a low of 2.03 percent and closed at 2.25 percent.

Gold Gains

The dollar declined 1.2 percent against a basket of six currencies, the biggest one-day drop since October. Gold gained $29.80, or 1.7 percent, to $1,740 an ounce. The Chicago Board Options Exchange Volatility Index, which measures the cost of options on the S&P 500, had the second-largest percent drop ever.

Yesterday’s decision to add a specific date to its commitment to low interest rates was a first for the Fed. Previously, the central bank promised to keep rates low for an “extended period,” which Bernanke defined as at least two or three meetings. That phrase was first used in March 2009 and was repeated at every meeting through June 2011. The Fed has eight regularly scheduled meetings a year.

‘Open Revolt’

Bernanke gained unanimity or near-consensus for his previous decisions since 2008’s financial panic. While one or two dissents from a Federal Open Market Committee decision aren’t unusual, a third would represent “open revolt” against the chairman, former Fed Governor Laurence Meyer said in his 2004 book, “A Term at the Fed.”

Prior to yesterday’s meeting, there had been 23 dissents during Bernanke’s tenure as Fed chairman. Nine of those came from Kansas City Fed President Thomas Hoenig, who voted eight straight times in 2010 against record stimulus, tying former Fed Governor Henry Wallich’s record in 1980 for most dissents in a single year.

Yesterday, the FOMC “discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability,” without identifying the tools. “It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate,” the Fed statement said.

Willingness to Buy

Economists interpreted the language as a sign of willingness to buy more bonds. The Fed purchased $1.7 trillion of mortgage debt and Treasuries from December 2008 to March 2010 and $600 billion of Treasuries from November 2010 to June 2011. Bernanke could give additional signals in his Aug. 26 speech at the Kansas City Fed’s conference in Jackson Hole, Wyoming, the venue he used last year to hint of the second round of quantitative easing.

Yesterday’s statement “clearly leaves the door open for further asset purchases, or QE3,” Michael Gapen, a Barclays Capital economist and former Fed researcher, said in a research note. “We now look to the chairman’s comments” at Jackson Hole for further guidance on the FOMC’s thinking, Gapen said.

Central bankers downgraded their assessment of the economy’s progress. Growth this year has been “considerably slower” than expected and that economic data show “a deterioration in overall labor market conditions in recent months.”

Since the FOMC’s June 21-22 meeting, the Commerce Department said the economy grew 1.3 percent in the second quarter of the year. The government lowered its calculation of first-quarter growth to 0.4 percent from 1.9 percent. The economy added an average of 72,000 jobs a month since May, according to the Labor Department, compared with an average of 179,000 in the first four months of 2011.

Temporary Forces

In June the Fed attributed economic weakness in part to temporary forces such as higher food and energy prices and disruptions from the March earthquakes and tsunami in Japan. In yesterday’s statement the Fed said that these circumstances explain “only some of the recent weakness in economic activity.”

“Bernanke has an operational majority, and he’s not afraid to ram things through over the objection of the minority,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut, and a former Fed researcher.

Echoing phrasing that preceded or accompanied interest-rate cuts in 2007 and 2008, the FOMC said that “downside risks to the economic outlook have increased.”

“They just lowered the threshold quite a bit for QE3,” said Diane Swonk, chief economist at Mesirow Financial Holdings Inc. in Chicago. “Short of a miraculous reacceleration in the second half, we will see QE3.”

J.P. Morgan’s Lear likened Bernanke to a golfer who would rather send the ball past the hole than strike it too softly. “You’re not going to come up short on your putt,” said Lear, deputy chief investment officer for global fixed income in New York. “He is not going to leave the fight against deflation short.”

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net; Joshua Zumbrun in Washington atjzumbrun@bloomberg.net.

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.

US Rating Cut by S&P for first time on Deficit Reduction Plan.. Aug 5, 2011.

US Rating Cut by S&P for First Time on Deficit Reduction Pact

Friday, 05 Aug 2011 08:49 PM

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The U.S. had its AAA credit rating downgraded for the first time by Standard & Poor's on concern spending cuts agreed on by lawmakers to raise the nation's borrowing limit won't be enough to reduce record deficits.

S&P dropped the ranking one level to AA+, after warning on July 14 that it would reduce the rating in the absence of a "credible" plan to lower deficits even if the nation's $14.3 trillion debt limit was lifted. The U.S. was awarded the top credit ranking by New York-based S&P in 1941. It kept the outlook at "negative."

'The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement today.

Demand for Treasuries has surged even with the specter of a downgrade as investors saw few alternatives to the traditional refuge during times of risk as concern increased global growth is slowing and Europe's sovereign debt crisis is spreading. The action could still hurt the U.S. economy over time by increasing the cost of mortgages, auto loans and other types of lending tied to the interest rates paid on Treasuries. JPMorgan Chase & Co. estimated that a downgrade would raise the nation's borrowing costs by $100 billion a year.

Moody's, Fitch

"It's a reflection of the fact that we haven't done enough to get our fiscal house in the order," Anthony Valeri, market strategist in San Diego at LPL Financial, which oversees $340 billion, said in an interview before the downgrade. "Sovereign credit quality is going to remain under pressure for years to come."
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'You Opened My Eyes to the Catastrophic Enormity of This Financial Debacle'
Debt ceiling 'medicine will become the poison,' according to famed economist. Brace for economic meltdown. Watch the Aftershock Survival Summit Now, See the Evidence.

_____________________________________________________________

Moody's Investors Service and Fitch Ratings affirmed their AAA credit ratings on Aug. 2, the day President Barack Obama signed a bill that ended the debt-ceiling impasse that pushed the Treasury to the edge of default. Moody's and Fitch also said that downgrades were possible if lawmakers fail to enact debt reduction measures and the economy weakens.

The measure raised the nation's debt ceiling until 2013 and threatens automatic spending cuts to enforce $2.4 trillion in spending reductions over the next 10 years.

S&P put the U.S. government on notice on April 18 that it risks losing its AAA rating unless lawmakers agree on a plan by 2013 to reduce budget deficits and the national debt. S&P indicated last month that anything less than $4 trillion in cuts would jeopardize the rating.

'Grand Bargain'

"A grand bargain of that nature would signal the seriousness of policy makers to address the fiscal situation in the U.S.," John Chambers, chairman of S&P's sovereign rating committee, said in a video interview distributed by the ratings firm on July 28.

Obama has said a rating cut may hurt the broader economy by increasing consumer borrowing costs tied to Treasury rates. An increase in Treasury yields of 50 basis points would reduce U.S. economic growth by about 0.4 percentage points, JPMorgan said in a report, citing Federal Reserve research and data.

"The hope is that we could keep Treasuries pure, limited to interest rate risk," Mohamed El-Erian, chief executive and co-chief investment officer at Pacific Investment Management Co., said in a Bloomberg Television interview before the announcement. "The minute you start downgrading away from AAA, you take small steps toward credit risk and that is something any country would like to avoid."

Relative Yields

Treasury yields average about 0.70 percentage point less than the rest of the world's sovereign debt markets, Bank of America Merrill Lynch indexes show. The difference has expanded from 0.15 percentage point in January.

Investors from China to the U.K. are lending money to the U.S. government for a decade at the lowest rates of the year. For many of them, there are few alternatives outside the U.S., no matter what its credit rating.

"Yields are low in the face of a downgrade because there is nowhere else for people to go if they don't buy Treasuries because they want to be in safe dollar assets," Carl Lantz, head of interest-rate strategy at Credit Suisse Group AG, one of 20 primary dealers that trade directly with the Federal Reserve, said before the announcement.

Ten-year Treasury yields fell to as low as 2.33 percent in New York, the least since October.

Bond Dealers

The committee of bond dealers and investors that advises the U.S. Treasury said the dollar's status as the world's reserve currency "appears to be slipping" in quarterly feedback presented to the government on Aug. 3. The U.S. currency's portion of global currency reserves dropped to 60.7 percent in the period ended March 31, from a peak of 72.7 percent in 2001, International Monetary Fund data show.

"The idea of a reserve currency is that it is built on strength, not typically that it is 'best among poor choices'," page 35 of the presentation made by one member of the Treasury Borrowing Advisory Committee, which includes representatives from firms ranging from Goldman Sachs Group Inc. to Pimco. "The fact that there are not currently viable alternatives to the U.S. dollar is a hollow victory and perhaps portends a deteriorating fate."

Members of the TBAC, as the committee is known, which met Aug. 2 in Washington, also discussed the implications of a downgrade of the U.S. sovereign credit rating. "None of the members thought that a downgrade was imminent," according to minutes of the meeting released by the Treasury.

A U.S. credit-rating cut would likely raise the nation's borrowing costs by increasing Treasury yields by 60 basis points to 70 basis points over the "medium term," JPMorgan's Terry Belton said on a July 26 conference call hosted by the Securities Industry and Financial Markets Association. The U.S. spent $414 billion on interest expense in fiscal 2010, or 2.7 percent of gross domestic product, according to Treasury Department data.

"That impact on Treasury rates is significant," Belton, global head of fixed-income strategy at JPMorgan, said during the call. "That $100 billion a year is money being used for higher interest rates and that's money being taken away from other goods and services."

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