Mandate by Congress Forces Post Office Into Default

Wiki image

Brandon Turbeville
Activist Post

On Friday, August 3, 2012, the United States Postal Service experienced its first-ever default on a Congressionally-mandated payment of $5.5 billion for the retirement benefits of future employees. 

Although USPS is claiming that, for now, the default will have “no material effect” on the operation of the Post Office and that the agency will continue to deliver mail and pay employees, the fact is that this financial quandary has raised new questions regarding just how long the agency will be able to operate. 

After all, the USPS is expected to default on the second half of this payment – another $5.6 billion – in September.

US debt ceiling talks fold after Republican walkout

Speaker of the House John Boehner speaks during
his weekly press briefing on Capitol Hill
© AFP/Getty Images Mark Wilson

AFP

WASHINGTON (AFP) - Crucial high-level talks on raising the US borrowing limit collapsed Thursday after Republicans walked out, accusing the White House of provoking an impasse with demands to raise spending and taxes.

The move sparked fears that Congress will fail to raise the 14.29 trillion dollar debt ceiling by an August 2 deadline and cause the United States to default on its obligations, sending shockwaves through the global economy.

Republicans, who won the House of Representatives last November amid public anxiety over government debt, will only back raising the borrowing limit in return for steep cuts in the annual deficit set to hit 1.6 trillion this year.

US Senate votes down ethanol subsidies

Critics say ethanol, made mainly from corn in the United
States, has diverted too much grain from food to fuel
© AFP/File Stan Honda

AFP

WASHINGTON (AFP) - The US Senate voted Thursday to end a $6 billion subsidy for ethanol in a move that appeared largely symbolic but sends a message about the growing unease on support for the biofuel made mostly from corn.

In a 73-27 vote, the Senate approved an amendment to end a 45 cent per gallon credit given for blending ethanol into gasoline and scrap a hefty tariff on ethanol imports.

The outcome for the measure remains uncertain, since the broader bill would need to pass the Senate and the House of Representatives, but lawmakers said a broad coalition supports the move to help curb the massive budget deficit.

US Congress votes against Libya funding

An explosion following a NATO air-raid in Tripoli
© AFP/File

AFP

WASHINGTON (AFP) - The US House of Representatives voted to prohibit the use of funds for American military operations in Libya.

Lawmakers adopted the amendment to a military appropriations bill by a vote of 248 to 163.

A number of members of Congress have recently expressed their dissatisfaction at President Barack Obama's decision to go ahead with operations in Libya in March and to continue without congressional authorization.

Kucinich: We must reclaim our monetary system for the people (Video)

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Despite Political Theater US Gov't is "Too Big to Fail"

Paul Craig Roberts
Lew Rockwell

Although the financial press speculates about a downgrade of the US government's credit rating and default if political impasse prevents the debt ceiling from being raised in time, I doubt anyone really believes that the debt ceiling will not be raised. It is just all a part of the political theater of the next couple of months.

Republicans will blame the budget deficit and accumulated national debt on Medicare and Social Security. Wall Street sees billions of profits in privatizing either, and debt rating agencies will oblige their Wall Street paymasters by opining from time to time that US Treasury bonds might be downgraded unless "entitlements can be addressed and the deficit brought under control."

Democrats will say that the budget deficit cannot be addressed without an increase in tax revenues, especially from the rich whose incomes have exploded upward while their tax rates have declined.

US lawmakers pass $690 billion Pentagon bill

The US House of Representatives passed a
$690 billion Pentagon budget Thursday
© AFP/DOD/File

AFP

WASHINGTON (AFP) - The US House of Representatives passed a $690 billion Pentagon budget Thursday that bars American ground forces in Libya and limits the Obama administration's powers on handling Guantanamo detainees.

Lawmakers voted 322-96 in favor of the budget plan which met the Defense Department's request for $119 billion to fund the wars in Iraq and Afghanistan.

It also placed restrictions on President Barack Obama's authority to reduce the US nuclear weapons stockpile under the new START treaty with Russia, prompting a White House veto threat earlier this week.

US Senate blocks bill targeting oil firm subsidies

© AFP/Getty Images/File David Paul Morris

AFP

WASHINGTON (AFP) - The US Senate defeated a bill taking aim at some $2 billion in annual subsidies to some of the world's largest and most profitable oil companies amid deep voter anger at high gasoline prices.

Lawmakers voted 52-48 to end debate on the measure, falling short of the 60 required and effectively killing a proposal that the White House's Democratic allies had portrayed as a belt-tightening step in cash-strapped Washington.

Democrats planned to revive the proposal -- which would have affected oil giants BP America, Chevron, ConocoPhillips, ExxonMobil and Shell -- as part of broader spending-cut talks ahead of a vote on raising the US debt ceiling.

The New Enemy of Economic Recovery: Austerity Protesters

George Osborne image

Eric Blair
Activist Post

As the United States surpasses the debt ceiling today, and Obama and Boehner play "let's make a deal" for deep cuts to the budget, citizens must prepare for austerity measures of higher taxes and less benefits.  These cutbacks won't necessarily be as evident as European austerity, because Americans scarcely get anything tangible from their tax dollars.  However, cutbacks will likely bring similar hardship and protest.

The increasingly ferocious protests over public service cuts and asset looting in the Euro-zone hints at what may be in store for America. Over the weekend a Washington Post article described the escalating unrest in Greece over punishing austerity measures.  However, the thrust of the article was to create the new enemy of the economy recovery: austerity "anarchists":

Despite deal, US budget woes far from over

The next fiscal showdown is likely to be
over the US's debt ceiling
© AFP/File image Shawn Thew

AFP

WASHINGTON (AFP) - The last-minute budget agreement that Republicans and Democrats reached may have averted a Saturday US government shutdown, but it's a mere skirmish in a looming war over the debt ceiling and the 2012 federal budget.

The agreement, reached after weeks of hard bargaining just before midnight Friday, funds the government for the rest of the fiscal year ending September 30, while making what President Barack Obama described as the deepest annual spending cuts in US history.

"This is not basically the last fight here," Republican Representative Adam Kinzinger told Fox News, some 12 hours after the 11th-hour vote. "This is the first opening salvo in a real attempt to bring back the size of government and start living within our means."

US lawmakers reach deal to avert govt shutdown

The agreement included some $38.5 billion
dollars of extra spending cuts
© AFP/File Jewel Samad

AFP

WASHINGTON (AFP) - A dramatic 11th-hour deal slashing spending has staved off a US government shutdown, ending a rancorous budget row between President Barack Obama and his newly empowered Republican foes.

Party leaders clinched the agreement, including some $38.5 billion dollars of extra spending cuts, after intense bargaining, barely an hour before the federal government effectively ran out of money at midnight Friday.

The showdown was just the first bruising engagement in a string of likely clashes between Obama and Republicans boosted by a new crop of conservative Tea Party lawmakers, as the president fires up his 2012 reelection bid.

Don't Believe the False Budget Arguments (Video)

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http://www.wideawakenews.com/
http://www.moneynews.com/StreetTalk/Laurence-Kotlikoff-Fiscal-Meltdown/2011/0...
http://www.usatoday.com/money/companies/management/2011-03-31-ceo-pay-2010.htm

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Ratigan to Ron Paul: 'Don't You Have an Obligation to Run for President?' (Video)

Activist Post

Ron Paul appears with Dylan Ratigan on April 5th, 2011 to discuss the budget cut debate and foreign policy.  Paul says the budget debate is a joke and "nothing compared to the calamity that we face."  Ratigan, as if pleading with Paul at the end of the interview, asks "Don't you have an obligation to run for President?

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US Republicans vow steep long-term spending cuts

Editor's Note: "Ryan's plan would privatize the Medicare health program for older Americans, giving beneficiaries vouchers to pay for care." Of course it will.  Using a "crisis" to transfer more taxpayer funds to private cartels.

Republican Representative Paul Ryan
© AFP/File Jim Watson

AFP

WASHINGTON (AFP) - President Barack Obama's Republican foes, warning the debt-heavy US economy is headed for collapse, unveiled a plan on Tuesday to slash government spending by $6 trillion over the next decade.

Republican Representative Paul Ryan, the chairman of the House of Representatives' Budget Committee, showcased the party's "Path to Prosperity" as a direct rebuke to what he denounced as Obama's free-spending ways.

"The United States is heading toward a debt crisis," Ryan said in a slickly produced video on his committee web site. "We face a crushing burden of debt, which will take down our economy, and will lower our living standards."

US to reach debt limit by May 16: Treasury

"Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover," Geithner said. He warned that military pay, social assistance payments and tax refunds could be among the first things to be blocked.

US Treasury Department said US likely to hit
$14.29 trln debt limit sooner than thought
© AFP/File Karen Bleier

AFP

WASHINGTON (AFP) - The United States is likely to hit its $14.29 trillion debt limit sooner than thought, the Treasury Department said Monday, pressuring lawmakers to raise the ceiling or face a possible government default.

"The Treasury Department now projects that the debt limit will be reached no later than May 16, 2011," the Treasury said.

The department previously estimated it would hit the ceiling by May 31.

If it is not raised, the United States would only have weeks before it runs out of cash to pay its bills, according to government estimates.

Ron Paul Explains Why We Don't Need Income Taxes (Video)

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White House pushes Congress to avert shutdown

© AFP

AFP

WASHINGTON (AFP) - The White House on Friday warned that a looming US government shutdown "would be bad for the economy" as it urged feuding lawmakers to reach a budget compromise by a March 4 deadline.

"All of us agree that a government shutdown would be bad for the economy," said spokesman Jay Carney, who told reporters "we believe that a compromise can be reached" in hard-fought congressional negotiations.

His comments came as US President Barack Obama's Republican foes, who control the House of Representatives, unveiled a two-week stopgap spending measure that would cut $4 billion dollars by reducing or scrapping programs.

Senate Democrats were reportedly working on their own version, a seven-month extension that would accelerate some $33 billion in spending cuts and program terminations included in Obama's proposed budget for next year.


"We are glad that the leaders of Congress are working on this issue," said Carney, who added that a shutdown "would create a great deal of uncertainty and potential instability and might have a negative impact on the economy."

But Carney refused to say what the White House hoped to see in a short-term spending bill, amid a pitched political battle in Washington over what to cut, and by how much, and preemptive finger-pointing over a possible shutdown.

"Let me be clear: a government shutdown is not an acceptable or responsible option for Republicans," the House of Representatives' number-two Republican, Majority Leader Eric Cantor, told reporters on a conference call.

The US government could suffer a partial shutdown unless polarized lawmakers in the Senate and House of Representatives agree on a compromise to replace a current stopgap spending measure that expires at midnight March 4.

Cantor said the new Republican-drafted "continuing resolution" would fund the government to March 19 and cut some $4 billion in government spending while all sides pursue negotiations on a broader accord.

"If they walk away from this offer, they're then actively engineering a government shutdown," Republican Representative Peter Roskam, one of the party's senior vote-counters, said on the same conference call.

Details of the plan, known as a "continuing resolution" or "CR" in the jargon of Washington, were to be available later in the day.

A spokesman for Democratic Senate Majority Leader Harry Reid, Jon Summers, sought to portray House Republicans as backing off $61 billion in cuts in legislation they passed one week ago and hinted at a compromise.

"If we need a little more time to agree on a responsible path forward, we should pass a short-term CR for no longer than the next month," Summers said in a statement.

"But the 'my way or the highway' approach Republicans have been taking in the past only signals a desire for a government shutdown that our country can’t afford. We hope this is a sign that they have abandoned it and will work with Democrats moving forward," he said.

The Washington Post reported earlier that Senate Democrats were drafting a seven-month spending measure as part of an effort to rein in Washington.

All sides have said they want to avoid a government shutdown, and sought to pin the blame on their political foes if such an outcome disrupts many services and idles hundreds of thousands of government employees.

A Congressional report on the most recent shutdown, a 21-day hiatus in late 1995 and early 1996, noted that it idled environmental cleanup efforts and led to millions of visitors being turned away from museums and national parks.

Then-president Bill Clinton successfully pinned the blame on Republicans for that shutdown and coasted to reelection in November 1996 while portraying his political foes as radicals.

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