Before Slashing Budgets, Find the Savings

Before Slashing Budgets, Find the Savings

It was a bold move for a government entity. In 2005, the commonwealth of Pennsylvania hired a private company to overhaul the archaic way it buys goods and services. It seemed simple enough, but what was innovative — and daring — was a key condition: 30 percent of the contractor’s compensation would come from the savings achieved. No savings, no payment.

Putting such a risk on the contractor paid off handsomely. Among other things, officials combined the buying clout and pricing data of all 89 executive branch agencies and departments to strike better deals. Without cutting a single program or service, Pennsylvania saved more than $140 million, or 21 percent, from its annual $700 million tab for everything from office and cleaning supplies to information technology services and tires. The savings far exceeded projections.

Pennsylvania is not alone. Similar value-based contracts enabled the New York City Board of Education to shave $86 million from its $720 million procurement budget, and state and local agencies are experiencing similar savings. Continue reading “Before Slashing Budgets, Find the Savings”

Labor Day Reports Show Long-Term Income, Wealth Decline

08/31/2012; Tula Connell

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Several new economic reports out in time for Labor Day point to long-term trends that are driving a declining standard of living for America’s middle- and low-income workers. Here’s a quick summary (click on charts to expand).

Middle-class incomes have declined over the past decades. For the past several decades, the share of the economic pie that the middle class receives has decreased and fewer people have earned middle-class incomes, according to the Center for American Progress. “Moreover, the costs of middle-class basics have risen and debt levels have increased.”

The center’s “5 Charts on the State of the Middle Class” offers downloadable versions of each chart.  Continue reading “Labor Day Reports Show Long-Term Income, Wealth Decline”

Romney can’t have it both ways on defense spending, tax cuts

Dana Milbank
Dana Milbank
Opinion Writer

Romney can’t have it both ways on defense spending, tax cuts

By , Published: July 25

There have been many mendacious moments in this presidential campaign, but it will be hard to top what Mitt Romney told the Veterans of Foreign Wars conference this week.

President Obama is seeking “an arbitrary, across-the-board budget reduction that would saddle the military with $1 trillion in cuts,” the Republican said. “Strategy is not driving the president’s massive defense cuts. In fact, his own secretary of defense warned that these reductions would be devastating, and he’s right. . . . This is no time for the president’s radical cuts in our military.”

Come again?

Romney is referring to the automatic spending cuts, or “sequestration,” required by the Budget Control Act of 2011. For those suffering memory loss of the sort afflicting Romney, that legislation came about when Republicans threatened to throw the country into default unless Democrats agreed to automatic budget cuts if a “supercommittee” couldn’t reach a bipartisan agreement (which it couldn’t, naturally). Continue reading “Romney can’t have it both ways on defense spending, tax cuts”

How the Across-the-Board Cuts in the Budget Control Act Will Work

How the Across-the-Board Cuts in the Budget Control Act Will Work

By Richard Kogan; Revised April 27, 2012

The Budget Control Act (BCA) of 2011 imposed caps on discretionary programs that will reduce their funding by more than $1 trillion over the ten years from 2012 through 2021, relative to the Congressional Budget Office (CBO) baseline from 2010.  It also established a Joint Select Committee on Deficit Reduction to propose legislation reducing deficits by another $1.2 trillion over that period, and established a backup “sequestration” procedure to increase the incentive on the Joint Committee to reach a compromise.  Because the Joint Committee failed to achieve its goal, sequestration — a form of automatic cuts that apply largely across the board — is now scheduled to occur starting in January 2013 and to cover the period through 2021.

Part 1 of this report outlines how these across-the-board cuts will work in 2013.  Part 2 describes how they will work from 2014 through 2021. As explained below, the process for 2013 is substantially different from that for the ensuing eight years.

Broadly speaking, for 2013 the across-the-board cuts will mean about an 8.4 percent cut in most affected non-defense discretionary programs, a 7.5 percent cut in affected defense programs, an 8.0 percent cut in affected mandatory programs other than Medicare, and a 2.0 percent cut in Medicare provider payments.  For 2014 through 2021, the Medicare cut will remain at 2 percent while the percentage cuts in other programs will gradually shrink.  These estimates — which are revised from estimates in our December 2, 2011, analysis — take into account new CBO budget projections and the details of the President’s funding requests for 2013.

With one exception, this report is based on estimates from CBO on the dollar cuts from the four program categories outlined above — non-defense discretionary, defense, affected mandatory programs, and Medicare – provided as part of CBO’s March 2012 baseline.  The Appendix discusses why we have revised our previous estimates and the ways in which we use or alter CBO’s estimates. Continue reading “How the Across-the-Board Cuts in the Budget Control Act Will Work”

Who Is The Smallest Government Spender Since Eisenhower? Would You Believe It’s Barack Obama?

Who Is The Smallest Government Spender Since Eisenhower? Would You Believe It’s Barack Obama?

It’s enough to make even the most ardent Obama cynic scratch his head in confusion.

Amidst all the cries of Barack Obama being the most prolific big government spender the nation has ever suffered, Marketwatch is reporting that our president has actually been tighter with a buck than any United States president since Dwight D. Eisenhower.

Who knew?

Check out the chart –

So, how have the Republicans managed to persuade Americans to buy into the whole “Obama as big spender” narrative?

It might have something to do with the first year of the Obama presidency where the federal budget increased a whopping 17.9% —going from $2.98 trillion to $3.52 trillion. I’ll bet you think that this is the result of the Obama sponsored stimulus plan that is so frequently vilified by the conservatives…but you would be wrong. Continue reading “Who Is The Smallest Government Spender Since Eisenhower? Would You Believe It’s Barack Obama?”