White House Seeks $15 Billion from Federal Property Sales

Earlier in the week the Obama administration announced a plan to create an independent board to overlook the sale of billions of dollars worth of federal property. Both at home and abroad, President Obama wants to get rid of unnecessary federally owned buildings.

From Reuters.com:

President Barack Obama previewed the plan in his 2012 budget and State of the Union Address as part of his efforts to trim government waste and curb a budget deficit projected to reach $1.645 trillion this fiscal year.

The board, made up of experts drawn from the private and public sector, would make recommendations to Congress on 14,000 properties already identified as excess to requirements.

The White House says it expects the board, whose creation requires the approval of Congress, would save $15 billion in the first 3 years of its operation.

"The proposed civilian property realignment board will finally bring 21st century management practices to federal real estate," White House deputy budget director Jeffrey Zients told reporters.

More here

White House to Cut Energy Assistance for the Poor

With all the self-righteous talk about cutting spending, those cuts have to hit someone. But is energy assistance for low-income households really where we should cut?

From National Journal.com:

President Obama’s proposed 2012 budget will cut several billion dollars from the government’s energy assistance fund for poor people, officials briefed on the subject told National Journal.

It's the biggest domestic spending cut disclosed so far, and one that will likely generate the most heat from the president's traditional political allies. Such complaints might satisfy the White House, which has a vested interest in convincing Americans that it is serious about budget discipline. One White House friend, Sen. Chuck Schumer (D-NY), earlier today said a Republican proposal to cut home heating oil counted as an "extreme idea" that would "set the country backwards." Schumer has not yet reacted to Obama's proposed cut. On Wednesday, Sen. Jeanne Shaheen, D-N.H., declared: “The President’s reported proposal to drastically slash LIHEAP funds by more than half would have a severe impact on many of New Hampshire’s most vulnerable citizens and I strongly oppose it." A spokesman for Rep. Ed Markey, D-Mass., declared similarly: “If these cuts are real, it would be a very disappointing development for millions of families still struggling through a harsh winter.”

The Low Income Home Energy Assistance Program, or LIHEAP, would see funding drop by about $2.5 billion from an authorized 2009 total of $5.1 billion. The proposed cut will not touch the program's emergency reserve fund, about $590 million, which can be used during particularly harsh cold snaps or extended heat spells, three officials told National Journal.

In 2010, Obama signed into law an omnibus budget resolution that released a total of about $5 billion in LIHEAP grants for 2011. Pointing to the increasing number of Americans who made use of the grants last year, advocates say that LIHEAP is already underfunded. The American Gas Association predicts that 3 million Americans eligible for the program won't be able to receive it unless LIHEAP funding stays at its current level.

Continue reading at National Journal.com...

Obama Administration Unveils Startup America

Yesterday the White House held a press event unveiling President Obama's new Startup American program.

According to USAToday.com Startup America plans to:

• Permanently eliminate capital gains taxes on key investments in small businesses.
• Expand the New Markets Tax Credit to encourage private sector investment in startups and small businesses that operate in low-income communities.
• Direct $2 billion in existing loan guarantees over five years to match private-sector investment for startups and small businesses in underserved communities.
• Provide mentors for "clean tech" startups.
• Train veterans who want to start businesses.
• Allow entrepreneurs to request faster review of patents.

Official White House Statement on Bush Tax Cuts

Well, at least we finally know what the result of all the political posturing is: the Bush tax cuts will be extended for all taxpayers, including the highest earning taxpayers. Yesterday the White House released their official statement regarding the deal on the Bush tax cuts. The President explained why he compromised:

We saw that in two different votes in the Senate that were taken this weekend. And without a willingness to give on both sides, there’s no reason to believe that this stalemate won't continue well into next year. This would be a chilling prospect for the American people whose taxes are currently scheduled to go up on January 1st because of arrangements that were made back in 2001 and 2003 under the Bush tax cuts.

I am not willing to let that happen. I know there’s some people in my own party and in the other party who would rather prolong this battle, even if we can't reach a compromise. But I'm not willing to let working families across this country become collateral damage for political warfare here in Washington. And I'm not willing to let our economy slip backwards just as we're pulling ourselves out of this devastating recession.

In addition to the official statement, the White House press secretary also released their "Fact Sheet on the Framework Agreement on Middle Class Tax Cuts and Unemployment Insurance." According to the document, the President’s plan will accomplish the following three things:

Working families will not lose their tax cuts.

A typical working family faced a tax increase of over $3,000 on January 1st. That’s avoided under this framework agreement, and working families won’t see their tax cuts go away next year.

Focused on high impact job creation measures.

The framework agreement includes some of the best measures for jumpstarting growth and job creation, including a full year of emergency unemployment insurance benefits, about $120 billion in payroll tax cuts for working families, and a continuation of tax credits for working families. This is on top of growth generated by extension of the middle-class income tax rates.

Does not worsen the medium- and long-term deficit.

These are responsible, temporary measures to support our economy that will not add costs by the middle of the decade. The President does not believe it is affordable to make the high-income tax cuts permanent and will continue to have that debate in the years ahead.

White House Denies Folding on Bush Tax Cuts, but Still ‘Open to Compromise’

From WashingtonIndependent.com:

A lot of hubbub this morning surrounding a Huffington Post article that suggested the White House was willing to cave on its position of permanently extending tax cuts for most Americans while only temporarily extending those for the upper two percent and instead accept the idea of a temporary extension of all the tax cuts. Following the story’s publication, White House Communications Director Dan Pfeiffer emailed Greg Sargent to set the record straight:

The story is overwritten. Nothing has changed from what the President said last week. We believe we need to extend the middle class tax cuts, we cannot afford to borrow 700 billion to pay for extending the tax cuts for the wealthiest Americans, and we are open to compromise and are looking forward to talking to the Congressional leadership next week to discuss how to move forward. Full Stop, period, end of sentence.

That still leaves unclear, however, whether the White House will keep demanding that the majority of the tax cuts be permanent while the ones for individuals making more than $200,000 be temporary. Republicans are pretty much categorically opposed to “decoupling” the time frames of tax cuts for these two groups, because then they’d be forced to advocate for an extension of tax cuts just for the rich at some point down the line.

Tax Cut Timing is Proving Problematic for Democrats

From NY Times.com:

When one party controls the White House and Congress, it controls the calendar for what gets done and when. So how is it that Democrats ended up in such a fix over what to do about the expiring Bush-era tax cuts?

That is what many Democrats are asking.

By dint of calculation and miscalculation, after mixed messages and missed signals, President Obama and Congressional Democratic leaders delayed debate until before the midterm elections. They dared Republicans to fight for extending the tax cuts for the rich and, in so doing, “hold hostage” those for the middle class. But it was Democrats who blinked as their ranks splintered in the heat of a worsening electoral climate, and they delayed any vote until after the elections.

Now, with the tax cuts due to expire Dec. 31, the debate finally commences next week in a lame-duck session, with Democrats weakened, Republicans emboldened by the election results and the tepid economy continuing to provide some argument against letting rates rise even for the highest income levels.

For every election since the Bush tax cuts became law in 2001 and 2003, a central plank of Democrats’ campaign platforms has been to repeal them for high-income brackets — to pay for other programs, like expanded health care, or to reduce budget deficits.

Romer Resigns as Chief of Obama's Economic Council

President Obama’s Chief of Economic Council, Christina Romer will be stepping down and returning to her teaching position at the University of California. According to CNN Money the resignation will take effect on September 3.

CNN Money reports:

Romer, who has been a big supporter of health care reform and the president's stimulus plan, is one of Obama's principle economic advisers -- certainly, one of the most visible. The two meet on almost a daily basis.

"Christy Romer has provided extraordinary service to me and our country during a time of economic crisis and recovery," Obama said in a statement. "While Christy's family commitments require that she return home, I'm gratified that she will continue to offer her insights and advice as a member of my Economic Recovery Advisory Board."

Romer had previously expressed an interest in returning to California once her son starts high school in the fall, Obama added.

Read more here

White House Releases Staff Salary Data

Yesterday the White House released a report detailing the salaries of its staff members. According to this article from TheHill.com, the report included the wages paid all employees, from lowest level employees to the chief of staff Rahm Emanuel.

Emanuel, press secretary Roberts Gibbs, senior adviser David Axelrod, and senior adviser Valerie Jarrett make the top salary amount of $172,200 per year. Three staffers have their salaries listed as $0.

In total, the White House pays its staff $38,796,207.

"Since 1995, the White House has been required to deliver a report to Congress listing the title and salary of every White House Office employee," the White House blog says. "Consistent with President Obama's commitment to transparency, this report is being publicly disclosed on our website as it is transmitted to Congress."

Obama Tells Panel on Federal Debt to Consider All Options

From NY Times.com:

As President Obama’s bipartisan commission on reducing the mounting federal debt headed to its first meeting on Tuesday, the president told its members that “everything has to be on the table” as they consider options for reducing spending and increasing tax revenue.

Mr. Obama, appearing in the Rose Garden at the White House, recounted some steps his administration has already taken to restrain the growth of annual deficits. But he said, “This alone will not make up for the years in which those in Washington refused to make hard choices and live within their means.”

“And it will not make up for the failure to level with the American people about the costs of the services that they value,” he added. “This is going to require people of both parties to come together and take a hard look at the growing gap between what the government spends and what the government raises in revenue. And it will require that we put politics aside, and that we think more about the next generation than the next election.”

The president was flanked by his choices to chair the commission: Alan K. Simpson, the former Republican senator from Wyoming, and Erskine Bowles, a Democrat and former White House chief of staff. With a grin, Mr. Obama saluted them for their courage in accepting the assignment — a nod to the low expectations that many in Washington have for the commission, given the polarization between the parties, especially in an election year.

Mr. Obama then left for Iowa for the next stop on his “Main Street Tour,” and the commission members walked across the street to an executive conference center for their three-hour inaugural meeting.

National Debt to be Higher than White House Forecast

According to the Congressional Budget Office, Obama’s proposed budget would add over $9.7 trillion to the national debt over the next ten yeas. They made the announcement on Friday, and claim that the President’s tax cuts for the middle class are the main reason for the shortfall.

The 10-year outlook released by the nonpartisan Congressional Budget Office is somewhat gloomier than White House projections, which found that Obama's budget request would produce deficits that would add about $8.5 trillion to the national debt by 2020.

The CBO and the White House are in relative agreement about the short-term budget picture, with both predicting a deficit of about $1.5 trillion this year -- a post-World War II record at 10.3 percent of the overall economy -- and $1.3 trillion in 2011. But the CBO is considerably less optimistic about future years, predicting that deficits would never fall below 4 percent of the economy under Obama's policies and would begin to grow rapidly after 2015.

Deficits of that magnitude would force the Treasury to continue borrowing at prodigious rates, sending the national debt soaring to 90 percent of the economy by 2020, the CBO said. Interest payments on the debt would also skyrocket by $800 billion over the same period.

Continue Reading at WashingtonPost.com…

White House Plans to Lend $30 Billion to Small Banks

From the Wall Street Journal:

The Obama administration is finalizing plans to create a new government program to lend $30 billion to community banks that would include incentives to boost small-business lending, people familiar with the matter said, a move White House officials hope will help jump-start the economy.

Details are still being finalized and changes could be made, the people familiar with the plan said.

Under one leading version, the government would allow banks with less than $1 billion in assets to borrow an amount equal to 5% of their assets from the government. These banks would have to pay the government a 5% dividend on the loan, but that dividend would be reduced to as little as 1% if the banks substantially increased their lending to businesses.

Banks with between $1 billion and $10 billion in assets would be able to borrow up to 3% of their assets from the new program.

The plan would essentially use leftover money from the Troubled Asset Relief Program to allow banks to tap the government funds with fewer strings attached than the initial program created in 2008. Banks that already have TARP funds would be able to essentially refinance into the new program.

Continue Reading at WallStreetJournal.com…

Four Treasury Dept Nominees Left Hanging As Senate Leaves Town

According to Nasdaq.com, the Senate adjourned Thursday for a break that will last until January 20^th, 2010. Although the Senate was able to pass a health care bill, and raise the government’s debt limit, they left four Treasury Department nominees waiting on their confirmation.

Those nominees include Lael Brainard, the White House's pick for Treasury under-secretary for international affairs, whose nomination had been delayed for months as Senate Finance Committee staff scrutinized her tax returns.

The Finance Committee approved the nominations of Brainard and the other three Treasury officials Wednesday, but the nominations did not clear the full Senate because of an objection from at least one senator. At press time the source of the objection could not be learned.

Meanwhile, the Senate confirmed Miriam Sapiro as Deputy U.S. Trade Representative, before adjourning. It also confirmed Paul Anastas as an assistant administrator at the Environmental Protection Agency, and John Norris as a member of the Federal Energy Regulatory Commission.

The other Treasury nominees who will have to wait until the Senate returns for final confirmation include Michael Mundaca for assistant secretary for tax policy; Mary John Miller for assistant secretary for financial markets; and Charles Collyns for deputy under secretary for international finance.

Sen. Charles Grassley (R., Iowa), had threatened to block those nominees because of a dispute with the Internal Revenue Service over small business tax penalties, but he lifted that objection Wednesday evening.

Bank of America Pledges $5 Billion More for Small Businesses

After a White House meeting encouraging U.S banks that received large bailouts to increase lending, Bank of America has announced they would be lending out $5 billion in 2010 to small and medium sized businesses. This is a good sign for the Obama administration, which is hoping that other large banks will follow suit. If small business lending does increase in the next year, it could certainly help slow down the ever climbing unemployment rate.

"Bank of America is determined to do our part to help the economy grow next year and reduce unemployment by making every good loan we can make," CEO Ken Lewis said in a statement.

Lewis acknowledged the key role that small businesses play in creating jobs, calling them the "lifeblood" of the U.S. economy. "Our improved financial condition and our optimism about the economy will allow us to step up lending to support these clients," he said.

Bank of America (BAC, Fortune 500), based in Charlotte, N.C., is currently the second largest small business lender in the U.S., behind only Wells Fargo (WFC, Fortune 500), according to reports filed to the Treasury Department. Bank of America ended September with $41.9 billion in small business loans outstanding. That tally includes credit lines, credit cards, traditional loans and other financing.

But like most other big banks, Bank of America has pared back its lending through the recession. Since April, when top banks began submitting monthly reports on their small business lending, Bank of America has shaved its outstanding loan balance by 5%, or $2.2 billion.

Continue reading at CNN.com…

White House Reports 1 Million Jobs Saved, Created

A new report from White House’s top economists was published this morning and claims that over 1 million jobs have been saved or created by the Obama administration. The economists also said, however that the estimates must "be regarded as preliminary and understood to be subject to considerable uncertainty."

President Barack Obama has promised that his $787 billion stimulus plan will create or save 3.5 million jobs by the end of next year. But the economy has fared worse than the White House predicted when it pitched the jobs plan and officials have sought to beat back criticism that the results did not justify the huge combination of tax cuts, state aid and government spending.

In its first report to Congress on the stimulus, the White House Council on Economic Advisers said Thursday that the economy would have been far worse without the stimulus.

The report attributes the million job figure to the stimulus and other policy actions but says the driving force behind the job creation is the stimulus. Economists cautioned, however, that the estimates must "be regarded as preliminary and understood to be subject to considerable uncertainty."

The report is certain to draw criticism because the U.S. economy has actually lost about 2.5 million jobs since the stimulus was signed in February. Because the White House number is based on economic models, it's impossible to say for certain what that number would have been without the stimulus.

White House Leans Toward Tighter Enforcement of Taxes

From The Wall Street Journal:

President Barack Obama's initiative to raise new tax revenue to pay for major policy changes likely will focus in the short run on tightening enforcement against businesses and wealthy individuals. In the long run, some experts believe it could lead to sweeping changes in the tax code itself.

White House officials disclosed the tax initiative on Tuesday, saying they intend to explore ways to better enforce the current code as well as improve it by eliminating corporate subsidies and untangling its many complexities. Mr. Obama has assigned the task to his President's Economic Recovery Advisory Board, an outside panel of economists and businessmen headed by former Federal Reserve Chairman Paul Volcker.

Administration officials said the group faces two limitations: no tax increases before 2011 and no tax increases on families earning less than $250,000 a year. The task force is to report its recommendations by Dec. 4.

The initiative reflects the Obama administration's re-evaluation of how the U.S. government pays for itself, as lawmakers drop some major proposals from Mr. Obama's budget plans for future years.

A growing number of experts and many lawmakers believe the current U.S. income-tax system isn't raising enough money because it is obsolete. They say the U.S. should consider switching to more efficient means of raising revenue -- for example, taxes on consumption.

"We're shooting ourselves in the foot economically by relying as heavily as we do on income taxes when the rest of the world relies on consumption taxes," said Michael Graetz, a Yale University professor and former Treasury official in President George H.W. Bush's administration. "I think you can tinker with the existing system, but anybody who believes they are going to get enough revenue simply by improving collection of taxes owed is fooling themselves."