Pentagon lands extra $50 billion out of debt deal
Pentagon lands extra $50 billion out of debt deal
By Stephen C. Webster
Tuesday, August 2nd, 2011
Out of a bill that was supposed to cut government spending and waste wherever it is found, lawmakers managed to cobble together an additional $50 billion for the U.S. Defense Department's budget, using an accounting trick to disguise the move.
Instead of cutting $400 billion from the Pentagon's budget over the next 12 years like President Barack Obama proposed in April, Republicans put their own cuts at $350 billion over the next 13 years, leaving the nation's defense apparatus an extra $50 billion it hadn't planned on.
Disguised as a cut, the Pentagon's budget boost would have gone unnoticed in the press were it not for McClatchy reporter Nancy A. Youssef.
At the time of his recommendation, President Obama said that part of the savings might come from the scheduled withdrawal of the remaining U.S. troops from Iraq by the end of the year, as well as a planned drawdown of forces in Afghanistan.
The deal President Obama and Senate Democrats struck with House Republicans will set up a 12-member legislative committee to look at cuts moving forward, and would mandate up to $600 billion in defense cuts if Congress cannot agree on the committee's recommendations.
Defense industry advocates and some members of Congress have cautioned that the recommendations for defense spending cuts could slice deep and may ultimately trim off much more than current numbers reflect.
The cuts won't begin until 2014.
By Stephen C. Webster
Tuesday, August 2nd, 2011
Out of a bill that was supposed to cut government spending and waste wherever it is found, lawmakers managed to cobble together an additional $50 billion for the U.S. Defense Department's budget, using an accounting trick to disguise the move.
Instead of cutting $400 billion from the Pentagon's budget over the next 12 years like President Barack Obama proposed in April, Republicans put their own cuts at $350 billion over the next 13 years, leaving the nation's defense apparatus an extra $50 billion it hadn't planned on.
Disguised as a cut, the Pentagon's budget boost would have gone unnoticed in the press were it not for McClatchy reporter Nancy A. Youssef.
At the time of his recommendation, President Obama said that part of the savings might come from the scheduled withdrawal of the remaining U.S. troops from Iraq by the end of the year, as well as a planned drawdown of forces in Afghanistan.
The deal President Obama and Senate Democrats struck with House Republicans will set up a 12-member legislative committee to look at cuts moving forward, and would mandate up to $600 billion in defense cuts if Congress cannot agree on the committee's recommendations.
Defense industry advocates and some members of Congress have cautioned that the recommendations for defense spending cuts could slice deep and may ultimately trim off much more than current numbers reflect.
The cuts won't begin until 2014.
posted by Kevin Anthony Stoda at 11:02 PM
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This article is from the Summer 2011 issue of the Trends Journal, a publication of Gerald Celente's Trends Research Institute. It is republished below with Mr. Celente's permission.
As the second decade of the 21st century began, the US economy had not recovered from the Great Recession that began in December 2007.
The economy's failure to recover was despite the largest fiscal and monetary stimulus in the country's history. There was a $700 billion bank bailout, a $700 billion stimulus program, a couple of trillion in "quantitative easing," that is, in debt monetization or the printing of money to finance the government's expenditures. In addition the Federal Reserve's balance sheet had expanded by trillions of dollars as the Fed purchased troubled mortgage bonds and derivatives in its effort to keep the financial system solvent and functioning. According to the Government Accountability Office's audit of the Federal Reserve released by Senator Bernie Sanders, the Federal Reserve provided secret loans to US and foreign banks totaling $16.1 trillion, a sum larger than US Gross Domestic Product (GDP).
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