Photograph by Andrew Harrer/Bloomberg

A protester during a demonstration by federal employees outside the Department of Labor, with the Capitol in the background, in Washington, D.C., on March 20, 2013.

The head of a union representing government workers is upset that the Pentagon is planning to furlough employees for 14 days while continuing to spend hundreds of billions of dollars on contracts with private firms.

The unpaid leave for the Defense Department’s 700,000 civilian workers is less than the 22 days originally planned under the automatic budget cuts that began this month.

But that’s not placating the American Federation of Government Employees, which notes the furloughs will save about $2.5 billion — small change next to the $300 billion the department plans to spend on contracts this year. The union cited data compiled by Bloomberg that showed the Pentagon had awarded contracts valued at as much as $39.4 billion in March, a 71 percent increase from February.

“[Defense Secretary Chuck Hagel] seems to believe that we should be happy with the crumbs he has thrown our way,”  J. David Cox Sr., the union’s national president, said today in a statement. ”Meanwhile, he’s invited contractors back to the table to resume their feast.

“It defies belief that Congress and the administration are unable to secure for the department the additional flexibility under sequestration necessary to squeeze less than one percent in savings from its contracts, in order to avoid arbitrarily cutting salaries for its own workers,” he added.

Original post is Union to Pentagon: Stop Throwing Us Crumbs by Political Capital.

Photograph by Mass Communication Specialist 2nd Class Corbin J. Shea/Navy Media Content Services via Bloomberg

Aviation ordnanceman practice color guard drills aboard the amphibious assault ship USS Kearsarge (LHD 3) in the Atlantic Ocean on Feb. 15, 2013.

The public apparently has little sympathy for complaints about the across-the-board cutting ordered in most discretionary federal spending.

The public is more concerned, a poll shows, about the cuts in Defense spending.

By a margin of 61 percent to 33 percent, people surveyed by ABC News and the Washington Post support the non-defense budget cutting that started Friday.

By a nearly identical margin, ABC reports, they oppose the cut in military spending.

The poll run by Langer Research Associates  found support for the non-defense cuts among Democrats (57 percent) and Republicans (75 percent) as well — while opposition to the defense cuts ran 73 percent among Republicans and split Democrats “down the middle.”

This would appear to place little pressure on Congress to restore much of the cuts as it writes a spending plan for the remainder of the fiscal year ending in September. Yet it would also tend to support a move in Washington to give the Pentagon more discretion over how the cuts are implemented, rather than requiring them across the board.

That work starts today in the House, with a March 27 deadline for writing a new budget.

Original post is Most Cuts OK, Not Defense: Poll by Political Capital.

Photograph by USAF

The Pentagon in Arlington, Virginia.

With just a week to go before the scheduled start of automatic budget cuts, the Pentagon is worried about not having enough cash.

What’s the biggest federal agency to do? Tell the folks in accounts payable to slow down.

The Defense Department yesterday revoked a policy to provide faster payments to contractors in a move that’s expected to shore up “several” billion dollars, Maureen Schumann, a Pentagon spokesperson, said in an e-mail.

The change comes in preparation for the possible March 1 start of across-the-board budget cuts known as sequestration, said Larry Allen, president of Allen Federal Business Partners, a consulting firm in McLean, Virginia. The military “needs to stretch out its money as long as it can if they know it’s going to be tight,” he said in an e-mail.

Companies aren’t pleased. The policy was designed to help small businesses, which don’t generally have the finances to support a major government project for a month or longer, according to Molly Brogan, a National Small Business Association spokesperson.

“This memo is exactly the problem with sequestration and Congress’s failure to do anything about it to this point,” she said in an e-mail.

Original post is Pentagon to Accounts Payable: Slow Down by Political Capital.

Photograph by Rich Clement/Bloomberg

A memorial for the Sept. 11, 2001 attacks stands at the Pentagon in Arlington, Virginia.

That’s how much the Pentagon would face in cuts for the rest of the fiscal year if automatic spending cuts went into effect March 1.

The across-the-board cuts, known as sequestration, will “result in a serious erosion of readiness across the force,” Defense Secretary Leon Panetta said in a message yesterday to about 800,000 Department of Defense employees.

Bloomberg’s Tony Capaccio and Brendan McGarry have more here on Panetta’s message, in which the defense secretary said he notified Congress that furloughs could occur under sequestration.

Defense officials are also concerned that the cuts could affect the department’s ability to train alongside NATO allies, Bloomberg’s Gopal Ratnam reports.

Original post is Bloomberg by the Numbers: $46 Billion by Political Capital.

Photograph by Rich Clement/Bloomberg

A newly-renovated corridor leading to a ramp is seen at the Pentagon in Arlington, Virginia.

The “automatic, brutal” spending cuts in Defense and other sectors of discretionary federal spending set to take effect March 1 pose a threat to the nation’s economic recovery, President Barack Obama said today.

“Our top priority must be to do everything we can to grow the economy and create good, middle-class jobs,” the president said in an appearance at the White House complex. “That’s our North Star.”

“That’s why it’s so troubling that just 10 days from now, Congress might allow a series of automatic, severe budget cuts to take place that will do the exact opposite,” he said. “It won’t help the economy, won’t create jobs, will visit hardship on a whole lot of people.

“The whole design of these arbitrary cuts was to make them so unattractive and unappealing that Democrats and Republicans would actually get together and find a good compromise of sensible cuts as well as closing tax loopholes and so forth,” the president said. “This was all designed to say we can’t do these bad cuts — let’s do something smarter.  That was the whole point of this so-called sequestration.”

“Unfortunately, Congress didn’t compromise,” he said. “They haven’t come together and done their jobs, and so as a consequence, we’ve got these automatic, brutal spending cuts that are poised to happen next Friday.”

“If Congress allows this meat-cleaver approach to take place, it will jeopardize our military readiness. It will eviscerate job-creating investments in education and energy and medical research,” Obama said. “It won’t consider whether we’re cutting some bloated program that has outlived its usefulness, or a vital service that Americans depend on every single day.  It doesn’t make those distinctions.”

“These cuts are not smart.  They are not fair,” he said. “They will hurt our economy.  They will add hundreds of thousands of Americans to the unemployment rolls.  This is not an abstraction — people will lose their jobs.  The unemployment rate might tick up again.”

“And here’s the thing:  They don’t have to happen,” he said. “There is a smarter way to do this –- to reduce our deficits without harming our economy.  But Congress has to act in order for that to happen.”

The solution, he maintained, is a balanced approach to spending cuts and tax revenue increases — achieved with the repeal of tax exemptions.

That’s a tax balance in which the Republican-run House says it has no interest.

See the Senate Appropriations Committee’s accounting of the impact of that sequestration here.
 

Original post is Obama: ‘Brutal’ Budget Cuts March 1 Threaten Economic Recovery by Political Capital.

Photograph by Andrew Harrer/Bloomberg

Chuck Hagel, nominee for U.S. secretary of defense, listens to a question during a Senate Armed Services Committee hearing in Washington on Jan. 31, 2013.

From Bloomberg Government’s Congress Tracker blog:

Senate Armed Services Committee Chairman Carl Levin will seek a vote by the panel tomorrow on Chuck Hagel’s nomination as Defense secretary, according to a committee aide who asked not to be identified.

Senate Democrats are working to overcome Republican opposition to President Barack Obama’s nomination of Hagel to replace the retiring Leon Panetta as the Pentagon’s top official.

South Carolina Republican Lindsey Graham said yesterday that he may place a hold on the nomination until he gets answers about what the president did personally to encourage military action at the time of the Sept. 11, 2012, attack on the U.S. mission in Benghazi, Libya.

A committee vote could pave the way for a vote by the full Senate later this week, according to a Senate Democratic leadership aide who also asked not to be identified when discussing the plans.

Original post is Panel Said to Plan Hagel Vote Tomorrow by Political Capital.

Photograph by Andrew Harrer/Bloomberg

A combat-disabled veteran of the Vietnam War demonstrates his newly fitted Otto Bock Healthcare X2 prosthetic limb with a physical therapist at the Walter Reed Army Medical Center in Washington.

Defense Secretary Leon Panetta pledged last year to “meet or beat” a 2017 deadline to integrate two health-records systems, one for troops and the other for veterans.

Now, Panetta and Eric Shinseki, secretary of the Department of Veterans Affairs, are scrapping plans to build a single system because of concerns about how much it would cost and how long it would take to develop.

“Our worry is, how long is it going to take to get to that goal?” Panetta said at a media briefing yesterday in Washington. “And what is going to be the price tag to get to that goal? And how many times is it going to be delayed?”

The two officials announced yesterday they would combine health data from the two agencies by 2014. That will better enable the departments to track patient records through “existing solutions,” Panetta said.

“Rather than building a single integrated system from scratch, we will focus our immediate efforts on integrating VA and DOD health data as quickly as possible, by focusing on interoperability and using existing solutions,” Panetta said.

The move away from an entirely new system is disappointing, Senator Patty Murray, a Washington Democrat, said in a press release. “What they are now proposing is not the fully integrated, end-to-end IT solution that this problem demands,” she said.

President Barack Obama in 2009 ordered the two agencies to figure out how to share electronic health records. The VA has struggled to treat veterans without a complete record of their service injuries.

Panetta and Shinseki previously had promised to deliver the new system by 2017. Their new approach would allow them to comply by 2014, they said.

The two agencies “have been at this for years and have sunk over $1 billion into making this the cornerstone of a nationwide electronic medical records initiative,” Murray said. “I intend to follow up with both secretaries to find out why this decision was made.”

The decision to cancel plans for a new system may benefit vendors with contracts to serve the two departments’ existing medical-records programs, said Brian Friel, an analyst with Bloomberg Government. Those companies include Hewlett-Packard Co., SAIC Inc., Harris Corp. and Dell Inc.

Original post is VA, Military to Beat Health-System Deadline by Changing Their Goal by Political Capital.

Photograph by Andrew Harrer/Bloomberg

Contractors lay down flooring at a construction site in Lorton, Virginia.

Timing is everything.

Before Election Day, it was reported that the nation’s unemployment fell below 8 percent for the first time in nearly four years.

After Inauguration Day, it’s reported that  the economy contracted, with the nation’s gross domestic product dropping at an annual rate of 0.1 percent in the fourth quarter of 2012, its worst performance since the second quarter of 2009, when the world’s largest economy was still in recession. And a remarkable swing from the third-quarter growth of 3.1 percent.

President Barack Obama rode to re-election in November with a sizable Electoral College majority in an election that was said to be inextricably linked to the health of economy. It turns out the economy was in a stall during that fourth quarter of 2012.

Behind these numbers, there were gains. Consumer spending grew during the quarter. Home sales are rebounding.

“Consumer confidence has been rising, and consumer spending has been rising, but there’s more work to do,” White House press secretary Jay Carney said in his press briefing today, “and our economy is facing a major headwind.”

“I don’t think any time you see a reduction in economic growth that it’s good news, but I think we need to understand what lies underneath it, the sharp drop in particular in defense spending, which is consistent with what we know has been going on in preparation for the possibility of sequester” of Defense Department and other discretionary spending,’ Carney said. “That was the case towards the end of the year when sequester was supposed to kick in on Jan. 1.”

“The broader point, I think, is that — and I think there’s been some reporting to reflect this — that there are — there remain even within this report indications whether it’s housing or consumer spending or business investment that we continue to be poised for positive economic growth and job creation,” he said. “And we need to make sure that in Washington we are not taking actions that undercut that progress that we have been making and can continue to make and will continue to make.”

Democratic activist Brad Woodhouse noted that one economist put the bad news-good news mix this way:

Paul Ashworth at Capital Economics called it “The best-looking contraction in U.S. GDP you’ll ever see.” wapo.st/VnIaCt

— Brad Woodhouse (@woodhouseb) January 30, 2013

The re-elected president’s popularity is up again, at its highest level since his first year in office.

Timing still is everything.

And this president’s party has a lot of time — four more years — to deliver a GDP that looks good on Election Day 2016.

Original post is Obama’s Economy: Timing Everything by Political Capital.

Photograph by Munir uz Zaman/AFP via Getty Images

U.S. Army soldiers attached to 2nd platoon, C troop, 1st Squadron (Airborne), 91st U.S Cavalry Regiment, 173rd Airborne Brigade Combat Team operating under NATO sponsored International Security Assistance Force (ISAF) looks through his rifle as a Medevac helicopter takes off during a patrol near Baraki Barak base in Logar Province on Oct. 13, 2012. T

Written with Richard Rubin

Just as the U.S. gross domestic product is taking a hit from lower defense budgets, federal spending cuts viewed as unthinkable a few months ago — $1.2 trillion falling heavily on the Pentagon — are seen as likely to happen starting March 1.

What’s known as budget sequestration, designed to be so draconian that it would push Democrats and Republicans to compromise on taxes and spending, has hardened the parties’ positions. If the cuts occur, they would require $600 billion in across-the-board military spending reductions over a decade that Defense Secretary Leon Panetta called “devastating.”

House Republican leaders, weakened by Obama’s re-election and Democratic gains in the House and Senate, are resigned to accepting the cuts rather than risking a deal with Obama that would mean higher taxes. Democrats see little political benefit in accepting Republican offers to forestall the reductions in exchange for cuts to entitlement programs such as Medicare.

“I want to make sure we save that money,” said Senator Lamar Alexander, a Tennessee Republican. “I’m not going to vote to change it unless we replace it.”

Alan Krueger, chairman of Obama’s Council of Economic Advisers, said the decline in GDP underscores the need for legislation that does away with the automatic spending cuts “to avoid self-inflicted wounds to the economy.”

Congress must “move toward a sustainable federal budget in a responsible way that balances revenue and spending, and replaces the sequester, while making critical investments in the economy that promote growth and job creation and protect our most vulnerable citizens,” Krueger said in an e-mailed statement.

Today’s economic report may not change the underlying political standoff that has prevented Congress from avoiding sequestration.

See the full report on defense cuts and the GDP at Bloomberg.com.

Original post is Defense Cuts: Unavoidable, Despite GDP Contraction Pinned on Defense? by Political Capital.

Photograph by Alex Wong/Getty Images

President Barack Obama shakes hands with former Sen. Chuck Hagel during a personnel announcement in the East Room at the White House, on Jan. 7, 2013 in Washington.

“The Jewish lobby,” as former Sen. Chuck Hagel once called pro-Israeli forces in Washington, is divided over his nomination for secretary of defense.

Political action committees describing themselves as pro-Israel were on opposite sides of several high-profile congressional races. Now they’re at odds over President Barack Obama’s decision to nominate the Republican from Nebraska to run the Pentagon.

The Washington Political Action Committee, for example, contributed to the campaigns of four Republican Senate candidates, then-incumbent Scott Brown of Massachusetts, Ohio Treasurer Josh Mandel, former Reps. Heather Wilson of New Mexico and Allen West of Florida.

J Street’s PAC financially supported the Democrat in all four races, Harvard University professor Elizabeth Warren in Massachusetts, incumbent Sen. Sherrod Brown in Ohio, Rep, Martin Heinrich in New Mexico, and Patrick Murphy in Florida. All four won.

The founder of Washington PAC, Morris Amitay, says that if he were a senator, he wouldn’t vote to confirm Hagel.

“It’s a poor choice not only regarding Israel but it’s a poor choice for national security,” Amitay said. “Someone who basically has been fairly soft on strengthening Iran sanctions and who seems to feel there can be major cuts in the defense budget is very poor choice for the United States.”

J Street, though, is behind Hagel, urging supporters to call their senators and ask them to confirm him, noting his support of a two-state solution to the Israeli-Palestinian conflict.

“It was important to push back and not allow him to be yet another person who was swift-boated into withdrawing from national service,” said a J Street spokesman, Alan Elsner. “We don’t think he’s out of the mainstream at all. Those who are attacking him are out of the mainstream.”

As for Hagel, he told his hometown paper today:  “The distortions about my record have been astonishing.”

There is “not one shred of evidence that I’m anti-Israeli, not one vote that matters that hurt Israel,”’ Hagel told the Lincoln Journal Star in Nebraska. “I didn’t sign on to certain resolutions and letters because they were counter-productive and didn’t solve a problem.”

The criticism stems from an interview for a 2008  book in which Hagel told Mideast scholar Aaron David Miller that “the Jewish lobby intimidates a lot of people up here. But I’m a United States senator. I’m not an Israeli senator.”

Hagel had used the term “Jewish lobby” interchangeably with “pro-Israeli lobby,” Miller, a scholar at the Woodrow Wilson International Center in Washington, said in an interview. The author said he didn’t think the former senator was in any way “anti-Israel.”

Original post is Pro-Israel Lobbies Split Over Hagel by Political Capital.