, As fiscal cliff nears Panetta warns of furloughs

With the real possibility of massive military budget cuts just days away, Defense Secretary Leon Panetta on Thursday told defense employees that staffing and program cuts will be considered if Congress can’t agree on alternative budget plans.

In a department-wide memo, Panetta wrote that he does not expect any immediate disruptions to military operations on Jan. 2 – the day the budget cuts are set to trigger – but warned that “should we have to operate under reduced funding levels for an extended period of time, we may have to consider furloughs or other actions in the future.”

Military pay and staffing are exempt from the cuts, and Panetta promised to provide “requisite advance notice” before any civilian employee actions.

“We will carefully examine other options to reduce costs within the agency before taking such action,” he wrote.

It’s the first formal warning to defense employees that their jobs could be lost to the two-year fight in Congress over the national debt, and a sign of how poorly last-minute negotiations between the White House and Republican leaders have gone.

On Thursday, the House abruptly adjourned for Christmas after failing to pass viable plans to avoid the so-called “fiscal cliff” – tax increases and $1 trillion in automatic spending reductions set to go into effect the first week in January.

House Speaker John Boehner, who has been sparring with the president behind the scenes over details of a compromise measure, also failed to get his caucus to adopt a “Plan B” which would have allowed tax breaks for millionaires to expire in exchange for cuts in entitlement programs.

The measure wasn’t expected to advance in the Senate, but was expected to provide some political cover in the event of a financial meltdown. Instead, it prompted questions about how deep the political divisions on Capitol Hill run, and whether any deal can possibly be reached in coming days. stripes.com

FACTS & FIGURES

Critics of American spending for military power often make three arguments: The U.S. spends more than a combination of the military budgets of the next 12, 15 or 17 nations, depending on who is counting and what is included; military spending drains funds from welfare, health care, education and other domestic programs; and, military spending is rife with fraud, waste and abuse, and should be rigorously scrutinized and scrubbed. scmp.com

The Pentagon’s budget accounts for about half of the government’s discretionary expenditure – spending that is not mandated under fixed government programs. As a result, defense budgets are set to fall 9.1 per cent next year, across all programs, if the automatic spending cuts come into force. ft.com

http://banoosh.com/2012/12/22/as-fiscal-cliff-nears-panetta-warns-of-furloughs/

America And The Global Financial Crisis

Brilliant post Jon, hope everyone reads!!!
~~Sandy

I am thoroughly convinced that this recession and global financial crisis has been orchestrated.

Main Reasons:

Besides Lucky Larry and his family being tippe

d off about the World Trade Center, it has been a marvelous past six years for the ultra wealthy and here is why I say that:

1. The stock markets all over the globe have been a rollercoaster of a ride--any economist that isn't owned could tell you that is a windfall for those who truly know how to play it.

2. Two countries have been, well, almost conquered and foreign investments have poured in to get a piece of the action that wasn't available before.

3. Healthcare organizations have geared up with the building of more places to be at the right place to capitalize on the Obamacare when it goes into swing.

4. A hell of a lot of real estate has been stolen and is being sold for extremely good prices.

5. Unions have been scapegoated and in some cases totally demonized and crushed.

6. People are as scared and divided as ever--great opportunities to gain wealth.

7. Smaller competitors are slowly closing shop creating more dependency on the large chain stores.

8. People are scared and divided--Yes I already mentioned it and I'm mentioning again because it creates a clinging dependency.

9. A lot of opportunities and profits have been made from this and they are doing it right in front of you because we just sit back and do nothing. We are scared, we are dependent, we are trapped in the box created by our minds.

Open that box

If you think this is ridiculous, because who would do this to people especially those victims of 9/11, I would say those deaths are just a drop in the bucket compared to the tally since then.

When a person has an addiction, a bad addiction to something like money and power, historically, life is very cheap, especially when it is no one they know or would care to know.

Thoughts from the Jon

https://www.facebook.com/WakeUpNewss

How the Fiscal Cliff Would Raise Your Taxes

By David Rohde | The Atlantic – Fri, Nov 30, 2012 7:57 AM EST

The White House estimates that the average American family will pay $2,200 more in taxes next year if an agreement is not reached. In fact, the final tally could be even higher.

Reuters

With rising Democratic opposition to cuts in social spending and Republican leaders reiterating their opposition to raising taxes on the wealthy, talks on avoiding the fiscal cliff were at a standstillThursday.

Officials on both sides of the debate say the political jockeying is likely to continue this week. But they warn that the details of a compromise must emerge next week if an agreement is to be reached in time.

Erskine Bowles, the co-chair of the bipartisan Simpson-Bowles deficit reduction task force, said on Wednesday that he was skeptical that a deal would be reached. Bowles put the chances of an agreement before the end of the year at roughly one in three.

"I believe the problem is that we are going over the fiscal cliff," Bowles told The New York Times, "and I think that will be horrible."

Bowles is right. While potential tax increases on the rich have dominated the political debate, a raft of taxes on the middle class will increase if an agreement is not reached. The scope will vary, depending on a person's income. White House officials estimate that the average American family will pay $2,200 more in taxes next year if an agreement is not reached. But, if an agreement is not reached at all, even after the January 1 deadline, the increase could be higher, particularly for households that make over $100,000 a year. Here's why:

Alternative Minimum Tax: An obscure tax created in the 1960s to ensure that the super-wealthy paid a minimum amount of tax, inflation and other factors have resulted in the AMT now applying to the four to five million Americans who make $200,000 to $1 million, according to theWashington Post. In recent years, Congress has enacted a "patch" that prevents the AMT from applying to Americans who make less. Unless an agreement is reached, no "patch" will be enacted, and another 31 million Americans will have to pay the tax.

The non-partisan Tax Policy Center estimates that over half of all married couples will owe an additional $4,000, the Post reported. And a third of families with children will have to pay the AMT as well, with parents of three or more children facing an extra tax of up to $4,700.

The center estimates that 84 percent of married couples that make a total of $75,000 to $100,000 and have at least two children will pay a significantly higher tax bill this year because of the AMT.

The impact would be much higher in some areas, with the number of AMT-paying taxpayers in New Jersey rising to 50.3 percent, the highest rate in the country, according to the Post. And the percentage of taxpayer paying the AMT in California, New York and Connecticut would rise to over 30 percent.

Given the breadth of the potential AMT increases, experts predict that Congress will enact a "patch" even if a broader agreement is not reached. For middle class families, let's hope they are right.

Payroll tax: A payroll tax holiday that was enacted in 2010 is set to expire, according to the Fiscal Times. The tax holiday cut employee Social Security contributions by two percent for households that make less than $110,00 a year. The end of the measure could mean that the average American family pays another $1,000 in taxes per year.

Deductions: Increases in deductions that were part of the Bush tax cuts will expire. Marginal tax rates will change as well, as described in this Washington Post piece. Exactly how this will play out for families depends on multiple factors. One calculator that could help you estimate the impact on your family is here.

I believe a short-term deal will likely be made to not increase middle class taxes. Allowing that to happen would be political suicide for both parties. But I think the chances of a long-term deficit-reduction deal are low. The failure of both parties to seize this post-election moment, show political courage, and compromise is tragic. This missed opportunity will haunt us and our economy for years.

If our elected leaders can't agree with this type of a political and economic gun to their head, I doubt there will be an agreement any closer to the 2014 midterm elections. Even if a short-term deal prevents middle class taxes from rising, our fiscal dysfunction is likely to continue.

This post also appears at Reuters.com, an Atlantic partner site.