The Sequester Two-Step
March 08, 2013
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I'm happy to see that Washington took my advice. As I recommended in my post two weeks ago, our elected officials let our country fall over the financial cliff on March 1, and we are now fully under the budget-reducing powers of the sequester. Well, guess what? At least for now, the world hasn't come to an end, and the U.S. Treasury is $85 billion less in debt. It's a good start, but there's a lot more to do.
Now, as with everything, there is good and bad to sequestration. The good is that we have started cutting back on deficit spending. The bad is that spending cuts are across the board and arbitrary. We're cutting things we shouldn't be cutting and not cutting enough where we should. The President and Congress are going to spend the next couple of weeks posturing and grandstanding about whose fault it is and how to keep the political fall-out from snowballing, while the solutions are plain and simple. So I'm going to do what I feel is my civic obligation and lay out the road map for them. It's really not that difficult.
- Any tax loopholes that get closed and raise revenue need to be accompanied by corresponding reductions in overall tax rates, making them revenue-neutral. Having the highest earning taxpayers in places like New York City and California pay in excess of 50% of their incomes in taxes is just not right or equitable. It needs to stop.
- Each department in the federal government needs to go line-by- line through its own budget and deliver spending cuts equivalent to what sequestration is doing arbitrarily. Let's let strategy and common sense prevail.
According to a published report I read last week, "The Justice Department in 2007 leased two Gulfstream V jets for the FBI to use for counter-terrorism operations, but the Government Accountability Office found 60% of the flying hours were for 'non-mission' flights." The article went on to say that Attorney General Eric Holder and his predecessor, Michael Mukasey, used the jets for business and personal trips 88 times. Now for those of you who aren't an expert on Gulfstreams, a G-V, as it's called, is a $50 million aircraft that can seat 16 people and fly from New York to Tokyo non-stop. Why in the world does the U.S. Attorney General need to fly in such a plane on presumably domestic business? Wouldn't a used $7 million Hawker 800 do? Or what about a fractional share from Warren Buffet's NetJets company?
Another published article on the same day stated that Vice President Joe Biden had given up flying home to Delaware on weekends aboard "Air Force Two, the luxury military jet that costs $180,000 per hour to ferry Biden around." $180,000 per hour! Who in their right mind thinks there's anything OK about spending taxpayer money like this when we're posting record annual deficits? It reminds me of when the near-bankrupt domestic auto CEOs all traveled to Washington to beg for bailout money in company-owned private jets. Biden is now traveling between Washington and Delaware on Amtrak for an outlay I'm sure is much less than $180,000.
The amount of un-checked discretionary spending in Washington must be mind-boggling.
People are surprised to learn that I personally sign every non-payroll check over $1,000 at Marcum. I've always believed that signed checks are our last defense over wasteful spending. Perhaps it's time that President Obama (or maybe a high-ranking Republican who really wants to take a position on wasteful spending) takes responsibility for personally signing every U.S. Treasury check over, say, $100,000. The buck might really stop there.
The opinions expressed in this column are solely those of Jeffrey M. Weiner and do not represent those of Marcum LLP, its partners or its employees.
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