Where is the $ coming from?

[AtomHeartMother]

Record-High Defense Bill Goes to Senate

Friday May 21, 2004 8:01 AM


By JIM ABRAMS

Associated Press Writer

WASHINGTON (AP) - A record-high wartime defense bill awaits Senate approval after passing the House in a strong bipartisan vote.

Putting aside for a moment differences over the war in Iraq, the House on Thursday voted 391-34 for a $422 billion bill to authorize military programs in the new budget year that begins in October. The spending level was up nearly $21 billion over the amount approved for this year.

The House also agreed to a White House request to add $25 billion as a downpayment for the costs of military operations in Iraq and Afghanistan during the next budget year.

``No one can question the need to fund our troops to keep them strong and victorious,'' said Republican Majority Leader Tom DeLay, R-Texas.

The Senate was debating a similar bill, but then put off a final vote until after it returns from the Memorial Day recess next week.

There was near unanimity in the House on the need to focus on programs aimed at keeping troops in hostile areas safer and doing more to make their families back home financially secure.

The House bill, generally mirrored by the Senate version, includes an across-the-board 3.5 percent pay raise for military personnel and raises the hazardous pay for troops facing hostile fire from $150 to $225 a month. It also increases separation pay for those stationed overseas and improves health care programs for reservists.

To answer complaints that U.S. troops are not adequately protected from insurgent strikes, more than $1 billion is included in the bill for better armored Humvees and add-on ballistic protection for vehicles in Iraq and Afghanistan.

A dispute over base closings was the one major trouble spot. The House bill courts a presidential veto by delaying for two years the next round of military base closures, set to take place next year. An amendment to reverse the delay was defeated, 259-162.

The administration contends the Pentagon could save billions by closing unneeded facilities. It says there still is more than 20 percent excess capacity in military facilities nationwide.

There have been four previous rounds of base closings from 1988 and 1995, in each case over the objections of lawmakers concerned about the economic repercussions to their districts.

Under the ``base realignment and closure,'' or BRAC, authority, the Pentagon draws up a list of excess capacity facilities and an independent commission picks which bases to close. Congress can accept or reject, but cannot change, that decision.

There's still a long way to go before President Bush has to decide whether to veto a record-breaking defense bill during wartime. The Senate, also considering its version of the authorization bill, earlier this week voted 49-47 against an amendment to delay the closings, and the House provision could be removed when the two chambers negotiate a compromise version.

The White House issued another veto threat over language in the House bill that would restrict Pentagon flexibility on ``competitive sourcing,'' or contracting some Pentagon jobs out to private companies.

The bill also requires that the Army add 30,000 troops over the next three years and the Marines 9,000.

On Thursday the House voted 214-204 against an amendment proposed by Rep. Ellen Tauscher, D-Calif., and others that would have eliminated some $36.5 million in the bill for the Energy Department to study a tactical nuclear weapon known as the ``bunker buster.''

Tauscher argued that even the small nuclear weapon could cause massive collateral damage and ``undermine decades of United States leadership'' in stopping nuclear proliferation. Her proposal would have shifted the money to improving intelligence on deeply buried targets and improving conventional bunker-busting capabilities.

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The House bill is H.R. 4200

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On the Net:

Congress: thomas.loc.gov/

www.guardian.co.uk/uslatest/story/0,1282,-4115119,00.html

[AtomHeartMother]

Last Updated: 11:39 pm, Wednesday, April 21st, 2004

War costs $4.7 billion per month
By LOS ANGELES TIMES

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WASHINGTON — With bills piling up from the deepening war in Iraq, pressure is mounting on war planners in Washington to come up with additional money to fund the conflict.
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Republicans in Congress complained Wednesday that the Bush administration’s plans to put off a request for more money until early next year is unrealistic. And the nation’s top military official, Joint Chiefs of Staff Chairman Gen. Richard Myers, said the growing violence is pushing the cost of the war far over budget, threatening a $4 billion shortfall by late summer.
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The war is costing about $4.7 billion a month, officials said.
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Defense officials are studying their budget, which runs through Sept. 30, to determine whether some money can be moved from purchase programs or other Pentagon accounts, Myers told the House Armed Services Committee.

Myers said the recent decision to extend the tours in Iraq of about 20,000 troops will cost the Pentagon about $700 million more over the next three months
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The complaints among Republicans that the administration has failed to own up to the soaring costs of the war reflect growing political strains over the war and the looming elections. If the administration is indeed forced to ask for more money, Republicans would prefer to see that happen while the election is months away.
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In surprisingly sharp terms, members of the House Armed Services Committee criticized the Bush administration’s plan to wait to seek additional money until after the election.
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Visibly angry, U.S. Rep. Curt Weldon, R-Pa., said the Army had told his subcommittee that it had nearly $6 billion in unfunded budget requests.
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“I think the budget request that is provided to us is short-sighted and, in the case of the Army, I think it is outrageous,” Weldon said. “How can we justify that?”
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Armed Services Chairman Duncan Hunter, R-Calif., told reporters after the hearing that he believed the administration should seek additional funding for Iraq before the current fiscal year ended in September. He said he was inclined to include an authorization for $20 billion in his committee’s Pentagon authorization bill whether the administration requested it or not.
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Hunter said it was clear that the $87 billion appropriated last year was being spent faster than expected. Without more money, the Pentagon will risk being forced to gut other programs to cover Iraq costs.
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“It is clear that money is going to be very tight in the last month or two of the fiscal year. We don’t want to have a period of shortage,” Hunter said. “The prudent thing to do is to move early with that money rather than later.”
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Privately, lawmakers said the Pentagon had told Congress it needed more money fast. And, said one lawmaker, “The Pentagon will get it.”
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House Appropriations Committee Chairman C.W. “Bill” Young, R-Fla., whose committee would have to handle a request for more funds, signaled that no decision had been made on when to appropriate the funds. “At all of our hearings on the subject, the administration told us there is adequate money through the end of the fiscal year,” Young said. But in light of changing circumstances, Young said, “a certain amount of flexibility is always in order. You’re still dealing with a lot of unknowns.”
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Young said he would not consider additional funding until House-Senate negotiators reached some agreement on the fiscal 2005 budget.
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U.S. Sen. Chuck Hagel, R-Neb., said he sensed election-year politics was a factor in the administration’s delay. “The administration would be well served here to come forward now, be honest about this, because the continuity and the confidence in this policy is going to be required to sustain it,” Hagel said. “And that means be honest with the Congress, be honest with the American people.”
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Hagel said it would cost another $50 billion to $75 billion “to sustain us in Iraq for this year.”
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Other Republicans said Congress would be unlikely to provide additional money unless the administration requested it.
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As a political matter, the administration set the last supplemental spending bill at a higher level than some wanted — the $87 billion passed last year — with the idea it would last until after the 2004 election.
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“I’d be surprised” if the leadership would push for a vote on more money before the election, said U.S. Rep. Rob Portman, R-Ohio, a member of the GOP leadership.
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But the administration’s decision was taken before the recent surge of attacks by Iraqi insurgents forced military commanders to ramp up the intensity of counterattacks.
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President Bush, acknowledging the growing controversy over the deterioration in Iraq in recent weeks, said Wednesday he realized the military situation had been “really rough.”
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“Roughest on the families of those who lost their lives and those who wonder about the security and safety of their loved ones,” Bush said.
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White House spokesman Scott McClellan told reporters that the administration was keeping the door open to the possibility of a supplemental request before the election.
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“The decisions should be based on what the commanders in the field feel is necessary,” he said. “It really depends on circumstances on the ground.”
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Spratt said military commanders in Iraq had been telling lawmakers that “they could run short of funds late this summer.”
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If additional money is not provided, he said, Iraq operations will have to be financed by deferring maintenance in other areas or shifting money from nondeployed troops to deployed troops.
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U.S. Sen. Jack Reed, D-R.I., said the Pentagon had proposed shifting $619 million from the defense-operations budget to pay for urgent war needs.
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Army officials confirmed that the service had told lawmakers that it had identified $6 billion in unmet funding needs that were not addressed in the administration’s $402 billion defense budget request for 2005.
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The list of unmet needs includes $21.5 million for M-249 squad automatic weapons, $879 million for combat helmets, boots, underwear and other clothing, $956 million for repairing worn equipment, $101 million for replacing equipment lost in combat, and $132 million for adding heavy armor to vehicles.
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“These aren’t pork-barrel projects,” Weldon said at the hearing, waving a list of the Army’s needs in the air and urging the administration not to wait until after the elections to submit the supplemental request. “This is the unfunded priority list of the Army.”

[AtomHeartMother]

Snip from:

Woodward Shares War Secrets

April 18, 2004

“Gets to a point where in July, the end of July 2002, they need $700 million, a large amount of money for all these tasks. And the president approves it. But Congress doesn't know and it is done. They get the money from a supplemental appropriation for the Afghan War, which Congress has approved. …Some people are gonna look at a document called the Constitution which says that no money will be drawn from the Treasury unless appropriated by Congress. Congress was totally in the dark on this."

www.cbsnews.com/stories/2004/04/15/60minutes/main612067.shtml

[AtomHeartMother]

Posted on Sun, Apr. 11, 2004
U.S. government debt jumping by trillions

Dallas Morning News

BY DANIELLE DIMARTINO

Late last year, Moody's Investors Service did something astonishing. The ratings agency said it could foresee circumstances that would force it to downgrade the sovereign debt of the U.S. government.

Blasphemy, many said at the time. Pure nonsense.

But the fact is, the national debt of the United States swelled to an all-time high of more than $4 trillion at the end of 2003, and the rebirth of the deficit means that debt is set to grow more.

This year, the federal deficit is expected to add $520 billion to the country's debt load. Looking into the future, in particular at the pending retirement of the baby boomers, some estimates put the country's obligations in the stratosphere.

Laurence Kotlikoff, an economist and research associate with the National Bureau of Economic Research, asked this question: If the United States collected all of the future revenue it anticipates receiving and matched that to its future obligations, would it be able to meet them? The answer was "no," to the tune of $45 trillion.

"It is the most dramatic way of expressing how far out of balance the budget is," said Ed McKelvey, senior economist at Goldman Sachs Group in New York.

The election, the war with Iraq and recent legislation have dragged national debt back onto center stage. Take the passage of the 2003 tax cut and the new prescription drug benefit package. Added together, they easily tacked on several trillion dollars to the deficit outlook over the next decade.

"The problem is that fiscal policy right now is not preparing the country for the decade of the teens and thereafter," said Steven Hess, lead U.S. analyst at Moody's in New York. "To prepare for these astronomical outlays, it would be desirable that government had a balanced budget. In fact, they're moving in the opposite direction."

Hess, whose job is to rate U.S. debt, said the country is in no imminent danger of a fiscal crisis or a ratings downgrade, for that matter. At 40 percent of gross domestic product, debt is not too much worse than that of other countries with the same pristine AAA rating. But if nothing is done, he said, the country could be imperiled.

"We still believe that because there is time, people in Washington will realize that something has to happen," Hess said.

That "something," Hess said, could be lowering entitlements such as Social Security and Medicare benefits -- something Federal Reserve chairman Alan Greenspan brought up recently. The other option, also politically charged, is to raise taxes.

"If they don't do one or the other by the end of this decade, we'd have to consider lowering the country's rating," Hess concluded.

Today's deficits do not, in and of themselves, impinge upon the future fiscal health of the country, experts say. It's the baby boomers who pose the main risk.

"We have a major demographic issue to deal with in the next 20 years," said Michael Bazdarich, a senior economist at the UCLA Anderson Forecast. "I don't think it's anything to be complacent about."

Something north of 77 million Americans will be eligible to retire in a few short years.

"God knows what this prescription drug benefit will cost us 20 years down the line," Bazdarich added.

Goldman projects that debt as a percentage of GDP will grow to about 52 percent in the next 10 years -- to $10 trillion from today's $4 trillion. Think of that, McKelvey said, as the country gathering revenue through midyear just to satisfy its debt obligations.

And that's with interest rates at rock-bottom levels. Presumably, Treasury auctions will not cease in the event that interest rates rise -- that is, unless the country can learn to stop living beyond its means overnight. So brisker economic activity, which is usually accompanied by higher rates, will translate into a higher debt service burden for the government.

Part of the problem, as McKelvey sees it, are four federal objectives that, in the current climate, appear to be immutable. They are to maintain defense spending at current levels, increase nondefense discretionary spending at a low rate, maintain the current tax cuts and maintain entitlements.

"These four things are current, if not formally stated, objectives," McKelvey said. "And they're inconsistent with reducing the deficit."

For now, the United States is on solid footing. As long as the economy grows as expected and Congress acts to reduce the size of future debt, experts say, the country will remain in good financial health.

"We have huge problems over the long term, and we will have to face them some day," Moody's Hess said. "If not, the United States will find itself in an unsustainable fiscal problem."

www.kansas.com/mld/eagle/business/8403594.htm

[AtomHeartMother]

Nearly Half of Every Tax Dollar Goes to Military, National Debt

NORTHAMPTON, MA - April 8 - As April 15 approaches and people prepare to pay their 2003 income taxes, they should know that nearly half of every dollar they owe will be used to support military spending and interest on the national debt. Military spending in 2003 required 29 cents of every income tax dollar, with the debt taking another 20 cents, according to the National Priorities Project.

By comparison, education and veterans benefits receive only four cents of every income tax dollar, slightly ahead of nutrition (three cents), housing (two cents) and natural resources (two cents). Less than a penny of each dollar will fund job training programs. The only budget category besides military spending and the debt to receive more than five percent of the income tax dollar is healthcare (20 cents).

The average household paid $6,548 in federal income taxes in 2003. Of this, $1,928 went to military and defense, $1,295 to pay interest on the debt, and $1,287 for healthcare. Only $249 from the average household funded education, $233 for veterans’ benefits, $176 for nutrition, $147 for housing and $117 for natural resources.

Citizens can get a breakdown of how their individual tax payments are spent by visiting the Internet website of the National Priorities Project (NPP) at www.nationalpriorities.org. Visitors to the website can also find the impact of federal tax policy in all 50 states and 190 cities nationwide.

“As the national debt continues to rise, more and more of our taxes will have to go toward paying interest, leaving even less money for such critical needs as the environment and education,” says Greg Speeter, NPP’s executive director.

Speeter adds that nearly half of the payments on the national debt, or nine cents, goes toward interest on past military expenditures, meaning that taxpayers’ total contribution to military and defense is close to 40 cents of every dollar. “The United States spends almost as much on military and defense as the rest of the world combined. When you add the cost of the war in Iraq, there is little money left for such critical needs as natural resources and the environment—less than two cents of every tax dollar.”<br>
The non-partisan National Priorities Project shows how national tax and spending policies impact local communities and states across a broad range of issues. NPP, a non-profit organization, aims to help people respond to federal decisions that affect their daily lives.

www.commondreams.org/news2004/0409-03.htm