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Pat McCrory 5Well, it’s a start.

As reported byUnder the Dome Gov. McCrory told MSNBC that he was worried about federal sequestration and that many Republicans come across as too “negative” and “strident.”  These comments — particularly the first one — contrast sharply with yesterday’s statement from Senate President Pro Tem Phil Berger’s office that efforts by advocates to call attention to the threat of sequestration were “a publicity stunt.”

Unfortunately, McCrory also used the interview to defend his decidedly negative and strident position on unemployment insurance — which he helped shred by signing disastrous legislation earlier this week — and his plan to block Medicaid expansion (an idea that’s now being embraced by more and more Republican governors around the country).  

 

 

The looming federal sequestration cuts have been all over the news recently, as the clock ticks down to the March 1 deadline imposed by the fiscal cliff deal.  While most media accounts have focused on the negative consequences these across-the-board spending cuts will have on defense programs and military communities, the cuts to federal non-defense domestic programs will also have profoundly damaging—if often underreported—impacts on the North Carolina state budget. In light of these impacts, Congress needs to repeal sequestration and replace these indiscriminant, automatic spending cuts with a balanced approach that includes at least one dollar in new revenues for every dollar of smart spending reductions and that protects the state budget.

Enacted in the Budget Control Act of 2011, these sequestration spending cuts were intended to automatically reduce funding for national defense and domestic programs like K-12 education, job training, Head Start, food inspects, and research and development by $1.2 trillion over the next decade if Congress could not find another way to reduce the federal budget deficit before December 31, 2013. Congress postponed that New Year’s deadline to March 1, and if Congress does not resolve this issue in time, North Carolina will experience $85.3 billion in sequestration cuts in 2013 alone.

According to a wide range of analysis conducted over the past two years, sequestration is expected to inflict significant damage on North Carolina’s economy and state budget. On the defense side, the cuts to Pentagon spending are estimated to cost North Carolina at least $1.5 billion in defense contracts and as much as 12,000 in job losses.  At the same time, the non-defense cuts are also expected to harm the state’s economy by reducing North Carolina’s Gross State Product by as much as $2 billion and contributing to more than 17,000 in job losses.

In a new twist on an old problem, the economic impact of these federal cuts would be magnified by the negative fiscal impacts on the state budget.  Specifically, the non-defense cuts will reduce the state’s Department of Health and Human Services budget by $35 million and education spending by $84 million—reductions that come on top of the steep cuts to state funding already enacted by the General Assembly in state FY 2011-13.

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Phil BergerNorth Carolina Senate President Pro Tem Phil Berger was once a semi-reasonable guy. Conservative? Certainly. But during the first several years of his tenure in Raleigh, Berger mostly came across in a way you might expect from a middle-aged, small town, Republican lawyer: Traditional and pro-business, but pleasant, intelligent and friendly enough. Though progressives seldom found themselves agreeing with Berger, he was someone who with whom a person could have a discussion (and maybe even find some common ground).

Something happened in recent years, however, to the old Phil Berger. Especially since he became Senate leader and developed ambitions for higher office (either for himself or his kid), the old, semi-friendly small town lawyer has been replaced by a meaner, edgier, much more reactionary Phil Berger. Sometimes you almost feel as if you’re watching someone trying to play a role. His policies and policy statements are uniformly reactionary and harsh while those of his staff members are frequently even more extreme.

For a case in point, check out this story in today’s Fayetteville Observer. Read More

It turns out government spending is the problem with the economy—there’s been too little of it over the last few months, according to Wednesday’s report from the U.S. Bureau of Economic Analysis (BEA).  

Gross domestic product (GDP) dropped by 0.1 percent during the 4th quarter of 2012, the first GDP contraction in three years. While this would ordinarily seem an ominous sign for the health of the nation’s economic recovery, most economists and market-watchers have argued that the contraction is temporary and likely the result of government policy, rather than signs of a long-term downturn.   

Specifically, the fourth quarter contraction is due to sharp reductions in government spending on national defense contracts coupled with a $40 billion drop in business inventories resulting from the same policy environment.

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