Monday, July 16, 2012

BREAKING Economic News Affecting Arizona, US Senate Race

You should be aware of these couple stories breaking on the economic front, which highlights the lengths to which candidate Richard Carmona and the Democrats will go to raise taxes on small businesses even in the face of news saying the economy is slowing.

Within the last hour the Associated Press reported that the U.S. economy appears weaker as retail sales have fallen.

ASSOCIATED PRESS: "The report led some economists to downgrade their estimates for economic growth in the April-June quarter. Many now think the economy grew even less than in the first quarter of the year, when it expanded at a sluggish 1.9 percent annual rate. ... ‘However hard you look, there's just no good news in this report at all,’ said Paul Ashworth, chief U.S. economist at Capital Economics.” (Martin Crutsinger, US economy appears weaker as retail sales slump, Associated Press, 7/16/12)

What makes this interesting is that on the very same morning news breaks that our economy continues to struggle, national Democrats led the day with this front page story in the Washington Post:

WASHINGTON POST: Murray’s address, set to be delivered at the Brookings Institution, is meant to influence both the Nov. 6 election and the lame-duck legislative session in November and December, when the fiscal cliff will be at hand and the fight over taxes will be in full throttle. Regardless of the election’s outcome, President Obama and the current Congress will be in office for the session. The speech comes less than a week after Obama assured Hill Democrats during a White House meeting that he would veto any attempt to maintain the Bush tax cuts on income over $250,000 a year, according to several people present. It also echoes the dismissive response by Senate Majority Leader Harry M. Reid (D-Nev.) to Republicans seeking to undo scheduled reductions in Pentagon spending that even Defense Secretary Leon E. Panetta has said would be"devastating” to national security. (Lori Montgomery, Democrats threaten to go over ‘fiscal cliff’ if GOP fails to raise taxes, Washington Post, 7/16/12)

This comes on the heels of a letter that Republican leaders sent to the White House on Friday asking the President to put forward a plan to avoid defense cuts that even his own Secretary of Defense has called"devastating.”

The bottom line is this: even in the face of more daunting economic news, Richard Carmona and his fellow Democrats would rather hold military families, veterans’ health care, and millions of jobs hostage because of their addiction to higher taxes.

Background on who gets hit with the Democrats’ proposed tax hikes:

Hundreds of thousands of small businesses would feel this tax hike right away.

According to the Joint Committee on Taxation, nearly 940,000 flow-through businesses would be subject to the President’s proposed tax rate hikes that would take effect on January 1, 2013
As much as a quarter of our nation’s workforce depends on these employers for a paycheck.

According to the National Federal of Independent Businesses, up to 25 percent of the workforce is employed by businesses that will be affected by the President’s proposed tax hikes.

Half of all flow-through business income would be hit by Obama’s proposed tax hike.

According to the Joint Committee on Taxation, 53 percent of all flow-through business income is subject to the President’s proposed tax hikes.

This is especially harmful to small business, because virtually all small businesses are organized as flow-through entities such as S corporations, partnerships, and LLCs. (see IRS Statistics of Income Integrated Business Data)

Under Democrats, The Defense Budget Faces Over $1 Trillion In Cuts Obama’s FY 2013 Budget Cuts Defense Spending By $487 Billion Over The Next Ten Years.“An array of military programs, from fighter jets to retiree benefits, would be nicked to squeeze savings in the Pentagon's $525 billion budget for 2013, according to officials and documents released Monday. The proposed 2013 budget represents the Pentagon's first installment in a plan to reduce its projected spending by $487 billion over 10 years. Congress must approve the changes.” (Tom Vanden Brook"Pentagon Budget Calls For Cuts To Jets, Benefits,” USA Today, 2/13/12)

Sequestration Would Slash An Additional $500 Billion From The Defense Budget.“The cuts, roughly $500 billion to both defense and non-defense spending, were set in motion after the supercommittee failed to find more than $1 trillion in deficit reduction last year. The Obama administration has said it’s not yet planning for the cuts, instead arguing they were never intended to be implemented and urging Congress to find a fix.”(Jeremy Herb,"Pentagon’s No. 2 Joining Budget Director At Sequester Hearing,” The Hill's "DEFCON Hill" Blog, 7/11/12)

Total Defense Cuts Would Put Up To 1.5 Million Jobs At Risk."‘Sequestration ($1 trillion in cuts) assumes across the board spending cuts with losses peaking in the 2013-2014 time period, with 1 million to 1.5 million jobs lost and that could increase the U.S. unemployment rate by nearly 1 percentage point in the near term,’ said Lt. Col. Elizabeth Robbins, a spokeswoman of the Department of Defense.” (Sean Gorman,"Rep. Randy Forbes Says 1.53 Million Defense Jobs Are ‘At Risk,’” Politifact, 10/12/11)

The Pentagon Estimated That Sequestration"Could Add 1 Percent To The Nation’s Unemployment Rate.” "Nearly $1 trillion in defense cuts that the 2011 Budget Control Act could require would devastate the military and the defense industrial base, and could add 1 percent to the nation’s unemployment rate, the Pentagon press secretary said today.” (Cheryl Pellerin,"Additional Budget Cuts Would Devastate Military, Spokesman Says,” American forces Press Service, 9/15/11)

Pentagon Press Secretary George Little:"We’re Not Talking About Just Military Jobs, We’re Also Talking About Jobs In The Private Sector That Support The Innovation And Creativity And Capabilities That We Need To Keep America Strong.”"At the Pentagon, internal analysis shows that sequestration also would have a profound impact on the U.S. industrial base, he added, by threatening many of the 3.8 million military and civilian jobs that the sector represents. ‘We’re not talking about just military jobs, we’re also talking about jobs in the private sector that support the innovation and creativity and capabilities that we need to keep America strong,’ he said. Moving to sequestration and the additional budget cuts it would require, department officials believe ‘would potentially add 1 percent to the national unemployment rate,’ Little said.” (Cheryl Pellerin,"Additional Budget Cuts Would Devastate Military, Spokesman Says,” American forces Press Service, 9/15/11)

Secretary Panetta:"That Kind Of Sequestration Cut Across The Board Would Have A Serious Impact Not Only On Men And Women In Uniform, But On Our Personnel And The Contractors Who Serve The Defense Establishment.” SENATOR DANIEL INOUYE:"This sequestration, coupled with projected discretionary defense spendings, could add 1 percent to the national unemployment rate from job losses in government, military and private sector jobs within the defense industrial base. Does that description make sense?” SECRETARY PANETTA:"Mr. Chairman, I think that that is the estimate that we’ve seen in terms of the impact that would have. Now again, I just – I stress, look, Defense Department is not a jobs program. It’s a program to defend the nation. But clearly it would – that kind of sequestration cut across the board would have a serious impact not only on men and women in uniform, but on our personnel and the contractors who serve the defense establishment.” (Subcommittee On Defense, Committee On Appropriations, U.S. Senate, Hearing, 6/13/12)

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