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MORNING MESSAGE: Will Pete Peterson’s Half Billion Buy a New Recession?

OurFuture.org's Robert Borosage: "The sequester cuts added to spending cuts and tax increases already scheduled will slow growth and cost jobs ... Why would the U.S. repeat this folly, despite warnings from the International Monetary Fund and Federal Reserve officials? ... One major contribution comes from the money and monomania of Pete Peterson, a Wall Street billionaire who has committed about half a billion bucks rousing hysteria about deficits and debt. Today, The Nation magazine and the Center for Media and Democracy are releasing an expose of Peterson and his latest front, the Fix the Debt coalition, with a new resource detailing the background at the center’s SourceWatch.org."

Sequester Would Hurt Everyday Life

Daily Beast compiles 8 ways the sequester will impact everyday life: "More than two thousand fewer types of food inspections could occur as a result of sequester cuts, putting eaters of all kinds at risk of exposure to food-borne illnesses ... loan guarantees provided by the Small Business Administration will be cut by up to $902 million. This will place a huge financial burden on small business owners who rely on those loan guarantees to create jobs and keep their operations afloat ... You might want to put your vacation plans on hold, as $110 million of the looming cuts would impact national parks across the country..."

Sequester means less oil drilling. McClatchy: "...some 300 fewer oil and gas leases would be issued in Western states, while Gulf of Mexico exploration plans would be put at risk and oil permitting would be slowed in Alaska, [Interior Sec Ken] Salazar said."

Military leaders warn sequester will "undermine readiness" reports W. Post: "Gen. Ray Odierno, the Army’s chief of staff, recently warned that the cuts may curtail training for 80 percent of ground forces, including some in the deployment pipeline, forcing him to extend the deployments of troops already in Afghanistan ... Facing a $8.6 billion shortfall, the Navy has delayed the deployment of the USS Harry Truman, leaving just one aircraft carrier instead of two in the Persian Gulf, where tensions continue with Iran ... two-thirds of [Air Force] pilots would 'drop below acceptable level of readiness,' Air Force chief Mark Welsh told lawmakers recently."

Size of government already smaller. AP: "Spending by federal, state and local governments on payrolls, equipment, buildings, teachers, emergency workers, defense programs and other core governmental functions has been shrinking steadily since the deep 2007-2009 recession ... The recent downsizing in government is most pronounced at the state and local levels..."

NYT edit board reminds we have a revenue problem, not a spending problem: "Contrary to Mr. Boehner’s 'spending problem' claim, much of the deficit in the next 10 years can be chalked up to chronic revenue shortfalls from the Bush-era tax cuts, which were only partly undone in the fiscal-cliff deal earlier this year ... Even with recent increases, the new top rate of 39.6 percent is historically low; investment income is still taxed at special low rates; and the heirs of multimillion-dollar estates face lower taxes than at almost any time in modern memory."

NYT's Paul Krugman says just repeal the sequester: "Just about two years ago, Erskine Bowles and Alan Simpson, the co-chairmen of the late unlamented debt commission, warned us to expect a terrible fiscal crisis within, um, two years unless we adopted their plan. The crisis hasn’t materialized ... The right policy would be to forget about the whole thing. America doesn’t face a deficit crisis, nor will it face such a crisis anytime soon."

Americans agree. Bloomberg: "Fifty-four percent of poll respondents favor postponing $1.2 trillion in automatic spending cuts during the next nine years beginning on March 1, compared with 40 percent who say Congress should act now before the deficit gets out of control..."

WH feels it has the upper hand. NYT: "...Mr. Obama believes he is acting from a greater position of strength, advisers say, pointing to several recent polls that show he holds an upper hand in the budget debate ... the sense of urgency from earlier budget fights, which included all-night meetings and dueling news conferences at the White House and on Capitol Hill, have given way to more of a business-as-usual feeling in the West Wing. The budget debate is taking place alongside immigration and gun control discussions, rather than overtaking them."

Business, Labor Announce Partial Immigration Agreement

Business and labor forge agreement on immigration principles. McClatchy: "The agreement between the U.S. Chamber of Commerce and the AFL-CIO establishes a set of principles for low-skilled worker visas. The guidelines include creating a visa program that would allow some temporary workers the chance to become permanent residents, establishing a federal bureau that would oversee the program and giving American workers more information – a 'first crack' – on available jobs."

But key matters not resolved. WSJ: "One of the most contentious issues has been how to set the number of workers that may be admitted in the future, with business wanting liberal rules and labor wanting limits. Labor was pushing for a commission to set the figure, something the chamber argued wouldn't be effective. The parties did agree that a bureau should be established inside a federal agency to inform Congress, but they didn't say whether it should have power to set immigration quotas ... Other unresolved questions include how employers will prove they tried to recruit Americans before hiring from abroad, whether immigrant workers will be required to leave after a set period, and whether they become eligible to become American citizens."

Breakfast Sides

Republican governors warm to ObamaCare's Medicaid expansion. NYT: "In Florida, where Gov. Rick Scott reversed his position and on Wednesday announced his support for expanding Medicaid, proponents say that doing so will not only save lives, but also create jobs and stimulate the economy. Similar arguments have swayed the Republican governors of Arizona, Michigan, Nevada, New Mexico, North Dakota and Ohio, who in recent months have announced their intention to expand Medicaid."

Homeowners still need help after mortgage settlement. NYT: "...the banks are taking credit for giving more than half a million struggling homeowners roughly $45.8 billion in relief ... [But just] under 71,000 borrowers, or 13 percent of the total borrowers helped so far, received assistance on their primary mortgage ... Even though addressing second mortgages does offer some relief to homeowners, in a troubling number of instances the banks are not providing any help with the first mortgage..."

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