The Leader's Ledger

Posted by Jessica Straus on

Good Morning,

According to a new study, if the sequester is left in place – as leading Democrats are advocating – it will eliminate a reported 2 million jobs from the economy. Rather than offering their own solution to replace the sequester, or joining House Republicans to negotiate a bipartisan solution to stop these devastating defense cuts, Democrats are stubbornly showing ‘no signs of buckling.’ Ignoring the reality of the sequester, on top of the demands by the President and his party to hike taxes, will result in fewer jobs, higher taxes on small businesses and working families, and compromise the ability of the United States to defend itself at home and abroad. This sort of so-called leadership is unacceptable. With the economy on life support, and fewer jobs created each month, House Republicans remain focused on taking real steps to help our country get back on track. This week, the House will vote on the bipartisan Sequestration Transparency Act and we urge the President and his party to stop playing chicken with our nation’s defense and job creation in this country.

This Day In History: In 1955, Disneyland opened in Anaheim, California, at a cost of $17 million. Special invites had been sent out for opening day, but when counterfeit passes were made, thousands of uninvited guests entered the theme park, causing it to run out of food. The Mark Twain Steamboat came close to capsizing due to too many passengers, women’s shoes became stuck in the newly-poured concrete, the park suffered a gas leak, and a plumbing strike left the park with few drinking fountains, leading Disney to term July 17th as “Black Sunday.”

Birthdays: Mark Burnett, David Hasselhoff, Camilla Parker-Bowles, Donald Sutherland, David McCullough, Craig Morgan, and Luke Bryan

Here Are The Top Stories We’re Watching:

1. State Of Play: 2 Million Jobs Will Be Lost If Automatic Defense Cuts Kick In. Automatic cuts in federal spending will cost the economy more than 2 million jobs, from defense contracting to border security to education, if Congress fails to resolve the looming budget crisis, according to an analysis released Tuesday. The study, obtained by The Associated Press, was conducted for the Aerospace Industries Association, but it examined the shared pain for defense and domestic programs from the across-the-board reductions slated to kick in Jan. 2. The cuts would reduce the nation's gross domestic product by $215 billion next year while consumer confidence would plummet, said the report by Dr. Stephen Fuller of George Mason University and Chmura Economics and Analytics. "If they are allowed to occur as currently scheduled, the long-term consequences will permanently alter the course of the U.S. economy's performance, changing its competitive position in the global economy," said the report. The analysis is similar to other cautionary reports that have emerged in recent months from independent organizations that analyze federal spending and the process known in Washington as sequestration. All the reports carry a degree of uncertainty as the government hasn't spelled out where it would make the cuts. Associated Press

2. National Defense: Editorial: President Obama’s Is Willing To Put Politics Ahead Of Our National Defense. President Obama is willing to put our national defense at risk for a win on his campaign pledge of higher taxes. He’s shown no interest in leading an effort to handle the sequester, the $1.2 trillion in automatic reductions that will hit Jan. 2. Instead, his priority has been re-election fundraising, lollygagging on a bus tour and chatting at town halls. Republicans are trying to force him to get to work. GOP House and Senate leaders wrote the president Friday seeking a bipartisan effort to address the military’s concerns. The multiyear sequester is set up to reduce planned spending by $110 billion in 2013, half coming from defense and the rest taken from other programs across the board. House Speaker John A. Boehner, Senate Minority Leader Mitch McConnell, Senate Minority Whip Jon Kyl and House Majority Leader Eric Cantor cited National Journal’s report that White House Chief of Staff Jack Lew and senior adviser David Plouffe want a six-month delay in the sequester. The letter said, “Rather than proposing to simply put more space between this problem and the election or offering tax-increase proposals that face bipartisan congressional opposition, we hope you instead work with us to find a bipartisan solution before the end of the fiscal year.” Washington Times

3. The Obama Economy: Economy Has Downshifted To “Near-stagnation.” Another disappointing retail sales report prompted some economists to cut the second-quarter U.S. GDP again. Stephen Stanley, chief economist at Pierpont Securities, now sees 0.6% growth rather than 1% previously predicted. ”As you can see, I am running out of room with regard to being above zero.” “The economy has downshifted from muddling to near-stagnation,” says Stanley. Signs of the economy losing steam raised more pressure on the Fed to add stimulus and investors will zero in on Bernanke’s testimony Tuesday before lawmakers. “The hyperactive Fed is going to attempt to ride to the rescue,” says Stanley, though he adds that it is too bad “Bernanke’s steed is a broken down mule.” At these anemic rates, the economy is at the loosely defined “stall speed,” which anything around or under roughly 1.5% (different economists define it differently). Depressingly, this is almost exactly where we were last year. All this has helped bring the U.S. 10-year Treasury yield down to 1.45%, near the 1.437% all-time low set on June 1 after a disappointing U.S. employment report. Stocks are down, with the Dow off by 28, and the S&P 500 by 1, and you can bet it’d be worse if Bernanke was trudging up to the Hill tomorrow. Wall Street Journal

4. Job Creation: Leader Cantor Focuses On Job Development, Encourages Student Entrepreneurs in Virginia. The students at Virginia Commonwealth University’s da Vinci Center for Innovation are learning to be job creators, not job takers, VCU President Michael Rao told Rep. Eric Cantor Monday during his visit to the school. That’s important, Cantor, R-7th and the House Majority Leader, said, because the United States needs innovative young people to compete in the global market. “Make no mistake about it,” Cantor said, “there is a global war, really, for jobs.”…After talking to the students about their projects, Cantor asked how many of them are interested in becoming “job creators” later in life. Almost all of them raised their hands. Cantor said that’s the response he gets whenever he asks young people that question. “They want to go out and create something, create opportunities, create jobs,” Cantor said…The da Vinci Center offers students interdisciplinary classes during the school year and a paid internship course during the summer. Kenneth Kahn, the center’s director, said the center is launching a master’s program this fall in which nine students will “come in with an idea, leave with a business.” After the presentations, Cantor said programs like the da Vinci Center are what make Virginia an “epicenter” of job creation and entrepreneurship. “What I saw was a remarkable effort to bring the many assets of VCU together toward creativity and innovation,” he said. Work It Richmond

5. Tax Debate: Toying With Recession, Democratic Senators Willing To Jump Off The Fiscal Cliff To Hike Taxes. In a speech at the Brookings Institution, she [Patty Murray] declared that if Republicans won't raise taxes on income above $250,000 before November, Democrats will gladly let all of the Bush tax rates expire at the end of the year—even on the middle class, and no matter the economic consequences…"If middle-class families start seeing more money coming out of their paychecks next year—are Republicans really going to stand up and fight for new tax cuts for the rich? Are they going to continue opposing the Democrats' middle-class tax cut once the slate has been wiped clean? I think they know this would be an untenable political position." So there you are. Democrats are delighted to let a giant tax increase whack the economy in January because then Republicans won't be able to stop it and will also find it impossible to cut taxes again on anyone whom Democrats define as "the wealthy." Mrs. Murray may think she's putting Republicans on the political spot, but her real hostage is the already weak economy. Growth in the first quarter was a mere 1.9%, and economists have steadily downgraded their expectations for the second. As the tax cliff approaches, the policy uncertainty is already causing businesses to hold off on hiring and investment. Even the Keynesians at the Congressional Budget Office say that if all of the Bush tax rates expire, growth will fall close to recession territory. Perhaps Senator Murray and her fellow Democrats really don't think tax increases will hurt all that much, and it's clear she's clueless about the way expectations influence economic decisions. But at least voters now know that Democrats are willing to toy with recession to win an election. Wall Street Journal

6. Obamanomics: Brit Hume Commentary: President Obama’s View On Business, He Believes Government Creates Jobs. “It is fair to say that we know more tonight than we ever have about the President's view of business and the economy. His assertion over the weekend that ‘if you've got a business, you didn't build that. Somebody else made that happen’ explains nearly everything. He wasn't talking about God. He was talking about government. Here is a man who believes not just that the government provided framework of roads and bridges, defense, and law enforcement helps the private sector, he believes these things are the nerve center, the driving force. More important than any individual talent, enterprise or initiative. As he put it: ‘there are a lot of smart people out there.’ As for diligence, ‘there are a whole bunch of hardworking people out there.’ Success? ‘You didn't get there on your own.’ This is a view that successful businessmen and women are merely the ones who did better at taking advantage of the benefits that government has bestowed. Therefore, he thinks they should be glad to pay an even greater share of federal taxes than they do. He calls that, ‘giving back.’ As if the government conferred on them all that they have and they shouldn't mind returning a bit more of it to the where they came from. This explains why so much stimulus money was spent to protect government jobs and why his legislation on healthcare and financial reform involved extending the reach and power of, you guessed it, government.”Fox News Channel

7. Small Biz: NFIB Responds To Insulting Claim That No One Succeeds On Their Own. America's leading small business association has slammed Barack Obama for showing 'an utter lack of understanding' of the country's entrepreneurs when he told them: “If you've got a business - you didn't build that. Somebody else made that happen.” In a hard-hitting statement to Mail Online, the National Federation of Independent Businesses (NFIB) said: “What a disappointment to hear President Obama's revealing comments challenging the significance of America's entrepreneurs. His unfortunate remarks over the weekend show an utter lack of understanding and appreciation for the people who take a huge personal risk and work endless hours to start a business and create jobs.” …And the spokesman for the NFIB added: “I'm sure every small-business owner who took a second mortgage on their home, maxed out their credit cards or borrowed money from their own retirement savings to start their business disagrees strongly with President Obama's claim. They know that hard work does matter. Every small business is not indebted to the government or some other benefactor. If anything, small businesses are historically an economic and job-creating powerhouse in spite of the government.” Daily Mail

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