Tag Archives: Budget

News

Electric car company that got $500 million in stimulus announces layoffs

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From the left-wing Politico.

Excerpt:

In another setback for President Obama’s clean energy loan programs, the recipient of more than a half-billion dollars in federal loans is laying off workers at their Delaware and California operations.

Delaware’s News Journal reports that Fisker Automotive, a California-based electric car start-up company, is laying off an undisclosed number of staff to try to reserve enough capital in order to qualify for more federal help from the Department of Energy, according to a Delaware state development official.

“They’re trying to preserve the cash that they have,” said Alan Levin told the News Journal. “And unfortunately, until they meet the milestone that DOE continues to set … they’re not able to access the additional capital that they need.”

The company also came under fire last year for taking federal loans while producing cars in Finland. Company officials told ABC News at the time that “there was no contract manufacturer in the U.S. that could actually produce our vehicle.” The company was working on reopening a shuttered General Motors plant in Wilmington to produce vehicles — an effort that top Obama administration officials lauded.

[…]“This is proof positive that our efforts to create new jobs, invest in a clean energy economy and reduce carbon pollution are working,” said Energy Secretary Steven Chu. “We are putting Americans back to work and reigniting a new Industrial Revolution that is paramount for the economic success of this country.”

The company received $529 million in loans to produce two lines of plug-in hybrid cars.

The Wall Street Journal explains who stands to gain from the loans that were given to Fisker.

Excerpt:

A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car in Finland that will sell for about $89,000.

The award this week to California startup Fisker Automotive Inc. follows a $465 million government loan to Tesla Motors Inc., purveyors of a $109,000 British-built electric Roadster. Tesla is a California startup focusing on all-electric vehicles, with a number of celebrity endorsements that is backed by investors that have contributed to Democratic campaigns.

[…]Kalee Kreider, a spokeswoman for Mr. Gore, confirmed that the former vice president backs Fisker and purchased a Karma. “He believes that a global shift of the automobile fleet toward electric vehicles, accompanying a shift toward renewable-energy generation, represents an important part of a sensible strategy for solving the climate crisis,” she said in a statement.

Fisker’s top investors include Kleiner Perkins Caufield & Byers, a veteran Silicon Valley venture-capital firm of which Gore is a partner. Employees of KPCB have donated more than $2.2 million to political campaigns, mostly for Democrats, including President Barack Obama and Hillary Clinton, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign contributions.

Officials at Kleiner Perkins didn’t return requests for comment.

So let’s recap. A company connected to Democrats gets a $500 million pay-off, then lays off employees to qualify for more payoffs. And all of this money is coming f

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News

CBO report predicts 30% higher taxes and trillion-plus dollar deficit

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CNS News reports.

Excerpt:

The amount of money the federal government takes out of the U.S. economy in taxes will increase by more than 30 percent between 2012 and 2014, according to the Budget and Economic Outlook published today by the CBO.

At the same time, according to CBO, the economy will remain sluggish, partly because of higher taxes.

“In particular, between 2012 and 2014, revenues in CBO’s baseline shoot up by more than 30 percent,” said CBO, “mostly because of the recent or scheduled expirations of tax provisions, such as those that lower income tax rates and limit the reach of the alternative minimum tax (AMT), and the imposition of new taxes, fees, and penalties that are scheduled to go into effect.”

The U.S. economy, CBO projects, will perform “below its potential” for another six years and unemployment will remain above 7 percent for another three.

Fox News reports that the deficit will remain above 1 trillion dollars.

Excerpt:

A new budget report released Tuesday predicts the U.S. government will run a $1.1 trillion deficit in the fiscal year that ends in September, the fourth year in a row over $1 trillion, though a slight dip from last year.

[…]The report is yet another reminder of the perilous fiscal situation the government is in, but it is commonly assumed that President Barack Obama and lawmakers in Congress that little will be accomplished on the deficit issue during an election year.

[…]”Four straight years of trillion-dollar deficits, no credible plan to lift the crushing burden of debt,” said House Budget Committee Chairman Paul Ryan, a Republican. “The president and his party’s leaders have fallen short in their duty to tackle our generation’s most pressing fiscal and economic challenges.”

“We will not solve this problem unless both sides, Democrats and Republicans, are willing to move off their fixed positions and find common ground,” said Senate Budget Committee Chairman Kent Conrad, a Democrat. “Republicans must be willing to put [tax increases] on the table.”

The study also predicts modest economic growth of 2 percent this year and forecasts that the unemployment rate will remain above 8 percent this year and next. That is based on an assumption that President Barack Obama will fail to win renewal of payroll tax cuts and jobless benefits by the end of next month.

That jobless rate is higher than the rates that contributed to losses by Presidents Jimmy Carter (7.5 percent) and George H.W. Bush (7.4 percent). The study predicts unemployment to remain above roughly 5 percent — until 2016. The agency also predicts that unemployment will remain at 7 percent or above through 2015

Deficits in 2007 under George W. Bush were $160 billion and the unemployment rate was around 4-5%.

The CBO report also shows that the real unemployment rate is 10%.

Videos

Paul Ryan takes Obama’s State of the Union speech apart

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Budget hawk Paul Ryan on Fox News Sunday.

Snippet 1:

“The irony of this is the president’s policies do the exact opposite.  We basically have this. The president can’t run on his record. It’s a miserable record. He is not going to change his tune and moderate like say Bill Clinton did in 1996 because he’s really stuck with his ideology so he has no choice but to divide. So he is going to run a very decisive campaign for political gain and he has this concept of fairness and equality where he uses the kind of rhetoric we use, but the policies he’s producing will result in crony capitalism will result in more power in the government to supervise our lives, to give us a stagnant economy where the rich and the powerful are the ones who are picking it. So what I’m trying to say is he is giving us a future of debt, doubt, and decline. “

And snippet 2:

“The president isn’t leading. The president isn’t truthful with the American people about what kind of fiscal train wreck is coming, we’re going to be. And we’ll pass budgets to show the country exactly how we propose to fix the problem. You know the thing that is frustrating about this, Chris, is there is an emerging bipartisan census on fixing these big problems. There are Democrats who do agree with us on how to do tax reform. Get the loopholes out, lower the rates. We’re getting a bipartisan consensus on Medicare reform. The problem is the president and his party leader are out on the left standing on the sidelines looking in. So what we clearly need is a new White House and a new Senate and then we can realize this emerging bipartisan consensus on how to fix these problems”.

It’s good that we have Paul Ryan to respond to Obama’s rhetoric.

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