In wake of scandal, Obama ousts IRS chief -- who was leaving anyway

Fox News

President Obama announced Wednesday that acting IRS Commissioner Steven Miller would resign in the wake of the agency scandal in which conservative groups were targeted -- though Miller was apparently set to step down anyway. 

An official close to Miller told Fox News, shortly after Obama's brief announcement, that the IRS chief was "set to resign the position of acting commission as of early June." He was planning to leave the IRS entirely a "couple of months later, regardless of the current controversy," the source said. 

These details were not mentioned by the president as he announced Wednesday evening Miller was resigning. Obama spoke following a meeting with Treasury Secretary Jacob Lew  and other top department officials in which they reviewed a highly critical inspector general’s report on the practice. The report concluded poor management allowed agents to improperly target Tea Party and other groups for more than 18 months, starting in 2010.

Obama said Lew asked for the resignation and Miller agreed, after being on the job since November 2012.

“Americans have a right to be angry about it, and I’m angry about it,” Obama said from the White House. The president is expected to name a new acting commissioner later this week. 

Republicans, who along with Democrats have slammed the IRS for the practice, welcomed the resignation Wednesday but made clear they would continue to investigate and press for accountability. 

Rep. Vern Buchanan, R-Fla., said the resignation "is a necessary first step but more heads need to roll." 

Rep. Michele Bachmann, R-Minn., reacting to the claim that Miller was leaving anyway, said it seemed like he was a "perfect scapegoat" for the administration. 

Miller’s resignation was part of three-step plan Obama outlined to fix the problem.

The other steps are to put in place the safeguards recommended in the IG report and to work with Congress as it investigates. 

“The good news is we can fix this,” Obama said. 

Miller became acting commissioner after Commissioner Douglas Shulman completed his five-year term. Shulman had been appointed by President George W. Bush.

The president has proceeded cautiously since the IRS controversy was made public Friday. While he initially said the accusations were "outrageous," he also said he wanted to wait until the report was released before addressing what should be done to hold accountable those responsible.

Obama said he would hold a press conference Thursday.

The report lays much of the blame on IRS supervisors in Washington who oversaw a group of specialists in Cincinnati who screened applications for tax-exempt status. It does not indicate that Washington initiated the targeting of conservative groups, but it does say a top supervisor in Washington did not adequately supervise agents in the field even after she learned the agents were acting improperly.

The Justice Department is also investigating the IRS targeting, as are three congressional committees.

Sources told Fox News that Miller will remain on the job "for a couple of weeks." 

The House Ways and Means Committee said after the announcement of Miller's resignation that he still will attend a hearing Friday.

And the House Committee on Oversight and Government Affairs sent a letter Wednesday afternoon to the IRS  requesting five employees named in the IG audit be made available for transcribed interviews by committee staff.

The Republican-led committee wants to start the interviews Monday.

The names and titles of the IRS employees requested are Holly Paz, a director; John Shafer, a manager; Gary Muthert, a screener; Liz Hofacre, a case coordinator; and Joseph Herr, a manager.

"The resignation of Steven Miller is a positive and important step as this agency struggles to try to regain the public’s trust," said Utah Sen. Orrin Hatch, the top Republican on the Senate Finance Committee. "A clean slate at the IRS with new leadership is imperative to fix this egregious encroachment on the lives of honest, hard-working Americans whose only sin was that they want to express their beliefs."

Earlier in the day, White House Press Secretary Jay Carney sidestepped a question about whether Obama still had confidence in Miller, saying he wouldn't discuss personnel matters. He said Obama has expressed his overall view that IRS personnel had acted inappropriately. 

"He wants to see that the actions taken, as revealed by the Treasury report, that are inappropriate, are met with consequences," Carney said. "He will make clear to Treasury Department leaders that he expects action." 

Carney said Obama wants the public to "understand and believe that the IRS applies our tax laws in a neutral and fair way to everyone."

Read more: http://www.foxnews.com/politics/2013/05/16/obama-to-meet-with-treasury-officials-over-irs-scandal/#ixzz2TTPQ7aqM

Boehner: "My question is who is going to jail over this scandal?” IRS disciplines 2 in probe into conservative targeting

usnews

By Kelly O’Donnell, NBC News

A senior official at the Internal Revenue Service has told congressional investigators that two IRS employees have been disciplined in relation to the special scrutiny applied to conservative groups, Congressional sources told NBC News on Wednesday.

The disciplined employees are from the IRS’s Cincinnati office, which was responsible at the time for reviewing the applications of groups that wanted tax exemption, the sources said.

An internal report faulted the IRS for using “inappropriate criteria” in the screening and for bad management. The disclosure has angered members of both parties in Congress, and President Barack Obama has said it was inexcusable. The Justice Department has opened an investigation.

In testimony before the House Judiciary Committee, Attorney General Eric Holder said Wednesday that prosecutors are looking at several different criminal statutes, including one that requires IRS employees to do their jobs without favoritism.

“The facts will take us wherever they take us,” Holder said.

He said that the investigation, while based in Washington, will be nationwide in scope and not limited to the offices that have been the subject of complaints so far.

IRS employees used to terms search as “Tea Party” and “Patriots” to determine which organizations would be allowed tax exemption under federal law. An IRS official has apologized, but lawmakers want to know who within the organization, and perhaps elsewhere in government, was aware of the screening.

House Speaker John Boehner, R-Ohio, demanded earlier Wednesday: “My question isn’t who is going to resign. My question is who is going to jail over this scandal?”

Surprise! IRS Boss Who Targeted Tea Party and Jewish Groups Investigated Anti-Clinton Groups in the 1990s | A Time For Choosing

A Time For Choosing

By Gary P Jackson

It seems we can never escape these evil Nazi sons-a-bitches! Yes, I used the “N” word, because these kind of tactics were used extensively by the Nazis to intimidate and take away the rights of their political opponents. Of course, Hitler wasn’t the only one who did this, Stalin, Lenin, Mao, Castro, Chavez, and other Marxist tyrants did the same. Add Bill Clinton and Barack Obama to the list.

What gets me is people knew at the time Bill Clinton had the IRS attacking his opponents, and yet, when impeachment time came, this was never part of the Articles of Impeachment. Had it been, the Senate may have convicted and removed Slick Willy from office.

It’s not like there wasn’t a precedent for impeaching a president over this sort of evil. Another liberal president, Republican Richard Nixon, was about to be impeached for doing the exact same thing both Clinton and Obama have done, turning the IRS on political opponents.

This makes impeaching Obama a must.

By now you’ve heard all about the IRS targeting and harassing the Tea Party, and many Conservative groups as well as Jewish groups. The IRS even turned over confidential data to radical leftist groups so they could use it to destroy Obama’s opponents.

It started out with the corrupt media portraying this as “rogue agents in Ohio” but we quickly learned that this went all of the way to the top of the IRS, and several top leaders lied about knowing of these attacks, which have been going on since 2010.

Now we learn that this isn’t IRS boss Steven T. Miller’s first rodeo. In addition to doing Obama’s bidding, attacking Conservatives, Miller played a similar role during the Clinton years, attacking anti-Clinton groups.

Keep reading on A Time For Choosing >>

5 unanswered questions about the IRS targeting of conservative groups

usnews

By Erin McClam, Staff Writer, NBC News

Outrage intensified in Washington on Monday over the disclosure that the Internal Revenue Service targeted conservative groups for special scrutiny when they applied for tax-exempt status.

President Barack Obama, at a White House appearance with the British prime minister, said that he wanted all the facts but used strong terms to condemn the reported conduct.

“I’ve got no patience with it. I will not tolerate it,” he said. “And we will make sure that we find out exactly what happened on this.”

The Treasury Department’s inspector general for tax administration will release an audit report later this week. In the meantime, here are five big unanswered questions looming over the IRS.

How did this start and why?

In January 2010, a Supreme Court decision known as Citizens United touched off a flood of political spending, much of it classified under a section of tax law known as 501(c)4 that entitles certain “social welfare” groups to tax exemption.

Two months later, a special unit of the IRS in Cincinnati assigned to screen applications for 501(c)4 status began searching for groups with descriptions that included “Tea Party” and “Patriots,” according to a partial draft of the inspector general’s report obtained by NBC News.

Lois Lerner, head of the IRS division on tax-exempt organizations, said Friday that the targeting of conservative groups was “inappropriate” but “absolutely not” influenced by the White House. She also said that none of the targeted groups was denied tax-exempt status.

What has not been spelled out is who in the Cincinnati office decided to search for conservative groups and why.

At least one Tea Party group called on the administration Monday to appoint a special prosecutor to look into the matter, which it called “un-American and Nixonesque.” One of the articles of impeachment against President Richard Nixon accused him of targeting political opponents for tax audits.

Both Republicans and Democrats in Congress are determined to investigate.

“I just don’t buy that this was a couple of rogue IRS employees,” Sen. Susan Collins, R-Maine, said Sunday on the CNN program “State of the Union.”

Who knew what, and when, higher in the IRS?

Lerner learned in June 2011 that agents had targeted groups with names including “Tea Party” and “Patriots,” according to the draft obtained by NBC News.

She “instructed that the criteria immediately be revised,” according to the draft. Ten months later, in March 2012, the IRS commissioner at the time, Douglas Shulman, testified to Congress that the IRS was not targeting tax-exempt groups based on their politics.

The IRS said over the weekend that senior executives were not aware of the targeting, but it remains unclear who knew what and when. Shulman, who left the agency last fall, has not spoken publicly about the scandal and did not answer a request for comment Monday from NBC News.

Members of Congress had sent letters to Shulman as early as June 2011 asking specifically about targeting of conservative groups, according to a House Ways and Means Committee summary obtained by NBC News.

The IRS responded at least six times but made no mention of targeting conservatives, according to the committee’s summary.

Will anyone be fired?

Sen. Marco Rubio, R-Fla., on Monday demanded the resignation of the head of the IRS. That is Steven Miller, who is serving as acting commissioner until Obama nominates a replacement.

The last commissioner was Shulman, who was appointed by President George W. Bush in 2008, left the agency in November and has taken a position as a guest scholar at the Brookings Institution.

Newt Gingrich, the Republican former House speaker, told MSNBC on Monday that Obama should say “he’s going to fire everybody he can legally fire who’s been involved with this.”

How will the White House contain the political damage?

The IRS scandal presents a daunting political challenge for the White House, which is already being forced to defend its handling of the deadly attack on a U.S. diplomatic post in Benghazi, Libya, last September.

The furor over the IRS has come from both parties. Sen. Max Baucus of Montana, the Democratic chairman of the Senate Finance Committee, said Monday the agency had committed an “outrageous abuse of power” and pledged a grilling.

“The IRS will now be the ones put under additional scrutiny,” he said.

Sen. Tim Kaine of Virginia called it inexcusable, and Sen. Joe Manchin of West Virginia said the president “must immediately condemn this attack on our values and find those individuals in his administration who are responsible and fire them.”

How can this be prevented in the future?

Rubio, in his letter calling for the resignation of the IRS chief, called the behavior “seemingly unconstitutional and potentially criminal.”

But under existing law, the worst that can happen to an IRS agent who discriminates against taxpayers is getting fired, said Rep. Mike Turner, an Ohio Republican who sits on the House Oversight Committee.

Turner introduced a bill Monday to increase the toughest penalty to five years in prison and a $5,000 fine.

“This is about protecting the rights of all Americans and their ability to freely express their political thoughts,” he said.

-------------------

Kelly O’Donnell of NBC News contributed to this report. Reuters and The Associated Press also contributed.

SCANDAL WIDENS: IRS Targeting Went Beyond Tea Party, Conservatives

Read on foxnews >>

House Republicans swiftly announce hearing on IRS targeting conservative groups

Fox News

The IRS acknowledging that it targeted conservative political groups during the 2012 election season has sparked bipartisan calls for investigation -- with House Republicans already saying they will hold a hearing on the issue.

House Majority Speaker Eric Cantor said Friday the Republican-led chamber would investigate the tax-collecting agency for flagging the groups for additional review to see whether they were violating their tax-exempt status.

“The IRS cannot target or intimidate any individual or organization based on their political beliefs,” the Virginia Republican said.

Cantor’s comments were followed within minutes by House Ways and Means Committee Chairman Dave Camp saying he would hold a hearing.

The IRS on Friday apologized for targeting groups, but Camp, R-Mich., argued the agency had “repeatedly denied” such activity.

“The admission by the agency that it targeted American taxpayers based on politics is both shocking and disappointing,” he said.

The committee has jurisdiction over IRS, but it remains unclear whether other House committees also will investigate the issue, in which roughly 300 groups were flagged.

Republicans were joined by a leading Senate Democrat in the call for congressional investigations.

Michigan Sen. Carl Levin, chairman of the Senate Permanent Subcommittee on Investigations, said members have already been looking into the IRS's failure to make sure tax-exempt groups engage only in social welfare activities -- not partisan politics.

“Today’s announcement by the IRS raises a second issue: whether the IRS, to the extent it has enforced its rules, has been impartial in doing so,” Levin said Friday. “Both issues require investigation.”

Lois Lerner, who heads the IRS division that oversees tax-exempt groups, said that organizations were singled out because they included the words "tea party" or "patriot" in their applications for tax-exempt status.

In some cases, groups were asked for their list of donors, she said.

"That was wrong. That was absolutely incorrect, it was insensitive and it was inappropriate," Lerner said. "The IRS would like to apologize for that."

Republican lawmakers appeared vindicated in part by the announcement, after complaining about the suspected harassment more than a year ago.

A dozen Republican senators wrote to the IRS in March 2012 expressing concerns about various accounts that the agency inquiries were "perceived to be excessive."

However, IRS Commissioner Douglas Shulman told Congress in March 2012 that the agency was not targeting groups based on their political views.

"There's absolutely no targeting. This is the kind of back and forth that happens to people" who apply for tax-exempt status, he told a House Ways and Means subcommittee.

Among Capitol Hill Republicans already raising further concerns or calls for investigations are California Rep. Darrell Issa, Senate Minority Leader Mitch McConnell, Kentucky; Utah Sen. Orrin Hatch, Georgia Sen. Johnny Isakson and Florida Sen. Marco Rubio.

“The IRS’s political targeting of select groups based on their political leanings is reprehensible, and it should trouble every American to know that a federal government agency could abuse its power so outrageously,” Rubio said. “We need immediate congressional hearings.”

Lerner said the practice was initiated by low-level workers in Cincinnati and was not motivated by political bias. She said no high-level IRS officials knew about the practice. She did not say when they found out.

The IRS has put out a written statement saying protocol was changed at the Cincinnati office in response to the rising number of applications for so-called 501(c)(4) groups. This classification grants tax-exempt status to social welfare groups. Unlike other charitable groups, these organizations are allowed to participate in political activities but their primary activity must be social welfare.

The agents tried to "centralize work" in response to the applications, the IRS said, leading to problems the agency claims have since been fixed.  Lerner said the number of groups filing for the tax-exempt status more than doubled from 2010 to 2012, to more than 3,400. To handle the influx, the IRS centralized its review of these applications in the office in Cincinnati. As part of the review, staffers look for signs that groups are participating in political activity. If so, IRS agents take a closer look to make sure that politics isn't the group's primary activity, Lerner said.

In all, about 300 groups were singled out for additional review, Lerner said. Of those, about one-fourth were singled out because they had "tea party" or "patriot" somewhere in their applications.

Cubans to start paying taxes for the first time

todaysthv.com

Lindsey Tugman

HAVANA, CUBA (CNN) -- Paying taxes is something many of us are simply resigned to, but not in Cuba, at least not until now. Economic reforms mean thousands of people no longer work for the state, but for themselves. And that's leading to big changes in the communist country.

A Havana car wash has only been open for a few months but business is already rolling in. it's privately owned, one of many small businesses sprouting up across cuba where capitalism, until three years ago, was forbidden. Owner Yasmani Claro Duran says, "It feel good, thanks to the changes happening in the country and easing of restrictions, people are doing better."

But people doing better means a growing disparity in living standards, something the Cuban revolution was supposed to have abolished.

After Fidel Castro took power nearly everyone worked for the government and made similarly meager salaries. but under after economic reforms initiated by his brother Raul over 400,000 Cubans have started small businesses, some making fortunes, at least compared to those who stayed on the state payroll.

So starting this year many Cubans will do something they have never done previously: pay taxes. Vladimir Regueiro Ale with the National Tax Office Administration says, "It's a form of redistribution that before didn't exist. Social participation was more passive. The taxes are being applied to a sector of the economy that's generating new wealth."

Everyone, except state workers and self employed farmers, will pay this tax. But government officials say in the future there may be taxes on property and state salaries.

Increasingly the government here is calling on citizens to contribute more if they want to continue to have free health care and education.

At an office outside Havana, government employees explain the new tax code and convince small business owners to pay up. There are new fines for those who don't, but no jail time. Tax collector Maria del Carmen Cárdenas Salas says, "When people began working for themselves there wasn't the same strictness placed on paying taxes that there is today. This is an obligation established with the state and we have to enforce it."

The government could not tell CNN how much money these new taxes will bring in but they say there will be an improvement in services.

But requiring people to pay taxes could be a double edged sword for the government here. As they pay more into the system, Cubans may finally stop simply hoping that officials will fix the broken streets, buildings and transportation system here and expect them to.

House Dems Want 45% Taxes on $1M Incomes

breitbart

By Ben Shapiro 

On Thursday, House Democrats proposed a new bill that would create a minimum 45 percent tax rate on income more than $1 million, and a rate of 49 percent on income more than $1 billion. Rep. Jan Schakowsky (D-IL) is the mastermind behind this notion; she calls it the Fairness in Taxation Act. “Our country faces an inequality crisis,” she said. “While the amount of earned income – and accumulated wealth – by the top one percent of earners continues its dramatic rise, most Americans have seen little or no gain in take-home pay for decades. We need increased revenue to eliminate the sequester.” Other sponsors of the bill include the most liberal members of the Congress: John Conyers (D-MI), Donna Edwards (D-MD), Luis Guttierez (D-IL), Barbara Lee (D-CA), Betty McCollum (D-MN), and John Yarmuth (D-KY).

Of course, the Obama administration rammed through a tax increase at the beginning of 2013, and focused largely on measures designed to redistribute income to low-income earners throughout President Obama’s first term. The result: the weakest and most lopsided recovery in American history. In California, where taxes have been consistently increased for years, more and more businesses and high-income earners are leaving the state for greener pastures.

Our country does not face an inequality crisis. It faces a growth crisis. Cuba has no inequality crisis, but the people are still miserable. The same holds true of most socialized societies, where income gaps are smaller but growth is similarly minute.

Here Are the 5 Most Interesting Things in Obama’s & Biden’s Tax Returns

TheBlaze.com

Becket Adams

The White House on Friday released President Barack Obama and Vice President Joe Biden’s tax returns.

“Today, the President released his 2012 federal income tax returns,” White House press secretary Jay Carney wrote in a blog post on the White House website. “He and the First Lady filed their income tax returns jointly and reported adjusted gross income of $608,611. The Obamas paid $112,214 in total tax.”

“The President and First Lady also reported donating $150,034 – or about 24.6 percent of their adjusted gross income – to 33 different charities,” Carney said.

Here are five interesting things we discovered about the Obamas and Bidens via their 2012 federal income tax returns:

5. President Obama’s Income Has Declined

“President Barack Obama made less in 2012 than in any other year since taking office, with about 40 percent of the nearly $609,000 in income that he and first lady Michelle Obama reported coming from book sales,” the Associated Press notes.

4. The Bidens Donated $2,000 Worth of Clothing, Boots, Toys, Pottery, etc. to Goodwill

“A look at the Bidens joint filing reveals that $2,000 of [their $7,190 to charity in 2012] was in the form of ‘donated property’ given to Goodwill in Wilmington, Delaware,” the Weekly Standard notes.

Screen grab.

“[O]n June 25 of last year, the Bidens gave ‘Clothing, Boots, Kitchenware, Glassware’ totaling $400 to Goodwill,” the report notes. “Earlier, on May 16, the Bidens gave ‘Furniture and Exercise Equipment’ valued at $1,100 to the Ministry of Caring. And on May 27 of last year, the Bidens gave ‘Bicycles, Toys, Glasses, Pottery, Kitchenware’ valued at $500 to the same Goodwill.”

Canada Revenue Agency struggling to put a lid on tax fraud

The Globe and Mail

KATHRYN BLAZE CARLSON 

It is a simple scheme that netted a Brampton, Ont., man’s clients thousands of dollars, all on the backs of law-abiding Canadians.

His crime was this: As a tax preparer from 2005 to 2010, Adegboyega Adenekanad Adebukunola filed $858,897 in fake donations on 129 returns, reducing his clients’ tax bill by a total of $245,602.

The case represents a tiny fraction of the revenue lost to false receipting, but it offers a fresh glimpse into a fraudulent enterprise that has cost Ottawa hundreds of millions of dollars over a decade. Because of people like Mr. Adebukunola and his clients, millions of Canadians filing returns next month will shoulder an unfair tax burden and suffer from fewer dollars flowing into federally funded programs and social services.

The Harper government has sought to boost revenues without raising taxes since 2006, introducing dozens of tax-fairness measures expected to bring in more than $2-billion by 2015. Last week’s budget was no exception – its fiscal outlook relies on raking in billions by closing loopholes and pursuing cheats more aggressively. Still, Finance Minister Jim Flaherty’s plan sent mixed signals to the Canada Revenue Agency: It will get $13-million annually to track international financial transfers and pursue fraudsters scamming its R&D tax credit program, but it is also the target of fresh cuts, taking a hit of $60-million annually on top of previous cutbacks.

And while the CRA is getting sharper teeth, its new-found authority will be limited. If the agency suspects people failed to pay their due taxes, it can now collect half of the disputed amount while the case is tied up in court. But that new deterrent applies only to charitable-donation tax shelters and it remains to be seen whether it will some day extend to unpaid taxes tied to fake receipts.

In charity lawyer Mark Blumberg’s view, one bright light from the latest budget is what was missing: Though it introduced a new first-time donor’s “super credit” that will increase the value of a receipt by 25 per cent (once per couple, and only up to $1,000), there are no other donation incentives. And that means there are no new financial incentives to file fake receipts.

After Mr. Adebukunola’s arrest in the United States on an international warrant, he pleaded guilty to tax fraud this month and was sentenced to house arrest. There are other cases: In October, 2012, for example, Penelope Donick was sentenced to one year in jail and a $200,000 fine after the CRA discovered she had filed $4-million in falsified receipts across 269 fraudulent returns; before her, there was Ambrose Danso-Dapaah and his estimated $39-million in fake charity receipts.

“Anyone with a computer and a printer at home could do this,” Mr. Blumberg said. “Anyone can, in about 15 minutes, create an official donation receipt for income tax purposes for any charity.”

Canada’s 86,000 charities issued $13-billion in receipts for the 2011 tax year. Ever since 2007, the CRA has focused on combatting charity-gifting tax arrangements and tackling this other lesser, but far simpler, scheme involving fraudulent donation receipts. In a newsletter last year, the CRA listed fake receipting as among Canada’s top-five tax scams.

Keep reading on  The Globe and Mail >>

Thieves make billions on fake tax returns

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Emilio Ichikawa » Razones para meterse a disidente [o cuentapropista] en Cuba

Emilio Ichikawa 

En una rueda entre amigos en Miami hablamos que lo de meterse a disidente no solo viene estimulado por la facilidad de visado en las Embajadas y las (a)cogidas en universidades extranjeras; también está el hecho de que el gobierno cubano lleva más cómodo a los disidentes que a humildes cuentapropistas de barrio. El gobierno cubano, en su afán por no ser percibido como extremista, no le grava los dólares que ganan escritores cubanos como Miguel Barnet y la propia Yoani Sánchez, y sin embargo en el pueblo de Bauta acaban de acaballar a un amigo con una multa porque dicen que declaró 50 pizzas de menos. Consejo para Felito Dientefrío: Funda un partido opositor, y ponte a vender croquetas que por acá te defendemos como seguidor de Martí.

Obama Spends Tax $$ Teaching People How to Use Microwaves

Fox Nation

(h/t Breitbart.com): In the new 'The Cook It Safe' campaign the USDA is running a series of mind numbingly stupid TV commercials trying to teach college students to use a microwave properly with the hight of absurdity coming in a scene where a food thermometer is inserted in a frozen, pre-cooked, chicken pot pie that one could theoretically eat as a frozen pot pie popsicle without the fear of undercooked food danger.

From  USDAFoodSafety

More at Breitbart >>

O'Reilly: Righteous anger

Boehner: ‘I don’t think anyone quite understands’ how sequester gets resolved

Visit NBCNews.com for breaking news, world news, and news about the economy

By Tom Curry, National Affairs Writer, NBC News

In an exclusive interview with NBC’s Meet the Press, House Speaker John Boehner said there is no easy way to stop the budget cuts -- known as the “sequester” -- that began taking effect Friday night, and voiced uncertainty over how Washington can solve the overall fiscal problems that have consumed the nation’s politics for more than two years.

In an exclusive interview on Meet the Press, House Speaker John Boehner weighs in the economic impact of the sequester and whether or not it will hurt the country's economy.

“I don't think anyone quite understands how it gets resolved,” Boehner admitted in his interview with NBC’s David Gregory.

Boehner explained his strategy in the Republicans’ tax-and-spending standoff with President Barack Obama, saying that he didn’t want to “arbitrarily pull out a couple of tax expenditures” just to raise the revenue needed to avert $85 billion in spending cuts which are being made this year.

The president and many of his administration officials have warned of dire consequences to government services and national security if the sequester happens as planned.  But to avoid them and reach a deal, the president wants new tax increases, something Boehner and his fellow Republicans have insisted are off the table.

The spending cuts – which were intended to spur a bipartisan “grand bargain” on deficit reduction, entitlement reform and tax increases -- are part of the 2011 Budget Control Act which Obama signed into law.

Boehner voted for the law and urged his members to do likewise.

But now that the spending cuts are beginning, neither Boehner nor Obama wants them to continue. Yet they have been unable to reach an accord on an alternative measure.

More on nbcpolitics >>

Obama's cynical sequester strategy

foxnews

By Peter Morici 

President Obama has taken the middle class hostage in a thinly veiled bid to hike their taxes.

Having refused to work with Congress to reduce spending by $1.2 trillion over ten years, as he agreed to do when drafting the Budget Act of 2011, the president must now implement $85 billion in across-the-board cuts to defense and non-entitlement government spending.

House Republicans have offered to ease the burdens on the public—by increasing administration flexibility in implementing those cuts in the continuing resolution to keep the government funded past March 27—but the president wants no part of that.

Mr. Obama talks like President Truman but taxes like King George.

Instead, he is campaigning across the country, painting the dire consequences sequestration will impose on all of America if new taxes are not imposed on the wealthy. That is a cynical ploy—Mr. Obama talks like President Truman but taxes like King George.

Taxes imposed at his insistence on January 1 have eliminated 80 percent of the benefits of tax deductions—mortgage interest, state income taxes, local property levies, and the like—for wealthier households. Any substantial gains from further tightening deductions, as President Obama proposes, must come from similarly limiting their use by middle-class taxpayers.

Already, by hiking payroll taxes, the majority of $150 billion in additional revenue obtained on January 1 was extracted from the working poor and middle class families, and federal revenues share of GDP will now substantially exceed its average for the last 40 years.

President Obama is also unwilling to acknowledge government spending is completely out of control. Over the last five years, outlays are up by $1 trillion—three times the amount required by inflation—and tax revenues are short because high rates and burdensome regulations are choking economic growth and jobs creation.

Instead, the president threatens America with the dire scenario of furloughed meat inspectors, food shortages and streets without police. His cabinet secretaries threaten three hour waits in airport security lines, reduced embassy protection and border patrols. The list goes on and on.

Appropriation legislation does limit President Obama’s ability to allocate the cuts among departments. However, even without additional legislation, he has considerable discretion in allocating the 10 percent spending cuts within departments, but he has refused to entertain options that would limit the pain in his pursuit of higher taxes.

For example, the Agriculture Department has one of the largest staffs of economists in the world—surely, safe food is more important than yet another dull research paper. Military bands could also stand down to maintain Marine guards at embassies.

Repeatedly, President Obama has proclaimed that if Congressional Republicans don’t cooperate, spending cuts now could derail our hard won economic recovery. It puzzles why he believes $85 billion in spending cuts could make such a difference, when avoiding those cuts through higher taxes would not.

Whether a second recession occurs is already baked in the cake. Mr. Obama’s $150 billion January tax hikes, and similar rate increases imposed by Democratic governors from Maryland to California, have forced consumers to trim purchases. Retailers and wholesalers are reporting weaker sales traffic and are trimming inventories. Corporate leaders have announced plans to cut new investments and hiring owing to weak demand and more burdensome health care costs and regulations.

When Americans can’t get hamburger at the supermarket and unemployment rises this spring, President Obama will place the blame squarely on Republicans for permitting sequestration, but it is the American people who will bear the burden of his inflexibility, his disregard for the facts and his neglect in undertaking the responsibilities of his office.

Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist.

Read more: http://www.foxnews.com/opinion/2013/02/26/obama-cynical-sequester-strategy/#ixzz2M1rKjgE7

Get 'off your ass': Boehner blasts Senate Democrats

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firstread

By Carrie Dann, NBC News

House Speaker John Boehner addresses the ongoing sequester standoff on Capitol Hill.

Echoing the frustration of lawmakers throughout Washington hoping for a last-minute swerve to avoid impending budget cuts, House Speaker John Boehner, R-Ohio, used some PG-13 phraseology Tuesday to urge the Senate to action. "We have moved a bill in the House twice," Boehner said at a press conference Tuesday. "We should not have to move a third bill before the Senate gets off their ass and begins to do something." The refrain of urging Senate action comes from Boehner just four days before the sequestration cuts are slated to kick in. President Barack Obama will travel to Newport News, Va. this afternoon to highlight the cuts' effect on the region's shipbuilding community. He will be joined by the area's Rep. Scott Rigell, a Republican. The White House's road trips to warn of the sequester's impact have drawn criticism from foes. "He has traveled over 5000 miles the last two weeks, and we challenge him travel a mile and half and come to Capitol Hill," said Rep. Cathy McMorris Rogers of Washington on Tuesday. "Sit down with Harry Reid and urge the Senate Democrats to take action."

Boehner said Obama's event this afternoon will reduce the nation's military to a campaign "prop."
"I don't think the president is focused on finding a solution to the sequester," he said. "The president has been traveling all over the country, today by going down to Newport News in order to use our military men and women as a prop in yet another campaign rally to support his tax hikes."

Washington's sequester standoff drags on: 'Mr. President, you got your tax increase'

By Michael O'Brien, Political Reporter, NBC News

The nation’s capital was enveloped in a familiar kind of gridlock late Monday, as Republicans again demanded that President Barack Obama and Senate Democrats act first to put off $85 billion in automatic cuts slated to take effect on Friday.

“The president says we have to have another tax increase to avoid the sequester,” House Speaker John Boehner, R-Ohio, said of the hefty and indiscriminate spending cuts. “Well, Mr. President, you got your tax increase. It's time to cut spending.”

Related: Obama to govs: Push Congress to avert cuts

As Congress returned to work following a weeklong recess, the Obama administration and lawmakers appeared no closer to resolving the automatic spending cuts before their Friday deadline. While both Democrats and Republicans bemoan the cuts as potentially catastrophic for the economy and the national defense, both sides have been locked in a virtual staring match over the sequester.

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The truth about Obama's tax fake out

By Liz Peek 

editorial.equities.com

Americans must be confused. For years President Obama has promised that raising taxes on the wealthy would solve our budget problems. Making the rich pay “a little more,” as Mr. Obama has repeatedly promised, was supposed to reduce our deficits – a goal embraced by most Americans. 

But now the president has signed a bill which finally raises taxes on the wealthiest Americans -- and it turns out we will continue to rack up deficits for the foreseeable future. In fact, the plan adds $329 billion to this year’s deficit alone. 

Further out, this agreement will do almost nothing to slow the dangerous erosion of our nation’s financial strength;  projected ten-year deficits of $7.9 trillion will be whittled down by $650 billion as the wealthy, by the way, pay not “a little more,” but quite a lot more.

Astonishingly, the one approach that might actually move the needle in the right direction – boosting economic growth – is hardly mentioned by the Obama White House.

On top of a hike in rates from 35% to 39.6%, the wealthy will also see deductions phased out, will be paying new surtaxes on investment income to fund ObamaCare and Medicare as well as higher rates on investment income. In addition, several states, including California, have passed new taxes on those in the top income brackets. 

In a still-struggling economy, this approach may make sense, in that no other group can afford higher taxes. But, raising taxes on any Americans could carry hidden penalties; our highest-earners normally account for some 40% of consumer spending but in this slow-growth period, that slice has expanded to about 50%.  

Jacking up taxes on the rich risks further undermining our tepid recovery. Indeed, early indications suggest that the threat of higher taxes caused the wealthy to cut back on holiday spending, leading to a lackluster retail season.

Voters may also be mystified that President Obama, who as recently as New Year’s Eve reiterated his commitment to a “balanced” approach to reducing our deficits, has signed a bill that cuts spending by $15 billion, while boosting tax revenues by $620 billion. That ratio of 44:1 tax hikes to spending cuts doesn’t sound very balanced.

Equally puzzling, President Obama pledged to prevent a tax increase on most Americans. But – surprise - surprise - the Tax Policy Center reports that 77% of U.S. households will pay higher taxes this year, thanks to the expiration of the two percentage-point payroll tax holiday.

Hard pressed, voters might wonder about other claims made recently by their president. For instance, he has on numerous occasions boasted that he has cut spending. And yet, for the first two months of this year, federal spending jumped a whopping 16%. Even adjusted for some timing issues, spending was 4% higher for October and November than it was last year – and still growing considerably in excess of inflation. 

Note to voters: Obama’s “cuts” are always made from a hypothetical spending line which points inexorably north. It’s a little like the wife who claims to have saved her husband money by buying three new handbags, instead of four.

Americans are still waiting for President Obama to take up the harder challenge of trimming so-called “entitlement” programs, which claimed 62% of the federal budget in fiscal 2012. As he campaigned for office in 2008, Mr. Obama pledged to “take up entitlement reform quickly”  -- certainly in his first term in office. 

In 2009, he explained this necessity, saying that the “real problem with our long-term deficit actually has to do with our entitlement obligations.” 

He’s right. Social Security, Medicaid and Medicare alone now account for 44% of all federal spending. When ObamaCare is added in, the four programs will sap about 18.5% of GDP by 2050, according to the Heritage Foundation – or roughly the same portion historically claimed by all government functions.  That is, every other spending need, from defense to education, will be paid for with borrowed money. (Some analysts project this will occur by as soon as 2025.)

Entitlement spending has more than doubled in the past two decades, driving deficits higher. Here’s why: the Urban Institute reports that a couple in which both people earn an average wage will pay $116,000 in Medicare taxes over their lifetime, and receive $351,000 in payments. As the country ages, this is a seriously losing proposition for the nation. For the individuals receiving those benefits, it’s heaven-sent.

During the election, we were supposed to debate this problem. The nomination of budget savant Paul Ryan as the GOP vice presidential candidate was meant to thrust the issue to the forefront; instead, both Republicans and Democrats found entitlement reform simply too toxic, and it was dropped, along with Paul Ryan.

The country should now look towards President Obama for leadership in setting our country on a sustainable course. He must re-up his earlier pledge “to cut the deficit we inherited in half by the end of my first term in office.” It is clear that raising taxes on the rich will not alone do the trick. 

Astonishingly, the one approach that might actually move the needle in the right direction – boosting economic growth – is hardly mentioned. This White House discredits the potential power of the private sector unleashed; that has been, and will continue to be, President Obama’s greatest handicap. It is also the number one reason that voters made a terrible choice this past November.

Read more: http://www.foxnews.com/opinion/2013/01/04/truth-about-obama-tax-fake-out/#ixzz2IjCxQOLU

Millions notice pay hit after payroll tax hike

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