The following are excerpts from editorials in other newspapers across New England:
Worried about a backlash next year from gridlock-weary voters, U.S. House and Senate negotiators have a workable plan to stave off another government shutdown, at least from now through next October.
Another such disaster would have moved attention from the roll-out woes of the Affordable Care Act to House Republicans’ central role in forcing the past couple of government shutdowns. Thus the GOP leadership seemed, if not eager, at least amenable to a compromise. But tea party types and the Koch brothers are threatening retaliation.
The agreement, struck between House Finance Committee Chairman Paul Ryan (R-Wisc.) and Senate Finance Committee Chairwoman Patty Murray (D-Wash.), would restore about $63 billion in automatic spending cuts forced by “sequestration” in such areas as defense, education, Head Start, research and National Parks.
To do this, it would extend by two years a 2 percent cut in the previously expected increase for Medicare spending and reduce cost-of-living increases on military pensions. It would raise revenue via such devices as higher airline taxes for airport security (oops, officially call them “fees”); asking federal workers to pay in more for their pensions; forcing companies to raise their contributions to the federal Pension Benefit Guaranty Corporation and making energy and mining companies cover more of the administrative costs for their leases on federal property.
But the legislators have punted yet again on the main long-term fiscal issues involving income tax rates and the future of Medicare, Medicaid and Social Security. Most Democrats want to avoid cuts in these entitlement programs while many Republicans and business executives and other affluent people want to cut them in order to reduce their taxes.
Still, it’s nice to have a breather in Washington’s budget wars. Assuming that the deal goes through, legislators can return to their own private and really big fiscal concern and time-consumer -- raising campaign cash.
-- The Providence (R.I.) Journal
Bailouts alter markets
Government Motors is no more. The U.S. Treasury sold its remaining shares of General Motors common stock Dec. 9. “Taxpayers recouped about $39 billion of the $50.1 billion pumped into GM in late 2008 and 2009,” Joanne Muller of Forbes magazine reported.
In 2009, President Obama and automotive executives promised taxpayers would get back all of the bailout money they provided, and then some. Muller explained why the repayment seemingly came up $11 billion short but actually accrued in taxpayers’ favor. “A study released by the Center for Automotive Research concluded that the government bailout of GM spared 1.2 million jobs in 2009 and preserved $39.4 billion in personal and social insurance tax collections in 2009 and 2010,” she wrote.
That assertion requires a healthy dose of skepticism. For one thing, the Center for Automotive Research receives 20 percent of its funding from the automotive industry, according to financial writer Paul Ebeling, so its researchers were motivated to paint the brightest possible picture of the bailout and its aftermath.
Moreover, the center’s findings are speculative. Had GM and Chrysler been allowed to slip into conventional bankruptcy, their strongest units -- for example, GM’s Chevrolet and Cadillac divisions, and Chrysler’s Jeep and Ram truck operations -- would have been snapped up by healthier automakers. The job-preservation and tax-collection priorities pursued via the bailout strategy would have been achieved by different means.
For many decades, America grew thanks in part to a process known as “creative destruction,” under which some companies died as demand for their products waned, or others came up with ways to build better products at lower cost. Today, the government picks winners and losers, often for reasons rooted in corruption or ignorance, and the result is manifest in the nation’s persistently sluggish growth.
-- The Republican American of Waterbury (Conn.)