Follow the Bouncing Ball: Serious Misreporting of the Sequester News – Russ Winter

“There won’t be any easy off-ramps on this one. The days of 11th-hour negotiations are over.” -Sen. Mitch McConnell, GOP Senate Minority Leader

Increasingly, I feel as if I am Alice in Wonderland and have serious concerns about the fifth estate. One has to be a Sherlock Homes to get to the bottom of the sequester story, so little wonder that the wool is being pulled over the eyes of the American people. Thus, the online public comments in these news stories don’t even seem to even understand the numbers or math being proposed. I am posting this so that others can cross-check how the sequester counterplan from the Senate Democrats is being falsely reported.

I read through about ten news reports on this Senate Democrat counter-proposal in an attempt to get to the bottom of it. In almost all cases, this counter-proposal is being portrayed as an “$110 billion cut” with no reference point such as annual. This conveys the impression that it is a legitimate substitute for the $120 billion annual cuts called for in the sequestration. Buried in a few stories was this account suggesting that the defense cuts would be a total of $27.5 billion over ten years (not annually) and mostly at the back end:

“Senate Appropriations Committee Chairwoman Barbara Mikulski (D-Md.) said the defense cuts don’t kick in until 2015, after the Afghanistan war ends and they are phased in slowly until 2021. The plan would make defense cuts of about $3 billion in fiscal years 2015 and 2016 and slowly rise to $5 billion in 2021.”

This is a press release sent to Huffington Post from “the Senate Democrat staffer.” This time the language is clear enough that this is nothing more than a proposal to delay the sequester until Jan. 2 and to start the discussion (at this late day) around a feeble offer of $110 billion in new revenue and spending cuts over 10 years, not on an annual basis.

For the GOP to kick the can this time would be to hand the Democrats a huge political victory and fracture their own Party. This is virtually a September 1939 “Poland moment” for both of these parties. Given the level of obfuscation, bizarre media reporting, magical thinking, and how far apart the situation is, I expect fur to fly in March. Meanwhile, the House and Senate voted to take a recess and will not reconvene until  Monday, Feb. 25.

Click here to try the Professional Edition for 30 days risk free.

Russ Winter’s Actionable- Actual trading with tactics and strategy from a master. Learn more and subscribe now.

Share!Tweet about this on TwitterShare on FacebookShare on LinkedInEmail this to someonePrint this page

Click here to try the Professional Edition for 30 days risk free.