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Policy: Economy

Morning Examiner: Best. Economic. Contraction. Ever.

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Politics,Beltway Confidential,Conn Carroll,Morning Examiner,Economy

“A decade of war is now ending,” President Obama said last week in his Second Inaugural Address, “An economic recovery has begun.”

Unfortunately for Obama some rather inconvenient facts are getting in the way of his preferred political narrative. Yesterday, the Commerce Department released their advance estimate of economic growth for the 4th quarter of fiscal year 2012 and the news was not good: the economy shrunk by .1 percent.

Shocked by the unexpected news Obama’s supporters couldn’t decide how best to respond. Democratic Party Communications Director Brad Woodhouse tried to find a silver lining in the report, tweeting out one economists claim that this was “The best-looking contraction in U.S. GDP you’ll ever see.” Ashworth, and many other liberals, noted that while the private sector economy actually added 1.2 percent to economic growth, a huge reduction in defense spending led shrank the economy by 1.3 percent. Never mind the fact that even 1.2 percent is far from the levels of economic growth needed to sustain the federal government surging entitlement spending obligations.

Later in the day, White House Press Secretary Jay Carney minced no words about who was to blame for this “best-looking contraction,” telling the White House press corps: “Our economy is facing a major headwind, which goes to your point, and that’s Republicans in Congress. Talk about letting the sequester kick in as though that were an acceptable thing belies where Republicans were on this issue not that long ago, and it makes clear again that this is sort of political brinksmanship of the kind that results in one primary victim, and that’s American taxpayers, the American middle class.”

Except, as Bob Woodward documented in his book The Price of Politics, the defense sequester not only was the White House’s idea, but they are the one’s who insisted it be part of the 2011 Budget Control Act. And don’t forget that cutting defense spending has been a major goal of the Obama administration from day one. In fact, at this time last year, Obama was trumpeting his efforts to cut defense spending by $487 billion over the next decade. It takes a lot of audacity to fight for defense cuts one year and then blame the other party for the economic affect of those cuts the next.

And the economy could get weaker from here. Remember, Obama also insisted on a $600 billion tax hike this January. That is going to have an impact on economic growth, as is the expiration of the payroll tax cut which has already sent consumer confidence plummeting.

From The Washington Examiner
Examiner Editorial: Why isn’t gun control working in Chicago?
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Sean Higgins: How to neutralize the left’s anti-voter ID campaigns
Tim Carney: Ex-Sen. Ben Nelson cashes in on his Obamacare vote
Michael Barone: Virginia Republicans’ dumb idea

In Other News
The Wall Street Journal, Some Unions Grow Wary of Health Law They Backed: Labor unions enthusiastically backed the Obama administration’s health-care overhaul when it was up for debate. Now that the law is rolling out, some are turning sour. Union leaders say many of the law’s requirements will drive up the costs for their health-care plans and make unionized workers less competitive.
Associated Press, Some families to be priced out of health overhaul: Some families could get priced out of health insurance due to what’s being called a glitch in President Barack Obama’s overhaul law. IRS regulations issued Wednesday failed to fix the problem as liberal backers of the president’s plan had hoped.
The New York Times, Israeli Airstrike in Syria Targets Arms Convoy: Israeli warplanes carried out a strike deep inside Syrian territory on Wednesday, American officials reported, saying they believed the target was a convoy carrying sophisticated antiaircraft weaponry on the outskirts of Damascus that was intended for the Hezbollah Shiite militia in Lebanon.
The Los Angeles Times, Sen. Robert Menendez denies consorting with prostitutes: Sen. Robert Menendez of New Jersey, a key player in the effort to overhaul immigration laws, denied allegations that he consorted with prostitutes during trips to the Dominican Republic with a longtime friend and campaign donor whose South Florida office was raided by the FBI.
The Washington Post, Gabrielle Giffords speaks at Senate hearing on gun violence: Former House member Gab­rielle Giffords was the first witness called by the Senate Judiciary Committee on Wednesday in a hearing that served as the congressional kickoff for a bitter fight about guns.

Lefty Playbook
Jonathan Cohn tells liberals not to worry about Obamacare’s sticker shock.
Brian Beutler on the Democrats’ sequester strategy.
Sahil Kapur on the Obama administration’s four proposed exemptions to the Obamacare mandate.

Righty Playbook
Sen. Marco Rubio, R-Fla., takes his case for amnesty to RedState.
Rich Lowry on Marco Rubio’s bad deal.
Ben Domenech backs a path to legalization, not citizenship.

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