Budgetary Magic: Funding of Obamacare

From reading and listening to all the learned pundits it seems remarkable that no one has really ever tried to show in some concrete way how the 111 Congress and the Obama Administration were able to say with a straight face that they passed ObamaCare and balanced the budget all at the same time.  Remember they wanted to give 43 million people health insurance and not increase the federal deficit...  the problem was how to pay for it.

Here is how they were able to do it:

• Make the drug companies reduce the prices of their drugs by $80 billion (coercision?)
• Take $500 million from Medicare and Indian health service (deception?)
• Force 300 million buy health insurance for $900 million (constitutional?) (tax)
• Increase payroll taxes
• Force 50 states to use Medicaid to subsidize the future regional health pools (constitutional?)
• Regulate the insurance industry to force them to reduce costs 
• Force the insurance industry to accept more people

The CBO was able to certify that the budget would not be busted because ObamaCare was going to push all the costs to the states and citizens of this country which meant the cost to the federal government would not result in a deficit..  The only thing that the federal government will now pay is the cost of regulating the insurance industry and the enforcement efforts by the IRS.

The consequences of this White House and Congressional shell game was to shift the cost burden onto the shoulders of the citizens and the states.  They did not reduce costs -  they just rearranged the cost pools until the burden was off Uncle Sam.  We will either pay for this legislation through payroll taxes, income taxes, or being forcibly required to pay for federally mandated health insurance's coverage which the consumer will have no choice except to write the check.  The federal government will dictate everything - the cost of insurance, what will be covered by insurance policies, etc.

Eventually the insurance industry will no longer exist; we will be left with only the federal government selling us our insurance policies.  I am not looking forward to the day that we have to stand in line to buy insurance policies like we have to purchase car tags.

Life, Liberty, & the Pursuit of Happiness

ObamaScare - a distillation of the law

Life, Liberty, and the Pursuit of Happiness

Nancy Pelosi said we had to pass the law so we could find out what is in it,.  Facts and consequences of the law have come out in dabs and dribbles.  I will try to lay out the facts and consequences as gathered from pundits, editorials, and studies by the States.  Please feel free to correct me with any errors of fact.  Notably this task is a work-in-progress to find out about the consequences of ObamaScare.

Facts (ObamaScare is a minefield full of taxes for every citizen, loopholes, conundrums, and "gotchas")

• The Congressional Budget Office predicts ObamaScare (Affordable Care Act) will cost taxpayers $2 trillion when fully implemented
• The vast majority of the un-insured are being dumped into Medicaid
• Employees at small firms will face an individual tax of as much as $2,085 per family if they do not have the government-sanctioned level of coverage
• Based on Oklahoma Employment Security Commission statistics, 5.67% of Oklahoma employers , who employ 57.9% of the workforce in Oklahoma,  will have to comply with ObamaScare and will likely drop health coverage and possibly downsizing to avoid the high cost of health insurance
• The federal government will provide worker subsidies, by only if you buy a policy through a state exchange (not through a federal exchange)
• Like several other states, Oklahoma is considering not establishing a state exchange because of the high cost to the states.
• If employers raise worker pay too much the employer faces a tax hit coming or going
• Starting in 2014, Americans must report on the income tax return whether they have "qualified" health insurance.  If you do not have a "qualified" plan you have to pay the higher of $95 or 1% of taxable income.  In 2015 the tax rises again, to $695 or 2.5% of taxable income.  
• The IRS will become Big Brother
• Qualified plans will be graded bronze (cover 60% of cost), silver, gold and platinum (cover 90% of cost) - reflecting how much of health care costs are covered by the plan
• Tennessee estimates that ObamaScare will cost them $716 million dollars the first year
• Whether a person/family needs immunizations, mammograms, autism screening, or cholesterol screening, they will be paying for them anyway

Consequences

• ObamaScare expands Medicaid which will likely divert State funds from schools and roads
• Work at too small a business and you might get taxed.  
• Work for a firm with more than 50 employees, you might get fired and then taxed.  
• Work for a large firm with "insufficient" coverage, you might get dumped into your state's Medicaid program or health exchange.  Unless your state does not expand Medicaid or set up an exchange, in which case you just get dumped and then taxed.
• If employers have 40+ workers they will be financially penalized for exceeding 50.  
• The IRS will expand the federal workforce by the thousands - agents, administrators, regulators, etc.

Union Consumption

Life, Liberty, & the Pursuit of Happiness

Boehner and Obama Tangle

Big Oil's $4B tax break in doubt as Obama, Boehner tangle

President Obama once again calls for the subsidies to end as high gas prices erode Republican opposition.

By Steve Hargreaves, senior writer

CNNMONEY.COM — 04/29/11

President Obama repeated his call Tuesday for an end to $4 billion in oil industry tax breaks as gas prices approach $4 a gallon and after a top lawmaker indicated a possible shift in Republican policy.
In a letter to congressional leaders, the president said the oil industry is profitable enough without the tax incentives and that the money should be spent on alternative energy sources and conservation.
"CEOs of the major oil companies have made it clear that high oil prices provide more than enough profit motive to invest in domestic production without special tax breaks," said Obama. "As we work together to reduce our deficits, we simply can't afford these wasteful subsidies."
This week those profits are going to be front and center. BP is expected to report earnings on Wednesday. Exxon is slated to announce its results on Thursday. Some analysts expect the company's profits to jump 50% from last year. Chevron (Symbol : CVX

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) is scheduled to make its earnings announcement on Friday.
The oil industry and many of its supporters in Congress have long argued that the tax breaks encourage domestic oil production and provide jobs for millions of Americans. Republicans in particular have resisted efforts to eliminate these tax breaks, something many Democrats have been trying to do since at least 2008.
But on Monday night, Speaker of the House John Boehner indicated he might be open to taking some of those breaks off the table.
"I don't think the big oil companies need to have the oil depletion allowances, but for small, independent oil and gas producers, if they didn't have this, there'd be even less exploration in America than there is today," Boehner said on ABC's (Symbol : DIS

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) World News Tonight. "It's certainly something we need to be looking at."
Depletion allowances let oil companies treat the oil in the ground as capital equipment, and they can write off a certain percentage for each barrel that comes out.
On Tuesday the speaker appeared to backtrack from those comments, with an aid telling CNN (Symbol : TWX

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) that "what the President has suggested so far would simply raise taxes and increase the price at the pump."
Nonetheless, Obama took the chance to pounce, saying in his letter that he was "heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies."
This all comes as the price of gasoline surges above $4 a gallon in many states, making it increasingly difficult politically to defend Big Oil.
As gas prices approach their record highs set in 2008 they are threatening to derail the nation's nascent economic recovery.

The tax breaks in question

The Obama administration is targeting nine tax breaks, according to a paper from the left-leaning Center for American Progress. Four account for the lion's share of the money:
Domestic manufacturing tax deduction: This is the largest single tax break, and would save over $1.7 billion a year if eliminated.
The tax deduction, passed in 2004, is designed to keep factories in the United States. Companies that manufacture here can deduct 9% of their income from operations that are attributed to domestic production.
But some question if that incentive is really appropriate for oil companies. "What are they going to do, move the oil field to the North Sea," said one staffer at the Center for American Progress said in an interview earlier this year.
No, but higher costs in the United States may make them move the drill rigs to the North Sea or some other place.
Eliminating the tax breaks "would actually discourage new energy projects and new hiring in one of the nation's most dependable job-creating industries," the American Petroleum Institute said in a statement at the time, noting the industry currently supports over 9 million jobs.
The percentage depletion allowance: This lets oil companies deduct about 15% of the money generated from a well from its taxes. Eliminating it would save about $1 billion a year.
The deduction essentially lets oil companies treat oil in the ground as capital equipment. For any industry, the value of that equipment can be written down each year.
But critics say oil in the ground is not capital equipment, but a national resource that the oil companies are simply using for their own profit.
The foreign tax credit: This provision gives companies a credit for any taxes they pay to other countries. Altering this tax credit would save about $850 million a year.
Foreign governments can collect money from oil companies through royalties -- fees for depleting their national resources -- and income taxes.
A royalty would be deducted as a cost of doing business, and would likely shave about 30% off a company's tax bill. Categorized as income tax, it is 100% deductible.
Foreign governments long ago grew wise to the U.S. tax code. To reduce costs for everyone involved and attract business, they agreed to call some royalties income taxes, allowing oil companies to take the 100% deduction on a bigger slice of their bill.
Intangible drilling costs: This lets the industry write off about $780 million a year for things like wages, fuel, repairs and hauling costs.
All industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year.

Wisconsin Budget Gap: Blame Politicians or Teachers' Unions? - TIME

Wisconsin Budget Gap: Blame Politicians or Teachers' Unions? - TIME

Unions support Tax increases

Budget Shortfall  

Conspiracy?
Share the Pain
Sick Teachers?
Bargaining Rights Poll

How beholden are Democrats to Public Sector Unions? 

Are Democratic elected officials working as hard for Taxpayers as they do for Public Sector Unions?

 Are Public Sector Unions working for Taxpayers, or just the opposite?

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Natural Debt as Budget Cuts Loom - TIME

Environmentalists Warn of Natural Debt as Budget Cuts Loom - TIME

  Ask any Republican — from the Speaker of the House to a local sheriff — what the biggest problem facing the country is today and you're sure to get the same answer: Debt. Conservatives believe a public debt of $14 trillion and growing is crippling the economy and condemning future generations to penury.

In Wisconsin, new Republican governor Scott Walker says that a $137 million deficit leaves him no choice but to force public unions in the state to accept drastic benefits reductions and curtailed bargaining rights — a stance that has brought tens of thousands of protesters to the streets of Madison. In Congress, the Republican-controlled House has passed a budget that would slash $60 billion in government spending, most of it from discretionary programs. "We're broke," Speaker John Boehner told Meet the Press last week. "It's time to get serious about how we're spending the nation's money."

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State Approves Detroit Schools' Cuts - WSJ.com

State Approves Detroit Schools' Cuts - WSJ.com

The state of Michigan approved a plan for Detroit to close about half of its public schools and increase the average size of high-school classrooms to 60 students over the next four years to eliminate a $327 million deficit. The plan was submitted in January by Robert Bobb, Detroit Public Schools' emergency financial manager, as a last-ditch scenario if the district couldn't find new revenue sources, which it hasn't so far.

Final approval came after Mike Flanagan, the state superintendent of public instruction, cleared Mr. Bobb's initial plan with some new requirements, including that the district not file for bankruptcy protection during Mr. Bobb's remaining months in office. The state approved the plan in a Feb. 8 letter, which the Detroit public-schools district released Monday.

Mr. Bobb said the deep cuts were necessary if the district hoped to be solvent again without additional state aid. But he said the strategy was ultimately ill-advised because it will likely drive even more students away, depriving the district of needed state funds, which Michigan apportions on the basis of enrollment. "This is the route we're forced to take under state law," Steven Wasko, Detroit Public Schools' assistant superintendent for communications, said Monday. "However we continue to look for longer-term plans so we can avoid this."

Mr. Bobb is now moving to shrink the district to 72 schools from 142, as enrollment is expected to decline to 58,570 students by 2014 from about 73,000 students today.

Mr. Bobb was appointed emergency financial manager for the district two years ago to help close what was then a $218 million deficit, and moved quickly to close schools and root out waste. But the deficit deepened during his tenure, weighed down by salary, pension and health-care obligations. The longtime municipal manager said that without the cuts and cost-savings measures he has made since 2009, the district would face a deficit of more than $500 million today. Meanwhile, many of his efforts to restructure the district's academics and finances were derailed by clashes with unions and with the elected school board, which recently won a court fight to control academics and select the next superintendent.

Anthony Adams, the chairman of the school board, didn't respond Monday to a request for comment. The school board has sought an infusion of funds from the state and an end to outside control of the district. Mr. Bobb has agreed to stay a few more months beyond his appointed term, through the end of June. A spokeswoman for Republican Gov. Rick Snyder said Monday that he was considering appointing another emergency manager to succeed

Mr. Bobb, which would keep the elected board of education largely sidelined on financial matters for the near future.

Organized labor is fighting back. The Detroit Federation of Teachers called for an emergency lobbying day Tuesday in Lansing, the state capital, to protest bills granting emergency financial managers broad power over cities and school districts in financial crisis. Under those bills, emergency managers could toss out union contracts, dissolve school boards and set wage and benefit levels without collective bargaining. Mr. Bobb is generally supportive of the bills, said Mr. Wasko, the assistant superintendent.

Calls to union officials weren't immediately returned Monday.

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Major Reforms To Entitlements Can't Be Put Off - Investors.com

Major Reforms To Entitlements Can't Be Put Off - Investors.com: "Procrastination is rarely a cost-free strategy. That is true when it comes to fixing Social Security — as much as the Obama administration and, even more forcefully, its allies on the left may wish to believe otherwise.

Their 'what's the big rush?' message goes like this: The retirement program isn't really contributing to deficits in the short run.

Indeed, its finances are healthy enough so that it can continue paying all promised benefits for more than two decades, until 2037.

Even then, if absolutely nothing is done, Social Security would be able to pay about 75% of promised benefits.

So where's the fire? Here it is. Last year, for the first time in its history, Social Security paid out more in benefits than it received in payroll taxes.

The recession caused this shortfall: Seniors who lost their jobs chose to start collecting benefits earlier, while payroll tax collections fell because of high unemployment and lower wages.

As a general matter, it's true — although less than previously — that Social Security is not a cause of short-term deficits.

In fact, until last year, the surplus in the Social Security trust fund masked the true size of the current deficit. But the 2010 experience is a hint of things to come — soon.

By 2015, Social Security will be increasing the deficit every year, not obscuring it.

Still, that's not the real problem, or the strongest argument against thumb-twiddling. The reason is that making changes now will make it easier to protect the very people that the 'Social Security's not a problem' brigade say they care about.

Need To Act Now

The Social Security trustees make this point every year in their annual report about the system's finances: 'If action is taken sooner rather than later, more options will be available and more time will be available to phase in changes so that those affected have adequate time to prepare.'

The challenge isn't huge, but it is significant. As a useful paper by Charles Blahous and Robert Greenstein for the Pew Fiscal Analysis Initiative explains, when the trust funds run out, the gap between Social Security revenues and benefit payments will be 1.3% of the gross domestic product — about one-fifth of the projected deficit then.

Yes, Medicare and Medicaid present a bigger challenge, but the Social Security shortfall represents a significant slice of the deficit.

Unlike the health programs, whose solvency ultimately depends on the uncertain enterprise of slowing cost growth, the potential fixes to Social Security are both obvious and reliable.

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Life, Liberty, & the Pursuit of Happiness

Even Democrats are not pleased with Obama

Dems join GOP criticism of budget - TheHill.com

Democrats joined Republicans on Tuesday in criticizing President Obama's budget request for doing too little to bring down the national debt. Senate Budget Committee Chairman Kent Conrad (D-N.D.) faulted Obama for not taking on entitlement reform, and during testimony by Office of Management and Budget (OMB) Director Jack Lew, suggested the administration was not being serious enough about reducing the deficit.

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Obama is not providing any Leadership!

Obama unveils $3.73 trillion budget for 2012 - Yahoo! News

Obama's new budget projects that the deficit for the current year will surge to an all-time high of $1.65 trillion. That reflects a sizable tax-cut agreement reached with Republicans in December. For 2012, the administration sees the imbalance declining to $1.1 trillion, giving the country a record four straight years of $1 trillion-plus deficits.

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Republicans Seek Spending Cuts In Debt Ceiling Fight - Investors.com

Republicans Seek Spending Cuts In Debt Ceiling Fight - Investors.com

News the federal deficit will hit a record in 2011 pushed Congress one step closer Wednesday to its first major battle of the year: raising the debt ceiling. The national debt stands at just over $14 trillion and will soon hit the statutory limit of $14.3 trillion. If Congress doesn't raise it soon, the Treasury won't be able to issue debt above that ceiling, which would lead to substantial spending cuts and the eventual possibility of default. Many Republicans are insisting on major spending cuts in return for raising the ceiling. Democrats scoff at the idea. Meanwhile, Tea Party activists are gearing up to fight over the issue. Red Ink Is Expensive

The budget deficit will hit a record $1.48 trillion in fiscal 2011, the Congressional Budget Office predicted Wednesday. Over the next decade, an additional $6.7 trillion in red ink is expected. Meanwhile, the unfunded liability for Social Security and Medicare is $19.1 trillion in present-value terms. With the long-term fiscal picture looking dire and anti-deficit fervor among voters stronger than ever, many GOP lawmakers are demanding major cuts in exchange for voting to raise the debt limit. "We can't afford to kick this can down the road any longer," said Rep. Jeff Flake, R-Ariz. "We need both spending cuts and spending caps in any deal to raise the debt ceiling." The GOP-led House will likely do just that. But Democrats still control the Senate and White House. It's unclear how a standoff would play out politically.

Meanwhile, Tea Party activists oppose any debt-limit increases. "We think voting for the debt ceiling is a dangerous thing to do," said Mark Meckler, co-coordinator of the Tea Party Patriots. "It's time to cut up the credit card." A few Tea-infused members, such as Rep. Michele Bachmann, R-Minn., are steadfastly refusing to vote for a debt-limit hike. But more Republicans, like Flake, see a chance for driving a hard bargain. Rep. Frank Wolf, R-Va., recently said in a speech on the House floor: "When Congress is asked to increase the statutory debt limit, which will likely happen in the next few months, I will vote no, unless — and let me be completely clear here — there is a firm commitment to deal with the larger issue or the vote itself is tied to a plan to put America on a path to financial responsibility."

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Obama likens budget to family pocketbook choices - Yahoo! News

Obama likens budget to family pocketbook choices - Yahoo! News

WASHINGTON – Portraying his fiscal choices as kitchen table budgeting, President Barack Obama says he is making difficult cuts to allow needed spending increases in education, technology and basic infrastructure like roads and bridges. In a broad preview of his administration's budget for fiscal 2012, Obama says the combination of cuts and new spending will result in an overall freeze in annual domestic spending for the next five years.

"This budget asks Washington to live within its means, while at the same time investing in our future," the president said Saturday in his weekly radio and Internet address. The White House plans to release his budget on Monday. With public opinion turning against increased spending, Obama is making a concerted sales pitch to cast his initiatives as fiscally prudent. But the dual goal of taming deficits while adding dollars to selected projects comes as the government faces a projected $1.5 trillion deficit this budget year, which ends in September. Republicans are demanding greater deficit reduction efforts and members of the House GOP say they want to cut the current 2011 budget year by $61 billion.

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Tea Party Express Names Snowe as Its Next Moderate Republican Target : Roll Call

Tea Party Express Names Snowe as Its Next Moderate Republican Target : Roll Call

The Tea Party Express, which raised and spent millions of dollars to knock off moderate Republicans in Alaska, Colorado and Delaware in the 2010 election cycle, is now going after Olympia Snowe in Maine.

The conservative group, arguably the most organized and best funded campaign tool in the tea party movement, announced Thursday afternoon that it plans to fight the moderate Republican's 2012 re-election effort. Snowe enjoys tremendous popularity across the political spectrum in her home state, but she has irritated Maine's small and disjointed tea party movement for her willingness to work with Democrats.

Pine Tree State conservatives have already dubbed "Snowe removal" a top priority for 2012, when Maine's senior Senator will seek her fourth term. But they have struggled to rally around a single challenger. "Olympia Snowe dishonors the notion that the Republican Party is supposed to be the fiscally conservative, constitutionalist political party in America,"

Tea Party Express Chairwoman Amy Kremer said in a statement. "She voted for the bailouts, the failed stimulus plan, the repeal of tax cuts and showed her disdain for the constitution by voting in favor of the nominations of Elena Kagan and Sonia Sotamayer to the Supreme Court," Kremer said in the statement, which misspelled Sotomayor's last name.

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GM says its US sales rose 23 percent in January - Yahoo! Finance

GM says its US sales rose 23 percent in January - Yahoo! Finance

DETROIT (AP) -- General Motors Co.'s U.S. car and truck sales rose 23 percent in January, a strong start to what the auto industry hopes will be a continuation of last year's recovery. Analysts were expecting overall U.S. auto sales to rise 15 to 17 percent in January, even with lower sales to rental car fleets and East Coast snowstorms that kept some buyers at home. Fleet sales spiked to unusually high levels in January 2010 as businesses started buying again after the recession. This January, consumers were back.

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State of the State: Brown cites unrest in Egypt to make his case for budget vote| PolitiCal | Los Angeles Times

State of the State: Brown cites unrest in Egypt to make his case for budget vote| PolitiCal | Los Angeles Times
  Jerry brown Citing the pro-democracy unrest in Egypt and Tunisia, called it "unconscionable" that GOP legislators are vowing to block his attempt to ask voters to extend tax hikes to balance the budget. "When democratic ideals and calls for the right to vote are stirring the imagination of young people in Egypt and Tunisia and other parts of the world, we in California can't say now is the time to block a vote of the people," Brown said in his first State of the State address in nearly 30 years. He said the budget has tough choices but that the people "have a right to vote" on the package. He challenged both parties to take the difficult votes necessary to balance the budget.

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Fwd: House Speaker Boehner warns against debt default | Reuters

House Speaker Boehner warns against debt default | Reuters

With the Treasury Department rapidly coming closer to bumping up against its statutory borrowing limit of $14.3 trillion, some of Boehner's fellow Republicans in Congress have suggested that no further borrowing should be authorized until deep cuts are made in federal spending.

Obama to Push New Spending in State of the Union - WSJ.com

Obama to Push New Spending in State of the Union - WSJ.com: "President Barack Obama will call for new government spending on infrastructure, education and research in his State of the Union address Tuesday, sharpening his response to Republicans in Congress who are demanding deep budget cuts, people familiar with the speech said.

Mr. Obama will argue that the U.S., even while trying to reduce its budget deficit, must make targeted investments to foster job growth and boost U.S. competitiveness in the world economy. The new spending could include initiatives aimed at building the renewable-energy sector—which received billions of dollars in stimulus funding—and rebuilding roads to improve transportation, people familiar with the matter said. Money to restructure the No Child Left Behind law's testing mandates and institute more competitive grants also could be included.

While proposing new spending, Mr. Obama also will lay out significant budget cuts elsewhere, people familiar with the plans say, though they will likely fall short of what Republican lawmakers have requested.

In arguing that U.S. competitiveness is at stake, Mr. Obama plans to use his nationally televised speech to try to frame the spending debate with Republicans that is expected to dominate Congress in the coming months. 'We seek to do everything we can to spur hiring and ensure our nation can compete with anybody on the planet,' Mr. Obama said Friday after touring a General Electric Co. plant in Schenectady, N.Y. He cited clean-energy manufacturing, infrastructure and education as keys to competitiveness.

Previewing the expected theme of his speech, Mr. Obama on Friday appointed GE Chief Executive Jeffrey Immelt to lead a new President's Council on Jobs and Competitiveness.

Commenting on the new advisory panel, Senate Minority Leader Mitch McConnell (R., Ky.) said that unless its 'first recommendations are to reverse the damage the policies of the last two years have done to the business climate, job creation and the exploding national debt, I fear it will do more to create good public relations for the White House than good jobs for struggling Americans.'

Republicans are casting the White House's pivot toward competitiveness as an excuse for bigger government and more spending. They say a surge in federal spending and a $1.3 trillion budget deficit are impeding job creation, and dramatic spending cuts are needed immediately.

In the House, Republicans are pushing to cut $100 billion from the annual budget as soon as this year. A coalition of House Republicans proposed Thursday cutting $2.5 trillion in spending over a decade, pushing nondefense discretionary spending down to 2006 levels for 10 years.

'Today's the day we finally stop kicking the can down the road,' Rep. Jeff Flake (R., Ariz.) said as the proposal was introduced Thursday.

White House officials have said that spending cuts of the magnitude proposed by Republicans could stall the economic recovery. Still, Mr. Obama is expected to pair his calls for investment with an admonition that the country must embark on targeted spending cuts. Late last year, he called for a two-year wage freeze for all federal civilian employees to save $5 billion. He's expected to push for spending cuts on Tuesday, particularly in duplicative or dysfunctional federal programs.

Details of those cuts couldn't be learned Friday evening. Programs he has gone after in the past include agricultural subsidies, defense programs such as C-17 military transport planes, and an alternate engine for the Pentagon's Joint Strike Fighter.

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Life, Liberty, & the Pursuit of Happiness

Republicans to hold spending vote before State of the Union - TheHill.com

Republicans to hold spending vote before State of the Union - TheHill.com: "House Republicans will force Democrats to go “on the record” about government spending in a symbolic vote next week timed to coincide with President Obama’s State of the Union address.

The House Rules Committee on Wednesday approved by a party-line vote of 8-4 a resolution calling on House Budget Committee Chairman Paul Ryan (R-Wis.) to limit non-security discretionary spending in the second half of 2011 to 2008 levels “or less.”

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Life, Liberty, & the Pursuit of Happiness

Pump prices eyed as reason Americans driving less - Sunday, Jan. 16, 2011 | 3:24 a.m. - Las Vegas Sun

Pump prices eyed as reason Americans driving less - Sunday, Jan. 16, 2011 | 3:24 a.m. - Las Vegas Sun: "Americans are driving less, with the holidays behind them and gasoline at two-year highs.

Gas costs around $3.10 a gallon, the highest price since mid-October 2008. Americans usually drive less in the winter, and recent bad weather across the country was further incentive to stay home. And money needs to go towards paying off holiday credit card bills.

Analysts are closely watching economic news and consumer sentiment to determine how much high gas prices are influencing consumer habits. That could affect the pace of the economy in the months ahead.

Drivers are 'pulling back on gas right now but you can't tell whether it's weather-related,' said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. 'Unless you're in Boca Raton, Fla., or San Diego, you're seeing pretty sleepy midwinter demand.'

According to research firm MasterCard Advisors SpendingPulse, gasoline demand for the week ended Jan. 7 was 8.39 million barrels a day, a level not seen since Sept. 30, 2005. Demand fell 2.9 percent from a year ago.

Consumer prices rose last month by the largest amount since June 2009. Gasoline prices accounted for about 80 percent of the increase, the Labor Department said Friday. The gasoline index jumped 8.5 percent in December. Gas prices rose from about $2.86 a gallon on Dec. 1 to $.3.07 at year's end.

The price continues to rise, although at a slower pace. The national average for unleaded regular gasoline was $3.095 a gallon Friday, according to Wright Express, AAA and the Oil Price Information Service. That's up nearly 34 cents from a year ago.

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Life, Liberty, & the Pursuit of Happiness

Oil price over $100 'not unrealistic': Iran

Oil price over $100 'not unrealistic': Iran: "Oil prices crossing the 100 dollars a barrel mark is possible but would not merit an emergency meeting of OPEC, Iran's Oil Minister Masoud Mirkazemi who currently heads the cartel said on Sunday.

'The price of 100 dollars is not unrealistic in this situation,' Mirkazemi told reporters.

'Even if the oil price crosses 100 dollars a barrel there is no need for an emergency OPEC meeting. Some OPEC members believe there is no need for an emergency meeting even if oil reaches 110 or 120 dollars a barrel.'

At the New York Mercantile Exchange, a barrel of light sweet crude for delivery in February closed at 91.54 dollars on Friday.

The rise in global oil prices has been attributed to a harsh winter hitting Europe and parts of North America, as well as growth in China and other developing nations.

The Organisation of Petroleum Exporting Countries has said speculation was also fuelling the price rise.

At its last meeting at Quito, the 12-nation cartel decided to leave production quotas unchanged, stressing the looming risks to the fragile global economic recovery.

Some OPEC members -- Iran, Venezuela and Libya -- were urging higher prices at Quito to above 100 dollars a barrel to offset what they said were rising production costs.

But OPEC heavyweight Saudi Arabia differed, saying between 70 and 80 dollars a barrel was a 'fair price.'

Iran took over the cartel's rotating presidency from January 1, the first time in 36 years that Tehran holds the leadership of the cartel which accounts for 40 percent of world output.

Mirkazemi also announced that Iran has discovered a new onshore gas field with reserves valued at 50 billion dollars east of Assaluyeh on the Gulf.

'It has 260 billion cubic metres (9.18 trillion cubic feet) of gas, of which 210 (billion) can be exploited, which is about 24 million cubic metres per day,' the minister said.

Iran is OPEC's second largest crude exporter and holds the world's second largest gas reserves.

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