It's official: the bipartisan Congressional supercommittee charged with coming up with a compromise of budget-cutting (entitlement-slashing) and new revenue (taxes) has failed. Because the twelve lawmakers couldn't even come up with a way to call a press conference, the two chairs released a statement saying they were "unable to bridge the committee's significant differences." But enough of the doom and gloom: check out these AMAZING Black Friday deals! more ›

Despite Paul Giamatti Ben Bernake warning Congress that the failure to raise the debt ceiling by August 4 would spark a "major crisis" that would send "shock waves" throughout the global economy, Rep. Boehner angrily pulled back from a "grand bargain" and now even the more modest deals pitched by the Biden group seem to be in peril. This has America's Mayor, Mike Bloomberg begging Washington to raise the limit before something "catastrophic" happens. At a press conference in Queens yesterday, Bloomberg said of the DC pols, "The debt ceiling is so important that playing 'chicken with it may be cute and may be good politics but it doesn't leave the rest of the world having a warm and fuzzy feeling about investing in America." more ›

Finally, after leaving us on tenterhooks with months (years!) of speculation, former governor George Pataki has announced that he's not entering the 2012 race. He told Sean Hannity on Fox News last night, "I'm not running for president" (but he also said, "never say never"). Instead, Pataki said he's starting an advocacy group to reduce the deficit, "I think this is an extraordinarily important issue. We are going to focus on this." more ›

President Obama outlined his plan for deficit reduction today, calling for $4 trillion to be cut over 12 years, with spending cuts and tax increases. And he blasted the Republicans' deficit-reduction plans (Rep. Paul Ryan's "Path to Prosperity") which include tax breaks to the rich and corporations, "In the last decade, the average income of the bottom 90 percent of all working Americans actually declined. Meanwhile, the top 1 percent saw their income rise by an average of more than a quarter of a million dollars each. That’s who needs to pay less taxes? They want to give people like me a $200,000 tax cut that’s paid for by asking 33 seniors to each pay $6,000 more in health costs. That’s not right, and that’s not going to happen as long as I’m president." more ›

Hey, Governor-elect Andrew Cuomo, here's some bad news: According to State Comptroller Thomas DiNapoli, the state budget deficit is about three times bigger than Governor Paterson and the State Legislature projected, weighing in at $1 billion, thanks to "rising Medicaid costs and slower-than-projected tax revenues." Even Paterson's budget director says that DiNapoli's estimate is "not outlandish" and warns Cuomo's team will face “continued difficult choices of perhaps a historic nature." Apparently state spending is four times the rate of revenues, and things are expected to get worse when there are no more federal stimulus funds. more ›

Facing a $45 million deficit and never before seen demand, the NYC Housing Authority is considering the "inconceivable" measure of revoking vouchers that help low-income New Yorkers afford their rent. It may take back as many as 10,500 Section 8 permits, reports the Times, pushing recipients into overcrowded shelters. Judith Goldliner of NY's Legal Aid Society was shocked at the prospect. “This is just a disaster,” she said. “We don’t know who could be impacted by it.” more ›

State Comptroller Thomas DiNapoli issued a report, New York's Deficit Shuffle (PDF; not to be confused with the Truffle Shuffle) showing how NY State has hidden its budget deficits and ever-increasing spending by moving money around between accounts and other accounting "sleight of hand." DiNapoli is worried, "New York needs to stop playing games with the deficit. The state dips into dedicated funds here and shifts money over there, all to cover cash shortfalls and avoid making the difficult decisions needed to align spending with revenues. The end result is the state’s real fiscal condition is impossible to pin down. Every time the game is played, taxpayers lose." more ›

Gov. Paterson has given unions representing state workers an ultimatum. After taking emergency measures like delaying school aid and state construction projects he’s asked them to hold off on 4 percent raises that are part of their contracts, or face “massive layoffs”, reports the Times Union. This despite a no-layoff agreement he signed last year, in exchange for more affordable pension plans for new state employees. Facing a $9 billion deficit, Paterson says he’s not going back on his word, adding that now "everything's on the table." "I never promised I would not lay anyone off," said the governor. "I let them know that would be the plan, based on what they said (that) the economy is coming back.” more ›

The non-partisan Congressional Budget Office released a report (PDF) giving the proposed $940 billion health care legislation a boost because it forecasts almost $140 billion in deficit reduction: The Washington Post reports, "The cost of expanding coverage would exceed $200 billion a year by 2019, the CBO said. But new revenue in the package, combined with savings from program cuts, would outpace the cost of coverage, reducing the federal deficit by $138 billion over the next 10 years. The savings would continue to accumulate in the decade thereafter, the CBO said, eventually slicing around $1.2 trillion from the nation's budget gap." more ›

Now that Gov. Paterson is out of the race, Attorney General Andrew Cuomo will have to drop his “coy” act and start answering questions, experts say. Yesterday Cuomo announced he’d wait for the “appropriate time” (March, reports the Daily News) to confirm his run for the governorship, but according to an anonymous adviser, “You sort of see some running room now. There’ll be a not-so-subtle change in the discussion, from this whole ‘Stay cool’ approach to ‘O.K., guys and gals, let’s get ready for a campaign and hopefully we’ll have a candidate in the next month or so.’” But once he stops playing hard to get, will voters still want him? more ›

Comptroller Thomas DiNapoli thinks he's found a hidden pocket of funds that may help solve city schools' financial woes—problem is the money's locked away tight where no one can get to it. An audit revealed $615 million reserved for school employees to get accrued sick and leave time when they leave their jobs that, through some sort of mix-up, can't be accessed. more ›

Gov. Paterson now projects the deficit for the coming year at $8.2 billion, that's up $750 million from the figure he named in his budget. According to the budget division, low tax revenues from the banks are to blame. "We know that big guys typically pay us at the end of January,” said Robert L. Megna, the state budget director, referring to large banks like Goldman Sachs and JPMorgan Chase. “Last week, after the budget came out, they didn’t pay us.” Typical. more ›

As state legislators prepare to face the worsening financial situation in Albany, Mayor Bloomberg warned that budget cuts from could make life particularly miserable for New York City residents. "We're just going to have to suffer," he said on his WOR radio show. Following his warning yesterday that the state might cut even funding for the MTA as it attempts to plug a budget deficit of about $10 billion before the April 1 deadline, the Mayor warned that that cuts could be widespread, according to the Post. He also shared these less-than-encouraging words: "If they start taking it out on us, and disproportionately on us versus the rest of the state ... then we're in big trouble." more ›

After the announcement that a state accounting miscalculation underestimated the revenue the MTA was supposed to receive by a whopping $200 million, which means that the MTA has a shortfall of $343 million, the transit agency is bringing back some Doomsday ideas, like cutting bus and subway service and closing some subway stations overnight! more ›

A Treasury report suggests that the government will, as the NY Times reports, "recover all but $42 billion of the $370 billion it has lent to ailing companies since the financial crisis began last year, with the portion lent to banks actually showing a slight profit." The Obama administration had estimated TARP-related losses of $341 billion. more ›

The State Assembly passed a $2.8 billion deficit reduction plan last night and, according to the Times Union, "The Senate is expected to pass the bills with bipartisan support in a session scheduled for 10 a.m. today." Of course, this is not the $3.2 billion in reductions that Governor Paterson has repeatedly said the state needs, but he said he'd take it anyway, "I would not describe it as a 'deal' because a deal means that all parties accept the agreement... It does give us about $600 million in cuts or other actions that require legislative approval, so we would not cut off our nose to spite our face." more ›

Today, Governor David Paterson will present his plan for about $2.5 billion in budget cuts. When asked about it, Paterson previously only said, "Pain," but he also told the Daily News, "It's going to be pretty grim. It's going to be fair. It's going to be across the board. It's going to be hard to endure, but the consequences [of doing nothing] are harder." more ›

The Botanical Station post office in the Bronx is on the chopping block, as the Postal Service faces a $7 billion deficit. The NY Times visits the establishment, one older patron saying she doesn't "know what I would do" if it shut down. The PO's landlord doesn't want to them leave either, "They always pay on time. It’s like money in the bank." The paper notes that this is just one of 15 city post offices that may be shuttered, 7 of which are in the Bronx (here's a list of 14 of them). more ›

California has been dealing with a $24 billion budget deficit, which took its state government a while to pass. Newsweek says California's problem "resulted from overspending, foreclosures, contradicting ballot initiatives, and a two thirds majority needed to pass a budget" and offers some hints about the "Next Money Pit" states... and one of those is New York: "The state's revenues were hit hard by Wall Street's financial collapse, leading to a $20.1 billion deficit. It's a heavy spender on social services, too. With state senators busy turning off the lights and locking the Senate chamber doors, is there much confidence that the legislature is equipped to handle future crises?" Anyway, we'll know we're in bad shape when Governor Paterson does a video where he jokes about budget cuts while holding a HUGE KNIFE (yes, the Governator did just that). more ›

All signs point to the new NY State budget including new tax brackets for earners making more than $300,000. According to the Daily News, whose website offers a Robin Hood-ed Governor Paterson, "Assembly Democrats are pushing a three-tier plan that would raise the top rate - 6.85% - on people earning more than $300,000 a year." more ›

In his weekly address, President Obama discussed the economy (of course) and made two points: First, that 95% of Americans will get a tax cut, because employers will withhold less taxes—"By April 1st, a typical family will begin taking home at least $65 more every month." And, second, he will outline steps to tackle the huge deficit, "On Tuesday, I will speak to the nation about our urgent national priorities, and on Thursday, I’ll release a budget that’s sober in its assessments, honest in its accounting, and that lays out in detail my strategy for investing in what we need, cutting what we don’t, and restoring fiscal discipline." Here's his address: more ›

Since January 1st, the state's unemployment fund has been borrowing roughly $90 million a week from the federal unemployment trust fund, and the deficit has already reached $212 million. M. Patricia Smith, the state's labor commissioner, tells the Times, "I think we went insolvent about two hours into 2009. We're seeing 50 percent more claimants each week than a year ago." Soup is good food! The article goes into infuriating detail about how New York has the lowest unemployment benefits in the region, and the deficit is caused not just from the spike in joblessness, but because the state has not increased the payroll tax that covers the unemployment fund in nearly a decade. With Democrats finally controlling the Legislature, there is some hope that the state might finally upgrade the system to cover the downsized masses, but in the meantime, the Fed's charging 4.64% interest, and New York's debt to Uncle Sam is expected to exceed $2.5 billion by the end of 2010. more ›

In what continues to be a familiar story of cat and mouse in politicians pointing the finger as to where funds aren't coming from, Governor Paterson yesterday claimed the state lost hundreds of millions in tax revenue because less big Wall Street bonuses are being given out this year. Many CEOs and senior executives agreed to take significantly smaller (or no) bonuses after pressure from Attorney General Andrew Cuomo, in the end nearly halving last year's total of $50 billion in bonuses. Paterson originally claimed that Goldman Sachs' lack of bonuses alone would cost the state $178 million, but an aide later clarified that was just an estimate of how much taxable income was lost. Still the governor sounded grave saying, "This is a very, very difficult year for Americans. But I don't think it has been fully realized ... it could theoretically become another depression, it is that difficult." more ›

After spelling out the dire news that NY State's budget deficit will balloon to $47 billion by 2012 yesterday, Governor Paterson is now in Washington D.C., testifying before the House Ways and Means Committee, to request for a federal Empire State bailout. more ›

Governor Paterson continued his series of bad news about state economy by predicting the deficit to grow to $47 billion by 2012, thanks to the falling financial markets and NY State's own overspending. And for next year alone, it will grow to $12.5 billion--the current deficit is $1.2 billion--and that number is basically double what his administration previously projected. Paterson hasn't made any decisions about how the state will deal with these escalating costs, but he did say yesterday, "When you're in that amount of trouble, everything is on the table, not because you want it to be, but because it's the only way to manage. It is a crisis, and a crisis means that everyone has to be accountable and everyone has to sacrifice." more ›

Senators John McCain and Barack Obama better keep working on their economic policies: The White House released an estimate saying the deficit will grow to $482 billion next year, thanks in part, per the AP, to the "sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession." Keep in mind Bush inherited a $128 billion surplus in 2001. The budget office still says, "The nation's economy has continued to expand and remains fundamentally resilient," but let's cut to the Dow Jones Industrial slipping this afternoon. more ›

The New York State Legislature finally passed a budget two weeks ago, which it balanced by taking on extra debt without the approval of voters to fund a 6% increase in spending as revenues continue to shrink. State Comptroller Thomas DiNapoli says New York is heading for trouble, especially since revenue projections are so uncertain and vulnerable to further economic downturn. more ›