Making Grandma Pay for the Sequester

The Obama administration wants to make the federal budget sequester personal for people like me – affluent folks who make their living in the private sector and who think less government spending and lower taxes are basically good ideas.

So the president and his minions chose to make life difficult for my mother. That’s about as personal as it gets.

My mother, who is well into her 80s but is still quite mobile (I like to call her “Wheels-Up Rose”), had spent two weeks visiting a friend in California. She returned home to New Jersey last Thursday. I accompanied her on the westbound trip, but I was in Brazil last week on business, so Mom had to make the return trip alone.

She and a friend got up long before dawn to put my mother on her 7 a.m. Southwest flight out of Ontario, Calif. This first hop took her to Oakland, where she had a tight connection for her plane to Newark, with an intermediate stop at Chicago’s Midway Airport. She made her connection and the second flight left for Chicago.

The Chicago stop should have been just a brief layover, but this is where the administration’s political strategy kicked in. The president and several of his cabinet officers spent the first two months of this year warning us of dire consequences if the broad spending cuts were not reversed before taking effect on March 1. That date came and went, but for weeks, nothing much happened – at least as far as most of us who are not on the federal payroll were concerned.

Then the administration announced that the sequester left it with no choice but to furlough about 10 percent of the nation’s air traffic controllers, which would trigger delays across the country. The Justice Department, by contrast – where Attorney General Eric Holder had earlier promised that criminals would go uncaught and unprosecuted due to staff cuts – miraculously discovered that it had the authority to move money around its various accounts, thus allowing the administration to ensure that no banker in America goes unpunished.

When my mother’s flight stopped in Chicago, passengers were advised that due to staff reductions at the Newark control tower, they would have to get off the plane and wait. They did, for close to two hours. Then, with a new crew, they re-boarded the aircraft and proceeded to Newark. My mother’s coast-to-coast epic took about 13 hours. The extra wait in Chicago was not life-threatening, but for a senior citizen it was exhausting and inconvenient – exactly as it was intended to be.

The community-organizer-turned-president is considered, especially by his political opponents, to be a disciple of the late radical activist Saul Alinsky. “Pick the target, freeze it, personalize it, and polarize it,” Alinsky wrote in his Rules for Radicals, published in 1971. Picking on air travelers to suffer consequences of the budget cuts made the cuts personal for those travelers (and their immediate families), and polarized the topic by distinguishing people who can afford air travel from, say, the families of children who might have attended Head Start programs that suffered funding cuts.

This strategy was getting a little too personal on Capitol Hill, however. Unlike President Obama, members of Congress still have to face voters again. At almost the exact time Wheels-Up Rose was grounded in Chicago, the Senate passed legislation – unanimously – to reverse the air traffic furloughs, at least through Sept. 30. The House passed the bill the next day, and Obama signed it, though he groaned and grumbled as he did.

Yet even as Democrats caved, some of them hinted that they might try putting Alinsky’s rules into practice later, if they can’t get the cuts to some of their own pet programs reversed.

“This is a practical, pragmatic answer to an immediate problem,” Sen. Amy Klobuchar (D-Minn.), said of the Senate vote, according to The Washington Post. “But I hope the pressure starts mounting to get a bigger deal, because we’re not going to keep doing this.”

Why not? Don’t ask me; ask Klobuchar, or Senate Majority Leader Harry Reid (D-Nev.), who also backed the administration’s pressure tactics.

Or just consult Alinsky, who also wrote: “The major premise for tactics is the development of operations that will maintain a constant pressure on the opposition.”

I guess I’ll have to tell my mother, and my daughters, who worry about their grandma, that this is just the way the game is played in Washington today.

Sorry, Mom. They are making it personal now.

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About Larry M. Elkin 564 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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