Welcome to the Daily Digest.
We'll start off with some sobering news.
Yesterday, the Dow dropped 512 points - the steepest decline since October 22, 2008 - amid investor fears of another recession in the U.S. and in Europe.
Here's an FAQ about the stock market fall.
And now that we've ripped that Band-Aid off...
Minnesota could lose millions because of what some call a loop-hole in the new federal health care law.
A non-partisan citizens group will hold hearings to find out what changes Minnesotans want to see in the state political map.
Sharon Sund will challenge Republican Congressman Erik Paulsen in 2012.
Rep. Betty McCollum is blaming the Dow drop on the Tea Party.
Congress has agreed to stop-gap funding for the FAA.
Nevetheless, the partial shutdown of the FAA could delay construction of a new terminal at the Duluth airport by another year.
Minnesotans are feeling the effects of the partial shutdown.
The Race for President
Gov. Tim Pawlenty steps further away from his previous support of a cap-and-trade plan, saying that the "The weight of the evidence is that most [climate change], maybe all of it, is because of natural causes."
In the run-up to the Iowa straw poll, Bachmann has signed a pledge against gay marriage. So have Mitt Romney and Rick Santorum.
The Washington Post has an interesting story about a short-lived company that formed in March and dissolved in July - with just enough time in between to give $1 million to Restore Our Future, a "super PAC" designed to assist Mitt Romney's presidential bid.
And on that note...
Tom Scheck will be back next week. Thanks for reading the Daily Digest while I've been at the helm. It's been a pleasure.(3 Comments)
Rep. Chip Cravaack was one of four Minnesota lawmakers who voted against the bill to raise the nation's $14.3 trillion debt ceiling.
Among his reasons for rejecting the measure is that it would cut defense spending by half.
The debt ceiling "bill risks cutting 50 percent in current military spending, endangering our national security amid an ever-increasing and varied level of credible threats targeting the U.S. and our military operations," he wrote in an Aug. 3, 2011, Duluth News Tribune opinion piece.
Cravaack's claim is false.
The debt ceiling deal immediately trims $917 billion in discretionary spending over 10 years. Those savings are achieved in part by capping "security" spending, which includes the Department of Defense, the State Department, and the Department of Homeland Security, among other branches of government. Congress will ultimately work out the details, but the White House projects that $420 billion will be saved.
The second round of cuts is less certain. A House and Senate panel is supposed to put together a plan by Thanksgiving to slash an additional $1.2-to-$1.5 trillion in spending; it could include defense spending cuts, but no one knows for sure - it's all up to Congress.
What it seems Cravaack is talking about is the worst case scenario, one that budget and defense analysts say is unlikely to occur given how the bill is set up.
If lawmakers can't agree on additional cuts by Thanksgiving, spending would automatically be reduced by $1.2 trillion. Half of those cuts would come from defense spending, and half would come from other areas of government spending. The idea is that conservatives won't want to dig deep into the defense budget, and liberals won't want to cut social safety net programs.
In that regard, Cravaack's statement is inaccurate. He says that the bill "risks cutting 50 percent in current military spending," which is not the case. Rather, half the $1.2 trillion will come from defense spending, which is largely Department of Defense spending.
Budget officials estimate that the federal government is slated to spend in the range of $6 trillion on peacetime defense activities over the next 10 years. To cut that in half would mean trimming $3 trillion from the defense department's budget.
Even if Congress can't work out additional spending cuts by Thanksgiving, the automatic spending cuts would only reduce the defense department's budget by about $490 billion over 10 years (the rest of the $600 billion would be made up in interest savings.) That's still far less than Cravaack's statement implies.
We sent an email to Cravaack's staff asking him to clarify his statement, but received no response.
Update: Cravaack's spokesman did get back to us, saying that his boss was referring to 50 percent of the $1.2 trillion in automatic spending cuts.
Cravaack is wrong. The bill would not cut military spending in half. Instead, if lawmakers can't lay out a plan, half of the $1.2 trillion in automatic spending cuts would come from defense.
The Duluth News Tribune, Congressman's view: Constituents asked for vote against debt deal, by Rep. Chip Cravaack, Aug. 3, 2011
The Cable, Levin and McCain: We have no idea how much debt deal cuts defense, by Josh Rogin, Aug. 2, 2011
Defense Buck Does Not Stop with This Debt Deal, by Winslow T. Wheeler, Aug. 2, 2011
A Dangerous Debt Ceiling Deal, By Kim R. Holmes, Ph.D. August 1, 2011
The Washington Post, Will the defense cuts stick?, by Brad Plumer, Aug. 2, 2011
The House Rules Committee, Text of the Budget Control Act, accessed Aug. 4, 2011
National Public Radio, Pentagon Could See Deep Cuts In Debt Deal, by Rachel Martin, Aug. 3, 2011
The Center for Budget and Policy Priorities, How the Potential Across-the-Board Cuts in the Debt Limit Deal Would Occur, by Richard Kogan, Aug. 4, 2011
Center for Strategic and Budgetary Assessments, Defense Funding in the Budget Control Act of 2011, by Todd Harrison, August 2011
The White House, Security Spending in the Deficit Agreement, by Office of Management and Budget director Jack Lew, Aug. 4, 2011
The Congressional Budget Office, estimated impact of the Budget Control Act of 2011, Aug. 1, 2011
Interview, Winslow Wheeler, the Center for Defense Information, Aug. 4, 2011
Interview, Lawrence Korb, the Center for American Progress, Aug. 4, 2011
Interview, James Carafano, the Heritage Foundation, Aug. 4, 2011
Interview, Todd Harrison, the Center for Strategic and Budgetary Assessments, Aug. 5, 2011
Email exchange, Michael Bars, spokesman for Rep. Chip Cravaack, Aug. 4, 2011
Gov. Mark Dayton sent a letter this week to Metropolitan Council Chair Susan Haigh requesting her agency's help in evaluating the proposed Minnesota Vikings stadium site in Arden Hills.
The governor's office released the letter today. Dayton said that he now wants to sharpen the focus on the proposal and address remaining issues.
"I would like to ascertain the potential risk, if any, of the proposal and suggest ways to mitigate or eliminate any exposure to the public, Dayton wrote. "At a minimum, an analysis of potential risks should include, but not be limited to, an examination of the requirements of an Environmental Impact Statement and Alternative Urban Areawide Review, remediation needs, transportation needs, costs and cot-overrun exposures, scheduling issues, funding projections, and permitting permitting and approval issues."
Dayton has said he would be open to calling a special session to address a Vikings stadium bill. The governor hs not set any specific timetable, but in the letter he wrote that "time is of the essence."
With the Iowa Straw Poll barely a week away, Republican Rep. Michele Bachmann is touting a list of more than 100 Iowa pastors who are backing her candidacy.
"Many of the evangelical leaders offered support after hearing her testimony and witnessing how her faith guides her strong leadership on critical issues such as marriage, life, and the overbearing impact of government policies on the family," the press release states.
One of those leaders is Pastor Brad Cranston.
"Michele has fearlessly taken a stand for life and traditional marriage, while championing fiscally conservative legislation," he said.
Bachmann's faith is at the fore of her campaign. Political analysts say it will help her woo the same conservative Iowa voters who lined-up behind 2008 GOP candidate Mike Huckabee, a former pastor. Huckabee surprised everyone by coming in second in the 2007 straw poll.