Georgia Rep. Paul Broun (R) has proposed amendments cutting $300 million from the $17 billion House relief package for states affected by Hurricane Sandy. Among those cuts are nearly $20 million meant for studying future flood risks.

Such studies would lead to investments that would help reduce the risks of major flooding and to better infrastructure projects. But Broun, a stalwart conservative, believes that represents wasteful spending, The Hill reports:

Two of Broun’s amendments would affect the main bill, by removing $19.5 million to study future flood risks and removing $3 million for oil spill research.

Hurricane Sandy left large swaths of New York and New Jersey underwater. The Senate’s aid package included a total of $5.3 billion for future flood prevention, and experts have begun exploring various ways to protect New York City and New Jersey from the possibility of major flooding in the future. As the Sacramento Bee editorialized, “by failing to finance flood control projects and programs to protect communities against other natural disasters, Congress is adding to the potential liabilities of the federal government.”

House Republicans initially decided not to take up the Sandy relief package before passing a smaller bill as the last Congress ended. Some Republicans have renewed their calls that the relief funding be offset by spending cuts elsewhere, including cuts to every discretionary spending program in the federal budget.

Great Britain received some more bad news about its economy today, with the National Institute for Economic and Social Research saying that a triple-dip recession could be on its way:

Pressure mounted on chancellor George Osborne to moderate his austerity programme after analysis by a leading thinktank showed the UK economy heading for a triple-dip recession and as 800 jobs were axed at the Honda plant in Swindon.

The National Institute for Economic and Social Research (NIESR) said in its monthly healthcheck that the economy shrank by 0.3% in the three months to December. Against a backdrop of weak consumer spending and a drop in manufacturing output, the estimates from NIESR may add fuel to campaigns for Osborne to adopt a more radical approach to generating growth. [...]

The first official estimate for fourth quarter GDP by the Office for National Statistics will be released on 25 January. Britain emerged from recession in the third quarter of last year but a series of gloomy releases – including weak trade data and downbeat purchasing managers’ surveys – have fuelled fears of a contraction in the final quarter. If output continues to fall in the first quarter of this year, the UK will fall into its third recession in four years.

The UK service sector also shrank for the first time since 2010 last month, making it seem like Britain’s emergence from recession had more to do with a brief bump from the Olympics than anything else. Yet the Conservative government led by Prime Minister David Cameron has said that it will double down on austerity, rather than provide the economy more support.

The International Monetary Fund recently admitted that it significantly underestimated the damage austerity would do to European economies. And if American lawmakers aren’t careful, the U.S. will be in for a serious dose of austerity this year.

According to data from the Treasury Department, the U.S.’s monthly budget deficit all but vanished in December, coming in at just $260 million. Analysts had expected a $1 billion deficit for the month:

The U.S. government budget deficit narrowed to its most favorable December monthly result in five years, reflecting higher revenue, lower spending and calendar- driven shifts in some monthly payments.

The shortfall last month shrank almost completely to $260 million from $86 billion in December 2011, according to Treasury Department data issued today in Washington. The gap was smaller than the $1 billion median estimate in a Bloomberg survey of economists. Through the first three months of this fiscal year, the deficit was 9.1 percent smaller than the same period last year.

This was the best December result since 2007, before the financial crisis began. Monthly deficits can be a bit volatile, to be sure, but the low number is still a sign that the nation’s finances are moving in the right direction.

According to the Center on Budget and Policy Priorities, $1.4 trillion in deficit reduction over the next ten years would be enough to stabilize and eventually reduce U.S. debt. And for that number to be truly balanced — once all of the budget deals crafted since 2011 are taken into account — it would have to be composed of about 90 percent new revenue. 75 percent of the deficit reduction achieved by the Obama administration and Congressional Republicans has been via spending cuts.

Between the recent fiscal cliff deal, the Budget Control Act of 2011, and the federal budget negotiation of Spring 2011, the United States has succeeded in reducing its deficits for the next decade by over $2 trillion. The first brought in over $600 billion in new revenue, while the two budget deals cut over $1.5 trillion in spending, including reduced interest payments on a smaller debt.

As both the Center for American Progress and the Center for Budget and Policy Priorities have noted, the end result of all that leaves the country’s total deficit-reduction efforts grossly tilted towards the GOP’s priorities: spending cuts dominate new tax revenue by approximately three to one.

The CBPP’s report also fleshed out the implications of this imbalance going forward. In order to stabilize the debt for the next decade, another $1.2 trillion in deficit reduction is needed, accompanied by about $200 billion in additional interest savings. The CBPP’s numbers also show that for the final result to be a true 50-50 balance between spending cuts and tax increases, nearly 90 percent of the additional $1.2 trillion must come from revenue increases:

[E]ven if the additional savings [from $1.2 trillion in additional deficit reduction] were divided evenly between revenue increases and program cuts, the total deficit reduction under the three deficit-reduction packages would be heavily weighted toward budget cuts: 64 percent budget cuts to 36 percent revenue increases, or a ratio of nearly 2 to 1. To achieve a 50-50 split for the combined deficit-reduction packages, policymakers would have to obtain nearly 90 percent of the additional $1.2 trillion in savings from revenue increases.

In contrast, if all of the additional savings were to come from program cuts, as Republican congressional leaders have suggested, the overall ratio would be still more skewed, with more than four-fifths coming on the spending side — a ratio of nearly 5 to 1.

So the Democrats’ proposal that further deficit reduction include $1 trillion in additional revenue — which arguably denotes the far-left flank of the debate at this point — comes the closest to meeting the 50-50 test. Meanwhile, Republicans’ insistence that “the tax issue is finished” would push the country towards an even more wildly skewed result. America remains as far as ever from the ostensibly bipartisan goal of balanced deficit reduction.

The latest of a series of Shell mishaps in the Arctic occurred on New Year’s Eve, when Shell’s drilling rig, Kulluk, ran aground while being towed out of Alaskan waters. Harsh weather conditions began shortly after Shell began towing, causing the rig and its 150,000 gallons of fuel and drilling fluid to wash up on an island along the Alaska coastline.

Rep. Ed Markey (D-MA) challenged the suspicious timing of Shell’s decision to move despite the harsh conditions. If Shell had kept its rig stationed in Alaska waters on January 1, the company would have potentially paid $6 million in state taxes:

Shell could have been exposed to potential state tax liability on the Kulluk drill rig if it remained in the state on January 1st. Chapter 43.56 of the Alaska Statutes states that an annual tax of 2 percent can be assessed each tax year on January 1st on “the full and true value of taxable [oil and gas] property taxable under this chapter” Shell had reportedly spent $292 million just on upgrades to the Kulluk since purchasing the drill rig in 2005. That would mean that Shell could have potentially been exposed to state tax liability on the Kulluk in excess of $6 million.

Shell’s official response maintains that the “two-week window of good weather” prompted the decision to move out of Alaskan waters.

Shell has a history of tax dodging. For example, it has offshored pre-tax profits to avoid UK taxes. At the federal level in the U.S., Shell also lowers its tax bill with $200 million in annual tax breaks.

Louisiana Gov. Bobby Jindal (R) wants to eliminate both his state’s income tax and its corporate income tax, giving a big gift to the richest Louisianians and the state’s businesses. And he may pay for it by hiking the state’s sales tax, which will disproportionately hurt Louisiana’s poorest residents:

Gov. Bobby Jindal is proposing to eliminate Louisiana’s income and corporate taxes and pay for those cuts with increased sales taxes, the governor’s office confirmed Thursday. The governor’s office has not yet provided the details of the plan. [...]

Jindal said the plan would be revenue-neutral and that the goal would be to keep sales taxes “as low and flat as possible.”

The governor’s office has not yet confirmed or denied an article in The Monroe News-Star that reports eliminating the state income tax could require increasing the state sales tax from 4 percent to 7 percent.

Because low- and middle-income workers tend to spend all or most of their income, a sales tax hits them the hardest. And Louisiana’s tax system is already tilted towards the richest residents, with the richest 1 percent having a tax rate that is half the rate paid by the poorest 15 percent, according to the Institute on Taxation and Economic Policy.

As the Brookings Institution’s William Gale explained, “if you move the tax from income to consumption, you’re raising the relative burden on low savers, which are low and moderate income households, so almost any revenue neutral shift from the income tax to a consumption tax will be regressive in that manner.” Under the proposal, “some may benefit, some may lose,” said Senate President John Alario (R).

Since the Great Recession, California has epitomized the fiscal problems facing states. Its economy was ravaged by the housing crisis, and its budget gaps swelled into the tens of billions of dollars. Even before the recession, the state often struggled to balance its budget, hamstrung by legislative rules that made it nearly impossible to increase taxes.

Gov. Jerry Brown (D) took tax increases to the voting public in November, though, and voters approved multiple tax increases for 2013. After years of spending cuts and with billions of dollars in new tax revenue coming in, Brown now expects the state to have a budget surplus this year. The expected $851-million surplus would be just the second for the state in the last decade, the Los Angeles Times reports:

After years of red ink, Gov. Jerry Brown said on Thursday that California’s $96.7-billion general fund is now poised to end next year with a surplus, thanks to years of deep budget cuts and billions in new taxes approved by voters last year.

“We achieved the position we’re in because of tough cuts … and then the people voted for taxes,” he said. “We broke the logjam by going to the people.”

Proposition 30, the tax increase on the wealthiest Californians voters approved in November, is expected to raise $8.5 billion in revenue, bringing balance to the billions in spending cuts Brown had already approved to close California’s budget gap. The tax increases and the budget surplus will especially benefit California’s school system, which will receive a $2.7-billion budget increase in 2013 and more than $10 billion in increases by 2016. Medi-Cal, the state’s health care system, will also receive increases aimed at implementing Obamacare.

In Washington, President Obama has pushed for a similar balanced approach to deficit reduction. Thus far, 75 percent of the $2.4 trillion in deficit reduction that has been enacted since 2011 has come from spending cuts, and Republicans are refusing to consider further tax increases in future deficit reduction packages. Without tax increases in future deals, the ratio of spending cuts to tax increases could reach as high as five-to-one, according to the Center on Budget and Policy Priorities. But if California is any evidence, combining tax increases and spending cuts can bring balance to the budget while also allowing lawmakers to avoid cuts to education, health care, and other important programs.

The new head of the Republican Study Committee — a caucus of ultra-conservative House Republicans — said yesterday that he might favor the United States defaulting on its obligations, rather than raise the debt ceiling. Rep. Steve Scalise (R-LA) posited that, as long as the United States continues to pay interest on its debt, all would be well:

RSC Chairman Steve Scalise (R-La.) said Obama should pledge to avoid defaulting on Treasury bond payments once the Treasury Department no longer has the means to avoid exceeding the $16.4 trillion debt ceiling.

“The fact that we continue hitting the debt ceiling is a symptom of Washington’s spending problem, and hitting the debt ceiling does not immediately trigger a default,” Scalise said. “The Treasury Secretary has an obligation to preserve the credit rating of the United States and should pledge to continue making necessary interest payments to avoid default.”

This is a popular line of thinking on the right, but prioritizing payments doesn’t avoid a default. It simply means that the government will pay off holders of U.S. debt while stiffing any other number of people to whom payments are owed, including veterans or Social Security recipients. As the Bipartisan Policy Center has shown, the executive branch would have some very tough choices should it need to prioritize payments in the way Scalise proposes, and some obligations will have to fall by the wayside.

As Slate’s Matt Yglesias put it, breaching the debt ceiling results in “a deadbeat federal government. Some people won’t get money they’re legally entitled to.” And that will cause untold consequences across the world economy. Scores of government functions would need to be shut down, immediately, and interest rates will spike, affecting financial products (like credit cards and mortgages) around the globe.

Several prominent Republicans have admitted as much, with Speaker John Boehner (R-OH) saying it would be “a financial disaster, not only for us, but for the worldwide economy.” Yet Scalise is treating it like no big deal, in a bid to use the debt ceiling to wring policy concessions from Democrats. The U.S. will exhaust its borrowing ability on or around February 15th, according to the latest estimates.