June 27, 2016

CAGW Announces Its June 2016 Porker of the Month

Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.

Earlier this month, "Citizens Against Government Waste (CAGW) named Department of Homeland Security (DHS) Secretary Jeh Johnson its June Porker of the Month for failing to take sufficient steps to eliminate the “nightmarish” lines at Transportation Security Administration (TSA) airport checkpoints across the nation."

CAGW justified their selection this way:

"Since the beginning of 2016, airline passengers have been plagued with absurdly long lines at TSA security checkpoints.  American Airlines estimated that since February, long lines at Chicago’s O’Hare airport alone led to 4,000 passengers missing flights.  One of Secretary Johnson’s many feeble responses to this unprecedented and unnecessary problem was to tell passengers on May 13, 2016 to simply “contemplate increased wait times as you travel.”  He pledged to hire more TSA officers, while admitting that the additional staff would not improve the lengthy wait times during the summer travel season.  He assured air travelers that TSA would be asking airports for help with insignificant “nonsecurity” activities like moving bins that carry laptops, shoes, and other items through scanners even though airlines already spend millions to help move travelers through TSA’s inefficient process.

"Secretary Johnson and TSA officials not only blamed passengers for the delays; they also used the tired, old bureaucratic excuse that a lack of funding or resources is causing problems.  However, stubborn facts contradict these claims:  TSA’s fiscal year (FY) 2016 budget of $7.3 billion is one billion dollars and 16 percent higher than in FY 2007.  TSA’s full-time workforce rose by 4.3 percent over the last decade, even as air travel at major airports decreased.  To date, 22 airports have dropped TSA and switched to more cost-effective, flexible, and efficient private alternatives.  The massive lines of outraged passengers have caused airports in Atlanta, New York, and Seattle to announce they are strongly considering privatizing security as well.

"The true causes of these delays are the TSA’s bureaucratic ineptitude and its failure to reliably predict demand for TSA PreCheck, which allows passengers to bypass more intense security if they pay an $85 fee and provide a fingerprint and other background information.  TSA projected 25 million people would join this program, but to date less than three million have joined.

"For bringing America’s air travel to a screeching halt, failing to solve the problem, and using a bureaucratic cop-out, CAGW names Secretary Jeh Johnson its June Porker of the Month."

A video explaining CAGW's  selection of Secretary Johnson as its Porker of the Month is available at the press release here.

So take a few minutes to write your representatives in Congress. Find out what they are doing to ensure an effective, efficient, and economical Transportation Security Administration (TSA). Contact information is available at the Library of Congress' Thomas website (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -   write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

Not familiar with Citizens Against Government Waste? CAGW "is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government."

June 26, 2016

A Thought about Federalism

"The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite."

~ James Madison, Federalist No. 45

Source: The Patriot Post's Founder's Quote Database.

June 25, 2016

A Thought about the Constitution

"We the people are the rightful masters of both Congress and the courts, not to overthrow the Constitution but to overthrow the men who pervert the Constitution.”

~ Abraham Lincoln

Source: BrainyQuotes.

June 24, 2016

A Thought about Social Legislation

"I do not believe that the government should ask social legislation in the guise of taxation. If we are to adopt socialism, it should be presented to the people of this country as socialism and not under the guise of a law to collect revenue."

~ Calvin Coolidge, 30th President of the United States

Source: page 140, "As Certain as Death: Quotations about Taxes," 2010, compiled by Jeffrey Yablon, TaxAnalysts.com.

June 23, 2016

County Board Says Hunt is on for New County Auditor

Last Friday, we growled that the resignation of the recently appointed County Manager was a victory for Arlington County's government bureaucracy.

In an online article today, the Arlington Sun Gazette reports:

"Six months after hiring their first internal auditor, Arlington County Board members are on the hunt for a new one.

"Jessica Tucker, who moved into the position in January after a career with the Fairfax County government, will be relocating to California, where she has accepted employment with the Marin County government.

“In her short tenure, she’s already laid a firm foundation,” said County Board member John Vihstadt, who made the hiring of an auditor or inspector general one of the themes of his two successful political victories in 2014.

"Tucker was hired after County Board members received permission in 2015 from the General Assembly to employ an auditor that reported directly to them rather than through the general government chain of command. Previously, the County Board only had the authority to hire and fire the county manager, county attorney and their clerk.

As we wrote last Friday, Growls readers are urged to write to members of the Arlington County Board to voice their concerns about the County Auditor's resignation, proper staffing of the office, and assurance there is no bureaucratic meddling in its proper functioning. See our June 17 Growls for background details. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

June 22, 2016

Social Security and Medicare "In Dangerous Fiscal Positions"

A week ago yesterday, we growled, based upon an Investor's Business Daily (IBD) editorial, and asked if Social Security reform was possible in the next four years. According to the lead editorial in the past weekend's IBD, the newspaper wrote, "No matter who wins in November, it’s a virtual guarantee that Social Security reform won’t happen over the next four years. And that only means that the changes needed will be far more painful."

It was no surprise, then, to read the analysis of the Committee for a Responsible Federal Budget when the Social Security and Medicare Trustees released their annual annual report today on the financial status of the two programs. They wrote:

"The projections show that both programs are in dangerous fiscal positions and prompt action is necessary to secure these programs."

In their analysis, the Committee focused "specifically" on Social Security, and identified five key findings:

  • Social Security is Heading Toward Insolvency.
  • Social Security’s Deficits are Large and Growing.
  • The Shortfall is the Same as Last Year, Despite a Short-Term SSDI Fix.
  • Failure to Act Will Lead to Large, Abrupt Benefit Cuts.
  • The Latest Projections Highlight the Need to Focus on Solvency First.

Writing about the march towards insolvency, the Committee points out, "When the Social Security trust funds are exhausted in 2034, beneficiaries will face an immediate across-the-board 21 percent benefit cut. The size of the cut will grow over time, to 26 percent by 2090." The following graph is from CRFB's analysis:

Growls readers can read the CRFB's entire analysis, which is supplemented with very helpful charts; it is available here. In their conclusion, they write:

"The Social Security Trustees once again show the need to reform Social Security to make it solvent for future generations. The combined Social Security trust fund will run out of money within 18 years – when today’s 49-year-olds are just reaching the normal retirement age. Failure to make any changes would result in a 21 percent across-the-board benefit cut, a cut that would grow over time.

"Fortunately, the Social Security’s finances can still be fixed without making drastic tax or benefit changes. If policymakers are willing to act soon, they can develop and pass a plan that strengthens the program’s finances while phasing in changes gradually to give workers time to prepare, improving benefits for vulnerable beneficiaries, and promoting long-term economic growth. However the cost of delay is substantial and would take away the opportunity to act more gradually and thoughtfully."

You can read the Trustees' "Summary of the 2016 Annual Reports," here.

The Concord Coalition also advocates for a fiscally responsible federal government, and also commented today on the Social Security and Madicare Trustees reports. In their press release today, the group said in part:

"Today’s reports from the trustees of Social Security and Medicare confirm once again that these critical programs are on unsustainable paths and will put increasing pressure on the rest of the federal budget in the years ahead, according to The Concord Coalition.

"Concord urges the American public, elected officials and candidates for federal office this year to carefully consider the warnings of the trustees, who each year emphasize the need to quickly start reforming these programs.

“The trustees do not issue these reports for their own amusement,” says Concord Executive Director Robert L. Bixby. “The annual reports are required by law with the expectation that responsible lawmakers will heed their warnings and take appropriate action.”

“For the past several decades,” Bixby added, “that has been a vain hope. Time is now running short. The longer we delay corrective actions, the more difficult they will become and the more onerous the burden will be for future generations.”

"Today’s reports again show that Social Security and Medicare Part A (Hospital Insurance) are paying out more than they take in from their designated payroll taxes.

"In addition, still more general federal revenues are required to support Medicare Part B, which provides various medical services, and Part D, which helps pay for medication. The premiums that older Americans pay for these parts of Medicare only cover a fourth of the costs."

Earlier today, Forbes columnist Tim Worstall concluded:

" . . . The first major US political fight I can remember observing was the Social Security reforms of the 80s. All sorts of plans were put forward and bandied about. And what happened then was the result of exactly what I’ve diagnosed here – promises that politicians didn’t raise the cash to meet. So, the solution was to raise the taxes paid by those still in work so as to meet the promises to the earlier generation.

"This is what will happen again. The working young will be forced to pay more taxes for the things that were promised to their elders. It might even be true that most would be happy to do so to keep Grandpop independent and out of their spare bedroom. But it will still be the culmination of what some have been stating for decades. Contribution rates simply haven’t been high enough to pay for the benefits promised. On the very simple grounds that this is how politicians get elected, by promising sweeties and only charging half price for them. And as long as such systems, just like public sector pensions, are run by politicians that will always be our problem."

Other news coverage of the Trustees annual reports included:

  • CNN * Money, which said, "If lawmakers don't act, Social Security's trust fund will be tapped out in about 18 years," was "one takeaway."
  • Wall Street Journal (beware paywall). The lede said, "Medicare and Social Security will begin to spend more than they earn by the end of this decade, new projections showed Wednesday, putting a spotlight on an issue that has seen scant discussion in an election year—the programs’ solvency challenges facing the next president."
  • Reuters chose to focus on the Medicare program, and began with the lede, "The U.S. federal program that pays elderly Americans' hospital bills will exhaust its reserves in 2028, two years sooner than last year's estimate, trustees of the program said on Wednesday, but spending growth remained within forecasts."

Unfortunately, a Bing search produced very few stories in the so-called mainstream media.

At the moment, some Democratic members in the House of Representatives are holding a sit-in over gun legislation while Democrats in the Senate held four votes earlier in the week, according to CNN*Politics. Guess such political displays are the modern day version of "Bread & Circuses" held in Rome 2,000 years ago. Apparently, it's easier to stage such political displays rather than find ways to solve the promises made by earlier members of Congress, as noted by Tim Worstall above.

So take a few minutes to write your representatives in Congress. Find out what they are doing to ensure that Social Security and Medicate are sustainable for the children and grandchildren of today's Americans. Contact information is available at the Library of Congress' Thomas website (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -   write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

June 21, 2016

Diagnosing an 'Economic Sickness'

As I growled on May 9, 2016, "Frequent Growls readers know that economic growth is a frequent topic discussed here." I then linked to four past Growls. I growled again on May 28 about the need for tax reform to kickstart GDP. While economic growth will not solve every one of America's economic problems such as the national debt, a higher level of GDP growth would certainly make it easier.

Consequently, the June 17, 2016 New York Times column by Gregory Mankiw, professor of economics at Harvard and chairman of President George W. Bush's council of economic advisers, caught your scribe's attention. His lede paragraph said, "Economists, like physicians, sometimes confront a patient with an obvious problem but no obvious diagnosis. That is precisely the situation we face right now."

He puts the the problem into perspective this way:

"There is no simple way to gauge an economy’s health. But if you had to choose just one statistic, it would be gross domestic product. Real G.D.P. measures the total income produced within an economy, adjusted for the overall level of prices.

"Here is the sad fact: Over the last decade, the growth rate of real G.D.P. per person has averaged just 0.44 percent per year, compared with the historical norm of 2.0 percent. At a rate of 2.0 percent, incomes double every 35 years. At a rate of 0.44 percent, it takes about 160 years to double.

"It may be tempting to blame the Great Recession of 2008-9 for the paltry 10-year growth rate. Indeed, this recession was a deep one.

"Yet the explanation for the poor long-run performance is not that simple. The recession of 1982 was also a deep one. The unemployment rate peaked at 10.8 percent in 1982, compared with a peak of 10 percent in 2009. But by the first quarter of 1989, as Ronald Reagan was leaving the White House, the 10-year growth rate was up to 2.1 percent.

"The difference: The 1982 recession was followed by a robust recovery, whereas the recession of 2008-9 has been followed by a meager one.

"So what’s wrong with the economy? No one knows for sure. But numerous theories are being bandied about."

He identified five such theories. I won't try to describe them, but here they are:

  • A statistical mirage
  • A handover from the (2008-2009) crisis
  • Secular stagnation
  • Slower innovation
  • Policy missteps

In conclusion, he writes, " So there they are. One sickness, five diagnoses. Unfortunately, I have no idea which one is right. The truth may well involve a bit of each."

On the last theory, Mankiw writes "there were reasons to doubt" the Keynesian intervention of the Obama administration, and points to "(a) 2002 study of United States fiscal policy by the economists Olivier Blanchard and Roberto Perotti found that “both increases in taxes and increases in government spending have a strong negative effect on private investment spending.” They noted that this finding is “difficult to reconcile with Keynesian theory.”  He links to this paper in The Quarterly Journal of Economics. He also points to a more recent study that suggests "tax cuts" over "spending increases."

Take a few minutes to write your representatives in Congress. Find out what they are doing for economic growth and jobs by promoting tax reform and reducing the regulatory burden. Contact information is available at the Library of Congress' Thomas website (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

June 2016
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Items in Growls are written by individual ACTA members and do not necessarily represent the views of the Arlington County Taxpayers Association, Inc. Please send comments about Growls to The Growl Meister