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September 30, 2007

Congress Playing “Hoax and Mirrors” on Earmarks

Citizens Against Government Waste fired both barrels at Congress on Friday in this press release, blasting:

“the Senate leadership for its recent furtive attempts to roll back and undermine the earmark transparency and accountability provisions of S. 1, the Honest Leadership and Open Government Act of 2007, which was signed into law two weeks ago. Majority Leader Harry Reid (D-Nev.) is claiming that only earmarks included in appropriations bills can be subject to challenges on the Senate floor. The legislation is supposed to cover authorization and tax bills as well.”

In addition CAGW:

“strongly criticized both the House and Senate for two other significant, but stealthy votes.  H.J. Res. 43, which increased the nation’s debt limit by $850 billion to $9.815 trillion, was passed without a roll call vote. This is the fifth time since 2002 that Congress has opted to raise the debt ceiling and the national debt has grown by a whopping $3 trillion during that period. Congress also quietly passed a continuing resolution to keep the government operating past its fiscal year deadline of September 30, granting itself another seven weeks, until November 16, to come to an agreement on the budget.”

Fiscally responsible, eh? More like fiscally irresponsible!

September 28, 2007

John Berthoud, In Memoriam

We were saddened last night to learn of the death of John Berthoud, president of the National Taxpayers Union. A resident of Arlington's Cherrydale neighborhood, John was not only a supporter of ACTA, but also a friend. Thanks to John’s encouragement, I have a deeper understanding and appreciation of free markets, low taxes, and limited government.

John was 45. Pete Sepp, Vice President of Communications at NTU, described John as “a teacher, a mentor, a respected intellectual, and a lover of life.

In today’s Washington Times, John Berlau, director of the Center for Entrepreneurship at the Competitive Enterprise Institute said, "John was the happy warrior of fiscal conservatism . . ."He always made sure to take the message of low taxes and limited government beyond the Beltway. ... He made networking with state policy groups a priority and influenced others to follow in his footsteps in this area. John will be sorely missed, but his positive influence will be long felt.”

We offer condolences to John’s family, friends, and to the staff of the National Taxpayers Union.

September 27, 2007

Arlington Judge: Abusive Driver Fees Are Unconstitutional

From this morning’s Washington Post, Daniela Deane reports:

“An Arlington County General District Court judge has ruled that Virginia’s 's abusive-driver fees are unconstitutional, saying they violate guarantees of equal protection because they apply only to state residents.”

The newspaper reported added that the case will be appealed to the Arlington Circuit Court although “(t)he attorney general’s office said the fees do not violate guarantees of equal protection there are reasons to distinguish between Virginia residents and nonresidents.”

 

If you haven’t signed the online petition opposing the abusive-driver fees approved by the General Assembly, please do so.

September 25, 2007

“Fair and Equitable Tax Policy”

The following is excerpted from the September 20, 2007 statement of Andrew Moylan, Government Affairs Manager for the National Taxpayers Union before the House Ways & Means Committee.

 

From the introduction:

Any discussion of tax fairness ought to begin with some context, by examining IRS data. Tax returns filed in 2005 indicate that on the same dollar, the wealthiest 1 percent of Americans paid an effective income tax rate nearly eight times higher than those in the bottom 50 percent. This picture does not change significantly even when taxes often thought of as "regressive" are included in the analysis.

“A December 2005 study by the Congressional Budget Office (CBO) provides some illuminating statistics to prove the point. It accounted for ALL federal taxes, including income, payroll, and social insurance taxes, and broke the burden down by income quintile. CBO found that Americans in the lowest income quintile (who made an average of $14,800) paid 4.8 percent of their income in ALL federal taxes. Meanwhile, the highest quintile (situated at an average of $184,500) paid 25.0 percent of their income in taxes. Additionally, the top 1 percent of all income earners (who bring in an average of more than $1,000,000) pay 31.4 percent off the top in taxes.

“This is hardly the picture of a Tax Code that is insufficiently progressive. The richest among us pay the most in taxes, in both absolute and relative terms. Yet, in spite of that fact, some Members of Congress persist in poisoning the tax policy debate with false rhetoric about the Tax Code being tilted toward the wealthy.

And from the conclusion:

Congress ought to repeal the (Alternative Minimum Tax) outright. It is a confusing, economically destructive tax that has spiraled wildly out of control since its inception. It was created in 1969 to deal with 155 high-income individuals who paid no income taxes. Today, it is a monster that threatens to grow even larger if it isn't vanquished once and for all. As it so happens, the encroachment of the AMT also provides a cautionary tale to those who believe that a "small adjustment" in the tax treatment of carried interest will remain so;” and,

“If lawmakers seek tax fairness, they ought to focus on a fundamental overhaul of the IRS code, not piecemeal reform that only adds to the problem. With such a commitment, tomorrow's taxpayers will be most grateful to today's Congress.”

We encourage you to read the entire statement to get the complete context of the statement.

September 23, 2007

About That Common Sense That’s Lacking

A week ago, we questioned Richmond’s political class and their slew of spending plans on the table even though the state faces a half-billion deficit. One of the so-called "needs" is to increase spending for the so-called biennial re-benchmarking of the education Standards of Quality (SOQ).

The General Assembly’s legislative auditors December 2005 special report on SOQ costs (requires Adobe) provides a detailed analysis of these costs. Very briefly:

“Article VIII of the Constitution of Virginia requires that Standards of Quality (SOQ) for the school divisions “shall be determined and prescribed from time to time by the Board of Education, subject to revision only by the General Assembly.” The standards, which apply to elementary and secondary schools, address various education matters, including the availability of different types of staff and resources. The costs of the SOQ are to be determined and apportioned by the General Assembly between the State and local units of government.

“After determining SOQ costs, the State currently contributes to the costs in two ways. First, it provides State-apportioned sales tax dollars. Second, it pays an average 55 percent of the remaining SOQ costs (the actual percentage varies from locality to locality based on local ability to pay).”

It gets more complex, but that is the very short version. Additional information is available in the Virginia Association of Counties (VACo) September 15 issue of County Connections (Adobe). VACo is the lobbying organization for Virginia’s counties. The newsletter includes this:

“Re-benchmarking will be a top budget priority for VACo in 2008. The state updates – or readjusts for inflationary and new costs – the SOQ every two years coinciding with the new biennial budget. The standards prescribe the state mandated minimum requirements for learning. All 95 counties exceed the state mandated minimum requirements and associated costs.”

The Claire Booth Luce Policy Institute published a study in December 2005 (Adobe) in which they advocated a change from the “current staff-based SOQ funding methodology” (currently used by only four states; adopted when there was little emphasis on achievement and performance) to a “student-based” funding formula. According to the study:

“A student-based state SOQ funding methodology substantially improves budgetary transparency and is compatible with long-standing state sales tax and composite index ability-to-pay adjustments. It is also more equitable to students and offers local schools the flexibility to organize school programs and staffing patters around the educational needs of their student populations.”

Read the Claire Booth Luce study. We think you'll agree it meets the common sense test.

September 19, 2007

Just One Trick Ponies

What is it with some if not most politicians whose only answer to problems is to raise taxes? We were reminded of that last month when Representative Jim Oberstar (D-Minnesota), chairman of the House Transportation Committee, proposed a “temporary” 5-cent increase in the gas tax in the wake of the I-35W bridge failure in the congressman’s home state. The increased tax would have raised $25 billion in thee years for a so-called bridge trust fund.

For "seizing an opportunity to turn tragedy into tax increases, Citizens Against Government Wasted named Oberstar the August Porker of the Month.

In bestowing that honor on Oberstar, CAGW explained in detail just how Congress wastes taxpayer dollars on “transportation:

“The 2005 highway bill contained $2 billion annually for bridge reconstruction.  During its markup of the bill, the House Transportation Committee considered increasing that figure to $3 billion a year.  The committee not only failed to include the higher level of bridge repair funding, it opened the door for members of Congress to stuff the bill with nearly 6,500 pork-barrel projects worth more than $24 billion, about the same amount now being sought by Rep. Oberstar with his proposed tax increase.  “High-priority” transportation projects in the 2005 legislation included $452 million for the infamous “Bridges to Nowhere” in Alaska, $5 million to improve air quality in the Sacramento region of California, $4 million to develop bicycle paths and public park space adjacent to the New River in Calexico, California, and $4 million for streetscape, pedestrian improvements in Clarkson, Georgia.”

The solution? CAGW said”

“Instead of talking taxes, Chairman Oberstar should demand that Congress give the Secretary of Transportation authority to immediately transfer the billions of dollars in unobligated earmarked funds to bridge repairs.”

September 18, 2007

That May Be Legal, But Is It Right?

Keith Capp of the National Taxpayers Union, blogging at Government Bytes, has a nice analysis of the return on investment of the campaign contributions of one lobbying firm.

Capp reports on a study done by the Capitol Hill newspaper Roll Call (subscription required) in conjunction with Taxpayers for Common Sense. The study looked at the earmarks offered by three Democrat members of the House Appropriations Subcommittee on Defense, and found:

“Representatives John Murtha, Jim Moran, and Peter Visclosky have received 26% of their total campaign contributions from PMA and its clients who received earmarks in the 2008.Defense spending bill from the Representatives.”

Capp is correct in criticizing the recently passed earmark and lobbying reform bill. We agree with him that Members of Congress should not receive campaign contributions from companies or organizations that they obtain earmarks for although we would go further. Earmarks themselves should be banned!

Taxpayers for Common Sense released a press release last week that summarizes the $3 billion in disclosed earmarks included in the Defense bill. TCS also found 70 undisclosed earmarks that totaled $3.5 billion.

Finally, Capp includes a link to The Hill newspaper in his post, which shows just how cozy a relationship exists between lobbyists and members of appropriations committees:

“Out of (the PMA Group’s) team of 35 lobbyists, at least 30 have worked on Capitol Hill, in the Pentagon, or both.”

As Amity Shlaes writes in her new book The Forgotten Man, taxpayers are indeed today's forgotten people.

September 16, 2007

Common Sense Lacking in Richmond?

Virginia faces a half-billion budget shortfall. Any normal person in that situation would not be making any plans to increase spending. The political class in Richmond, however, doesn’t seem to think like normal people.

The lead editorial in today’s Richmond Times-Dispatch sums up the situation nicely:

“There's talk of tapping the state's rainy-day fund because tax revenues aren't keeping up with projections. There's consensus on the value of investing more in mental-health services . . .There's concern court rulings could put the kibosh on bad-driver fees, creating a need to find new money somewhere else.

"Gov. Tim Kaine also wants to launch a new universal pre-K program. Rebenchmarking the Standards of Quality for the public schools this year will further jack up costs in a realm where spending has greatly outpaced inflation and enrollment growth for the past decade. And Kaine is talking about a bond issue for higher education.”

The editorial is clear in identifying the problem, saying:

“State leaders raised spending more than 20 percent in the last budget. Now, confronted by a slowdown in revenue collections, all they can talk about is more new programs. Virginia does indeed face a serious shortfall -- not only in revenue but also in common sense.” [emphasis added]

Politicians with common sense. Wouldn't that mean they thought about the needs of taxpayers before they thought about the needs of the special interests?

September 15, 2007

"Fact Checking the ‘Middle-Class’ Rhetoric”

With the 2008 presidential campaign off to an early start, many taxpayers may already be fed-up with talk about "taxing the rich” but "helping the middle-class." Sorting out the wheat from the chaff, therefore, requires defining just who is “middle-class.”

The Tax Foundation has released Fiscal Fact 102 that defines “middle-class with “an objective set of data. The study notes:

“Economists rarely use the term and will typically use the term ‘middle income’ instead to mean the 20 percent of households whose incomes are in the middle, or sometimes to the 60 percent who are in the middle. But politicians are driven by polls, not income data, and a recent Tax Foundation poll showed nearly four out of five Americans label themselves "middle-class."1 Only 2 percent consider themselves ‘upper-class.’”

Using calendar year 2006 data from the study's Table 1, the Tax Foundation reported the following:

Type of

Household
Median
Income
Middle 20%
Range
Middle 60%
Range

 

All Households

 

$48,201

 

$37,771 –
$60,000

 

$20,036 –
$97,032

 

Married
Households

 

$69,716

 

$57,200 –
$82,935

 

$35,476 –
$121,842

The Tax Foundation also reports a “middle-class perspective may depend upon” where one lives. For example, “middle-class” taxpayers in Arlington County may not feel “middle-class” because Arlington County, along with Fairfax and Loudoun counties, is one of the 10 richest counties among America’s 3,000+ counties. Arlington had a ratio of county median income to nationwide median income of 1.80 (by comparison, Fairfax’s ratio was 2.07 and Loudoun’s was 2.05). On the other hand, someone with a "middle-class" income who lives in Arizona's Apache County might feel downriight rich since Apache's median income ratio is only 0.55 of the nationwide average.

In their conclusion, the Tax Foundation writes:

“When politicians discuss the term "middle-class," most people instinctively think, "That's me." The terminology has therefore become essentially useless as a barometer for relative economic status. The data presented above show how truly demagogued the term has become . . . Clarity is crucial in political debates over the middle class (or any class), and political rhetoric should be put aside in favor of accuracy.” [emphasis added]

September 14, 2007

Just a Minute

Yesterday, Arlington taxpayers learned from the Washington Post that Arlington Public Schools (APS) was not selected “to take over the county’s federally funded Head Start program, which provides preschool for disadvantaged children.” The paper further reported:

“The school system, in an effort to expand its early childhood programs, applied for $2.1 million in federal grants to run Head Start. The School Board also decided to contribute $1.9 million in local funds that would have been used to supplement salaries of the preschool teachers . . . The local funding would have allowed the schools to hire teachers with qualifications beyond those required under the federal program.”

One might think, therefore, that since the $1.9 million is no longer needed to operate the Head Start program, the money would be returned to its rightful owners, Arlington taxpayers. Not so fast, says APS. Embedded deep in their September 7 press release announcing that funding for their Head Start application was denied, there’s this little statement:

“School officials state that they will be making a recommendation to the School Board for the use of those funds.” [emphasis added]

Just a minute! Much as it may surprise some “School officials,” that $1.9 million does not belong to APS “to use,” but rather the money should be returned to its rightful owners, Arlington taxpayers.

September 12, 2007

Just How Many Ways Can Government Waste Your Taxes

Citizens Against Government Waste is the legacy of President Reagan’s Private Sector Survey on Cost Control, aka the Grace Commission. It was founded by the late industrialist J. Peter Grace and columnist Jack Anderson in 1984 “to eliminate waste, mismanagement, and inefficiency in the federal government.”

It accomplishes its mission through such publications as its annual Congressional pig book and various reports and newsletters. One of those is the monthly Wastewatcher newsletter. Highlights from the August 2007 issue include:

  • "Davis-Bacon for Ethanol Plants: New Ways to Waste Money. The federal government’s subsidization of the ethanol industry needlessly depletes the U.S. Treasury. As if that alone were not enough to upset taxpayers, H.R. 2419, the Farm Bill Extension Act, will only make an already egregious waste of money worse by making it even more expensive to build new ethanol plants."
  • "The Senate’s New Unethical Ethics Bill. "Members of Congress have reproductive organs the size of BBs," said Sen. Tom Coburn (R-Okla.) in challenging his colleagues to enact real earmark reform. Alas, Sen. Coburn was proven correct as the Senate voted 83-14 to approve S. 1, misnamed "the Honest Leadership and Open Government Act."
  • “Nutty” Earmark Rejected by Florida County. Sometimes you feel like a nut, sometimes you don’t. In the case of Coconut Road in Florida, even though a member of Congress felt like wasting taxpayer dollars on a highway interchange project at Coconut Road and I-75, taxpayers in Lee County, Florida did not want it and the Lee County Metropolitan Planning Commission eventually voted against it."

Browsing around the CAGW website for even a few minutes will convince you that politicians are capable of of wasting taxpayer dollars in an infinite number of ways. While there, consider becoming a CAGW member. Start complaining to your Senator, Congressman, and state and local grandees, too. Tell them a start would be to take a lot less of our taxes.

September 10, 2007

Knowing the Cost, Would They Answer the Same?

The Arlington Public Schools just published their latest customer satisfaction survey. According to reporting by the online Arlington Sun-Gazette, the “survey shows increasing happiness with school system.”

One of the questions asked of parents and community members was whether their tax dollars are well-spent. According to the newspaper report:

"83 percent of adults with students in the school system said they were, while 60 percent of those in the community at large said they were."

“[Results of the 2007 survey are here (requires Adobe), and here is APS’ September 5 press release on the survey.]

Unfortunately, the survey didn’t provide parents and community members with the cost per student, which for the 2007-2008 school-year is $18,563 per student. That is several thousand dollars more than the 'per-student cost of the Fairfax public school system. We doubt the satisfaction level of taxpayers would be anywhere near as high if they knew the cost of the Arlington school system.

September 09, 2007

Making Arlington County’s Grandees Look Conservative

To support their argument for the Columbia Pike trolley, the Arlington County Board touts the light rail system in Portland, Oregon. Well, if anyone in the bureaucracy at Courthouse Plaza mentions installation of high-tech toilets around Arlington, you can point them to a West Coast city where they’ve proven to be a waste of taxpayer money.

Last week, the Seattle Times asked whether five “gleaming, cylindrical public restrooms” in the city were worth $6.6 million. The toilets were supposed to be “an oasis of cleanliness and decency, but the newspaper reports:

“With automatic doors, toilet seats that retract for high-pressure cleanings, and a high-tech system to scrub down the floors, the $6.6 million toilet project was deemed a humane, if pricey, investment -- for tourists, and especially for the city's homeless.

“On Seattle streets since 2004, each toilet is now used an average 332 times a day, down substantially from previous years, according to records kept by the maintenance company, Northwest Cascade. But with regular use comes misuse. Prostitution and drug-dealing were predicted and, it seems, are taking place in the restrooms.”

It’s amazing what bureaucrats are capable of when asked to solve problems. Obviously, they’re not thinking about taxpayers.

September 08, 2007

Illegal Immigrants in Virginia's Jails

The September 7 issue of the Virginia Municipal League’s Update reports, “illegal immigrants are 6-10% of (Virginia’s) jail population." In fact, the Arlington jail was one of “the ‘top 10’ in numbers of illegal immigrants held.” According to VML’s “Update:”

“A State Crime Commission report shows that illegal immigrants make up 6 percent of the inmates in Virginia jails. The staff report to the commission’s illegal immigration task force, however, concluded that 6 percent was a conservative number and that the figure could be as much as 10 percent. The task force met Aug. 28 in Richmond.”

However, VML also reported:

“Some jail administrators disputed the report, according to an article in the Daily Press of Newport News. The jail administrators cited said that the number of illegal immigrants reflects the fact that the jails have a contract with the U.S. Immigration and Customs Enforcement agency. Under the contracts, the jails house suspected illegal immigrants who are undergoing a possible deportation process.”

We searched the Virginia Crime Commission’s website, but could not locate even a 'draft' copy of the report. We would like to see how that 6-10% illegal immigrant population translates into taxpayer dollars.

UPDATE (9/9/07): Here is AP's story from Sunday's Washington Times, which questions the statistics on jailed illegals.

Where’s the Border Enforcement?

The September 7 issue of the Virginia Municipal League’s Update reports, “illegal immigrants are 6-10% of (Virginia’s) jail population." In fact, the Arlington jail was one of “the ‘top 10’ in numbers of illegal immigrants held.” According to VML’s “Update:”

“A State Crime Commission report shows that illegal immigrants make up 6 percent of the inmates in Virginia jails. The staff report to the commission’s illegal immigration task force, however, concluded that 6 percent was a conservative number and that the figure could be as much as 10 percent. The task force met Aug. 28 in Richmond.”

However, VML also reported:

“Some jail administrators disputed the report, according to an article in the Daily Press of Newport News. The jail administrators cited said that the number of illegal immigrants reflects the fact that the jails have a contract with the U.S. Immigration and Customs Enforcement agency. Under the contracts, the jails house suspected illegal immigrants who are undergoing a possible deportation process.”

We searched the Virginia Crime Commission’s website, but could not locate even a 'draft' copy of the report.

September 07, 2007

One Socialist Fragment at a Time

Some who think spending by Arlington County long ago exceeded a responsible amount joke about the Peoples Republic of Arlington, referring to Arlington’s liberal to socialist politics. So it was pleasant to read Melanie Scarborough’s column in yesterday’s Examiner newspaper in which she introduces Normal Thomas, the Socialist Party presidential candidate from 1928 until 1948 (bio from Wikipedia, Bartleby, and Answers.com).

She goes on to list some of the planks from the Socialist Party platform of 1932, including public works programs, minimum wage laws, subsidized housing, health insurance and government pensions for the elderly, and higher taxes on inheritances and income. She wryly notes:

“the Socialist Party platform of 75 tears ago looks positively conservative compared with the modern Democratic Party.”

Scarborough then writes about some of the absolutely leftist proposals such as socialized medicine from Senator Hillary Clinton (D) and former Senator John Edwards (D). She then quotes Norman Thomas:

“The American people will never knowingly adopt Socialism. But under the name of ‘liberalism’ they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened.” [emphasis added]

Finally, she observes, “Some of us can see how it’s happening . . . The question is: Can we stop it?”

September 06, 2007

Is the Columbia Pike Trolley A Fiscal Folly?

The answer may depend on which two of the five Arlington County Board candidates, which Arlington citizens elect in November. Scott McCaffrey of the Arlington Sun-Gazette frames it thus in his report of the election “kick-off” at the Arlington County Civic Federation:

“Is it an economic engine for South Arlington, or a choo-choo traveling down the tracks of fiscal irresponsibility?

“The five candidates for County Board split decisively on the proposal for a $120-million-plus Columbia Pike trolley system, as they debated Sept. 4 in front of the Arlington County Civic Federation.”

Supporting the idea of a trolley were incumbent Walter Tejada and former School Board member Mary Hynes.

The three candidates opposing a trolley, with quotes from the online Arlington Sun-Gazette:

  • Mike McMenamin: “How are we going to pay for it - we're strapped so tight, there's no wiggle room [in the budget] at all.”
  • Joe Warren: According to the paper, Warren “said the idea for a trolley makes no sense, as it would narrow Columbia Pike for vehicular traffic, increasing congestion.”
  • Josh Ruebner: “It's a boondoggle designed to benefit developers.”

Unfortunately, time constraints only allowed three questions for the County Board candidates. So make every effort to raise your concerns with the candidates, e.g., during one of the neighborhood debates.

September 05, 2007

Really Help Those in Need

Brianna at NTU's Government Bytes notes the “astute observation" of a fellow blogger at Clear Commentary who observed the “disturbing” trend by politicians to:

“’help’ those in perceived need, rather than to reduce taxes and regulations to increase the chances for economic success.”

She then goes on to make some astute comments of her own:

“Government’s role has changed from maintaining the rule of law so we can all help ourselves to being the first defense against problems. Despite their (expensive) efforts and (best) intentions, too often Government ends up hurting those they intended to help. Government does not have the same feedback mechanism as the market and so its efforts do not always reach their intended beneficiaries. Past experience shows that farm subsidies don’t reach poor farmers, rent controls don’t improve housing situations for the poor and universal health care doesn’t guarantee access to doctors. [links in the original]

“Shifting the argument, people claim that though things are not perfect under government programs, they are much better than they would be otherwise. How do we know that? We are far enough away from a free-market economy that pointing out current failures will hardly prove their point. The regulations and taxes, as mentioned above, have distorted incentives and prices. Government insertions in the economy can mask true costs and eliminate the potential for private solutions to be discovered.”

Reducing taxes and regulations. Wow! Too bad most of the political class in Arlington, Virginia, and the United States are not equally astute.

September 02, 2007

Labor Day & the Benefits of Working

The Tax Foundation suggests that as we celebrate tomorrow:

“it is worth reflecting on how we spend the fruits of our labor—in particular, how much we spend on government in the form of taxes.”

Each year, folks at the Tax Foundation also calculate Tax Freedom Day, which this year occurred on April 30. At that point in 2007, Americans had worked 120 days (79 days for federal taxes and 41 days for state/local taxes), or “32.7 of the year,” which is “longer than we worked to pay for food, clothing and housing combined.”

As a result, the Tax Foundation asks two important questions:

  • “Are the government services that taxpayers receive worth this amount of labor?”
  • “And are the fruits of our labor used efficiently by federal, state and local lawmakers?”

While every American will have to answer that first question for themselves, anyone spending even a few minutes browsing around Growls will know our views about the second question. For help in answering the first question, take a look at the pie chart prepared by the Tax Foundation to see exactly how many days are devoted to each major spending categories. But tomorrow, enjoy your Labor Day!

September 01, 2007

Staggering, Simply Staggering

Two years ago this week, Hurricane Katrina struck the Gulf Coast around New Orleans and Biloxi, Mississippi. According to the National Oceanic and Atmospheric Administration, Katrina will be recorded as the most destructive storm in terms of economic losses, (but) it did not exceed the human losses in storms such as the Galveston Hurricane of 1900.

This three-page White House fact sheet reports the federal government has provided $114 billion in resources. With tax relief included, the amount comes to $127 billion. Of the $114 billion, $96 billion (84%) “has been disbursed or is available for the states to draw from.”

In his column at National Review Online, Larry Kudlow writes about the “monstrous $127 billion” figure. He complains that “not a single media story has highlighted this gargantuan government-spending figure.” To put that $127 billion in perspective, he provides two comparisons:

  • “The entire GDP of the state of Louisiana is only $141 billion, according to the U.S. Department of Commerce . . . This is simply unbelievable. And to make matters worse, by all accounts New Orleans ain’t even fixed.”
  • “Perhaps all this money should’ve been directly deposited in the bank accounts of the 300,000 people living in New Orleans. All divvied up, that $127 billion would come to $425,000 per person!”

Geoff Pender, reporting for the South Mississippi Sun-Herald, provides a third example for the $23.5 billion that was allocated to Mississippi for Katrina recovery:

“It’s enough money to buy two average-sized houses for each of the 65,000 families in Mississippi who lost their homes. And, there would be enough left over to buy each family a brand-new Honda Accord to drive between their two $166,000 houses.”

Pender provides a particularly useful report. He explains how Katrina altered federal relief and where the where the money went.

Kudlow then writes:

“Think of this: The idea of using federal money to rebuild cities is the quintessential liberal vision. And given the dreadful results in New Orleans, we can say that the government’s $127 billion check represents the quintessential failure of that liberal vision . . . Remember President Reagan’s line during the 1980 campaign about how LBJ fought a big-government spending war against poverty, and poverty won? Well think of all this Katrina spending as the Great Society Redux. And it failed. I guess the current Bush administration would like to label this ‘compassionate conservatism.’ But guess what? That failed, too.” [italics in original]

John Hawkins, writing at Townhall.com, says, “It’s time to get over it.” Admitting that it may be ‘too honest’ or ‘too mean,’ he writes:

“(P)eople lose their homes in this country every day of the year. If it isn't a hurricane, it's an earthquake. If it isn't an earthquake, it's a tornado. If it isn't a tornado, it's a fire. If it isn't a fire, it's a flood. Yet nobody sits and frets about John Doe, age 58, who lost his house in a flash flood two years ago or Jane Doe, age 60, who had her house blown away by a twister back in 2005.

How would Larry Kudlow have brought New Orleans back to life rather than the ‘gargantuan’ $127 billion federal government bailout?

“Right from the start, New Orleans should have been turned into a tax-free enterprise zone. No income taxes, no corporate taxes, no capital-gains taxes. The only tax would have been a sales tax paid on direct transactions. A tax-free New Orleans would have attracted tens of billion of dollars in business and real-estate investment. This in turn would have helped rebuild the cities, schools and hospitals. Private-sector entrepreneurs would have succeeded where big-government bureaucrats and regulators have so abysmally failed.” [italics in original]

Unfortunately, that requires believing in capitalism and the free market rather than government and the Nanny State as the solution.

Additional resources: the Congressional Budget Office has several documents, and the White House has produced a ‘lessons learned’ report.