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November 30, 2009

And Here Are This Year’s WABEs

The latest Washington Area Boards of Education (WABE) annual report is out, and once again, the Arlington Public Schools lead the nine area school districts when considering the cost-per-pupil. The WABE report also tracks sources of revenue, authorized positions, and salary, among other information.

School District            FY2010 Cost-per-Pupil

Arlington County               $18,569
Falls Church                       $18,116
Alexandria                          $18,003
Montgomery County          $15,490
Fairfax County                   $12,898
Prince George’s County     $12,267
Manassas City                   $12,192
Loudoun County                 $11,997
Prince William County         $10,383

Scott McCaffrey of the Sun-Gazette uses part of his editorial space this week to give a “thumbs up” to “the brutal honesty of the data” that is contained in each year’s WABE. In addition, he implicitly gives a “thumbs down” to Arlington’s high cost-per-pupil, noting:

“It always astounds us that county residents either don’t know, or don’t care, that it costs taxpayers 44 percent more to educate each and every public-school student in Arlington than it does in Fairfax County. Or 54.8 percent more than in Loudoun. Or a whopping 78.9 percent more than in Prince William County.

“Granted, those larger communities do benefit from some economies of scale. But that hardly accounts for all of the difference.”

McCaffrey also opines that for a good part of his tenure, former superintendent Robert Smith had been given “a blank check by School Board members (and never met a tax dollar he wasn’t eager to plow into something or other). In addition, McCaffrey said that Smith “used to intimate that it was somehow a point of pride that the district spent so much money.” An early practitioner of “spread the wealth,” we presume.

November 29, 2009

Senate Debate Over Health Care Reform Begins

Today’s Washington Times reports “Senate leaders on Tuesday are scheduled to take up the Democrats' health care reform bill in what's expected to be a raucous debate through at least the end of the year. The bill would establish a government-run insurance program, require nearly all Americans to obtain insurance, issue tax credits to help purchase coverage and fine some employers that don't provide it.”

According to a Tax Foundation press release last week, “The $848 billion health care reform legislation unveiled by Senate Majority Leader Harry Reid last week is financed primarily through cuts to Medicare provider payments (which would save $330.6 billion, or 34 percent of the bill's 10-year cost) and a 40 percent excise tax on high-value "Cadillac" health plans (which would generate $149.1 billion, or 15 percent of the bill's cost), according to the Tax Foundation's review of the Congressional Budget Office's (CBO) analysis.”

For “(a) comparison of the funding provisions in the House and Senate plans, along with pie charts breaking down the financing, see their Tax Policy Blog. In addition, the language of the two bills is available at the blog.

November 24, 2009

A Real Civics Education Lesson?

USA Today reports that an audit of a “non-profit group that gets millions of dollars a year from Congress to help teach students about government misspent or failed to justify more than $5.9 million last year." The newspaper reported:

“The audit examined the center's operation of programs that provide textbooks and materials for civics classes in U.S. schools and to develop international civics education courses. The center spent $23 million in federal grants during the year covered by the audit, from August 2007 to July 2008.

“This year's education spending bills pending in the House of Representatives and Senate would provide more than $25 million to the center, although President Obama's 2010 budget calls for eliminating the programs in favor of competitive grants.

“The inspector general's report says the center couldn't properly account for $3.2 million in employee salaries. The report says the center's monthly time sheets were unreliable because most of the employees interviewed said they estimated the time spent on each project rather than log what they worked.”

Some civics education lessons some California students are getting. Sheesh!

HT Taxing Tennessean

I hope your Thanksgiving holiday is enjoyable. Growling will resume in a few days. 

November 23, 2009

Lifestyle Transportation, What a Concept

In a WebMemo published earlier this month, Ron Utt, a senior research fellow at the Heritage Foundation, writes that Rep. James Oberstar (D-Minnesota) who is “chairman of the House Committee on Transportation and Infrastructure, introduced a 775-page bill -- the Surface Transportation Authorization Act (STAA) -- which would reauthorize the federal highway and transit programs that expired on September 30 for another six years.”

Utt continues by pointing out:

“If enacted into law, Oberstar's STAA would mark a dramatic, harmful change in federal transportation policy by:

  • Shifting resources from cars to trolleys and buses,
  • Requiring a huge tax increase to fund these new commitments,
  • Centralizing transportation decisions in Washington,
  • Necessitating a substantial increase in the number of state, local, and federal government employees, and
  • Discouraging the private sector from investing in surface transportation projects.”

“Higher Taxes for Social Engineering” (emphasis in the original).“As written, many provisions of STAA have two primary purposes:

  • Deterring the use of automobiles; and
  • Forcing residential and commercial development into higher density urban communities where public transit, walking, and bicycling would be the main form of transportation.

“To do this, Oberstar's bill would encourage and require states and metropolitan planning organizations to use new land use regulations that would lead to much higher densities than Americans now prefer.

“To fund these new commitments and lifestyle changes, STAA would require an additional $150-$200 billion in taxes over the next six years. Such an increase would be equivalent to a 112 percent increase in the federal fuel tax and an unspecified increase in other federal taxes to fund the added $50 billion higher-speed rail scheme STAA would also create.”

Utt concludes the WebMemo saying:

“As STAA now stands, there is no reasonable way to improve it, so rather than spend the next many months negotiating the terms of surrender, fiscal conservatives might better devote their energy to ending the federal highway program and turning it -- and the right to collect the federal fuel tax revenues -- back to the states.”

Sounds like a good idea to me.

November 22, 2009

Getting Dishpan Hands in the White House

Citizens Against Government Waste (CAGW) has named their November 2009 “Porker of the Month,” and he is Recovery Czar Edward DeSeve although his precise title Special Advisor to the President, Assistant to the Vice President and Special Advisor to the OMB Director for Implementation of the Recovery Act, according to CAGW’s press release.

“For presiding over the wasteful stimulus bill and a failed recovery.gov tracking website,”   CAGW names White House Special Advisor Edward DeSeve it’s November Porker of the Month.” In justifying their decision, CAGW wrote:

“Mr. DeSeve told ABC’s Jake Tapper on October 30 that he had been “scrubbing” the job estimates so much that he now has “dishpan hands” and his “fingers are worn to the nub.” However, the 640,000 jobs alleged to have been created or saved by the administration and listed on recovery.gov, as well as the inclusion of hundreds of non-existent congressional districts, have been ridiculed by talk shows, mainstream newspapers, and bloggers.

“Accountability and Transparency Board Chairman Earl Devaney has backed off the 640,000 figure, and, when pressed about the origins of the phantom jobs numbers, the Board’s Communications Director Ed Pound sputtered, “Who knows, man? Who really knows?” The Government Accountability Office testified before Congress on November 19 that more than 58,000 jobs had been created or saved by 4,000 stimulus recipients, even though they had not yet received any money. On the other hand, there were 9,200 recipients that reported no job creation, despite receiving a total of $965 million.

“The Obama administration told taxpayers that they would be able to track the stimulus money, and Mr. DeSeve is supposed to ensure the accuracy of the information. Clearly, his “dishpan hands” were not clean enough. The Accountability and Transparency Board has an $84 million budget. In May, the administration gave $18 million to Smartronix, a company that has received $260 million in federal contracts since 2000, mostly through the Department of Defense, to beef up recovery.gov. That should be more than enough to provide reliable reports.”

Sheesh! Someone needs to check just how rough, dry and scaly the Recovery Czar’s hands really are.

November 21, 2009

Auto Bailouts = Taxpayer Quagmire

According to a new study published earlier this week by the National Taxpayers Union, and authored by Thomas Hopkins, professor of economics at the University of Rochester:

"The federal government has distributed some $80 billion of taxpayer funds thus far to the U.S. auto industry since December 2008 – about $800 per American taxpaying family. The intended purpose of this funding was ‘to prevent a significant disruption of the American automotive industry’ .. . . Virtually all of the money has gone to just three firms – General Motors, Chrysler and GMAC – with GM alone receiving more than $50 billion. The bailout is by no means over; GMAC is in line for a further major transfusion.”

What has all that $80 billion done for American taxpayers? The press release puts it like this:

“The study found that the average American taxpaying family has invested roughly $800 in the auto bailouts so far. Moreover, the study found, the government support poured into General Motors, Chrysler, and GMAC – the financing subsidiary that supports sales at both – now stands at a towering $78.9 billion. Given that figure, and an estimate of how many vehicles GM and Chrysler will sell through the end of 2010, the study finds that each vehicle one of the bailed-out companies sells costs taxpayers $10,700.

“Finally, breaking down the costs by company, the study reports that every Chrysler vehicle sold costs taxpayers $7,600, and every GM vehicle sold costs taxpayers $12,200.”

Rather than spending time attempting to take over 1/6th of the American economy with their various health care schemes, Congress and the President should be devoting their energy in getting Americans back to work. Growl at Virginia's two senators and Arlington's representative in Congress, either calling or writing to them using their contact webforms:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

November 20, 2009

Who Is Congress Listening To?

Two weeks ago, Speaker Nancy Pelosi got her health care bill -- H.R. 3962 -- passed late Saturday evening, November 7, 2009 by a vote of 220-215, as we growled November 8, 2009. Now, the U.S. Senate’s Majority Leader, Harry Reid (D-Nevada) has scheduled a cloture vote on Saturday, according to Connie Hair, blogging  at the Human Events blog.

What is Congress trying to pass? According to a Gallup poll released last Friday:

“More Americans now say it is not the federal government's responsibility to make sure all Americans have healthcare coverage (50%) than say it is (47%). This is a first since Gallup began tracking this question, and a significant shift from as recently as three years ago, when two-thirds said ensuring healthcare coverage was the government's responsibility.” (Emphasis added)

Note the shift since 2001 as shown in the following graph. In 2001, Gallup polling showed more Americans (59%) thought the federal government was responsible for making sure all Americans had health insurance coverage than those who did not (38%). Compare how the polling on this question has changed as well as the partisan positions on health care legislation.

 

Gallup’s bottom line on this poll is:

“The current poll results indicate that, with the renewed healthcare debate since President Obama took office, Americans have become less convinced that it is an appropriate goal for the federal government to take on the responsibility of ensuring that all Americans have healthcare coverage. It is possible that the current debate has increased the average American's awareness as to the nuances of the various roles the government could play in the healthcare system, helping make the generic "make sure all Americans have healthcare coverage" sound less appealing. Plus, the current debate may have produced more skepticism among Americans that the government's role in healthcare could or should be this broad.”

November 19, 2009

Who Pays Federal Income Taxes?

On October 6, 2006, we growled about class warfare and who pays federal income taxes. Unfortunately, neither of our sources had a nice graphic that goes along with the data. Thanks to Taxing Tennessean, we can provide you with the following graphic from Mint.com showing who pays federal income taxes.
 

 

November 18, 2009

Hey! They're Just Improper Payments.

A Reuters story published today by CNBC reports that so-called “improper payments” by the Federal government hit $98 billion in fiscal year 2009, which ended September 30. Over half of the payments were made in the Medicare and Medicaid programs. According to Reuters/CNBC:

“The government made improper payments of $72 billion in the 2008 financial year. Fraud may also be partly to blame.”

These “improper payments” are nothing new in the federal government. They were once called overpayments, but the meaning was obviously too clear. GAO occasionally does precisely title their reports, however, e.g., in March 1997, GAO issued the report: “Food Stamps: Substantial Overpayments Result From Prisoners Counted as Household Members” (number RCED-97-54 - requires Adobe)

Guess one need not be extra careful when it's taxpayer money -- even when it's $98 billion. Sheesh!

UPDATE (11/19/09): At Cato@Liberty, the Cato Institute's Tad DeHaven comments on the news reports concerning these so-called overpayments, doubting the White House's executive order "will amount to much of a deterrent."

November 17, 2009

Thought for the Day

"Government has never increased the standard of living of one single human being in civilization's history.  For some reason that simple truth has evaded everybody.  The only thing that creates an increased standard of living is giving someone a job, the demand for their labor -- whether it's you and I, Chris, or anybody else.  The people that are paying the price for this juggernaut of federal spending are the middle class and the working class of America."

   ~ Steve Wynn, CEO of Wynn Resorts

HT Rush Limbaugh

November 16, 2009

Thought for the Day

"If politicians stopped meddling with things they don't understand, there would be a more drastic reduction in the size of government than anyone in either party advocates."

    ~ Thomas Sowell

HT The Atlasphere

November 15, 2009

Your Tax Dollars Being Wasted

In a report titled, "The Amazing Waste: Hydrogen Fuel Cell Funding," Taxpayers for Common Sense (TCS) writes, "Despite being expensive, inefficient, and ineffective, hydrogen fuel cell technologies have received more than $1.4 billion in federal funding in the past five years. While other more economical technologies much closer to practical realization exist, Congress continues to put taxpayer dollars toward HFC technologies, even after the Administration proposed more than $100 million in spending cuts for hydrogen fuel cells in the FY10 budget.”

“A hydrogen fuel cell (HFC) is an electrochemical conversion device that produces electricity from hydrogen and oxygen," according to TCS.

TCS points out that HFC technology is “not an effective climate solution," adding that while “(s)upporters tout the virtues of the HFC as a “zero [carbon] emission” technology . . . that is often not the case: deriving pure hydrogen from fossil fuels or biomass produces a significant amount of CO2. Even by producing hydrogen through water electrolysis, the barriers to development make any significant reduction in greenhouse gasses doubtful.”

TCS adds that hydrogen and fuel cell research and development is “wasteful” spending of taxpayer dollars. The Department of Energy cut their funding request by more than $100 million. TCS says, however, that “(u)nfortunately, Congress had different ideas: the House requested $153 million for hydrogen fuel cell research and the Senate requested $190 million. . . Ultimately, the two chambers agreed to appropriate $174 million to the Hydrogen Technology Program, ignoring DOE’s request to cut it to $68 million.” The following graph is from the TCS report, “The AmazingWaste: Hydrogen Fuel Cell Funding.”

 

November 14, 2009

How Taxpayers Fared At The Ballot Box?

Karen Tuinstra, state policy analyst for the National Taxpayers Union Foundation, has written NTU Issue Brief #174, “Election 2009 Results: How Taxpayers Fared at the Ballot Box.” Tuinstra begins by providing a macro view of what happened at the polls last week:

“With a limited number of states holding elections for public office in 2009, voters in many parts of the country focused on ballot measures instead. In order to better inform taxpayers of how these efforts would affect their wallets, NTU published General Election Ballot Guide 2009, The Taxpayers Perspective last month, which described ballot measures in twelve states and their likely effect on the size and cost of government. Now that the votes have been tallied, we look back on the results to see how taxpayers fared.

"Despite a wave of protests and activism opposing bigger government, the results of the vote on November 3rd proved only somewhat indicative of this rising tide. There were several ballot contests where Americans rejected higher taxes and more government regulation, while many others approved higher taxes and larger government.

"Out of the 44 state and local ballot questions identified by NTU's Ballot Guide 2009, measures that could lower taxes or control government passed 70 percent of the time (for a total of 7 proposals passed). On the other hand, measures that could raise taxes or expand government were also approved at a high margin, of 76 percent (for a total of 26 proposals passed).”

She uses tables to provide additional detail about tax. bond and spending, property rights, and state government reform measures that were on the November 3, 2009 ballots. Tuinstra concludes the brief by writing:

“For advocates of limited government, the ballot measure results from the 2009 election comprised a mixed bag. Americans' concerns on the national level over how much government is growing were visible in some state and local contests, but not uniformly so. Just as landmark laws such as California's Proposition 13 and Colorado's Amendment 1 failed in several forms at the polls before finally being adopted, future gains will likely occur gradually. Fortunately, taxpayer groups and government watchdogs are already working to make sure that pro-taxpayer measures are included on the 2010 ballot. Perhaps more than any other part of the body politic, citizen activists know all too well the importance of the old adage, "If at first you don't succeed, try, try again."

November 13, 2009

1776 Brought Back To Life

We’ve growled about the Tea Party movement on several occasions -- including here, here, here, and here, and this blogger has spoken at a local Tea Party. However, no one has, in my opinion, caught the true spirit of the Tea Party movement better than Kyle-Anne Shiver in an essay this week in American Thinker.

Kyle-Anne attended events in Atlanta and Birmingham, even interviewing people while riding the Tea Party Express Bus. If you do not have the time to read the entire essay, the following few paragraphs provide the sense of why Ms. Shiver believes that tea parties are “misunderstood and vastly underrated:”

“The Tea Party messages are clear and strident.

“Party operatives? Not welcome. Political candidates?  Keep your mouths shut and your ears open. Prefer a D or an R after your name? Not here, not on our time, or on our dime.

“The clear message: This is the people's movement. Outsiders, opportunists, and party pols are vehemently not invited. Want a voice in this groundswell, bottom-up oriented movement? Fine. All comers welcome to pitch in, get involved, stand up to tyranny, and do your own thing. Just don't try to hijack the people's movement for personal gain. Like our grandparents' generation, these folks can spot disingenuousness a mile away. They don't suffer fools or counterfeit passions.

“I talked to over fifty Tea Partiers in Birmingham and Atlanta on Monday, and I can honestly say I've never seen such a variety of people from different walks of life, different types of livelihood, and different ways of speaking all in the same place, united in one cause: Throw the bums out.

“Out of all the people I spoke with -- every single one -- I did not find a solitary person willing to identify with a political party. "Independent" was the only identifier with which people would agree to be labeled. Some said, "I used to be a Democrat," or "I used to be a Republican," but they invariably put a sharp edge on the words "used to be." The sense of betrayal by politicians is palpable among Tea Partiers.

“If there is a shared ideology among them, it is the one espoused by our Founders, simply put: God and Liberty. "Unalienable rights" was a phrase I heard over and over again.”

And about the title of this Growls:

“If anyone asked me to adequately describe the Tea Party movement, I would have to reach back into my American civics book to find its root.

“Simply put, the Tea Party movement is 1776 brought back to life.”

November 12, 2009

How Virginia Has Been Spending Your Tax Dollars

Virginia’s Joint Legislative Audit and Review Committee (JLARC) released a draft of their latest annual review of state spending (requires Adobe) from FY 2000 through FY 2009. The JLARC draft report highlights four key findings:

  • Over the past decade, Virginia’s operating budget has increased 73 percent. The growth was 46 percent in general funds and 103 percent in non-general funds.
  • Adjusting for the effects of inflation (which increased 23 percent between 2000 and 2009) and population growth (Virginia’s population grew ten percent over the period), the budget increased by 28 percent. (emphasis added)
  • Budget growth remains concentrated in a few State agencies and programs. Eight of the 156 agencies accounted for nearly 70 percent of all budget growth over the past ten years. Seven of the 207 budget programs accounted for 61 per cent of all budget growth during the period.
  • General fund budget growth was also dominated by a few large agencies, reflecting policy decisions and initiatives of the Governor and General Assembly during the period.

Virginia’s operating budget grew from $21.4 billion in FY 2000 to $37.1 billion in FY 2009, i.e., 73.4% over the decade although annual increases ranged from a low of 0.7% (FY 2002) to a high of 10.9% (FY 2005). Moreover, most of the spending is concentrated in just a few agencies/programs:

“Much of the ten-year, $15.7 billion growth in the State budget was concentrated in core functions of State government: education, health care, transportation, and social services. More than half (54 percent) of all budget growth occurred in four agencies: the Departments of Medical Assistance Services (DMAS), Education-Direct Aid to Education, Transportation (VDOT), and the University of Virginia (including the Medical Center). Adding only three more agencies—the Department of Social Services, the Virginia Community College System, and the personal property tax relief program (defined here as an agency)—accounts for almost two-thirds of the ten-year growth in Virginia’s budget.

“A few large agencies received most of the new general fund dollars between FY 2000 and FY 2009. The ten agencies each receiving more than $100 million in new general funds during the period accounted for 96 percent of all general fund growth. The Department of Education-Direct Aid to Education, DMAS, the personal property tax relief program, and the Department of Corrections each received approximately $374 million during the period.”

If you can only review one state financial report, this would be a good one. It contains many helpful charts and tables, highlighting spending in the Commonwealth. 

November 11, 2009

Nickel and Diming Arlington Taxpayers

The Arlington County Board is scheduled to vote on a proposed amendment to Chapter 27 of the Code of Arlington County on Saturday, November 14. The proposal -- agenda item #19 (requires Adobe) -- by the Acting County Manager would amend “Section 27-11 to change the payment due date on business tangible property* tax from September 15 to September 5.”

While the report to the Board claims the proposal would “accelerate and improve the capacity of the Treasurer to collect delinquent revenues” and balance the workload of the Treasurer and Commissioner of the Revenue, the primary motivation comes from its fiscal impact:

“It is expected that the proposed due date change will general an additional $15,000 in interest income in FY 2011. This revenue would be appropriated as part of the FY 2011 budget process in April 2010.”

A necessity of being part of a world-class community, we assume?

* "Arlington County levies a tax on all business tangible personal property located in Arlington on January 1 and used in a trade or business. This includes such items as furniture, fixtures, machinery, tools and programmable computer equipment. Businesses must itemize personal property and/or equipment, giving its date of acquisition and original purchase price."

November 10, 2009

Small Business & Health Care Reform

Sally Pipes, president of Pacific Research Institute (PRI) and author of “The Top Ten Myths of American Health Care: A Citizens Guide,” argues in an op-ed that appeared in Investor’s Business Daily last week, and available here at the PRI website:

“Several new studies show that ObamaCare will dramatically increase health costs for most small businesses.”

Pipes cites the results of three studies. One study “relied on actuarial data from WellPoint, a large health insurer that provided customer data in 14 states where it operates Blue Cross plans.” From this study, 70% of small businesses would see higher health insurance premiums if health care legislation is passed. In another study, small businesses would see “a 19% jump in premiums within the first five years of ObamaCare's passage.” The third study “from America's Health Insurance Plans and PricewaterhouseCoopers, found that the reform bill approved by the Senate Finance Committee would result in a 28% increase in premiums for firms with fewer than 50 workers by 2019.”

Ms. Pipes acknowledges that rising insurance premiums affect both big and small employers. However, she points out:

“. . . But the bigger ones have the luxury of spreading those costs among many workers. They can also use their purchasing clout to negotiate lower rates with carriers.

“Small businesses don't have these advantages. That's why, on average, they pay 18% higher premiums than their large counterparts, according to the Commonwealth Fund.“

Is there any question that small business will be buried by health care reform?

More information on Ms. Pipes’ book (cover below) is here.

 

November 09, 2009

House-Passed Health Care Bill Is Condemned

After the House voted 220-215 (Roll Call Vote #887) to pass the so-called “Affordable Health Care for America Act,” H.R. 3962, late Saturday evening, the National Taxpayers Union (NTU) issued a press release condemning it as:

“a bill that dramatically raises taxes and expands the size and scope of a federal government that is already far too large.”

The NTU press release went on to say:

“No health care system in the world could have cured this Congress of the 'do-something disease' with which it has been infected," said NTU Director of Government Affairs Andrew Moylan. "The American people spent months trying to cure their Representatives of this affliction by expressing their frustration and dislike for this health care bill, from town hall meetings to marches on Washington. But instead of taking their medicine and returning to the drawing board, supporters of this bill took advantage of what are legitimate problems with health care to pass an enormous package of tax hikes, subsidies, and regulations."

“NTU also sharply criticized many "Blue Dog" and other moderate Democrats who voted for the bill. "Nobody can still cling to pretenses of fiscal conservatism after voting for this hideous bill," Moylan said. "As many as 69 Democrats expressed some sort of opposition to the legislation, but in the end only 39 had the guts to stand by taxpayers and vote no."

Health care reform now moves to the U.S. Senate with NTU promising "to pressure moderates of both parties to vote against these harmful policies.”

November 08, 2009

Emergency House Call on Congress

In the end, the rally organized by Rep. Michelle Bachmann (R-Minnesota), and held Thursday on Capitol Hill, didn’t make a difference since Speaker Nancy Pelosi got her health care bill -- H.R. 3962 -- passed late Saturday evening, November 7, 2009 by a vote of 220-215 (Roll Call Vote #887).

Nevertheless, the effort of Rep. Bachmann, among many others, caused House Democrats to ‘scramble’ “Thursday (and Friday, as well) to find enough votes to pass their health care bill,” as CNSNews.com termed it. Bachmann was quoted by CNSNews.com saying:

“Rep. Michele Bachmann (R-Minn.) urged like-minded conservatives to converge on the Capitol during an appearance on Fox’s “Hannity” show last Friday. At the “house Call’ event yesterday, Bachmann said Republicans knew their options to block the Democrats’ health care bill is limited – “but what we knew was unlimited was the voice of persuasion of the American people.”

Fox News coverage is here. Barbara Curtis writes about the rally for Pajamas Media. Links to the rally at the Mark Levin Show website, including photos, are here.

November 07, 2009

Latest Example of Government Failure

In recent testimony before a subcommittee of the House Committee on Oversight and Government Reform, the General Accountability Office (GAO) told members of Congress:

“The U.S. Postal Service’s (USPS) financial condition and outlook deteriorated significantly during fiscal year 2009.  USPS was not able to cut costs fast enough to offset declining mail volume and revenues resulting from the economic downturn and changing mail use.  Facing an unprecedented cash shortfall, USPS stated that it would have insufficient cash on hand to make its mandated $5.4 billion payment to prefund postal retiree health benefits that was due by the end of the fiscal year.

GAO says that USPS’ financial condition and outlook for fiscal year 2009 “continue to be challenging.” GAO makes four major points:

  • “In fiscal year 2009, mail volume declined about 28 billion pieces, or about 14 percent, from the prior fiscal year, when volume was about 203 billion pieces; revenue declined from about $75 billion to about $68 billion.
  • A looming cash shortfall necessitated last-minute congressional action to reduce USPS’s mandated payments to prefund retiree health benefits by $4 billion. In the absence of congressional action, USPS was on track to lose about $7 billion.
  • USPS debt increased at the end of fiscal year 2009 by the annual statutory limit of $3 billion, bringing outstanding debt to $10.2 billion.  At this rate, USPS will reach its total $15 billion statutory debt limit in fiscal year 2011.
  • USPS projects annual deficits over $7 billion in fiscal years 2010 and 2011, and continuing large cash shortfalls.

In concluding the report’s highlights, GAO wrote:

“ . . . . Allowing USPS to compete more broadly with the private sector could lose money, and fair competition issues would need to be considered. Thus, in addition to its revenue-generation initiatives, USPS will need to continue making significant reductions in its workforce and network costs. When we recently added USPS’s financial condition to our high-risk list, we said that restructuring will require USPS to align its costs with revenues, generate sufficient earnings to finance capital investment, and manage its debt.”

Congress can’t manage the nation’s postal system, but are conceited enough to think they can manage America’s medical care system, which is one-sixth of the nation’s economy. Sheesh!

In addition to the one-page highlights, there are 13 pages of testimony

November 06, 2009

Medical Care and Free Lunches

The editorial in the Monday, November 2, 2009 Wall Street Journal claimed the House health care reform bill that Speaker Nancy Pelosi may bring to a vote as early as tomorrow “may well be the worst piece of post-New Deal legislation ever introduced.” The editorial’s sub-heading pretty much says it all:

“Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all.”

One of several new taxes and fees in the House would be a 5.4% ‘surcharge’ “on joint filers earning over $1 million, $500,000 for singles.” However, as the Wall Street Journal points out in the next paragraph:

“Even if Congress had confiscated 100% of the taxable income of people earning over $500,000 in the boom year of 2006, it would have only raised $1.3 trillion. When Democrats end up soaking the middle class, perhaps via the European-style value-added tax that Mrs. Pelosi has endorsed, they'll claim the deficits that they created made them do it.”

Read the entire editorial, and we think you will agree that Speaker Pelosi’s health care bill -- H.R. 3962 -- may indeed be the “worst bill ever.” The editorial ends by saying:

“Critics will say we are exaggerating, but we believe it is no stretch to say that Mrs. Pelosi's handiwork ranks with the Smoot-Hawley tariff and FDR's National Industrial Recovery Act as among the worst bills Congress has ever seriously contemplated.”

Or, as Thomas Sowell says so eruditely yesterday in a National Review Online op-ed, in arguing there are “no free lunches in medical care:

“Economics and politics confront the same fundamental problem (in medical care): What everyone wants adds up to more than there is. Market economies deal with this problem by confronting individuals with the costs of producing what they want, and letting those individuals make their own trade-offs when presented with prices that convey those costs. That leads to self-rationing, in the light of each individual’s own circumstances and preferences.

“Politics deals with the same problem by making promises that cannot be kept, or which can be kept only by creating other problems that cannot be acknowledged when the promises are made.”

November 05, 2009

Thought for the Day

"We are losing what’s made our country great. Instead of moving toward greater liberty, we’re moving toward greater government control of our lives."

   ~ Walter E. Williams

HT Townhall.com column

November 04, 2009

What Healthcare Bureaucracy Will Look Like

CNSNews.com reports a list of the 111 federal bureaucracies that would be created under House Speaker Pelosi’s healthcare reform bill, H.R. 3962. The list of the 111 “new boards, bureaucracies, commissions, and programs created in the House health care bill” was compiled by the House Republican Conference. Here are the first 10 of the 111 bureaucratic elements (including section and page numbers):

  • Retiree Reserve Trust Fund (Section 111(d), p. 61)
  • Grant program for wellness programs to small employers (Section 112, p. 62)
  • Grant program for State health access programs (Section 114, p. 72)
  • Program of administrative simplification (Section 115, p. 76)
  • Health Benefits Advisory Committee (Section 223, p. 111)
  • Health Choices Administration (Section 241, p. 131)
  • Qualified Health Benefits Plan Ombudsman (Section 244, p. 138)
  • Health Insurance Exchange (Section 201, p. 155)
  • Program for technical assistance to employees of small businesses buying Exchange coverage (Section 305(h), p. 191)
  • Mechanism for insurance risk pooling to be established by Health Choices Commissioner (Section 306(b), p. 194)
Take a look at the other 91 items on that list. By the way, compare the Republican and Democrat health care plans. Here's the 1,990-page Democrat's plan (requires Adobe), and here's the 219-page Republican plan.

November 03, 2009

Thought for the Day

"There is no art which one government sooner learns of another than that of draining money from the pockets of the people.”

    ~ Adam Smith (1723-1790), Scottish Economist, Philosopher and Author

HT OnPower.org

November 02, 2009

"Could America Go Broke?"

Many Washington Post readers may have dropped their newspaper in their cereal after they turned their eyes to read the title of Robert J. Samuelson’s column this morning, which carried the same title as today’s Growls. He writes the idea that “a major advanced country would default on its debt . . . was, until recently, a preposterous proposition.”

Samuelson says the thought the U.S. could go broke is “still a very, very long shot, but it's no longer entirely unimaginable. Governments of rich countries are borrowing so much that it's conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse. What happens then?”

Samuelson draws parallels between the U.S. situation and others such as the fiscal conditions in Japan. He concludes with the following:

“But containing debt by spending cuts or tax increases would involve wrenching and unpopular measures that might, perversely, weaken the economy and worsen deficits. In Japan, the existing value-added tax (national sales tax) of 5 percent would have to go to 12 percent, says JPMorgan, along with deep spending cuts. Against choices like that, some advanced country might decide that a partial or complete default, though dire, would be less damaging economically and politically than the alternatives.

“Deprived of international or domestic credit, defaulting countries in the past have suffered deep economic downturns, hyperinflation, or both. The odds may be against a wealthy society tempting that fate, but even the remote possibility underlines the precariousness and the novelty of the present situation. The arguments over whether we need more "stimulus" (and debt) obscure the larger reality that past debt increasingly constricts governments' economic maneuvering room.”

Mark your calendars to read Samuelson in every Monday’s Washington Post. Here is his archive where you can find such gems as last week’s “Public Plan Mirage.”

November 01, 2009

Government Health Care & America’s Core Values

Arthur C. Brooks, president of the American Enterprise Institute, argues in a Wall Street Journal op-ed last week that the reason health care reform keeps falling in the polls is because the debate over health care “is part of a larger moral struggle over the free-enterprise system.”

As a bit of background, Brooks points out:

“According to the Gallup polling organization, the percentage of Americans who believe the cost of health care for their families will "get worse" under the proposed reforms rose to 49% from 42% in just the past month. The percentage saying it would "get better" stayed at 22%.”

In searching for answers, Brooks writes that Americans:

“ . . .  aren't upset merely over the budget-busting details. Rather, public resistance stems from the sense that the proposed reforms do violence to three core values of America's free enterprise culture: individual choice, personal accountability, and rewards for ambition. (emphasis added)

Brooks summarizes this excellent op-ed saying:

"The health-care debate is part of a moral struggle currently being played out over the free enterprise system. It will be replayed in every major policy debate in the coming months, from financial regulatory reform to a cap-and-trade system for limiting carbon emissions. The choices will ultimately always come down to competing visions of America's future. Will we strengthen freedom, individual opportunity and enterprise? Or will we expand the role of the state and its power?"