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October 31, 2010

Big Dogs, Big Spending, and Public-Sector Unions

In today’s Boston Globe, Jeff Jacoby has a great column, and reports on which “special interest is spending the most money to influence the 2010 election.” Despite reporting in the so-called mainstream media, it’s not the Chamber of Commerce. Rather, Jacoby writes:

“In reality, the biggest outside spender is the American Federation of State, County, and Municipal Employees, which is pumping almost $88 million into TV commercials, phone banks, and mailings to promote Democratic candidates.

“We’re spending big,’’ AFSCME President Gerald McEntee boasted to The Wall Street Journal. “And we’re damn happy it’s big. And our members are damn happy it’s big — it’s their money.’’

“AFSCME isn’t the only public-sector union “spending big’’ to influence the vote on Nov. 2. So is the National Education Association and the Service Employees International Union, respectively the nation’s largest and fastest-growing unions. Together, the three government-employee unions will have spent nearly $172 million campaigning for Democrats in the course of this election cycle. That outstrips by more than $30 million what the Chamber of Commerce and the Rove network combined are pouring into the 2010 campaign.

“I have no objection to close media scrutiny when business-linked organizations spend heavily on campaign ads. But it should be a far bigger story when public-employee unions do so. Indeed, it should be cause for concern.”

In concluding the column, Jacoby emphasizes that:

“The cost of government has soared in tandem with the growth in public-sector unions — and those unions make no bones about their reliance on politics to enlarge their wealth and power. “We elect our bosses, so we’ve got to elect politicians who support us and hold those politicians accountable,’’ AFSCME’s website proclaims. “Our jobs, wages, and working conditions are directly linked to politics.’’ That is exactly the problem.

“Public-sector unionism has been unhealthy for American democracy. The power to “elect our bosses’’ has turned government employment into a rigged game — rigged in favor of ravenous government growth and against the private-sector taxpayers who pay for it. AFSCME may be “damn happy’’ at the impact it has on US elections. But the rest of us ought to be alarmed.

Thanks Jeff for a great column, which reminds taxpayers of just why the cost of government has been going in just one direction. You can read more by Jeff Jacoby at his website, JeffJacoby.com.

October 30, 2010

The Hidden Tax of ‘Red Tape’

We’ve often growled about the vast amount of red tape that entangles America’s productive class (most recently here, here, and here). In an updated “Backgrounder” on the amount of new regulation coming from the Obama Administration (No. 2482, October 26, 2010), James Gattuso, Diane Katz and Stephen Keen write:

“According to a report recently released by the Small Business Administration, total regulatory costs amount to about $1.75 trillion annually, nearly twice as much as all individual income taxes collected last year.” (emphasis added)

According to the report’s abstract:

“The burden of regulation on Americans increased at an alarming rate in fiscal year 2010. Based on data from the Government Accountability Office, an unprecedented 43 major new regulations were imposed by Washington. And based on reports from government regulators themselves, the total cost of these rules topped $26.5 billion, far more than any other year for which records are available. These costs will affect Americans in many ways, raising the price of the cars they buy and the food they eat, while destroying an untold number of jobs. With the enactment of new health care laws, financial regulations, and plans for rulemaking in other areas, the regulatory burden on Americans is set to increase even further in the coming year.”

A few of the major rulemakings identified in the appendix of the backgrounder include:

  • December 1, 2009, Environmental Protection Agency, “Effluent Limitations Guidelines and Standards for the Construction and Development Point Source Category”: $810.8 million annually.
  • January 8, 2010, Department of Energy, “Energy Conservation Program: Energy Conservation Standards for Certain Consumer Products (Dishwashers, Dehumidifiers, Microwave Ovens, and Electric and Gas Kitchen Ranges and Ovens) and for Certain Commercial and Industrial Equipment (Commercial Clothes Washers)”: $23.4 million annually.
  • March 10, 2010, Securities and Exchange Commission, “Amendments to Regulation SHO”: $1.2 billion annually; $1.1 billion start-up.
  • March 31, 2010, Department of Justice, Drug Enforcement Administration, “Electronic Prescriptions for Controlled Substances”: $1.4 billion.

Gattuso et al point out that all regulations are not unwarranted. However, they also point out that the regulatory burden, as well as the taxpayer burden, “are expected to in increase again in 2011 as agencies continue to promulgate new rules related to health care, energy, financial services, and telecommunications.

Given the exorbitant cost of the regulatory burden, the new Congress could make a serious dent in the federal deficit by taking a big bite out of the regulatory porker. The chart below, from the Heritage backgrounder, provides a brief look at the cost of major new regulations.

 

October 29, 2010

The Pessimism of Economics Bloggers

Economics professor Mark Perry who runs the famous Carpe Diem blog is also blogging now at the American Enterprise Institute's EnterpriseBlog. Earlier this week, he wrote there are many economic indicators that track the U.S. economy, however, he added:

“Tim Kane at the Kauffman Foundation came up with a new one about a year ago—a quarterly survey of economics bloggers, and he invited Nick Schulz and me to join the board of advisors for the project. The most recent survey was conducted in mid-October, and the results of the fourth “Quarterly Survey of Leading Economics Bloggers” were just released by the Kauffman Foundation.”

According to the Kauffman Foundation’s press release:

“For the fourth quarter in a row, the nation's top economics bloggers have conveyed a steadily deteriorating view of the U.S. economy . . . respondents' outlook on the U.S. economy is more pessimistic than in any previous quarterly survey in 2010, with 99 percent saying that conditions are mixed, facing recession or in recession. When asked about the probability of a double-dip recession in the United States, the average response is a 41 percent probability; two-fifths see a 20 percent probability, and opinion declines toward higher probabilities.

The study (requires Adobe) adds as part of a key finding:

“For an economy in which growth is the norm, 38 percent of respondents think that the U.S. economy is worse than official statistics indicate, and only 9 percent believe it is better. When asked to describe the economy using five adjectives, “uncertain” was used most frequently.”

Perry summarizes the views of the almost 70 economics bloggers saying they “offer a rather bleak assessment and outlook for the U.S. economy.” A fine mess the politicians have made with their interventions, I’d say.

You can watch Tim Kane being viewed on CNBC's Street Sign show by Erin Burnett at the Carpe Diem link.

October 28, 2010

Unlikely Allies Uncover Billions

Two days ago, we growled about the forthcoming report from the National Commission on Fiscal Responsibility and Reform that was created by President Obama last February to deal with the federal government's debt and deficit. The commission should look to “a new study released today by the U.S. Public Interest Research Group (U.S. PIRG) and the National Taxpayers Union (NTU),” which “provides the panel with a great place to start: more than $600 billion of spending cuts with appeal across the political spectrum.”

You can read more about the study in this NTU press release, which says:

“While the two groups have widely divergent views on many tax and fiscal issues, they have joined forces to identify federal programs that both Republican and Democratic lawmakers should recognize as wasteful and inefficient uses of taxpayer dollars.

"The U.S. PIRG and NTU study identifies more than 30 cuts in federal spending, including:

  • $62 billion in savings by eliminating wasteful subsidies to farmers and large corporations.
  • $354 billion in savings from reforming inefficient contract and acquisition procedures.
  • $77 billion in savings by improving execution of existing government programs as well as eliminating unneeded programs.
  • $108 billion in savings from ending low-priority or unnecessary weapons systems, along with rightsizing other programs.

“This election season has been dominated by talk about the deficit, but we haven’t heard enough about specific solutions,” said Nicole Tichon, Tax and Budget Reform Analyst for U.S. PIRG. “While these measures won’t fix the problem on their own, they are a solid first step for any legislator who is serious about a more responsible and efficient government.”

“Andrew Moylan, the report’s co-author from the National Taxpayers Union, added, “Taxpayers are incensed by wasteful spending in Washington, and it is clear that we can no longer afford as a nation to put off difficult decisions about getting back to balance. We hope this report will bridge the political divide and serve as a basis for that debate.”

‘The organizations plan to send their findings to the National Commission on Fiscal Responsibility and Reform, which is currently in the process of drawing up its final recommendations to Congress for balancing the budget and strengthening the government’s long-term financial health.”

Great job Ms. Tichon and Mr. Moylan for producing a coherent, well-written and well-document report. A link to the entire report and biographies of the two co-authors can be found at the above press release.

October 27, 2010

And October’s Porker of the Month Is . . .

Definition: “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.”

In their press release, Citizens Against Government Waste (CAGW) announced they have named Rep. Debbie Wasserman Schultz (D-Forida) their “October Porker of the Month for exaggerating the effect of the failed economic stimulus program, making dubious claims about jobs numbers, and misleading the American people about the true economic picture.” CAGW adds:

“Rep. Wasserman Schultz made the following claim about job creation,  “On the pace that we’re on with job creation in the last four months — if we continue on that pace — all the leading economists say it is likely that we will — we will have created more jobs in this year than in the entire Bush presidency.”

“According to an October 12, 2010 article in National Review by Veronique de Rugy, a senior research fellow at the Mercatus Center, “During the Bush presidency, net total employment went up by 1.08 million jobs.  So far, during the Obama presidency, total employment has been reduced by 3.3 million jobs.”

“Rep. Wasserman Schultz is one of the ‘say-anything’ crowd; she and her ilk never let the facts get in the way of a good story,” said CAGW President Tom Schatz.  “Instead of spinning the facts to create a fairy tale of economic recovery, she ought to be working to cut wasteful government spending and decrease the tax and regulatory burdens on American businesses.  Maybe the country then can experience a real recovery, not Rep. Wasserman Schultz’s fantasy recovery,” said Schatz.”

In addition, you can watch a video, co-produced with reason.tv, the video website of Reason Magazine, about CAGW’s naming of Rep. Wasserman-Schultz as the latest Porker of the Month at CAGW’s homepage, at reason.tv, or at You Tube.

October 26, 2010

Tax Breaks and the Looming Financial Disaster

A news article in this past weekend’s edition of the Wall Street Journal about the National Commission on Fiscal Responsibility and Reform created by President Obama last February floated some key tax breaks that are at risk as the commission prepares to issue its report on December 1. The Wall Street Journal's reporter, Damian Paletta, introduces the article this way:

“Sacrosanct tax breaks, including deductions on mortgage interest, remain on the table just weeks before the deficit commission issues recommendations on policies to pare back with the aim of balancing the budget by 2015.

"The tax benefits are hugely popular with the public but they have drawn the panel's focus, in part because the White House has said these and other breaks cost the government about $1 trillion a year.

“Sacrosanct tax breaks, including mortgage-interest deductions, remain on the table just weeks before the deficit commission issues recommendations on ways to balance the budget by 2015. Alan Murray and David Weidner discuss. Also, Jennifer Levitz discusses a leading national tea-party group that is laying plans to maintain pressure on new members of Congress after the Nov. 2 vote.

“At stake, in addition to the mortgage-interest deductions, are child tax credits and the ability of employees to pay their portion of their health-insurance tab with pretax dollars. Commission officials are expected to look at preserving these breaks but at a lower level, according to people familiar with the matter.

The article, reported by Damian Paletta, concluded by saying:

“The White House hasn't signed off on any of the potential proposals as it's waiting for the panel to complete its work.

“Mr. Obama "expects that the fiscal commission will continue the process of discussing and analyzing a wide range of ideas and it is premature to describe any specific idea as a conclusion of a commission that has not even voted yet," White House spokesman Amy Brundage said.

“The commission "is the last best hope right now for getting some substantive movement on the issue of the deficit, the debt, and the financial disaster we're facing," Sen. Judd Gregg (R., N.H.), a member of the commission, said in a recent interview.

Paletta adds that even with an agreement “any curbs on current tax breaks” would likely face stiff opposition in Congress as various lobbies try to work their magic.

October 25, 2010

For the Record . . . on the National Debt

CNS News has an article today reporting that the national “debt has increased $5 trillion since Speaker (Nancy) Pelosi vowed, ‘no new deficit spending.’” So, for the record, let’s take a look at the numbers from this well-documented article by Terrence Jeffrey, who writes:

“When Rep. Nancy Pelosi (D-Calif.) gave her inaugural address as speaker of the House in 2007, she vowed there would be “no new deficit spending.” Since that day, the national debt has increased by $5 trillion, according to the U.S. Treasury Department.

"After years of historic deficits, this 110th Congress will commit itself to a higher standard: Pay as you go, no new deficit spending,” Pelosi said in her speech [2] from the speaker’s podium. “Our new America will provide unlimited opportunity for future generations, not burden them with mountains of debt."

“Pelosi has served as speaker in the 110th and 111th Congresses.

“At the close of business on Jan. 4, 2007, Pelosi’s first day as speaker, the national debt was $8,670,596,242,973.04 (8.67 trillion), according to the Bureau of the Public Debt [3], a division of the U.S. Treasury Department.  At the close of business on Oct. 22, it stood at $13,667,983,325,978.31 (13.67 trillion), an increase of 4,997,387,083,005.27 (or approximately $5 trillion).

“Pelosi, the 60th speaker of the U.S. House of Representatives, has added more to the national debt than the first 57 House speakers combined.”

Jeffrey also points out “(t)he national debt first topped $5 trillion on Feb. 23, 1996, more than a year into Gingrich’s speakership.” He also notes the requirements of the U.S. Constitution, writing:

"No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law," says Article 1, Section 9, Clause 7 [7] of the Constitution.

“By precedent, appropriations originate in the House, with the Senate following suit,” says the House Rules Committee in an explanation [8] of the appropriations process.”

A well-documented and well-worth reading article if you want the facts and figures on the national debt as well as who is responsible for running up the numbers.

p.s. In the online article, the numbers 2-8 in brackets will link you to the source document.

October 24, 2010

Not Even A Clue How To Pay For It

I just sent the following letter to the editor of the Arlington Sun Gazette:

Dear Editor:

Re: In his letter to the editor (“Moran is Helping to Spend Us into Oblivion,” October 18, 2010), James Campbell faulted U.S. Rep. Jim Moran for saying that Republican candidate Patrick Murray’s “24 years in the U.S. Army were not in the public service” and for “all the earmarks and other spending” Moran has showered on the region.

Mr. Campbell likened it to stealing his granddaughter’s credit card to pay for gifts to Campbell’s wife. Well, it’s worse. Moran doesn’t have a clue how the granddaughter will pay for the credit card bills. I know because Moran told me so.

A month before Congress passed the $787 billion so-called stimulus bill in 2009, formally known as the American Recovery and Reinvestment Act, Jim Moran brought several of his staffers to Courthouse Plaza to brief the Arlington County Board and other local government poohbahs. I guess Moran wanted to make sure sure their projects were indeed “shovel-ready” when President Obama signed the bill into law.

After the meeting, I made a quick trip to the men’s room. Jim Moran was there. Since we were alone for a minute, I asked Mr. Moran how American taxpayers would be able to pay for the $787 billion Porkulous bill. He rolled his eyes and said, “You know, I ask myself the same question.”

Not only are Americans represented in Congress by people with no intent of abiding by their oaths to the Constitution or know the meaning of patriotism, American taxpayers are represented by economic illiterates.

Regards.
Timothy Wise

October 23, 2010

Quote for the Day

“The only way to fight poverty is with employment . . . Trillions of dollars have been given to charity in the last 50 years, and they don’t solve anything.”

   ~ Carlos Slim, "Billionaire" and "richest man in the world according to Forbes magazine"

HT CARPE DIEM

October 22, 2010

Accounting For The Excess Burden Of Taxation

In a working paper for the University of Michigan and the National Bureau of Economic Research (Excess Burden of Taxation, WP 2007-1, requires Adobe), James Hines writes:

“The excess burden of taxation is the efficiency cost, or deadweight loss, associated with taxation.

“The total economic burden of a tax includes both payments that taxpayers make to the government and any lost economic value from inefficient activities undertaken in reaction to taxes. Since direct tax burdens take the form of revenue that taxpayers remit to governments, the excess burden of taxation is the magnitude of the economic costs of accompanying economic distortions . . . At low tax rates this substitution entails only modest excess burdens, since, in the absence of other distortions, the welfare cost of substituting an untaxed for a taxed activity simply equals the tax rate, the difference between pretax and after-tax returns to the taxed activity. At high tax rates this difference is quite large, and as a result, residents of economies with high tax rates may face substantial excess burdens of taxation.”

Consequently, a new “policy analysis” from the Cato Institute, “Congress Should Account for the Excess Burden of Taxation” (No. 669, October 13, 2010) by Christopher Conover, a research scholar at Duke University, caught our eye. Why? Because, as Conover writes, “Economists have confirmed empirically what most laymen understand intuitively: “whatever you tax, you get less of.” That said, following is the executive summary from Cato’s policy analysis:

"A well-established principle of public finance holds that taxes impose costs on society beyond the amount of revenue government collects. Estimates vary depending on the type of tax, but the “marginal excess burden” of federal taxes most likely ranges from 14 to 52 cents per dollar of tax revenue, averaging about 44 cents for all federal taxes.

‘The Patient Protection and Affordable Care Act provides a useful illustration. The Congressional Budget Office has projected the 10-year, on-budget cost of the law will be just over $1 trillion. This paper estimates PPACA will impose an additional, hidden cost of $157 billion to $494 billion in the form of reduced economic output. Related provisions (such as the so-called “doc fix”) could drive the economic losses to $550 billion, or more than half of the bill’s official cost estimates. Failing to account for this hidden tax multiplier biases legislative decisions toward more costly policies.

“For nearly two decades, the U.S. Office of Management and Budget has directed federal agencies to include an average marginal excess burden of 25 cents per dollar when conducting cost-benefit analyses of federal programs.

“Congress should direct the Joint Committee on Taxation and Congressional Budget Office to incorporate the excess burden of taxation in their budget analyses, including cost estimates of legislation, baseline budget projections, and budget options. Making such costs visible will encourage policymakers to consider whether the benefits of federal programs equal or exceed the total costs, both visible and hidden. Since the legislation that the CBO analyzes represents marginal changes from an existing budget and tax baseline, marginal excess burdens would be the most appropriate measure.”

The analysis is short by Cato standards, only 10 pages, including footnotes. As Conover says in the conclusion, “It is irresponsible for members of Congress and the president to spend taxpayers earnings without understanding the full burden they are imposing on those taxpayers.” Absolutely true!

October 21, 2010

Your Taxes at Work . . . ‘Green’ Weatherization

The Washington Examiner posted an article on Tuesday by Byron York reporting that “stimulus weatherization money buys shoddy work, widespread fraud” in Chicago. According to York:

“Projects to weatherize homes are a key part of the Obama administration's fusion of stimulus spending and the green agenda. But a new report by the Department of Energy has found serious problems in stimulus-funded weatherization work -- problems so severe that they have resulted in homes that are not only not more energy efficient but are actually dangerous for people to live in.

“The study, by the Department's inspector general, examined the work of what's called the Weatherization Assistance Program, or WAP, in Illinois. Last year, the Department awarded Illinois $242 million, which was expected to pay for the weatherization of 27,000 homes. Specifically, Energy Department inspectors took a close look at the troubled operations of the Community and Economic Development Association of Cook County, known as CEDA, which is the largest recipient of weatherization money in Illinois with $91 million to weatherize 12,500 homes.  (Cook County is, of course, home to Chicago.)

“The findings are grim. "Our testing revealed substandard performance in weatherization workmanship, initial assessments, and contractor billing," the inspector general report says. "These problems were of such significance that they put the integrity of the entire program at risk."

The Department of Energy's IG report, “The State of Illinois Weatherization Assistance Program” (requires Adobe), may actually be worse that what York portrays. For example, the IG auditors write:

“Our testing revealed substandard performance in weatherization workmanship, initial home assessments, and contractor billing.  These problems were of such significance that they put the integrity of the entire Program at risk, although Illinois and CEDA asserted during the audit that they were in the process of improving performance.”

Don't you just look forward to when health care reform is fully implemented? Sheesh!

October 20, 2010

U.S. Must Return To Fiscally Sustainable Course

The Hill’s blog, Blog Briefing Room, reported yesterday: “The U.S. government must shrink if it wants to return to a fiscally sustainable course, Sen. Kent Conrad (D-N.D.) said Wednesday.” The entry, posted by Michael O’Brien, added:

“ Conrad, the chairman of the Senate Budget Committee and a member of President Obama's fiscal commission, said that there was no other choice but to cut spending in order to balance the budget.

"This government is going to have to be smaller," Conrad said on MSNBC. "There is no option."

“Conrad, the top Democrat on budgetary issues, is among the 18-member fiscal commission Obama appointed earlier this year to generate recommendations on how to bring U.S. deficits and debt under control.

[ . . . ]

“Conrad said that "everything does have to be on the table," in terms of options available to the fiscal commission, but that the bulk of cuts would have to be targeted at military and entitlement spending.”

Most readers who commented weren’t buying what Conrad had to say, however. For example, one reader responded:

“When Democrats say that government needs to be smaller, all they mean is that the rate of growth needs to be slowed. In other words, they mean is that the government needs to be smaller than it was on track to be five years from now.”

While we would agree with Conrad on the need for the U.S. to return to a fiscally sustainable course, the focus must be on reducing the mammoth spending, and not on tax increases. Unfortunately, Conrad thinks that tax increases need to be "on the table."

October 19, 2010

Bad News For Arlington County's Taxpayers

In an article in yesterday’s online Arlington Sun Gazette, Scott McCaffrey reports that County Manager Barbara Donellan will tell the Arlington County Board on Saturday that “higher expenses (are) likely to far outstrip additional revenue for county government next year.” He begins:

“Slightly improving economic conditions are expected to bring $13.8 million more into the county government’s coffers in fiscal 2012 than the $943.1 million anticipated for the current fiscal year.

“But that’s about the extent of the good news for the government and, by extension, for county taxpayers.

“The bad news: County officials are now estimating that total expenses for the fiscal year will run about $28 million more than in the current year, leaving a gap of just over $14 million - an estimate that likely underestimates the extent of the shortfall.

“The new figures, which remain very preliminary, will be presented to County Board members Oct. 23. Board members that day are expected to give County Manager Barbara Donnellan guidance for preparing her proposed fiscal 2012 budget, which will go to board members early next year. The fiscal year will start on July 1, 2011.”

McCaffrey’s reporting is based on item 34 on the Arlington County Board’s October 23, 2010 meeting agenda (available on the County Board’s webpage).

In her memo to the Board, Ms. Donnellan writes total “revenues are expected to increase $13.8 million above the FY 2011 adopted budget,” an increase of 1.5%. Staff expects real estate taxes to increase $9.6 million (1.9%) and sales taxes to increase $1.1 million (3.0%). In addition, they expect non-tax revenues to increase $900,000 (0.6%), primarily from license, permits and fees plus charges for services.

However, the memo then projects there will be $15.8 million in “costs that can not be avoided,” i.e.,:

  • Retirement Fund (up to $5.7 million)
  • Other Post Employment Benefits ($2.1 million)
  • School Transfer ($5.5 million from increased tax revenues)
  • New Facilities ($2.5 million)

The Manager’s memo also lists “another set of expenses” of $12.2 million for employee compensation, employee health costs, and “inflationary costs for existing current services.” She also says the county’s contribution to Metro “is not expected to change significantly” and debt service “is estimated to be slightly less in FY 2012.” Nor does the Manager include a previously approved amount of $7.5 million in PAYG maintenance capital in the projected funding gap of $14.2 million “at this time.”

Finally, because Arlington's public schools have seen an increase of 1,008 students, the Revenue Sharing Agreement, which we’ve growled about on previous occasions (most recently June 20, 2010), requires “an increase t0 the Schools transfer of $8.6 million in addition to the $5.5 million.”

If you’ve forgotten the Board’s machinations in adopting the FY 2011 budget last spring, McCaffrey reminds us, writing:

“Last year, when Donnellan was serving as acting county manager prior to Brown’s arrival, the County Board issued guidance that she plug the budget gap with an equal mix of tax increases and spending cuts.

“Her proposed budget of last spring did that, but board members went on to adopt a budget that mostly used increases in taxes and fees to address the budget shortfall.”

Our world-class County Board. Unable to even follow its own guidance. Do you expect them to do better on the FY 2012 next year?

October 18, 2010

When You Treat The Populace As Children

Betsy Newmark, blogging at Betsy’s Page today, reminds Americans to “keep an eye on the protests in France to let us know what could well happen to us if we keep on the road we are on.” She adds:

“Those protests are close to paralyzing the nation as the people are going on strike and protesting in the streets over a rather mild proposal to raise the age of retirement from 60 to 62.”

She then points to several paragraphs from a Washington Post article posted over the weekend, which provides details about those protests:

“Scattered fuel shortages rattled drivers, and officials at France's main airport warned that some flights must arrive with enough fuel to get back home as hundreds of thousands of people marched Saturday for the fifth time in a month to protest President Nicolas Sarkozy's plan to raise the retirement age to 62.

“Frequent strikes in the past few weeks have hobbled French trains and airports, closed schools and docks, and left garbage piling up in the southern port of Marseille.

“And now the airline industry is getting worried, after all of France's 12 fuel-producing refineries went on strike, forcing police to be called in Friday to reopen three main depots. The Civil Aviation Authority sent out an advisory Friday night to airlines requiring short- and medium-haul flights to Paris-Charles de Gaulle Airport - one of Europe's key hubs - to arrive with enough fuel to get home, spokesman Eric Heraud said.”

Ms. Newmark concludes her post entitled “What a culture of entitlement leads to,” writing:

“This is what happens when you treat the populace as children who must be provided for by the government. They won't understand that the gravy train can't run indefinitely - the money isn't there, yet they don't care. What will happen when such changes have to be made in places like California or New York? We haven't had such a paralyzing general strike here in the U.S. in decades. Do you think that our politicians have the nerve to deal with hundreds of thousands of striking protesters in the streets demanding that they get the generous pension benefits that they have been promised? We'll see if Sarkozy has the guts to continue in the face of these waves of protests and strikes. He has Greece's example to give steel to his spine.” (emphasis added)

First Greece. Now France. Then California, New York and Illinois? We’ve been warned!

October 17, 2010

Enough to Fire the Lot of Them

The Washington Post reported on Thursday of last week that an “in-depth Metro audit” found “numerous safety lapses.” However, there is no hew and cry that Metro’s board of directors step down. According to the Post’s reporting:

“A comprehensive audit of Metro safety released this week found serious deficiencies in identifying and reporting hazards, acute training shortfalls, track worker safety violations and a lack of security upgrades needed to address the heightened threat of terrorist attacks.

“The scores of "areas of concern" identified in the latest triennial audit by the Tri-State Oversight Committee, which oversees safety at Metro, indicate that much work lies ahead, despite the transit agency's stepped-up safety campaign.

"They've made significant progress in addressing some of these things, but that doesn't mean it's fixed," said Matt Bassett, chairman of the TOC. He said the most critical problem areas identified in the audit - including track worker protection, deferred escalator and elevator maintenance and a backlog of safety improvements - are the same areas in which Metro has devoted significant new resources in recent months.

“The nearly 300-page TOC audit, posted late Tuesday on the oversight committee's Web site, represents a more comprehensive probe of Metro's adherence to safety requirements than the 2007 audit . . . .”

Unfortunately, the TOC report made virtually no mention of how effective WMATA’s board of directors has been in overseeing safety throughout the Metro system. The only mention of management responsibility in TOC’s audit report (accessible from the Washington Post article) is the following:

“Since the last Triennial Review, WMATA also experienced changes in leadership and safety program structure. The agency hired a new interim general manager and a new chief safety officer.  Under this new leadership, WMATA has been generally receptive to TOC suggestions for improvement and has worked extensively with TOC to resolve outstanding safety issues and findings from previous internal and external safety reviews and investigations. Overall, WMATA management has been more forthcoming with TOC regarding safety and security issues.”

Given Metro’s safety record over the past several years, not to mention their record on spending, it’s safe to say that heads would have rolled, including members of the board of directors, if this had been a private sector corporation. Given the millions of dollars of taxpayer subsidies provided by Arlington County taxpayers to the Metro system, it doesn’t seem taxpayers are getting a fair return.

Contact information for WMATA is available here.

October 16, 2010

Pass a VAT; Lose Jobs

This weekend’s edition of Investors Business Daily (IBD) reports on a new study that warns “a value-added tax would kill 850,000 jobs in a year and cut retail spending by $2.5 trillion over 10 years.” According to the IBD editorial:

“An analysis for the National Retail Federation by Ernst & Young finds that adding a VAT to the U.S. tax system would reduce GDP for years, causing the loss of "850,000 jobs in the first year," plus "700,000 fewer jobs 10 years later."

“A VAT imposed in such a way would also cause retail spending to drop by almost $260 billion — or 5% — in the first year alone, according to the study. As a result, "most Americans over 21 years of age when the VAT is enacted would be worse off," and there would be "significant redistributional effects across generations, reducing real incomes and employment for current workers."

[ . . . ]

“The study comes at a time when President Obama's National Commission on Fiscal Responsibility and Reform may recommend a VAT when it announces its own ideas in December after the midterm congressional election is done.”

IBD also points out the report “also found that reducing the deficit by cutting government spending, rather than adopting a VAT, would mean more economic growth.”

Thankfully, as the IBD editorial also points out, in this year of the Tea Party Movement, spending restraint “has more resonance with voters than ever.” Exactly, what's needed is more economic growth, and that requires lower taxes and less regulation.

October 15, 2010

Eye-Popping Deficit Numbers for FY 2010

That’s how the Associated Press reported today the “near-record” $1.3 trillion budget deficit for the fiscal year just ended. Moreover, AP said, “The administration is projecting that the deficit for the 2011 budget year, which began on Oct. 1, will climb to $1.4 trillion.” AP also wrote:

“That means the government had to borrow 37 cents out of every dollar it spent as tax revenues continued to lag while spending on food stamps and unemployment benefits went up as joblessness neared double-digit levels in a struggling economy.

“While expected, the eye-popping deficit numbers provide Republican critics of President Barack Obama's fiscal stewardship with fresh ammunition less than three weeks ahead of the midterm congressional elections. The deficit was $122 billion less than last year, a modest improvement.”

Here’s how the Congressional Budget Office’s director introduced the news on his blog:

“The federal government’s fiscal year 2010 has come to a close, and CBO estimates, in its latest Monthly Budget Review, that the federal budget deficit for the year was slightly less than $1.3 trillion, $125 billion less than the shortfall recorded in 2009. Relative to the size of the economy, the 2010 deficit was the second-highest shortfall—and 2009 the highest—since 1945. The 2010 deficit was equal to 8.9 percent of gross domestic product (GDP), CBO estimates, down from 10.0 percent in 2009 (based on the most current estimate of GDP). CBO’s deficit estimate is based on data from the Daily Treasury Statements and CBO’s projections; the Treasury Department will report the actual deficit for fiscal year 2010 later this month.

“The estimated deficit is about $50 billion less than CBO projected in its August Budget and Economic Outlook. Outlays turned out to be lower and revenues higher than CBO anticipated.”

In their reporting on the near-record budget deficit today, the Wall Street Journal reports:

“Federal deficits are projected to remain at elevated levels in years to come, even assuming the economy recovers. That's due in large part to higher projected entitlement spending, including for aging baby boomers, as well as the cost of extending Bush-era tax cuts.”

Truly eye-popping, I’d say. The CBO’s entire October 2010 “Monthly Budget Review” is here.

October 14, 2010

Dependence on Government Jumps 13.6%

The Heritage Foundation published their 2010 Index of Dependence on Government (Report 10-08) today, authored by William Beach and Patrick Tyrrell of their Center for Data Analysis. The Index grew 13.6% in 2009. Since 1962, the Index has grown from a value of 19 to a value of 272 in 2009.

What is the Index of Dependence on Government? The authors write in part:

“The Index of Dependence is designed to measure the pace at which federal government services and programs have grown in areas in which private or community-based services and programs exist or existed to address the same or similar needs. By compiling and condensing the data into a simple annual score (composed of the scores for the five components), the Index provides a useful tool for analyzing dependence on government. Policy analysts and political scientists can also use the Index and the patterns it reveals to develop forecasts of trends and ponder how these trends might affect the politics of the federal budget.”

According to the authors, “For eight years, the Index has signaled troubling and rapid increases in the growth of dependence-creating federal programs, and for each of these years Heritage has raised concerns about the challenges that rapidly growing dependence poses to this country’s republican form of government and for the broader civil society.” The variables that increased the most the past year were health care and welfare (22%); rural and agricultural services (20%); and, housing (15%).

Why should taxpayers be concerned with an ever-greater dependency on government? Beach and Tyrrell explain:

“It is the conjunction of these two trends—higher spending on dependence-creating programs and an ever-shrinking number of taxpayers who pay for these programs—that worries those interested in the fate of the American form of government. Americans have always expressed concern about becoming dependent on government, even while understanding that life’s challenges cause most people, at one time or another, to depend on aid from someone else. Americans’ concern stems partly from deeply held views that life’s blessings are more readily obtained by independent people and that growing dependence on government erodes the spirit of self-reliance and self-improvement. These views help explain the broad public support for welfare reform in the 1990s.”

Gloomy data, but, hopefully, we have not yet reached a “tipping point.” Thankfully, members of the Tea Party Movement and other patriotic Americans are trying to drag the county back from the abyss of complete dependence.

For a book length treatment about dependency on government, try Charlotte Twight’s book, “Dependent on D.C.: The Rise of Federal Control over the Lives of Ordinary Americans.”

October 13, 2010

Your Taxes at Work . . . Medicaid Fraud and Abuse

The Richmond Times-Dispatch reports today that “Virginia's Medicaid program had improper payments of $39 million in fiscal 2009, including $20.2 million from fraud, an interim study by the state's watchdog agency has concluded.” In addition, “another $48 million additional $48 million in potential fraud or error was avoided by blocking improper claims before they were paid.” (emphasis added)

Medicaid is the second largest program in Virginia’s state budget, after K-12 education, and “accounted for 27 percent of Virginia’s budget growth from fiscal 2001 to fiscal 2010.

The report was produced by the General Assembly’s Joint Legislative Audit and Review Commission (JLARC) was an interim report with a final report due next year. According to the newspaper:

“The report said improper Medicaid payments stem from several sources, including billing for unnecessary medical services, billing for an item that lacks documentation, using incorrect medical codes and failing to properly bill a third party, such as Medicare or private insurance.”

But get this! According to a JLARC analyst:

“He also said some of the enforcement problems may result from the fact that responsibility for the Medicaid program's integrity is dispersed among too many federal, state and local agencies.”

Isn’t government great?

UPDATE (10/17/10): An editorial in today's Richmond Times-Dispatch isn't happy about the way Virginia's poohbahs have reacted to the JLARC report on Medicaid fraud and abuse, beginning the editorial this way:

"The ho-hum reaction to a report finding that Virginia's Medicaid program blew $39 million last year, roughly half of that through outright fraud, speaks volumes. Apparently Virginia Democrats -- and not a few Republicans -- are more alarmed by the possibility of not collecting that much money in the first place than they are by the reality of squandering it with reckless abandon.

"Gov. Bob McDonnell's plan to privatize the state's ABC stores has provoked fierce opposition chiefly because it would "cost" the state about $47 million. This, say opponents of the governor's plan, is an absolute outrage that must not be tolerated.

"But fecklessly throwing away nearly the same amount on improper payments and scammers? That elicits only a collective yawn among state officials. No wonder voters are retching."

October 12, 2010

Your Taxes at Work . . . Studying Bar Fights

CNSNews.com reported last week that federal government authorities paid $918,856 to study bar fights “tend to happen in darker, dirtier bars frequented by heavy drinking, less agreeable people.” The news outlet also reported, “The study also discovered that a woman who gets in a bar fight has consumed on average four times as many drinks as her usual intake.”

Wondering why you keep seeing similarly useless federal studies. Well, CNSNews.com “asked the National Institute on Alcohol Abuse and Alcoholism how it would justify the $918,856 in tax dollars spent on this grant to the average family earning $52,000 per year.” Here’s the answer:

“Problems related to the excessive consumption of alcohol cost U.S. society an estimated $235 billion annually,” said NIAAA Spokesman John Bowersox. “Alcohol use, the third leading preventable cause of death in the U.S. is responsible for approximately 80,000 deaths annually.

“Alcohol-related violence is an important social and public health problem, and a substantial proportion of alcohol-related violence and injury occurs in licensed premises,” said Bowersox. “Analyses of aggression in bars will allow us to better u nderstand the alcohol-aggression relationship and identify specific aspects of barroom aggression for targeting prevention programs.”

What is needed, however, is for Congress to begin reducing the federal budget, and money going to the "National Institute of This" and the "National Institute of That" could be one of the first places that Congress can start looking.

October 11, 2010

Your Taxes at Work . . . College Dropouts

In a story posted at Breitbart.com, the Associated Press reports that “college dropouts cost taxpayers billions.” The report is “based on government data and gathered by the nonprofit American Institutes for Research, are meant to put an economic exclamation point on the argument that college completion rates need improvement.” Eric Gorski of the AP writes:

“States appropriated almost $6.2 billion for four-year colleges and universities between 2003 and 2008 to help pay for the education of students who did not return for year two, a report released Monday says.

“In addition, the federal government spent $1.5 billion and states spent $1.4 billion on grants for students who didn't start their sophomore years, according to "Finishing the First Lap: The Cost of First-Year Student Attrition in America's Four-Year Colleges and Universities."

The AP story said: “The cost of educating students who drop out after one year account for between 2 to 8 percent of states' total higher education appropriations, (Mark) Schneider (a vice president at AIR) said. He said the report emphasizes state spending because states provide most higher education money and hold the most regulatory sway over institutions and can drive change.”

The cost to taxpayers could be much higher, according to the AP. They note:

“The actual cost to taxpayers may run two to three times higher given those factors and others, including the societal cost of income lost during dropouts' year in college, said Richard Vedder, an Ohio University economics professor. And tying state appropriations to student performance could just cause colleges to lower their standards, he said.”

It’s worth recalling what Voltaire once said, i.e., “In general, the art of government consists of taking as much money as possible from one class of citizens to give to the other.”

UPDATE (10/12/10): Bloomberg's Business Week reported yesterday that Virginia "spends $178M on college dropouts over 5 years," adding:

"Virginia ranked 15th in order of state money spent on first-year dropouts. California, New York and Texas were the top three. The state ranked 16th in the amount of federal student aid spent on first-year dropouts. New York, Texas and California were the top three.

"In Virginia, 21,170 students at Virginia's public four-year colleges and universities didn't return for a second year during the 2003-2008 academic years; 14,044 dropped out after the first year at private, not-for-profit schools; and 247 left after the first year at for-profit colleges.

"Among Virginia's public, four-year colleges and universities, the average first-year retention rate was 86 percent, the highest rate nationally, according to the report.

"The University of Virginia had the highest first-year retention rate at 97 percent, followed by 96 percent at the College of William and Mary. U.Va.'s College at Wise had the lowest, at 65 percent, followed by Virginia State University, at 68 percent."

October 10, 2010

Your Taxes at Work . . . Sending Checks to Dead People

Friday’s Wall Street Journal reported that the “Social Security Administration sent about 89,000 stimulus checks of $250 each to dead and incarcerated people.” However, they added “almost half of them were returned, a new inspector-general's report found.”

The Journal noted, however, there was both a “bright spot in the (IG’s) report” as well as a “downside,” explaining:

“There is a bright spot in the report: The inspector general estimates that about 41,000 of the payments were returned. It is illegal to spend social-security money issued to somebody else, but such actions are rarely prosecuted for small amounts. At least one person has been prosecuted for cashing a stimulus check not issued to them, in one of the few accusations of stimulus fraud to date.

“The downside: The SSA says that the stimulus package didn't include a provision allowing it to try to retrieve funds that were mistakenly sent out, so it can't try to retrieve the rest of the money. Money transferred electronically may be sitting untouched in bank accounts of dead people.

“The combined total of the mistaken payments is $22.3 million. About $12 million hasn't been returned.”

So you can’t try to retrieve funds mistakenly sent out, eh? Who writes these laws? Would the law have included the provision if Congressmen had read the legislation?

Blogging at National Review Online’s The Corner, Douglas Holtz-Eakin, former director of the Congressional Budget Office raises an even more disturbing issue. He writes:

“With the stimulus checks, the goal was to send seniors $13 billion in checks, one time, using a well-honed check-writing machine (the Social Security Administration) to an easily-defined group. And it didn’t go so well.

“So imagine what will happen with the new health-care law. Recall, the goal is to distribute about $466 billion in insurance subsidies over the next decade. This will require identifying who is eligible based on their income and whether their employer offers insurance (or perhaps offers “unacceptably costly” insurance). The subsidy amount will depend on income. It will have to be sent to the state of the individual’s exchange. It will have to be transmitted to the insurance company of the recipient’s choice. And it will have to be sent monthly in advance of the payment due date. So, the U.S. Treasury will have to parse through 300 million Americans; verify their income, employment, insurance status, location, and potential insurer; cut correctly over 10 million checks for just under $4 billion; and do so on a monthly basis.

“It will never happen.”

But government can do it. Just believe the liberals and/or progressives.

October 09, 2010

World-Class County Makes ‘Hiring Mistake’

The weekend edition of the Washington Examiner reports that “Arlington County asked manager (Michael Brown) to step down.” This after the Arlington Sun Gazette reported a week earlier that “(c)ounty officials have said that Brown voluntarily departed the job to care for his ill wife.” The Examiner began their reporting this way:

“Arlington County officials are conceding that a hiring mistake in filling a top government job will cost county taxpayers tens of thousands of dollars in a time of tight budgets.

"Former Arlington County Manager Michael Brown received a hefty six-month severance package after being forced to resign last week only 4 1/2 months after he was hired.

“Brown's abrupt resignation initially shocked county residents. The mystery surrounding the sudden departure was clarified when Board Chairman Jay Fisette conceded late Wednesday that Brown was asked to leave.

“Over $30,000 was spent on a seven-month nationwide search to hire Brown. And he'll earn more after being forced out than he did in his short time on the job -- the board voted last week to authorize a $110,000 severance payment written into Brown's contract in the event of his termination.

“Fisette detailed the board's request at the Arlington Democratic Committee meeting. The board had done its due diligence in the last few months to conclude that Brown was not a good fit for the county, he said.

“Fisette would not clarify in what way Brown was not a good fit, except to say the decision was not based on any single action.”

ARLnow did report on October 1 that Brown wrote in letter of resignation: “I hearby resign the position of County Manager for Arlington County effective today,” Brown wrote. “This action is regrettable but necessary because of the health of my wife Linda Lee. I need to take time now to assist her.” Brown’s letter is posted here at Blue Virginia.

Brown, who earned $220,000 annually, will be replaced by Barbara Donnellan, who had served as acting county manager from November 2009 through May 2010; she will earn $235,000 annually, according to the Sun Gazette.

Blue Virginia, a decidedly Democrat-leaning website, raised five very good thoughts/questions in an October 3 post, about Brown's sudden department. They were:

  1. "If the County Board's contract with Michael Brown provided for a severance payment in the event of his involuntary termination, and if the amount of that payment is approximately or exactly the amount reported that he will be paid, that is highly suggestive of the fact that he was involuntarily terminated. Therefore, the cover story that he has to take care of his very ill wife appears to be false.
  2. "If Michael Brown's wife truly is very ill, and if he must resign voluntarily to care for her, then the amount of the severance payment after only four months on the job appears grossly excessive, a waste of money, and a gift of a campaign issue to Republican County Board candidate Mark Kelly.
  3. "If Michael Brown really didn't work out after only four months on the job, on the one hand you have to give credit to the Board for acting quickly and cutting their losses. But, on the other hand, you have to give them an "F" for not coming clean as to the real reason.
  4. "If Michael Brown really didn't work out after only four months on the job, why didn't he work out? How could his deficiencies have been missed after a thorough nationwide search? How much did the Board pay the search firm? Was he the top choice after the search? Again, you have to give the Board an "F" unless they can come forward with a credible explanation for what happened and why they missed it before."
  5. By all accounts, Barbara Donnellan is terrific and will do a great job as Arlington County Manager. However, no matter how good she is, why was it that just last year, she declined to be considered as a candidate for County Manager during the nationwide search process, but this Friday, she got appointed the County Manager without any nationwide search process? (For the record, Blue Virginia shows question 5 as question 4)

Blue Virginia reported on Wednesday, October 6 (includes video) that he had a phone conversation with Arlington County Board chairman Jay Fisette. You can read the notes from his conversation, but his conclusion was:

“In the end, it's not like there's some big scandal here, and really there's little for the Republicans to latch onto. Of course, that won't stop them from trying, but something tells me that in four weeks, the end result will be the same as usual, with Democrats riding high in blue Arlington. We'll see.”

Scott McCaffrey of the Sun Gazette reported yesterday that because Fisette made his "clarifying" remarks about Brown's departure "at the monthly meeting of the Arlington County Democratic Committee," the local GOP is "disappointed" because County Board chairman "Fisette chose a partisan political event as the setting to begin to tell the truth."

Given the taxpayer money wasted on Brown’s severance package, not to mention Donnellan’s higher salary and the $30,000 paid to the search firm, it seems Arlington taxpayers deserve a County Board capable of making world-class decisions, not to mention a world-class explanation that's more than Brown was not a "good fit."

Additional links include these at the Sun Gazette website (here, here here, here, here, and here), and these at ARLnow (here, here, and here).

October 08, 2010

September Porker of the Month Named

Citizens Against Government Waste (CAGW) defines Porker of the Month as “a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.” According to CAGW, Sen. Dick Durbin (D-Illinois) was selected “for leading the effort to postpone a debate on extending the Bush tax cuts and creating more uncertainly in the economy at a time when taxpayers and businesses have been clamoring for clarity. The abdication of leadership on this issue is likely to add to taxpayers’ angst in the final months of 2010.”

The justification for awarding September 2010’s Porker of the Month to Sen. Durbin follows:

“According to a September 27, 2010 article in The Washington Times, “Democrats said Sunday that they will put off until after the elections a vote on whether to extend the Bush tax cuts, leaving most taxpayers in limbo for months as to whether they'll face tax increases at the beginning of next year.” Sen. Durbin told CNN's “State of the Union,” “We want to basically say after the election, when we still face a deadline by the end of the year, we'll take up all of these tax issues.”

“The debate over how and when to address expiring tax cuts intensified over the last several weeks as the December 31, 2010 deadline approached for the pre-election congressional recess.  The disposition of the tax cuts is especially important to businesses of all sizes, which cannot plan ahead without knowing the tax consequences of their decisions.  Yet, Congress has done nothing to preserve them. Even President Obama's former Office of Management and Budget Director Peter Orszag has stated his preference for extending the tax cuts even though Orszag does not favor making them permanent.  Orszag opined in a September 6, 2010 New York Times op-ed that allowing any of the Bush tax cuts to expire now would “make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned.”

“On September 20, 2010, CNN Money released the results of a survey it conducted among 31 leading economists.  The majority of those CNN surveyed stressed that the tax cuts should be renewed for everyone. “Americans are being forced to tighten their belts while the economy is limping along, but that doesn't deter porkers and big government advocates in Congress, like Sen. Durbin, from increasing the amount of uncertainty taxpayers already face in a sluggish economic recovery,” said CAGW President Tom Schatz. “By failing to expeditiously consider what to do with the Bush tax cuts, Sen. Durbin and other politicians in Congress are contributing negatively to the anemic economy. Most Americans support an extension of all of the tax cuts and renewed efforts to restrain the growth of government spending. This Congress, still completely out to lunch when it comes to the plight of average Americans, is holding taxpayers and the economy hostage while they play politics in the run-up to the elections,” concluded Schatz.”

To see how cartoonist  Henry Payne thinks Congress addressed the budget crisis,” click here. To contact, Sen.  Durbin’s office on Capitol Hill, call (202) 224-2152.

October 07, 2010

Go Figure

Yesterday,. we reported on the FY 2011 cost-per-pupil numbers for area school districts from the new WABE (Washington Area Boards of Education) Guide. Below, we add the SAT scores for the districts (average math + average critical reading + average writing). The WABE report is available here on the APS website.

Locality                           Cost-per-Pupil           Total SAT                                                                                                                 Score

Arlington County               $17,322(1)               1657(3)
Alexandria City                  $16,983)2)              1442(7)
Falls Church City               $16,729(3)               1795(1)
Fairfax County                   $12,597(4)               1664(2)
Prince George’s County      $11,611(5)                1306(8)
Manassas City                    $11,351(6)                  1491(6)
Loudoun County                 $10,833(7)                1597(4)
Prince William County        $9,577(8)                1508(5)

The cost number for Arlington County includes a footnote, which says, “Does not include $10.5 million reserve for the Virginia Retirement System (VRS) and Other Post-Employment Benefits (OPEB) budgeted in FY 2011 but earmarked for FY 2012 and beyond.”

If your favorite School Board member can provide a coherent explanation of the connection between SAT scores and the tax dollars poured into Arlington County’s public schools, we would be happy to post the explanations.

October 06, 2010

Arlington Schools Still The Big Spenders

The new WABE (Washington Area Boards of Education) report for FY 2011 is out (available here at the APS website), and page 30 provides the cost-per-pupil for the participating school districts. The Arlington Public Schools maintained their “highest spender” position, as shown below.

The WABE committee developed “uniform formulas . . . for consistency areawide,” and, consequently, the “numbers are comparable.” Below are the cost-per-pupil for eight of the nine areas school districts (a footnote on page 30 says the Montgomery County Public Schools are not participating in the 2011 WABE Guide). Given that proviso, here is the FY 2011 per-pupil cost information:

Arlington County               $17,322
Alexandria City                  $16,983
Falls Church City               $16,729
Montgomery County               NA
Fairfax County                   $12,597
Prince George’s County    $11,611
Manassas City                   $11,351
Loudoun County                $10,833
Prince William County      $9,577 

The cost number for Arlington County includes a footnote, which says, “Does not include $10.5 million reserve for the Virginia Retirement System (VRS) and Other Post-Employment Benefits (OPEB) budgeted in FY 2011 but earmarked for FY 2012 and beyond.” If that reserve had been applied in FY 2011, it would have added $498 and raised Arlington County's per-pupil cost to $17,820.

In a telephone conversation with a staff member of the Montgomery County Public Schools, I learned their participation was affected by budget cuts.

October 05, 2010

Your Tax Dollars at Work . . . Producing Plays

At the Heritage Foundation’s blog, The Foundry, yesterday, Nicolas Loris writes that American taxpayers, via the National Science Foundation, which is headquartered here in Arlington, Virginia, will give a $700,000 grant “to a New York theatre company to produce a play on climate change." Loris writes:

“The New York Times reports that the federal agency will award $700,000 of taxpayer money to a New York theater company to produce a show on climate change. Titled, “The Great Immensity,” the production will explore “the emotional and psychological aspects of the current environmental crisis.”

“Whether one agrees with the premise of the play is irrelevant. It is not something the NSF needs to allocate resources for, given its subjective message. Even the Times calls it a “rare gift” since the agency traditionally funds research that involves math, science, and engineering.”

Here’s the description of the play from the Spring issue of the PEI (Princeton Environmental Institute) News:

“In a collaboration melding art with science, climate researchers and other members of the Princeton University community joined forces with The Civilians, an acclaimed investigative theater company based in New York, to help create a work-in-progress about global climate change that was unveiled on campus Saturday, April 17.

“Titled “The Great Immensity,” the interpretive theatrical piece with music was the result of a yearlong collaboration between The Civilians and faculty, researchers and students from the Princeton Environmental Institute (PEI), and the Princeton Atelier at the University’s Lewis Center for the Arts.”

Loris wonders whether this involves nothing more than spending “taxpayer dollars on a politically motivated play.” As Arlington pundit Frank Emerson drily adds, “... now, if the play showed the maneuverings of scheming grant-seekers, it could be something of a scientific murder mystery, with the taxpayer as the victim... ”

Hmmm!

UPDATE (10/6/10): The Washington Examiner's Beltway Confidential notes, "One in 10 Americans are out of work, and this how the National Science Foundation is spending your money," adding:

"You know, you were probably just bemoaning that we haven’t spent enough money educating the public about global warming."

October 04, 2010

Tax Facts and the Income Redistributionists

Shortly before 5:00 P.M. this afternoon, a liberal called the Sean Hannity Radio Show concerned the rich, and especially the top quintile of taxpayers, just weren’t paying their “fair share” of income taxes. Like so many liberal talk show callers, he was short on facts.

So let’s look at the numbers put together from IRS data for Tax Year 2007 by the National Taxpayers Union (NTU):

Percentiles Ranked     AGI Threshold          Percentage of Federal
Ranked by AGI          on Percentiles          Personal Income Tax Paid

Top 1%                      $410,096                            40.42

Top 5%                       $160,041                           60.63

Top 10%                      $113,018                           71.22

Top 25%                        $66,532                           86.59

Top 50%                         $32,879                           97.11

Bottom 50%                  <$32,879                         2.89

The NTU webpage has that Tax Year data going back to 1999.

It’s not surprising the liberal caller has so little knowledge of basic tax facts. Almost three years ago, talk radio show host Neal Boortz was interviewing U.S. Rep. Dennis Kucinich (D-Ohio). He wrote in Nealz Nuze for January 8, 2009 that “Kucinich started rambling about getting rid of the Bush tax cuts and making the rich pay their fair share of taxes, so I decided it might be time to see if this 10th District Congressman from Ohio actually knew what he was talking about.” Here, specifically, is what Boortz asked, and how Kucinich answered:

“Kucinich has a long history in congress of trying to shift the tax burden away from low and middle income Americans onto the backs of the high-achievers. In 2003 he sponsored a law that would give a "refundable" tax credit to protect low and middle income people from having to pay Social Security or Payroll taxes. Kucinich, who is chairman of the "Progressive" (that means liberal) Caucus also proposed something he called a "tax dividend" for every man, woman and child. Well, almost every man, woman and child. He wanted to limit the dividends paid to the top 1% of income earners to only 1% of the total tax cut.

“Well, there's our clue. Kucinich doesn't have any idea in the world how much of the total taxes are paid by the top one percent of income earners ... so I asked him two questions:

  1. What percentage of total income is earned by the top 1% of income earners?
  2. What percentage of total federal income taxes are paid by the top 1% of income earners.

“The answers were astounding. Congressman Dennis Kucinich thinks that the top 1% of income earners earns about 60% of all income, and he thinks that they pay about 15% of all income taxes. The fact is that the top 1% of all income earners pull in about 18% of all income and pay 38.8% of all income taxes.

“This is an astounding level of ignorance on such an important statistic. You can excuse a mother of three loading up on Happy Meals for her porky little kids at a McDonalds for not knowing this .. .but a member of the Congress? Remember .. the Clinton tax increase passed the House of Representatives by only one vote ... and Kucinich was there ... there without a clue ... there voting for a tax increase on people he thought earned 60% of all the income but were only paying 15% of all income taxes. Inexcusable.”

Gee, da ya think Rep. Jim Moran, (D-Virginia), Arlington County’s Congressman, would answer much differently than did his colleague Rep. Dennis Kuchinich?

October 03, 2010

Where Your Tax Dollars Go

This website shows where the money you pay in taxes goes, both income and SS.

 

http://taxes.kareemshaya.com/

 

It does not account for the continued spending of borrowed money.

Your Taxes at Work . . . at Head Start

The U.S. General Accountability Office (GAO) released a report last month (requires Adobe) in which they said that “undercover testing finds fraud and abuse at selected Head Start centers.” In an essay by Tad deHaven of the Cato Institute, posted at Downsizing the Federal Government, he writes:

“Head Start was established in 1965, and it currently spends about $8 billion a year on early childhood development services to low-income children and their families. The program funds various educational and health care benefits.

“About 900,000 children are enrolled in Head Start, and annual spending is almost $9,000 per child. Eligibility is generally limited to children in families at or below the poverty line. However, children in the foster care system and children in families that collect Temporary Assistance for Needy Families or Supplemental Security Income are automatically eligible.

“In 2007, eligibility was expanded to allow grantee organizations to fill up to 35 percent of their slots with children from families with incomes between 100 and 130 percent of the official poverty line. Prior to this change, only 10 percent of the slots could be filled with children above the poverty line.”

According to the September 2010 GAO report:

“GAO received hotline tips alleging fraud by grantees. In response, GAO investigated the allegations, conducted undercover tests to determine if other centers were committing fraud, and documented instances where potentially eligible children were put on Head Start wait lists. On May 18, 2010 GAO testified on the preliminary results of the ongoing investigation. This report reiterates the findings disclosed in GAO’s May testimony, and discusses new findings related to specific fraud allegations at two Head Start grantees.”

If that’s not bad enough, Cato’s Andrew Coulson wrote in a New York Post article on January 28, 2010 (and available here). Coulson explains:

“Head Start, the most sacrosanct federal education program, doesn't work.

“That's the finding of a sophisticated study just released by President Obama's Department of Health and Human Services.

[ . . . ]

“The bad news came in the study released this month: It found that, by the end of the first grade, children who attended Head Start are essentially indistinguishable from a control group of students who didn't.

“What's so damning is that this study used the best possible method to review the program: It looked at a nationally representative sample of 5,000 children who were randomly assigned to either the Head Start ("treatment") group or to the non-Head Start ("control") group.”

As Coulson wrote, “Forty-five years and $166 billion later, it has been proven a failure.” (emphasis added) And now GAO finds fraud although deHaven also points out at Cato@Liberty:

“The GAO finding is not surprising given that previous reports show that HHS does a poor job administering the program.

“In 2000, the GAO found that 76 percent of Head Start grantees reviewed were not in compliance with financial management standards. In a subsequent review, more than half remained out of compliance. In 2005, the GAO reported that HHS still couldn’t adequately identify financial management weaknesses of Head Start grantees. In 2008, the GAO reported that HHS still had not undertaken a comprehensive assessment of Head Start’s risks, and said that it had made “little progress” in ensuring that the data it collects from grantees are reliable.”

I know, I know, you just can’t wait until you get to be treated under ObamaCare. No wonder the Tea Party Movement gets so many accolades.

October 02, 2010

If The Truth Hurts, If the Shoe Fits . . .

Looking for a good book to read? Consider David Kahane’s “Rules for Radical Conservatives: Beating the Left at Its Own Game to Take Back America.” Best-selling author Brad Thor says this about the book at Amazon.com:

“Don’t ask me why Kahane, the Arthur Frommer of the left, turned against his once beloved Progressive movement, just be glad that he has. Throughout this brilliant book, we get a poignant (and hysterical) peek behind the leftist curtain and learn what motivates them, how they operate, how they have co-opted media, education, government, and more. Best of all, Kahane offers us an ingenious, point-by-point roadmap for taking our country back.

“If you haven’t read Kahane before, you’re in for a treat. If you haven’t even heard of Kahane before, you’re in for an even bigger treat as Rules for Radical Conservatives is the perfect place to delve into his wide and witty body of work. And while the left may refer to him as their Benedict Arnold, I see him as our own Benjamin Franklin-–a man of incalculable intellect who can’t help but dispense his wisdom with an extraordinary sense of humor.

“Make no mistake, Kahane is no leftist plant. He’s the real deal and he’s here to help save America. Never has there been a funnier book that so succinctly spells out the left’s game and how to beat them at it. Only when you stop laughing will you realize how much you have learned and how much better prepared you are to take the fight to those who would destroy America and everything we hold dear.

“In short-–I laughed, I cried, I bought copies to give to all my friends. Rules for Radical Conservatives gets two red-white-and-blue thumbs all the way up!”

In an interview with the Capitol Hill newspaper, The Hill, Kahane described his book this way:

“It’s about freedom. It’s about intellectual freedom. It’s meant to be funny. It’s meant to wound because humor isn’t really funny unless it stings. If the truth hurts, if the shoe fits. Blah, blah, insert cliché there. But it’s meant to make you think. … Too often, I read kind of cartoon characterizations of conservative thinking, which bear zero resemblance to reality but have been accepted as uncritically as this kind of Mosaic Law on the left. … So this book is an attempt to bridge that gap by using humor and have Dave sort of fall into so many of those suppositions and then constantly get the rug pulled out from under him by reality. So I’d say, if you’re on the left, give it a shot. Throw it across the room. Stomp up and down on it if you want to but realize that there’s a kernel of truth there. And if you’re on the right, have a good laugh. We could all use that at this point.” (emphasis added)

Mark Levin, author of "Liberty and Tyranny" and radio talk show host, says “Rules for Radical Conservatives” is “(a) deadly—and deadly funny—dissection of the people who brought us to this critical moment in America’s history, and how to take them down. Witty, smart, and right on target, David Kahane’s  dismantling of the Left from the inside will have patriots everywhere cheering.” List to Kahane being interviewed on the September 29, 2010 Mark Levin Show (just after the 90-minute mark, also available at  iTunes).

Here is an archive of Kahane’s articles that have appeared in National Review Online while Big Government has an excerpt of the book. Finally, here's the book cover.

October 01, 2010

Easier to Imagine than Accomplish

George Will uses his September 20, 2010 Newsweek column to urge believers in man-caused global warming of the need to look backwards and think in geologic time. Will references the essay, “What the Earth Knows,” by Robert B. Laughlin, published in the Summer 2010 issue of “The American Scholar.”

Laughlin argues  that “(u)nderstanding the concept of geologic time and some basic science can give a new perspective on climate change and the energy future.”

Will writes:

“What (the Earth) knows, according to Robert B. Laughlin, co-winner of the 1998 Nobel Prize in Physics, is this: What humans do to, and ostensibly for, the earth does not matter in the long run, and the long run is what matters to the earth. We must, Laughlin says, think about the earth’s past in terms of geologic time.

“For example: The world’s total precipitation in a year is about one meter—“the height of a golden retriever.” About 200 meters—the height of the Hoover Dam—have fallen on earth since the Industrial Revolution. Since the Ice Age ended, enough rain has fallen to fill all the oceans four times; since the dinosaurs died, rainfall has been sufficient to fill the oceans 20,000 times. Yet the amount of water on earth probably hasn’t changed significantly over geologic time.

“Damaging this old earth is, Laughlin says, “easier to imagine than it is to accomplish.” There have been mass volcanic explosions, meteor impacts, “and all manner of other abuses greater than anything people could inflict, and it’s still here. It’s a survivor.” (emphasis added)

“Laughlin acknowledges that “a lot of responsible people” are worried about atmospheric concentrations of carbon dioxide from burning fossil fuels. This has, he says, “the potential” to modify the weather by raising average temperatures several degrees centigrade and that governments have taken “significant, although ineffective,” steps to slow the warming. “On the scales of time relevant to itself, the earth doesn’t care about any of these governments or their legislation.””

In summing up, Will writes:

“Six million years ago the Mediterranean dried up. Ninety million years ago there were alligators in the Arctic. Three hundred million years ago Northern Europe was a desert and coal formed in Antarctica. “One thing we know for sure,” Laughlin says about these convulsions, “is that people weren’t involved.””

Sure makes one wonder if the Arlington County Board is wasting our taxes by subsidizing the Prius and Lexus “clean fule” hybrids as we noted when we growled on March 8, 2008 or operating their ‘green’ FreshAIRE program.