« September 2012 | Main | November 2012 »

October 31, 2012

The Income Gap Really an Education Gap

We've growled numerous times over the past few years (including here, here, and here) about one of the Left's very favorite topics, i.e., income inequality.

Now, thanks to Richard Morrison of the Tax Foundation, we have the following chart showing, "America's income gap is really an education gap."

Laura D'Andrea Tyson, chairwoman of President Clinton's chairwoman of the Council of Economic Advisers, wrote the following for Economix, a business blog of the New York Times:

"A core American value is that each individual should have the opportunity to realize his or her potential. Birth needn’t dictate destiny. Education has been the traditional American pathway to opportunity and upward mobility, but this pathway is closing for a growing number of Americans in low- and middle-income families.

< . . . . >

"The United States is caught in a vicious cycle largely of its own making. Rising income inequality is breeding more inequality in educational opportunity, which results in greater inequality in educational attainment. That, in turn, undermines the intergenerational mobility upon which Americans have always prided themselves and perpetuates income inequality from generation to generation.

"This dynamic all but guarantees a permanent underclass. Indeed, the process is already under way: An American child’s future income is already more dependent on his or her parents’ income than a child born in most other developed countries."

Stanford University's Center for Education Policy Analysis held a conference this past spring about "income, inequality, and educational success." They introduced the conference by saying:

"Recent evidence demonstrates that the academic achievement gap between children from high- and low-income families has risen substantially in recent decades in the US, as has the disparity in college completion by family income. Indeed, the income achievement gap is now much larger than the black-white achievement gap, a reversal from the pattern 50 years ago, when black-white educational disparities dominated socioeconomic disparities."

A Goodgle search for "education + income inequality" produces a number of helpful articles, including this one from the Harvard Crimson. Finally, a January 2011 article at the Atlantic cites an OECD report that suggests "more education" would "reduce unemployment and income inequality."

October 30, 2012

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

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

In a press release last Thursday, “Citizens Against Government Waste (CAGW) named Office of Management and Budget (OMB) Director Jeffrey Zients its October 2012 Porker of the Month for promising to pay the legal fees of federal contractors who, under Department of Labor (DOL) orders, do not issue layoff notices to employees whose jobs could be in danger due to looming spending cuts.”

The justification, according to CAGW is:

“ . . . Large employers are obligated under the Worker Adjustment and Retraining Notification Act (WARN) to issue layoff notices 60 days in advance of a “reasonably foreseeable” event, such as the automatic spending cuts, or sequestration, triggered by the Budget Control Act of 2011. Instead, contractors who follow OMB’s instructions have been promised that any litigation fees that arise from layoffs without prior notice will be covered by taxpayers.

“Sequestration requires the $1.2 trillion in automatic spending cuts to take effect on January 3, 2013.  Contractors would have a deadline of November 2, 2012 – the Friday before Election Day – to issue layoff warnings to their employees. However, those contractors were told in a memo from OMB to “minimize the potential for waste and disruption associated with the issuance of unwarranted layoff notices” by not issuing them at all. The memo goes on to state that “any resulting employee compensation costs for WARN Act liability as determined by a court, as well as attorneys’ fees and other litigation costs, would be covered by the contracting agency”

“Sens. Charles Grassley (R-Iowa) and Kelly Ayotte (R-N.H.) issued a letter to Director Zients on October 1, 2012, demanding an explanation of DOL’s legal authority to tell contractors not to provide WARN Act notices, the legal authority of OMB to do the same, and to “explain in detail why … the Obama Administration did not have to first obtain approval from Congress before committing to pay tens or hundreds of millions of dollars (if not billions of dollars) in judgments, settlements and/or attorneys’ fees.”

“On October 5, Sens. John McCain (R-Ariz.) and Lindsey Graham (R-S.C.) sent a letter to the 15 largest U.S. defense contractors warning that, should they follow OMB orders, they would be setting up their companies for “serious legal and financial repercussions,” and that the senators “will oppose any requested funding increase in the budget process … to reimburse contractors for any expenses resulting from failure to comply with the law.” Whether a majority of senators agree with Sens. McCain and Graham remains to be seen.

“Director Zients’ legally questionable decision to put taxpayers on the hook for legal fees incurred by DOL’s reckless directives is appalling,” said CAGW President Tom Schatz. It is hard to interpret OMB’s actions as anything other than an attempt to force taxpayers to pay what amounts to hush money in the run-up to an election.”

The phone number for the Office of Management & Budget (OMB) is (202) 395-3080. You can also link to the OMB website here

While you’re visiting the CAGW, take a look at their 2011 Congressional ratings.

October 28, 2012

Comparing Economic Recoveries

On Saturday, the following graphic came across the electronic transom from the Obama for America campaign, suggesting that I “should forward” it, e.g., sharing it on Facebook or on Twitter.

Note the emphasis on job creation.

But first, let’s take a longer view, and focus on historical recovery more generally. In a quarterly update in August, the Council n Foreign Relations the “economic recover in historical context.” After asking, “How does the current recovery, which according to the National Bureau of Economic Research officially started in June 2009, compare to those of the past?,” they provide a series of charts, including the following two that compare the current recovery to the  real GDP growth “relative to the end of recession” as well as comparing the growth in nonfarm payrolls.


A bit more context. A search for “economic recovery” at the Concise Encyclopedia of Economics produced a short essay on “disaster and recovery" by Jack Hirshleifer. Especially interesting is how quickly Germany and Japan recovered from complete military devastation. Hirshleifer begins:

“Defeated in battle and ravaged by bombing in the course of World War II, Germany and Japan nevertheless made postwar recoveries that startled the world. Within ten years these nations were once again considerable economic powers. A decade later, each had not only regained prosperity but had also economically overtaken, in important respects, some of the war’s victors."

Now, let’s focus on comparing the current economic recoveries, however. Over this past weekend, at Investor's Business Daily, John Merline asks whether the “Obama economic recovery is as bad as it appears?” He writes, in part:

“But the data are clear that Obama's economic recovery — which started in June 2009, five months after he was sworn in — has been worse than any recovery since the Great Depression.

“Overall economic growth has been slower in this recovery than in any of the previous post-World War II recoveries, according to the Minneapolis Fed, using data from Bureau of Economic Analysis.

“In the 12 quarters since the Obama recovery started, real GDP has climbed 6.7%. That's below even the GDP growth rate in the 12 quarters after the 1980 recession ended — despite the fact that there was the intervening deep and prolonged 1981-82 recession.

“The picture isn't any better when looking at job growth.

“Obama often boasts that the economy has added 5.2 million private-sector jobs in the 31 months since employment bottomed out in February 2010. But that rate of job growth lags every previous recovery as well if, as Obama does, you start counting at the point where jobs bottomed out."

If you believe that a picture is worth a thousand words, Merline provides the following chart comparing economic recoveries back to the 1948-1949 recession:

In an editorial this weekend, the Wall Street Journal laments the “chronic fatigue economy,” complaining, “We borrowed $5 trillion and all we got was this lousy 1.7% growth.” However, they include the following chart comparing the President Reagan and President Obama economic recoveries. The WSJ chart, which follows, compares the two economic recoveries:

As Fox News likes to say, "We report, you decide." For your humble scribe, the answer is clear. However, let the American Thinker's Rick provide the conclusion. On May 30, 2012, he wrote:

"The one thing about economic issues during an election is that people decide for themselves, based on their own personal financial situation, how good or bad the economy is. If they, or their brothers, sisters, uncles and other relations are having a problem getting a job, the unemployment rate becomes meaningless and they will likely vote based on their personal perceptions of the economy."

And finally, be careful the next few days as Hurricane Sandy does her thing on the Washington, D.C. area. I probably won't be growling for the next two or three days.

Additional references that discuss post-war recoveries, or this recovery, see Peter Ferrara's explanation at the American Spectator or Conn Carroll at the Washington Examiner. Also posts by James Pethokoukis at the American Enterprise Institute's blog, AEIdeas -- here and here. Economist John B. Taylor discusses economic recoveries on October 15, October 17, and October 25, 2012. Finally, Greg Mankiw has posts about economic recoveries on March 4, 2009, March 3, 2009, which includes the note in an analysis by the President's Council of Economic Advisers noting that rebounds follow recessions, and June 5, 2012. The Cato Institute's Jim Powell had this article in Forbes explaining "how bad economies recover fast when government gets out of the way."

October 27, 2012

Oversight of the County Treasurer

According to the Arlington County Treasurer’s website, “Under the Virginia Constitution, the Treasurer is tasked with receiving, collecting, safeguarding, and disbursing county funds.  As part of the "safeguarding" function, the Treasurer's Office invests those funds within the confines of the Code of Virginia and the Treasurer's Office Investment Policy.”

Also at the website, you can access “The Investment Policy for Arlington County, Virginia” (requires Adobe). It was adopted in January 1987, and has been revised five times since, most recently May 15, 2012. On page two, there is a short discussion of the  Finance Board, including:

“The Finance Board has been established by the County Board in accordance with state law to review the Treasurer’s actions regarding the disposition of County funds. The Finance Board meets at regular intervals with the Treasurer to review the Treasurer’s Statement of Accountability.  The make up of the Finance Board is specified in §58.1-3151 et seq. of the Code of Virginia:

< . . . >

“It is the policy of the Finance Board to meet, at least, quarterly.  Acceptance of the reports for a particular month shall be by voice vote and must be unanimous. Should the reports for a month not be accepted by the Board, they shall be revised accordingly by the Treasurer and resubmitted to the Board at its next regularly scheduled meeting or earlier if requested.”

The Investment Policy also requires reports to the Finance Board, specifically, “The Treasurer shall report to the Finance Board on a regular basis, as determined by the Board, such information as the Board requires in order to fulfill its function.  At its discretion the Board may require additional information or clarification from the Treasurer either orally or in writing.” The most recent quarterly report (requires Adobe), date October 16, 2012. to the Finance Board is available online, and provides the following sections:

  • Economic Summary;
  • Investment Summary;
  • Banking Summary; and.
  • Bank Account Reconciliations

We congratulate the Treasurer for his efforts to add transparency to this important government function. However, we would make two minor recommendations. First, we would modify the website to ensure that all past reports to the Finance Board are easily accessible. Second, since the Investment Policy includes sections on both internal controls and compliance with the Code of Virginia, it seems the Quarterly Report to the Finance Board should address how the Treasurer complied with each set of those important issues. That said, once again, we congratulate the Treasurer for his efforts at transparency.

October 26, 2012

Tax Subsidy for each Artisphere visitor? $41.85.

In an online report today, the Arlington Sun Gazette reports, "The Artisphere required a taxpayer subsidy of $41.85 for each visitor it attracted for the fiscal year ending in June, according to a new accounting of the controversial cultural center’s finances." The newspaper also wrote:

"According to the county government, the Rosslyn facility attracted 55,607 visitors during the fiscal year, and required $2.37 million in net taxpayer support while bringing in $163,260 (81.6 percent of the budgeted amount) in admission and ticket income and $362,767 (99.4 percent of budget) in rental income.

"Counting all sources, revenues for the fiscal year totaled $1,221,985, or 97.3 percent of budget, while expenses totaled $3,459,001, or 99 percent of budget."

Yesterday, the online ARLnow.com noted that:

"Admissions and ticket income, educational program income, catering income, and concession income were all well under budget. Were it not for unexpected “event sponsorship” income, largely from the Rosslyn Business Improvement District — a major Artisphere patron which had already contributed $475,000 in the form of a donation — Artisphere would have required more tax support than budgeted."

The Artisphere's annual report for 2012 is available on Arlington County's economic development department's  website (requires Adobe).

At Growls earlier this week, we quoted Camille Paglia who wrote an op-ed for the Wall Street Journal on whether capitalism can save art. In the op-ed, she began:

"Does art have a future? Performance genres like opera, theater, music and dance are thriving all over the world, but the visual arts have been in slow decline for nearly 40 years. No major figure of profound influence has emerged in painting or sculpture since the waning of Pop Art and the birth of Minimalism in the early 1970s."

Hey Arlington County Board, there's a lessor in Ms. Paglia's op-ed. Read it, and learn!

October 25, 2012

The Rabbit is Dead

A joint work session of Arlington’s County Board and School Board was held this afternoon in the Ashlawn Elementary School Library (the agenda is available here). The majority of the two-hour and 5-minute meeting was devoted to transportation issues associated with Ashlawn school additions. However, the third item listed concerned the “FY2014 budget outlook.”

Your faithful scribe attended to hear the budget outlook. Both County Manager Barbara Donnellan and Superintendent Patrick Murphy made short presentations. I’ll provide their major points in the form of “bullets.”

County Manager Donnellan

  • Provided no presentation slide, but looked around, and joked that she saw no one from the press. Well . . . .
  • The economy is weak.
  • After reminding everyone that about 50% of the real property tax base is commercial, and about 50% is residential, she said there will be about 1% growth in revenues from real estate.
  • Still seeing office vacancies.
  • Estimating a $50 million budget gap that would be roughly divided between the county ($25 million) and schools ($25 million).
  • “Other taxes” such as sale taxes, BPOL, etc. are projected to increase less than 1%.
    Residential real estate prices seem stable.
  • Initial projections of state and federal revenue is 0%.
  • State is looking at changes in state funding formula for local road money.
  • She has asked department heads to identify budget cuts.

Superintendent Patrick Murphy

  • He provided a presentation slide, but went through the items rather quickly.
  • Federal sequestration could result in 10% reductions of Federal money, or about $1.5 million.
  • State funding could be cut by $2.3 million, including from so-called cost of competition/instruction - $2.0 million, and support - a bit more than $345,000.

In closing her presentation, Ms. Donnellen said, “The Rabbit is Dead,” suggesting there is no more magical money to be found and no accounting tricks to be pulled out of the hat. Arlington taxpayers need to start getting ready to tell the Arlington County Board that increasing the tax rates on the backs of already overburdened taxpayers is not a option this winter.

For a comprehensive review of the county’s Fiscal Year 2013 budget (that’s the one that started July 1, 2012 and ends June 30, 2013), take a look at the report of the Civic Federation’s Revenues & Expenditures Committee (requires Adobe). I will invite Ms. Donnellen and Mr. Murphy to suggest any changes.

UPDATE (10/26/12) I corrected the spelling of the County Manager's name and corrected the length of the meeting. In addition, ARLnow reported today on the county's pending "major budget shortfall." Finally, I learned earlier this evening that during a visit to the Leeway Orverlee Civic Association this week, the County Board chairman mentioned a possible revenue source would be "increasing the car tax to 5.5% since it hadn't been increased in a while." So now the Board thinks they are entitled to our hard-earned money, too.

October 24, 2012

A Thought on Economics, Politics, and Scarcity

“The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”

~ Thomas Sowell

HT Book Review by David Boaz at Reason Magazine

October 23, 2012

Reading the Obituaries for Economic Lessons

Every day seems to bring another blog that I would like to read on a daily basis, but the Cato Institute’s blog, Cato@Liberty, remains one of the few that I try to read every day. A post today by Chris Edwards, Director of Tax Policy Studies, explains why Cato@Liberty stays atop my list of essential blogs.

Before providing a few highlights from the Post story, Edwards explains where to find “the best place in the newspaper” to learn “how the economy works,” writing:

“In today’s Washington Post the business section has the usual stories about Ben Bernanke’s manipulations, government debt, and regulatory issues. But there is little on the innovation and dynamism that is at the heart of long-run economic growth.

“It is entrepreneurs who create growth, and they are often best covered in the obituary section of the paper. Today the WaPo has a Bloomberg story about the passing of Albert Ueltschi, “who founded aviation-training company FlightSafety in 1951 [and] expanded it into an international powerhouse.”

Edwards ends the post saying, “A final note is that the Washington Post does run some articles on live entrepreneurs, not just deceased ones. For example, Thomas Heath’s column is often very interesting and inspiring.”

If Cato@Liberty isn’t one your favorites, consider adding it.

October 22, 2012

Today's Thought is on Capitalism

"Capitalism has its weaknesses. But it is capitalism that ended the stranglehold of the hereditary aristocracies, raised the standard of living for most of the world and enabled the emancipation of women. The routine defamation of capitalism by armchair leftists in academe and the mainstream media has cut young artists and thinkers off from the authentic cultural energies of our time."

~ Camille Paglia

Source: Her October WSJ Op-Ed (HT Carpe Diem)

October 21, 2012

Politicians Still Digging Deeper Holes for Taxpayers

Over the past month, we’ve growled on any number of occasions (here, here, and here) of how America’s politicians keep digging ever deeper the financial holes which taxpayers eventually have to fill.

The latest latest example is an op-ed over the weekend in the Washington Post by two professors, Robert Novy-Marx and Joshua Rauh (they link to their paper at the social science research network; HT Via Media.). Their question:

“How much will the underfunded pension benefits of government employees cost taxpayers? The answer is usually given in trillions of dollars, and the implications of such figures are difficult for most people to comprehend. These calculations also generally reflect only legacy liabilities — what would be owed if pensions were frozen today. Yet with each passing day, the problem grows as states fail to set aside sufficient funds to cover the benefits public employees are earning.

“In a recent paper, we bring the problem closer to home. We studied how much additional money would have to be devoted annually to state and local pension systems to achieve full funding in 30 years, a standard period over which governments target fully funded pensions. Or, to put a finer point on it, we researched: How much will your taxes have to increase?

“We found that, on average, a tax increase of $1,385 per U.S. household per year would be required, starting immediately and growing with the size of the public sector. An alternative would be public-sector budget cuts of a similar magnitude, or a combination of tax increases and cuts adding up to this amount.”

Virginia is better off than many states, but the difference is relative, as Novy-Marx and Rauh write:

“ . . . Under legislation Virginia passed in April, for example, new employees will have about 40 percent of their defined-benefit pensions replaced by small 401(k)-style plans. As a result, Virginia’s annual household burden of $1,066 will fall around 20 percent. Virginia’s load will remain heavier than that of Maryland, which is in better shape than all but 12 states but nonetheless requires an additional $818 per household each year. Even Indiana, the state in the best condition, would need to increase contributions by $329 per household each year to meet its pension obligations.”

As former President Calvin Coolidge once said (HT Forbes' "Thoughts on the Business of Life"):

“Governments are necessarily continuing concerns. They have to keep going in good times and in bad. They therefore need a wide margin of safety. If taxes and debt are made all the people can bear when times are good, there will be certain disaster when times are bad."

Now, one more time! How is it that liberals can say that government does good things?

October 20, 2012

Welfare Spending of $1.03 Trillion is Up 32% in Four Years

In yesterday's Washington Times, Stephen Dinan reported, " Federal welfare spending has grown by 32 percent over the past four years, fattened by President Obama’s stimulus spending and swelled by a growing number of Americans whose recession-depleted incomes now qualify them for public assistance." He continues:

"Federal spending on more than 80 low-income assistance programs reached $746 billion in 2011, and state spending on those programs brought the total to $1.03 trillion, according to figures from the Congressional Research Service and the Senate Budget Committee.

"That makes welfare the single biggest chunk of federal spending — topping Social Security and basic defense spending.

"Sen. Jeff Sessions, the ranking Republican on the Budget Committee who requested the Congressional Research Service report, said the numbers underscore a fundamental shift in welfare, which he said has moved from being a Band-Aid and toward a more permanent crutch."

Here is just a short snapshot of background information about welfare spending from the CRS report, provided by "ranking member" Sen. Jeff Sessions (R-Alabama) in a 3-page background fact sheet:

" . . . CRS identified 83 overlapping federal welfare programs that together represented the single largest budget item in 2011—more than the nation spends on Social Security, Medicare, or national defense. The total amount spent on these 80-plus federal welfare programs amounts to roughly $1.03 trillion. Importantly, these figures solely refer to means-tested welfare benefits. They exclude entitlement programs to which people contribute (e.g., Social Security and Medicare).

< . . . >

"The exclusively federal share of spending on these federal programs is up 32 percent since 2008, and now comprises 21 percent of federal outlays (this share too is more than Social Security, Medicare, or defense).

"As a historical comparison, spending on the 10 largest of the 83 programs (which account for the bulk of federal welfare spending) has doubled as a share of the federal budget over just the last 30 years. In inflation-adjusted dollars, the amount expended on these 10 programs has increased by 378 percent over that time."

The background fact sheet contains a list of all 83 federal welfare programs examined by CRS. In addition, here is the press release from U.S. Senate Budget Committee (GOP-side).

If you're wondering what $1 trillion looks like, here is a 2 1/2-minute video I found on You Tube. Here is how Free Republic and Mint.com explain what $1 trillion look like in words and pictures, respectively.

Additional stories which comment on the Senate Budget Committee report include this blog post by the National Review Online staff; a post by blogger Heather Ginsberg at Townhall.com; Caroline May reports at the Daily Caller; and, a post at the Heritage Foundation's blog, the Foundry, by Robert Rector that includes a discussion about HSS efforts "gut the work requirements from welfare reform." In addition, at the Weekly Standard's blog, Daniel Halper has two posts, here and here, that have several charts, including the one at the bottom of this post..

Also, at the Weekly Standard blog, Jeff Anderson reports on the U.S. Treasury Department's "final monthly treasury statement of receipts and outlays" for FY 2012. Anderson highlights that " for every $7 we’ve had, we’ve spent nearly $11 (or, to be more exact, $10.95).  That’s like a family that makes $70,000 a year — and is already knee-deep in debt — blowing nearly $110,000 a year."

October 19, 2012

Details of George Allen vs. Tim Kaine Debate

Our friends at the National Taxpayers Union (NTU) note the two Virginia Senate candidates "fail to give details in final debate" in a post at their blog, GovernmentBytes today. Here's the background of the post:

"Perhaps it was how debates are moderated or how the candidates were coached, but in the final debate in which George Allen and Tim Kaine could detail their proposals, taxpayers were left with the same questions on the proposals of both candidates. The hour long televised debate, held on the Virginia Tech University campus in Blacksburg, Virginia, was another display of what the candidates did in the past and why they feel they are the best man for the job but offered Virginians only arguments, not the plans they have if they win in November."

Dan Barrett, who wrote the post, then continues:

To highlight each of their plans, NTUF conducted a comprehensive study of Allen’s and Kaine’s proposed spending agenda:

  • NTUF Summary
  • Virginia Senate Race Key Facts
  • Line-by-Line Report on George Allen
  • Line-by-Line Report on Tim Kaine

So if you're looking for comparative information about the two Senate candidates, use the link above and the links in Barrett's post to learn the details not provided in the final debate.

October 18, 2012

Today's Thought

"As Princeton’s Robert P. George remarked in a recent speech that repays careful rereading: “The two greatest institutions ever devised for lifting people out of poverty and enabling them to live in dignity are the market economy and the institution of marriage.” The comparative track record of the welfare state and the permissive society is appalling. That’s an insight the Left generally won’t acknowledge, but which conservatives and free marketers would do well to embrace in all its counter-cultural fullness."

~ Samuel Gregg

HT National Review Online's blog, The Corner

October 17, 2012

Arlington Bureaucrats: Best Paid in Region

In stories posted this evening, the Washington Examiner reports that except for the District of Columbia, Arlington County’s bureaucrats have: 1) the highest percentage of employees earning $100,000+; and 2) the highest average salaries ($84,360) among the six jurisdictions in the Examiner’s survey. In comparison, “the average median individual income of all six jurisdictions is $66,470,” according to the Examiner’s Ben Giles.

The Washington Examiner's reporting includes the base story, reporting on overtime and backpay, and employee salary data (Arlington County’s available here, but lists of each jurisdiction's government workers making $100,000 or more are available).

So Arlington’s county employees are the highest paid. and except for the District, Arlington has the highest percent of employees earning $100,000+. Here is selected information from a table of the six jurisdictions that appears in the Washington Examiner’s review:

Jurisdiction/Number of $100,000+ Employees/Percent

  • Alexandria/204/7.7%
  • Arlington/289/8.3%
  • District/1,943/8.8%
  • Fairfax/912/7.4%
  • Montgomery/722/8.2%
  • Prince George’s/485/7.1%

The Examiner reporting also points out:

“And such high wages don't account for other compensation.

"It's the benefits that are excessive compared to what private-sector employees are getting," DeHaven said.

“Government officials defend what critics call excessive compensation, saying they must spend to employ quality employees and compete with each other as well as the federal government.”

While we title the post "best paid in the region," we don't mean that on an "employee-employee" basis. For example, the salary of the personnel director in Arlington County is about $3,000 less than the personnel director in Fairfax County. Rather, the judgement is made on a collective basis.

Something to remember when voting on Tuesday, November 6, 2012? Kudos to the Examiner and reporter Ben Giles for reporting this story.

October 16, 2012

More of Your Tax Dollars Down the Black Hole

The Washington Examiner highlights examples today from Senator Tom Coburn's latest report on government waste. According to the Mark Tapscott, the Examiner's Executive editor:

"It likely will be decades before an American astronaut sets foot on Mars, but NASA officials are spending almost $1 million a year researching the best food for the Red Planet's first visitors from Earth.

"So far, scientists at Cornell University and the University of Hawaii have used the NASA funds to create recipes for Martian pizza and about 100 other dishes to be consumed on a mission that likely won't happen before the year 2030, according to Sen. Tom Coburn, R-OK.

"You don't need to be a rocket scientist to realize the millions of dollars being spent to taste test Martian meals that may never be served is lost in a black hole," an unimpressed Coburn said.

"The Martian culinary research is conducted under NASA's Advanced Food Technology Project, which was singled out in the 2012 edition of Coburn's annual "Wastebook" chronicle of the 100 worst examples of wasteful and unnecessary federal spending he and his staff uncovered in the past year.

"Washington spent much of the year deadlocked over whether to cut spending or increase taxes to address our fiscal crisis, all the while, allowing or even supporting these questionable projects," Coburn said."

Here's the real problem according to yesterday's press release from Senator Coburn's office:

“The problem in Washington is politicians are very specific about what we should fund but not specific about what we should cut. As a result, we are chasing robotic squirrels and countless other low-priority projects over a fiscal cliff,” said Dr. Coburn."

Here are just three examples of government waste from the press release, which says the oversight report, "Wastebook 2012," "highlights more than $18 billion in . . . some of the most egregious ways your taxpayer dollars were wasted in 2012."

  • Corporate welfare for the world’s largest snack food producer, PepsiCo Inc. ($1.3 million)
  • Government-funded study on how golfers might benefit from using their imagination, envisioning the hole is bigger than it actually is ($350,000)
  • “Prom Week,” a video game that allows taxpayers to relive prom night ($516,000)

If there is a Member of Congress more concerned about American taxpayers than Senator Coburn, its hard to think of who that would be. Thank you, Senator Tom Coburn!

UPDATE (10/16/12): The Daily Caller makes the following point about Senator Coburn's "Wastebook 2012" report:

"In his report, the senator singles out the current Congress as the “biggest waste of taxpayer money” for its potentially historic lack of productivity. Some committees rarely hold hearings, and Congress has passed  just 61 bills to date. Twenty senators, Coburn notes, have yet to even introduce an amendment — all while allowing wasteful spending to continue unabated."

October 15, 2012

"About the Gains of the Top 1%" vs. "Other Americans"

The Tax Foundation's Richard Morrison posted two great charts last week at their Tax Policy Blog. The one on Thursday shows the fortunes of the top 1% "rise and fall with the economy" while on Friday, the chart shows "the gains of the Top 1% don't come at the expense of other Americans."

You can find the first one here. The second chart (here) is included below:

By the way, nearly every each Monday, Tax Foundation bloggers post a "Monday Map" here

October 14, 2012

$5.8 Million for 'Text Against Terror' - Provides No Tips

According to Judicial Watch's blog, Corruption Chronicles, on Friday, October 12, 2012, "The U.S. government has blown nearly $6 million on an experimental “anti-terrorism” program in New Jersey that encourages the public to send tips via text message from their cellular phones." Here are more details:

"Since it was launched in mid-2011, the federally-funded “Text Against Terror” project has produced no credible tips, according to a local newspaper report that reveals the feds have poured $5.8 million into the initiative. Police in New Jersey claim 307 tips have been texted so far and that includes people “testing the system.”

"Of the 307 text messages, 71 “referred to something regarding homeland security,” according to the New Jersey police chief quoted in the story. The majority of the 71 texts were investigated, the chief says, and “eliminated as a cause for concern.” In other words, the costly program, funded with a Department of Homeland Security (DHS) public awareness grant, is a cash cow that’s accomplished nothing.

"The taxpayer dollars have paid for advertising time on local radio and television as well as fliers and ads on buses and trains. Other expenses include reserving a domain for unlimited texting capability. In a “rare instance” when a tip has required a follow-up, the New Jersey police chief says a state Joint Terrorism Task Force is available to get the job done. It includes state police, New Jersey’s transit and port authority police and the FBI.

"News of this disturbing waste of public funds for an ineffective homeland security program comes on the heels of a U.S. Senate report blasting a huge post-9/11 counterterrorism program that’s received north of $300 million but hasn’t provided any useful intelligence. Even scarier is that DHS has covered up the mess from both Congress and the public, according to the bi-partisan investigators who conducted the lengthy probe.

Kudos to Judicial Watch for their work on behalf of America's taxpayers.

October 13, 2012

More Than a South Arlington Issue

In a recent debate among the three candidates for the Arlington County Board, ARLnow.com reported that "in a neighborhood that has plenty of concerns about traffic, development, aircraft noise and other issues, the main topic of the debate was the Columbia Pike streetcar. The streetcar so dominated the first half of the debate that the moderator had to eventually ask the audience to refrain from asking about it."

It resulted in ARLnow writing, "It’s ironic, then, that the candidates all essentially agreed with one another." Here are what seem to be ARLnow's take on the three candidates positions on the proposed Columbia Pike trolley:

Libby T. Garvey (D)

“We need sensible transit,” said Garvey, in her opening remarks. “I have been working deliberately to gather more information about the proposed streetcar and the more I look at it the more convinced I am that what we need is a bus rapid transit system, or BRT. That is by far the best solution for us at this point.”

Matthew A. Wavro (R)

"Wavro also advocated for enhanced bus service along Columbia Pike instead of the streetcar, but he blasted Garvey for abstaining during a vote on the streetcar in July.

“We’ve had studies, more studies, then more studies on the Columbia Pike trolley,” he said. “With that amount of information out there, [Garvey] should be able to make a decision against the trolley.”

Audrey R. Clement (G)

"Clement echoed Wavro’s criticism.

“Board members are elected to take stands on controversial issues, not back away from them,” she said, adding that the streetcar will absorb tax dollars that could be used for capital improvements to Arlington’s existing transportation network and service enhancements like expanded weekend ART bus service."

In other positions, both Wavro and Clement "proposed the hiring of an independent inspector general to audit and analyze the county’s budget" while Garvey "promised a degree of fiscal responsibility."

ARLnow also reported, "There was disagreement over whether the Pike streetcar is a decision that can be reversed or not. Wavro argued that a lone board member would and should not be able to reverse the community process that led to the streetcar vote this summer. Garvey said the board only approved a “transit system” and that the “vehicle” for that system is a decision that will be made “down the line.”

Read the entire ARLnow report. It may cause you to attend a debate sponsored by your local civic association. By the way, the deadline for voter registration is Monday, October 15, 2012, according to the website of Arlington's Office of Voter Registration.

Update (10/14/12): Today's Washington Exameriner reports that streetcars are dominating the Arlington County Board race. Here's the meat of the article:

"Democratic incumbent Libby Garvey, elected to the board in March, joined the campaign debate over the proposed $249 million streetcar project along Columbia Pike, saying she now opposes the project and believes the planned streetcars should be replaced by buses.

"Garvey's challengers, Republican Matt Wavro and Green Party candidate Audrey Clement, who announced their opposition to the costly streetcar plan earlier, chided Garvey for failing to take a stand on the issue when it would have counted most -- when the county board voted in July to approve the project. Garvey abstained during that vote, saying it was a "very complex" issue that required greater study.

"I'm glad that after seven months of consideration, Ms. Garvey has come to a conclusion," said Wavro. Garvey was elected to the board seven months ago.

"All three of the candidates now support replacing the planned streetcars with buses that would that would run from Pentagon City to the Skyline area of Fairfax . . . ."

UPDATE (10/15/12): Steve Thurston of the Arlington Mercury reported on the candidates debate on Thursday, writing, "They all agreed that the proposed streetcar along Columbia Pike is not the answer for that area," but "differed on what they would do instead of the rails-in-the-road system."

October 12, 2012

Arlington's Aquatic Center. Is the ‘Want’ Worth the Cost?

On Wednesday evening, the Arlington Committee of 100 hosted a debate on the $50 million park bond, most of which will be used to pay for the County Board’s latest vanity project. According to the Arlington Sun Gazette’s online report Thursday by Scott McCaffrey:

"Proponents of the planned $79 million Long Bridge Park aquatics/fitness complex remain sketchy about the ultimate cost to both taxpayers and users, but argue that voters would be shortsighted to pass up what could be a once-in-a-generation opportunity to develop needed athletic facilities for an ever-urbanizing community.

“Yet critics charge that the annual cost of paying off construction and subsidizing operation of the center would take away from other county priorities, and charge that government officials aren’t being transparent in what might get cut to pay for the aquatics center.

“Those were the battle lines Oct. 10, as the Arlington County Committee of 100 hosted a mostly cerebral but at times caffeinated discussion of the pros and cons of the aquatics facility, the key component of the $50 million park bond on the Nov. 6 ballot.”

Here’s what seems to be the nut of the Sun Gazette’s article although we recommend reading all of Mr. McCaffrey’s extensive reporting:

“It’s a want, not a need – this is not the time,” said Wayne Kubicki, a civic activist who had the admittedly unenviable task of speaking against the bond at the Committee of 100.

“Kubicki painted a picture of a facility that will require taxpayer subsidies of up to $8 million a year to pay off bonds and cover operating deficits, and cautioned voters to be wary of rosy expectations laid out by supporters.

“Go to the Internet, put in ‘Artisphere’ and ‘budget,’ and see what you get,” he said, pointing to the two-year-old county cultural facility that has fallen so short of financial expectations that it is still in danger of being shuttered to stem a tide of red ink.

“But County Board member Jay Fisette, a key proponent of the aquatics center, said the project’s cost does not jeopardize Arlington’s top bond ratings. The facility, Fisette said, can recoup most or all of its operating expenses, and is an amenity the public wants.”

If you think the “public wants” this $79 million swimming pool, check the basis for Mr. Fisette’s assertion, which is a document called the North Tract Community Recreation Center Market Assessment Survey (requires Adobe) performed by ETC Institute in association with Brailsford and Dunlavey in October 2004.

Furthermore, if constructed, the facility won't even give Arlington County a world-class aquatics facity since that honor now falls to the London Aquatic Centre, which cost the City of London $416 million dollars, according to this AquaticsInternational.com webpage.

Finally, kudos to Wayne Kubicki for an outstanding job of defending Arlington County's overburdened taxpayers.

October 11, 2012

Another Month, Another Political Porker

Citizens Against Government Waste (CAGW) has announced their Porker of the Month for September, and he is Illinois Gov. Pat Quinn (D). He was awarded the dubious honor:

"for suggesting the possibility of a federal bailout for his state’s public sector pension programs, which are among the least funded in America.  Gov. Quinn’s fiscal year (FY) 2012 budget (published in 2011), referenced his state’s looming pension problem, stating that “while the pension reform of 2010 improved the situation by decreasing future liabilities … significant long term improvements will come only from additional pension reforms, refinancing the liability and seeking a federal guarantee of the debt, or increasing the annual required state contributions [emphasis added].”  When queried about it then, the governor claimed that the inclusion of that bailout language was a “precaution.”

CAGW justifies giving this dubious award to Gov. Quinn this way:

"On September 20, 2012, The Wall Street Journal was alerted to the language by the Illinois Public Policy Institute, which had launched a website called NoPensionBailout.com.  Exposed again, Gov. Quinn repudiated the budget language and claimed its inclusion in the 2012 budget had been a drafting “error,” even though it was still in the document.  However, as far back as October 2009, an article published in Crain's Chicago Business reported that “… local officials have asked President Barack Obama for a few favors since he took office; but now they want a really big one: a federal guarantee of a potential $14-billion Illinois pension bond obligation issue. According to newly installed state Budget Director David Vaught, Gov. Pat Quinn recently brought up the idea with U.S. Treasury Secretary Timothy Geithner and others at the White House. The governor got a good enough reception that he ‘intends to extend’ his efforts, Mr. Vaught said.”  Though the governor is rapidly trying to distance himself from the budget language (it has finally been expunged from the document), he has as yet refused to publicly rule out the possibility of seeking a federal pension bailout for Illinois in the future.

“Whether Illinois manages to secure a public sector pension bailout or not, Gov. Quinn has, with this budget language and subsequent conflicted statements, sent an encouraging message to other mismanaged states which could incent state officials to view federal bailouts as a viable possibility,” said CAGW President Tom Schatz.  “Intentionally or not, he has caused ears to prick up in state governments across the country, where decades of poor management along with an unwillingness to protect taxpayers from exorbitant wage and benefit demands by state workers have left huge debts and unfunded liabilities.  It is critical that lawmakers nip this notion in the bud, and assure federal taxpayers everywhere that they will not be left holding the bag for states that have failed to get their fiscal houses in order."

For more on CAGW's mission and history, click here.

October 10, 2012

Today's Thought

"I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments."

~ Friedrich A. Hayek

HT BrainyQuote.com

October 09, 2012

Arlington’s General Assembly Legislators Slipping?

Last Friday, the American Conservative Union (ACU) announced their “second annual conservative ratings of the Virginia General Assembly” to honor the Old Dominion’s “true conservatives.” The announcement pointed out:

“Last year, the American Conservative Union launched a new initiative to bring its annual Ratings of Congress – considered the gold standard of conservative voter education guides – to the state level, issuing inaugural ratings of state legislators in the battleground states of Florida, Nevada, North Carolina, Ohio and the Commonwealth of Virginia.”

Not surprisingly, not one of Arlington County’s seven legislators in the Virginia General Assembly came close to being named to the two categories of Conservative All-Stars. Defenders of Liberty earn a rating of 100% in the 2012 Virginia legislative rating (requires Adobe). Six senators and 23 delegates earned this honor for 2012. In the second category -- ACU Conservatives -- a score of 80% or higher was required. Eleven senators and 40 delegates were named ACU Conservatives.

ACU’s 2012 ratings scored four members members of the Senate as True Liberals of the Old Dominion for receiving scores of 0% on the 2012 legislative ratings. Despite Arlington County’s reputation as the liberal bastion of Virginia, not one of the seven members of the county’s “Richmond Delegation” received the dubious award of being a True Liberal of the Old Dominion for 2012. Here are the ACU percentage scores for the seven members:

Virginia Senate

  • Adam Ebbin -- 5%
  • Barbara Favola -- 10%
  • Janet Howell -- 5%

Virginia House of Delegates

  • Bob Brink -- 13%
  • David Englin -- 4%
  • Patrick Hope -- 4%
  • Alfonso Lopez -- 4%

In the Senate, Mr. Ebbin avoided a True Liberal award with his vote on SB 674 (wrongful death cause of action for the unborn). Ms. Favola also voted with the ACU on SB 674. She also voted with the ACU on an item in HB 1301 (government mandate on health insurance providers). Ms Howell voted with the ACU on HB 375 (protecting the right to store one’s firearms in his or her car).

In the House of Delegates, all four delegates avoided being True Liberals of the Old Dominion by voting with the ACU on HB 1063 ((returning to local government the authority to set the school calendar). In addition, Mr. Brink voted with the ACU on the House budget and a budget amendment.

Will Arlington County's seven legislators in the Virginia General Assembly work harder next year to earn a True Liberal of the Old Dominion designation? Although no General Assembly seats will be voted on in the general election on November 6, 2012, remember to reference the American Conservative Union's Virginia legislative ratings guide when considering how you will vote a year from now.

October 08, 2012

Loophole Allowing Foreign Political Campaign Donations?

At the Newsweek/Daily Beast website this afternoon (HT Alexander Marlow, Managing Editor of Breitbart News), Peter Boyer and Peter Schweizer report "(t)he  giant gap in our campaign-finance system that makes foreign and fraudulent donations possible," beginning with this lede:

"There has been no shortage of media attention paid to the role of money in the current presidential contest. Super PACs, bundlers, 527s, and mega-donors have attracted abundant notice. But there has been surprisingly little focus on perhaps the most secretive and influential financial force in politics today: the wide-open coffers of the Internet.

"With millions of online campaign donations ricocheting through cyberspace, one might think the Federal Election Commission would have erected serious walls to guard federal elections from foreign or fraudulent Internet contributions. But that’s far from true. In fact, campaigns are largely expected to police these matters themselves."

Here's the essence of how Andrew Stiles at Washington Free Beacon is reporting the story:

"A groundbreaking new report raises serious questions as to whether President Barack Obama’s reelection campaign is knowingly, and illegally, accepting and soliciting donations from foreign nationals.

"The Government Accountability Institute (GAI), run by Stanford University research fellow Peter Schweizer, conducted an extensive, six-month investigation examining the potential for fraudulent and foreign funds being funneled to U.S. political campaigns via the Internet.

"The “alarming” results detailed in the report, GAI found, highlight “a serious and systemic threat to the integrity of the U.S. election system” that demands a full-scale investigation by federal authorities.

< . . . >

"The vast majority of those donations were less than $200, and federal law does not require campaigns to collect information about the individual making such low-level donations: As of August, the Obama campaign has raised $138 million in such small donations.

"Furthermore, the campaign neglects to employ the most basic anti-fraud security measures to ensure that online donations are legitimate and only come from U.S. citizens, making it extremely vulnerable to fraudulent and illegal activity."

At Slate, Dave Weigel asks, "What's in that report about illegal foreign political donations?" The primary MSM news  outlet reporting at the moment is the Washington Examiner where Paul Bedard reports the story at Washington Secrets. Here's how the UK's Daily Mail begins it's story:

"A new report on foreign influences in American elections by the conservative Government Accountability Institute (GAI) has raised questions over whether the Obama campaign has violated federal election law by allowing foreign credit card transactions on its website.

"In a 109-page report entitled 'America the Vulnerable: Are Foreign and Fraudulent Online Campaign Contributions Influencing U.S. Elections?, several major security vulnerabilities on the part of the Obama campaign are detailed.

"'As FBI surveillance tapes have previously shown, foreign governments understand and are eager to exploit the weaknesses of American campaigns,' the report states."

Marlow's story has links to his sources. In addition, Hot Air, Daily Caller, Human Events, and Examiner.com are reporting the story. And oh, by the way, at Hot Air, Matt Vespa writes, "this development involves both parties." Finally, Jim Geraghty also raises the question about donation security at National Review Online's blog, The Campaign Spot.

October 07, 2012

Charting Campaign Promises

Ed Morrissey at the inimitable website HotAir has a "deficits and spending" chart posted courtesy of that other inimitable website Instapundit. He includes this explanatory note:

"Via Instapundit, this is the chart to keep in mind when it comes to deficits and campaign promises.  It’s pretty self-explanatory, but pay close attention to the huge jump in deficit spending between FY2008 and FY2009 — and the very large gap between White House and even CBO estimates and reality (in gray) in FY2010-12."

Here's the chart. If it's not sufficiently self-explanatory, Morrissey includes a "few things to bear in mind."


Instapundit also posted "another, more precise one, from a reader who asks to remain anonymous." (below):

Kudos to Instapundit and Hot Air's Ed Morrissey for their continued great work in keeping us informed.

UPDATE (10/8/12): Power Line includes this chart, and adds this comment:

"There are two appalling aspects to our exploding national debt under President Obama: the first is the sheer magnitude of the burden with which we are saddling our children. The second is that we have virtually nothing to show for it; not even a perceptible amount of infrastructure improvement."

October 06, 2012

4the Consecutive Year of $1+ Trillion Deficits

The Congressional Budget Office (CBO) reported in their final Monthly Budget Review for FY 2012 on Friday:

"The federal government’s fiscal year 2012 has come to a close, and CBO estimates that the federal budget deficit for the year was about $1.1 trillion, approximately $200 billion lower than the shortfall recorded in 2011. The 2012 deficit was equal to 7.0 percent of gross domestic product, CBO estimates, down from 8.7 percent in 2011, 9.0 percent in 2010, and 10.1 percent in 2009, but greater than in any other year since 1947. CBO’s deficit estimate is based on data from the Daily Treasury Statements; the Treasury Department will report the actual deficit for fiscal year 2012 later this month.

"The estimated deficit is $38 billion below what CBO projected in its August Budget and Economic Outlook because revenues were higher and outlays were lower than expected near the end of the fiscal year."

As CNS News and Breitbart's Big Government pointed out, that's the fourth straight year the federal deficit topped $1 trillion.

CBO's report also said that receipts "totaled $2.5 trillion, $148 billion more than those in the same period last year," which is up 6% over FY 2011. Receipts from the corporate income tax were up 34% while receipts from the individual income tax was up 3%. In addition, outlays were down by 1.6% for the year. For the two major programs, "Social Security payments increased by $42 billion (or 6 percent)" and "Medicare’s net spending was up by $15 billion (or 3 percent) after adjusting for timing shifts."

In their blog, the Committee for a Responsible Federal Budget summarized the year-to-year changes this way:

"In short, the moderate shrinkage of the deficit for 2012 comes from general economic expansion, deliberate deficit reduction, the expiration of temporary spending and tax measures, and the timing shift that pushed payments for October into the previous year."

Other resources: West Virginia's State Journal. And UPI said. The Chicago Tribune included a Reuters story that pointed out, "The deficit equaled about 7 percent of U.S. economic output, down from 8.7 percent in 2011, 9 percent in 2010 and 10.1 percent in 2009, but it was still greater than in any other year since 1947, the non-partisan Congressional Budget Office said." And the Wall Street Journal's report is here. Finally on Friday, the Heritage Foundation's blog, The Foundry, includes  the following chart comparing U.S. debt to several other countries:

UPDATE (10/7/12): Real Clear Politics posts the Associated Press report by Andrew Taylor about the CBO release of the final FY 2012 deficit numbers. The AP story included this:

"Obama inherited an economy in recession and a deficit in excess of $1 trillion. He promised to cut the deficit in half by the end of his first term, but deficits have instead remained at eye-popping levels, including a record $1.4 trillion deficit in 2009 and deficits of $1.3 trillion in each of the past two years.

"In Wednesday night's debate, Obama said he has a budget plan to shave $4 trillion from the deficit over the coming decade, but he counts $1 trillion from savings already accomplished in budget deals with Republicans last year and $848 billion from winding down wars in Iraq and Afghanistan."

October 05, 2012

Today's Thought

"If a country wants investors to invest, it cannot tax their resulting capital gains the same as the incomes of people whose incomes were guaranteed in advance when they took the job.

"It is not just a question of "fairness" to investors. Ultimately, it is investors who guarantee other people's incomes in a market economy, even though the investors' own incomes are by no means guaranteed. Reducing investors' incentives to take risks is reducing the jobs their investments are likely to create."

~ Thomas Sowell

HT his American Spectator column

October 04, 2012

Does Arlington Need a 'Taj Mahal' Aquatic Center?

The editorial in this week’s Arlington Sun Gazette opined about the four bonds referenda that will be on the ballot Tuesday, November 6, saying they “are decidedly not equally worthy of passage.” The newspaper endorsed the schools, Metro and transportation, and community infrastructure bond referenda. However, they did not support the local parks and recreation bond, saying:

“This is the bond where voters should say “enough is enough” with the self-aggrandizement of county officials, as the bulk of this bond is to pay for a Taj Mahal aquatics/fitness center at North Tract that most Arlingtonians are unlikely to ever use. County officials have not laid out how they plan to get the extra $25 million or so that is needed for the aquatics center off the ground, and, if given the green-light from voters for this project, already are planning for an indoor athletic field on the site that could cost another $80 million.

“Voters should turn this bond down and not fear the repercussions, as county poobahs have the dollars in reserve to fund the other, much more needed parkland components that are within the bond package.”

Meanwhile, the Arlington County Civic Federation, which tends to track the overall liberal bent of Arlington County came close to turning down the parks and recreation bond (26 in favor, 22 against, and 3 abstentions), but ended up endorsing all four bonds. The next closest vote was the schools bond (38-6-6) with the community infrastructure (42-2-4) and Metro/transportation (45-2-4) bonds receiving almost unanimous approval.

The Sun Gazette’s Scott McCaffrey has a comprehensive report of the Civic Federation bond debate posted online. Here’s a portion:

“Why do we need a $79 million swimming pool?” asked delegate Burton Bostwick.

< . . . >

“Others asked why the three indoor government-operated pools – at Yorktown, Washington-Lee and Wakefield high schools – weren’t enough.

< . . . >

“Delegate Pat Spann wanted to know why, if the Fairfax County Park Authority is able to recoup 100 percent of the cost of operating its pools, Arlington only expects to be able to cover 80 to 90 percent of its costs.

“If there’s such a great demand, why can’t we recover 100 percent?” Spann asked.”

You can read the entire bond referenda report (requires Adobe) prepared for the Civic Federation’s monthly meeting by it’s Revenues & Expenditures Committee and it’s chairman, Wayne Kubicki. The report includes a comprehensive review of the background and all four bond referenda. The R&E committee recommended approval of three bonds, but opposed the local parks and recreation bond. The following is the committee’s justification for opposing the bond:

“County revenues are facing considerable uncertainties on the immediate horizon due to BRAC federal office relocations, possible federal sequestration and an overall restructuring of the federal budget.  Two recent articles in The Sun Gazette on August 13 and August 16 (copies of which are attached at the end of this report) highlighted increasing office vacancy rates and the possible ripple effect on Arlington homeowners.

“Coupled with certain near-term cost increases delineated in the CIP for such projects as the Arlington Mill Community Center (operating subsidy of $3.3M/year), the Metro Silver line ($800K/year), the DHS consolidation ($2.343M/year), the year round homeless shelter/additional office space project ($631K/year), the operating subsidies for the Columbia Pike and Crystal City streetcars ($7.6M/year), and new costs for the ConnectArlington fiber optic project ($600K/year), along with additional cost pressures from Arlington Public Schools due to increased enrollments and possible increases in pension fund contributions due to shifting accounting rules, R&E sees the Long Bridge aquatics center as a luxury the County cannot afford. R&E accordingly recommends that Federation delegates vote to oppose the Parks/Recreation bond.”

With rumors the 2013 real estate assessments are likely to be virtually flat, suggesting a significant increase in the real estate tax rate, it seems that voting in favor of the local parks and recreation bond is a high risk proposition. There may only be a technical risk to the county’s highly vaunted AAA bond rating, but it seems reckless to even risk losing it.

If you want to learn more, next Wednesday's monthly meeting of the Committee of 100 will include an extended discussion of whether Arlington voters should approve the bond that includes the Long Bridge Aquatics Center.

Other references: In addition to the references available in the R&E committee report, readers can browse the Capital Improvement Program webpages of Arlington County's department of management & finance.

October 03, 2012

How do you Make $45,000, and Still be a Nonpayer

At their Tax Policy blog today, the Tax Foundation has a "must see" chart (below) that shows "how a family of four with $45,000 in income become nonpayers." First, subtract the standard deduction and personal exemption. Then subtract two child credits and receive a $450 earned income tax credit. That's how someone begins with an initial liability of $1,813, but ends up receiving a "refund check" of $637.

Here's the chart from the Tax Foundation:

Visit the Tax Foundation whenever you have a tax question. And consider supporting the Tax Foundation; click here for more information.

October 02, 2012

Today's Thought is on Global Warming

"As someone who personally experienced central planning and attempts to organize the whole of society from one place, I feel obliged to warn against the arguments and ambitions of the believers in the global warming doctrine. Their arguments and ambitions are very similar to those we used to live with decades ago under Communism. The arrogance with which the global-warming alarmists and their fellow-travellers in politics and the media present their views is appalling. They want to suppress the market, they want to control the whole of society, they want to dictate prices (directly or indirectly by means of various interventions, including taxes), they want to “use” the market. I agree with Ray Evans that we experience the “Orwellian use of the words ‘market’ and ‘price’ to persuade people to accept a control over their lives”[8]. All the standard economic arguments against such attempts should be repeated. It is our duty to do it." (emphasis added)

~ Vaclav Klaus, President, Czech Republic

HT Speech (in English)

October 01, 2012

Profiting from Poverty

Have you ever wondered why Big Business is in love with Big Government, which some call crony capitalism? If so, look no further than the food stamp program, now called the Supplemental Nutrition Assistance Program (SNAP). With a HT to Wynton Hall at Breitbart's Big Government today, we learn of a new report from the Government Accountability Institute (requires Adobe) that "finds that JP Morgan has made at least $560,492,596 since 2004 processing the Electronic Benefits Transfer (EBT) cards of 18 of the 24 states it has under contract for the food stamp program."

Here's a short summary from the GAI report's executive summary:

"Originally conceived as a means to prop up sagging crop prices to support American farmers, the Food Stamp Program, now called the Supplemental Nutrition Assistance Program, or SNAP, has exploded into a welfare program that costs tax payers a record $75.67 billion in 2011.1 Almost everyone has heard this story, but few realize that only three corporations have cornered the market for providing SNAP services to the needy and destitute. According to JP Morgan, the largest food stamp industry player, the business of food stamps “is a very important business to JP Morgan. It’s an important business in terms of its size and scale…. Right now volumes have gone through the roof in the past couple of years or so. The good news from JP Morgan’s perspective is the infrastructure that we built has been able to cope with that increase in volume.”2 And JP Morgan has good reason to be pleased, since the bank profits from programs designed to help the poor."

From the executive summary, GAI reports these findings:

  • Three companies – J.P. Morgan EFS, Affiliated Computer Services, and eFunds – provide EBT services for 49 states and 3 US territories.
  • Since 2004, 18 of 24 states who contract with J.P. Morgan to provide welfare benefits have contracted to pay $560,492,596.02. New York alone has a seven-year contract worth $126,394,917.
  • Projected average food stamp spending post-recession will be 175% greater than pre-recession average spending, from $28 billion to $77 billion.
  • Since 2009, 32 states have followed the USDA’s suggestion to use Broad Based Categorical Eligibility “as a way to increase SNAP participation and reduce State workloads.”4 Changing the rules for eligibility, along with state-level changes in application methods, has contributed to a 70 % increase in food stamp participation from 2007 to 2011.
  • Lax security by EBT processors and states invites food stamp fraud, often through social media.
  • There are understaffed fraud investigation units at both the federal and state level. For example, Florida has just 63 staff positions to police approximately 3 million EBT users state-wide. These investigators not only handle TANF and SNAP eligibility fraud, but also EBT trafficking, Social Security Disability and Medicaid eligibility fraud, Emergency Financial Assistance for Housing, and Low Income Energy assistance, among many others.

The report includes chapters on the evolution of food stamps, the Electronic Benefits Transfer (EBT) industry, as well as proposed solutions.

Mr. Hall's report points out several significant points, including:

  • "While some may be glad that a private company—not a government agency—is tasked with EBT transactions, the GAI report reveals that JP Morgan does not use the same fraud detection systems commonly used by today’s credit card companies.  In fact, federal and state agencies—not EBT processors—are the ones tasked with policing food stamp fraud."
  • "By making welfare inefficiency and abuse lucrative, the poverty industry has created a potentially toxic brew of corporate cronyism and government inefficiency that lets food stamp abuse enforcement slip through the bureaucratic cracks."
  • "The GAI report . . . says JP Morgan’s political donations to members of the House and Senate Agriculture Committees (who oversee the food stamp program) skyrocketed once the bank entered the EBT market."

No wonder there is so much support for the Tea Party movement, but that does not mean you shouldn't ask your favorite Member of Congress what they have done to better oversee the food stamp program. If you live in Arlington County, here is the contact information for Arlington’s two Senators and Representative on Capitol Hill so you can either call them or e-mail them:

  • Senator Jim Webb (D) -- write to him or call (202) 224-4024
  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376