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April 30, 2013

Your Federal Taxes Spent on , , , , Nothing?

According to a front-page story in the Washington Post last week (HT Citizens Against Government Waste), the federal government spent "at least $890,000 on fees for empty accounts," or as reporter David Fahrenthold wrote, for "nothing." Here is Fahrenthold's lede:

"It is one of the oddest spending habits in Washington: This year, the government will spend at least $890,000 on service fees for bank accounts that are empty. At last count, Uncle Sam has 13,712 such accounts with a balance of zero.

"They are supposed to be closed. But nobody has done the paperwork yet.

"So even as the sequester budget cuts have begun idling workers and frustrating travelers, the government is required to pay $65 per year, per account to keep them on the books.

"In this time of austerity, the accounts are a reminder of something that makes austerity hard: expensive habits, built into the bureaucracy in times of plenty. The Obama administration has spent the past year trying to close these accounts, with only some success.

“If anyone had kept open a bank account with no money, and was getting a charge every month, they would do everything they could to close it,” said Thomas A. Schatz of the watchdog group Citizens Against Government Waste. But, he said, the government hasn’t shown the same kind of urgency with taxpayers’ money."

Even Fahrenthold couldn't hold back his cynicism, writing, "The Pentagon once paid $435 for a hammer, after all. But at least in that case it got a hammer." As we growled on March 29, 2013, at least Arlington County taxpayers got a so-called 'Super Stop' bus stop when the five innumerates on the Arlington County Board wasted $1 million.

Kudos, Mr. Fahrenthold.

April 29, 2013

Financial Irregularities in Arlington Senior Travel Program

In an exclusive story, ARLnow.com reports in its lede that:

"One county employee was fired and three others were disciplined after financial irregularities were discovered at Arlington’s Senior Adult Travel Program, but no criminal charges were brought after a months-long investigation that one source says was “botched.”

"The investigation started in fall 2011, after four improperly-opened bank accounts were discovered, but only came to light this month after one of disciplined employees appealed her punishment at a public Civil Service Commission hearing, which was attended by ARLnow.com.

"The four accounts were opened, unbeknownst to county officials, at an Arlington PNC Bank branch in 2010. They were opened by an Arlington Department of Parks and Recreation (DPR) employee who coordinated the Senior Adult Travel program, we’re told by a source with knowledge of the investigation.

"The county-run senior travel program organizes dozens of trips per year for Arlington residents over the age of 55. The activities range from day trips to cultural performance, casinos and historic sites — on a new county-owned bus — to overnight trips to Europe and elsewhere. The program has two employees, an annual budget of $134,046 and recorded 2,738 trip reservations in Fiscal Year 2012, according to DPR Director Jane Rudolph."

It seems Arlington County taxpayers should be asking some very pertinent questions about just what the county government is doing. After all, providing seniors the opportunity to take overnight trips, whether to Europe or elsewhere, seems to be far beyond providing essential core services.

The story contains more detail than can be summarized in the above lede. However, ARLnow.com notes an unidentified employee "was able to conduct transactions — like paying for meals and other expenses on the trips — without the restrictions and hassle of the county’s internal financial controls."

Arlington County has issued a press release, which has been incorporated into the ARLnow exclusive story. The following two paragraphs seem to be the most important, however:

"The County coordinated an investigation into the program’s management and financial practices with the Arlington County Police Department and Commonwealth’s Attorney. The investigation included a review by external auditors. It was determined that no program participant lost any money. In every instance, participants received the services that they paid for.

"In May 2012, ACPD and the Commonwealth’s Attorney determined that there was no criminal activity or intent in the operating of the accounts or the program. The County then conducted an administrative investigation and held staff accountable for failing to follow County practices; this included a number of personnel actions that were only recently completed."

Earlier this month, ARLnow published a story of how Arlington County lacked "robust internal auditing," writing:

"A local civic activist is calling for Arlington to improve its internal financial auditing, lest more spending snafus fall through the cracks.

"Suzanne Smith Sundberg, a member of the Arlington County Civic Federation Revenues and Expenditures Committee, has written an eight page report detailing what she characterizes as a lack of audit oversight over the county’s finances.

"The county eliminated two internal auditing positions during budget cuts in 2010, Sundberg writes, a move that raised red flags with her committee at the time. Recent news items have supported their concern and point to need to create a permanent internal auditing office, she says."

Looks like we can now add the senior travel program to the list of "financial irregularities," which already includes the Super Stop bus stops, the Artisphere, and the Columbia Pike streetcar initiative. Kudos to ARLnow.com for attending the Civil Service Commission meeting. After attending several of them years ago, that's going above and beyond the call of a journalist's duties.

UPDATE (5/1/13): The Washington Post's Patricia Sullivan reported yesterday that "Arlington fires one worker, disciplines others for opening bank accounts for program" while the Clarendon-Courthouse-Rosslyn Patch has this report today.

April 28, 2013

A Thought on the Nation's Debt

"We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much."

~ Ronald Reagan

HT John Hawkins's second favorite Ronald Reagan Quotation

April 27, 2013

A Thought on Liberalism vs. Supply-Side Conservatism

"Liberalism had flourished by making government spending the independent variable and taxes the dependent one: Give the people a cluster of attractive and successful social welfare programs, the logic went, and voters will accept the taxes required to support them. Supply-side conservatives tried to make taxes the independent variable and spending the dependent one: Give the people a cluster of appealing tax cuts and count on their attachment to them to set spending at the level defined by the resulting revenue stream." (emphasis in the original)

~ William Voegeli, "Never Enough: America's Limitless Welfare State," page 218

HT Barnes & Noble

April 26, 2013

Rep. Jim Moran Featured Twice in New "Taypayer's Tab"

Rep. Jim Moran (D-Virginia), who represents Arlington and nearby sections of Northern Virginia, is featured twice in the April 25, 2013 edition (Volume 4, Issue 15) of the National Taxpayers Union Foundation's The Taxpayer's Tab.

Rep. Moran's bill, H.R. 1686, the Trash Reduction Act of2013, was listed as the "most expensive bill of the week" with an annualized first year cost of $4.08 billion. According to the Taxpayer's Tab newsletter:

"On April 23, one day after Earth Day, Congressman Jim Moran (D-VA) re-introduced H.R. 1686, the Trash Reduction Act of 2013. The bill would impose a five-cent tax on every paper or plastic disposable bag that retailers issue to consumers. Businesses would be solely responsible to collect the fee. Some bags would be exempt from the tax, including reusable bags and those used for garbage or pet waste disposal.

"Tax dollars would go to a new Land and Water Conservation Fund. Eighty percent of the taxes collected would be directed into the Fund and used to finance various conservation programs and construction of outdoor recreation areas. A new nonrefundable tax credit payment to retailers who participate in bag recycling programs would make up the remaining twenty percent of revenues.

"Representative Moran said that he modeled the legislation after existing "bag tax" programs in Washington, D.C., which neighbors his own District. On the bill's introduction, he said "[t]his small disposable bag charge helps people understand that paper and plastic bags are not without cost. They impact the environment, support foreign dictators, and make Everest's of trash. Our bill begins to shift America away from its current disposable culture back to a simpler time when Americans understood the value of reusing what they bought."

"According to Moran's office, Americans used over 102 billion plastic bags in 2009. Based on that data, NTUF estimates that the 5 cent tax could generate up to $4.08 billion in its first Fiscal Year to be spent on Land and Water Conservation Fund programs (tax revenues  and non-refundable credits are not counted under BillTally rules). It is unclear whether there would be significant administrative costs associated with the legislation. It is also unclear to what degree consumers would seek to avoid the new tax."

More information is available at WashingtonWatch.com. To date, the bill has three co-sponsors.

Rep. Moran was also featured in the "wildcard" category for his bill, H.R. 1195, International Conservation Corps Act of 2013, which has annualized savings of $10 million.

To contact Rep. Jim Moran:

  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

To join NTU, or to make a charitable donation, visit the following webpage.

April 25, 2013

Porker of the Month Named for April 2013

"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."

According to a press release last week, "Citizens Against Government Waste (CAGW) named Federal Housing Administration (FHA) Commissioner Carol Galante its April 2013 Porker of the Month for her agency’s apparent desire to rekindle the financial crisis of 2008 by developing new ways to interfere with mortgage markets." It continues by saying:

" . . . Undeterred by the lessons of the housing collapse and the spectacular failures of Fannie Mae and Freddie Mac, Commissioner Galante made clear on April 2 in The Washington Post her view that the federal government knows which borrowers should or should not be approved for a mortgage: “There are lots of creditworthy borrowers that are below 720 or 700 – all the way down the credit-score spectrum,” said Galante, adding, “It’s important you look at the totality of that borrower’s ability to pay.”

"In a staggering display of short-term memory loss, housing officials within the Obama administration like Commissioner Galante are bending over backwards to push banks to make bad loans again. Specifically, Commissioner Galante’s FHA has, according to the Post, been “urging the Justice Department to provide assurance to banks … that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default,” while encouraging the same banks to utilize home loan programs that insure banks against losses. In the event of default, taxpayers would be on the hook."

CAGW's press release completes the justification of awarding the April 2013 Porker of the Month by saying:

"The nation has been down this road before. The housing crisis that precipitated the latest recession was complicated, but it was undoubtedly made worse by the fact that the two federal housing giants with a federal “implicit guarantee,” Fannie Mae and Freddie Mac, were sucking up bad loans originated by private lenders at an alarming rate. Thanks to that strategy, taxpayers have paid $187 billion to Fannie and Freddie since they were brought under conservatorship in September of 2008. Last year, the White House announced the creation of a mortgage-related arm of the Consumer Financial Protection Bureau dedicated to punishing lenders that gave money to people without the means to pay it back. Now, with banks behaving more cautiously, the Obama administration would like them to lend to borrowers with compromised credit.

“Commissioner Galante’s Goldilocks complex makes it awfully hard to discern just what banks are supposed to do,” said CAGW President Tom Schatz. “Five years ago they loaned too much, now they loan too little. First they would be punished for making risky loans, now they are being told to hand money out to everyone. Unless Commissioner Galante has been handed tablets from on high with lists of responsible borrowers – and, if the FHA’s $16.3 billion net worth deficit is any indication, she hasn’t – she should stop endangering taxpayers."

Once again, we offer our kudos to Citizens Against Government Waste. Click here for information to join CAGW.

April 24, 2013

We Have What? Food-Stamp Recruiters. Unbelievable!

In a lengthy, front-page, below-the-fold story in today's Washington Post, Eli Saslow in Fort Pierce, Florida, writes about the job of a food-stamp (now called Supplemental Nutrition Assistance Program, or SNAP) recruiter, saying:

". . . it is (Dillie) Nerios’s job to enroll at least 150 seniors for food stamps each month, a quota she usually exceeds. Alleviate hunger, lessen poverty: These are the primary goals of her work. But the job also has a second and more controversial purpose for cash-strapped Florida, where increasing food-stamp enrollment has become a means of economic growth, bringing almost $6 billion each year into the state. The money helps to sustain communities, grocery stores and food producers. It also adds to rising federal entitlement spending and the U.S. debt.

"Nerios prefers to think of her job in more simple terms: “Help is available,” she tells hundreds of seniors each week. “You deserve it. So, yes or no?”

Later, Saslow adds:

"A decade ago, only about half of eligible Americans chose to sign up for food stamps. Now that number is 75 percent.

"Rhode Island hosts SNAP-themed bingo games for the elderly. Alabama hands out fliers that read: “Be a patriot. Bring your food stamp money home.” Three states in the Midwest throw food-stamp parties where new recipients sign up en masse:

Seems food stamps have evolved from being a welfare safety-net program into a federal government program to shore up the economy. Saslow describes the brochures handed out by the food stamp-recruiter this way: "SNAP brochures . . . the bold type on the brochure. 'Applying is easy.' 'Eat right!' 'Every $5 in SNAP generates $9.20 for the local economy.'"

In a related story last month, Saslow wrote how  "food stamps put Rhode Island town on monthly boom-and-bust cycle." We've growled several times over the past six months about food stamps, including December 16, 2012 when we growled about the sky rocketing use of food stamps; January 12, 2013 when we growled that American taxpayers spent a record $80.4 billion on food stamps; February 10, 2013 when we quoted Stephen Moore about the use of food stamps; and most recently March 11, 2013 when we growled about the use and abuse of food stamps.

Finally, speaking of fraud in the food stamp program. In a recent story at CNS News (HT the Mark Levin Show), Joe Schoffstall writes, "In 2012, a U.S. Department of Agriculture official said that food stamp fraud totals $750 million each year - a number that more than doubles the cost of trafficking reported in a 2006- 2008 USDA study."

UPDATE (54/30/13) At the Heritage Foundation's blog, The Foundry, today, Rachel Sheffield has a great summary of the food stamp problem.

April 23, 2013

Columbia Pike Streetcar Would Cost $310 Million, Say Feds

In an online story posted two hours ago at Arlington Sun Gazette, the weekly newspaper says:

"The Columbia Pike streetcar project lost its chance at $75 million in federal funding when federal officials determined the project could end up costing significantly more than the $250 million being projected at the local level.

"An analysis conducted for the Federal Transit Administration pegged the potential cost of the rail line at $310 million, or $60 million higher than is allowable under the federal government's "Small Starts" funding program. (emphasis added)

"The county government earlier in April announced that the project had failed to qualify for funding, and after meetings between county staff and their federal counterparts, on April 23 provided a more detailed explanation of what happened.

< . . . >

"County Board Chairman Walter Tejada opted against allowing board members to publicly question staff after their report.

"Time is slipping on us," Tejada said, gaveling the meeting into closed session at 5:37 p.m. in preparation to reconvene for a 6:30 p.m. session to take up other matters. He directed board members with questions to submit them to staff in writing."

We growled about the Columbia Pike streetcar boondoggle more recently on March 28, 2013, April 12, 2013, and April 15, 2013. And talking about open government in Arlington, check out those last two paragraphs from the Arlington Sun Gazette story.

April 22, 2013

A Thought on Whether Life is Fair

"Some people seem to think that, if life is not fair, then the answer is to turn more of the nation’s resources over to politicians — who will, of course, then spend these resources in ways that increase the politicians’ chances of getting reelected."

~ Thomas Sowell

HT Column posted at National Review Online

April 21, 2013

Is the 'Climate Circus' Leaving Town?

The April 29, 2013 edition of the Weekly Standard contains an essay by Steven Hayward about climate change and "traditional energy sources (going) from doom and gloom to boom." He begins with climate change, saying:

"If you had told environmentalists on Election Day 2008 that four years later there’d be no successor treaty to the Kyoto Protocol, that a Democratic Congress would not have enacted any meaningful climate legislation, that domestic oil production would be soaring even after a catastrophic offshore oil spill, and that the environmental community would be having a lively internal debate about whether it should support reviving nuclear power, most might have marched into the ocean to drown themselves. Yet that’s the state of play four months into President Obama’s second term.

< . . . >

"After two decades of steady and substantial global temperature increase from 1980 to 1998, the pause in warming is causing a crisis for the climate crusade. It wasn’t supposed to happen like this. The recent temperature record is falling distinctly to the very low end of the range predicted by the climate models and may soon fall out of it, which means the models are wrong, or, at the very least, something is going on that supposedly “settled” science hasn’t been able to settle. Equally problematic for the theory, one place where the warmth might be hiding​​—​​the oceans​​—​​is not cooperating with the story line. Recent data show that ocean warming has noticeably slowed, too.

"These inconvenient data are causing the climate science community to reconsider the issue of climate sensitivity​​—​​that is, how much warming greenhouse gases actually cause​​—​​as I predicted would happen in these pages three years ago: “Eventually the climate modeling community is going to have to reconsider the central question: Have the models the IPCC [Intergovernmental Panel on Climate Change] uses for its predictions of catastrophic warming overestimated the climate’s sensitivity to greenhouse gases?”

Hayward concludes his essay that is worth reading in its entirety with:

"The final unexpected aspect of the global hydrocarbon renaissance is that it is starting to cause a few environmentalists to have second thoughts about .  .  . nuclear power. For nearly 30 years nuclear power was the only form of energy environmentalists despised more than hydrocarbons. But even with Japan’s nuclear power plant disaster of 2011, some environmentalists have come to see a positive tradeoff of nuclear power over coal and natural gas. James Hansen recently co-authored a paper concluding that nuclear power has saved 1.8 million lives over coal and gas-fired alternative electricity sources since 1970, and will prevent 7 million deaths by mid-century . . . ."

The essay even has a local touch when Hayward points out, "Despite these relentless setbacks for the climate campaign, environmentalists are not going gentle into this well-lit night, nor will they abandon their decades-old crusade to kill off hydrocarbon energy. The movement is too well funded, and has established ample footholds in the policy machinery stretching down to the local level in the United States. Having a “climate action policy” is de rigueur for just about every self-respecting city council and county commission in the country, typically raising numerous regulatory hurdles for new development." (italics in the original)

Yessiree, indeed. Thanks to Arlington County Board member Jay Fisette, Arlington County climate campaign director, Arlington County taxpayers have been funding a so-called Community Energy Plan since January 1, 2010. Here's how the county's website describes the effort to date:

"On November 20, 2012, Arlington made public its draft Comprehensive Plan Energy element, aka, the Draft Community Energy Plan (CEP), the accompanying Draft Community Energy Implementation Framework (CEIF), and the CEP Community Engagement Plan.  The CEP and CEIF documents will be brought to the County Board for action in mid-2013.  Please email us any questions or comments on either the CEP or CEIF documents to energyplan@arlingtonva.us.  Comments received to date, with staff responses, can be found here."

For more detail on what the "community energy plan" has cost Arlington County taxpayers, this staff response to a Board member question outlines some of the cost.

Growls readers will very likely enjoy reading the entire essay. A much-better read, we're sure, than the drivel coming from the mainstream media tomorrow about Earth Day 2013.

April 20, 2013

County Board Spends Beyond Their 'Guidelines'

Wow, you can't even trust the innumerates on the Arlington County Board to follow their own guidelines.

Last fall, the Arlington County Board provided the County Manager guidelines to prepare her proposed Fiscal Year 2014 budget, which she released on February 23, 2013. From our read of her budget, she followed those guidelines to a "T" although it resulted in a real estate tax increase of 3.2 cents per $100 of assessed valuation.

However, to placate such special interests as affordable housing and schools advocates, the Board voted to advertise a real estate tax rate increase of 5.0 cents. Now, two months later, the Board voted to increase the real estate tax rate by 3.5 cents. While things could have been much worse for taxpayers, holding the real estate tax rate to 3.5 cents is not victory for taxpayers. Here are the four 'talking points' included in the county's press release:

  • "Board restores funding for public safety, social safety net programs, and environment and natural resources
  • :Fully funds childcare regulation
  • "Provides additional funding for Arlington Public Schools and affordable housing
  • "Approves 3.5-cent increase in property tax rate"

Walter Tejada, Arlington County Board chairman, however, signaled the Board would have been happy to spend every last cent of the 5.0 tax rate increase the Board voted to advertise in February, as suggested in the press release:

“This is not a year in which we can do many new things,” said the Chairman.  “We can, however, maintain the fundamental commitments that Arlington has made, especially in areas like public safety, affordable housing, the social safety net for our most vulnerable residents, our natural environment, and our schools.  This budget reflects those values.”

"The County’s financial picture improved since the Manager’s proposed budget was released in February, with modest increase in various revenue streams, Tejada noted. This allowed the Board to restore many proposed service reductions, while only increasing the tax rate three-tenths of a cent above what was included in the proposed budget."

The affordable housing special interest people did get $3 million more, however, which came from so-called "one-time funding." Readers are urged to read the lengthy press release since it contains the details including links to many source documents. ARLnow's reporting includes the same press release cited above, but provides some of the historical context that's left out of the press release.

All-in-all, it was not a good day for Arlington County taxpayers.

April 19, 2013

Yesterday was Tax Freedom Day

According to the Tax Foundation, Tax Freedom Day® is defined as:

". . . the day when the nation as a whole has earned enough money to pay its total tax bill for the year. A vivid, calendar based illustration of the cost of government, Tax Freedom Day divides all federal, state, and local taxes by the nation’s income. In 2013, Americans will pay $2.76 trillion in federal taxes and $1.45 trillion in state taxes, for a total tax bill of $4.22 trillion, or 29.4 percent of income. April 18 is 29.4 percent, or 108 days, into the year."

This year, the Tax Foundation points out that Tax Freedom Day will occur five days later this year. Their reasoning:

"Tax Freedom Day is five days later than last year, due mainly to the fiscal cliff deal that raised federal taxes on individual income and payroll. Additionally, the Affordable Care Act’s investment tax and excise tax went into effect. Finally, despite these tax increases, the economy is expected to continue its slow recovery, boosting profits, incomes, and tax revenues."

In Virginia, Tax Freedom Day arrives on Saturday, April 20. According to  the Tax Foundation, it's two days later than in the nation as a whole because:

" . . . In 2013, Virginia taxpayers worked until April 20th (10th latest nationally) to pay their total tax bill. The Tax Freedom Days of neighboring states are: Maryland, April 21st (ranked 8th latest nationally); West Virginia, April 19th (ranked 13th latest nationally); Kentucky, April 6th (ranked 10th earliest nationally); Tennessee, April 2nd (ranked 3rd earliest nationally); and North Carolina, April 10th (ranked 21st earliest nationally).

If you are wondering, Tax Freedom Day is calculated by "Tax Foundation economists (who) calculate Tax Freedom Day using federal budget projections, data from the U.S. Census and the Bureau of Economic Analysis, and projections of state and local taxes. Tax Freedom Day was conceived in 1948 by Florida businessman Dallas Hostetler, who deeded the concept to the Tax Foundation when he retired in 1971. Tax Freedom Day by state has been calculated since 1990, when sufficient data became available."

Kudos to the Tax Foundation. Use the link above to access and read the entire paper.

Additional Resources: CPA Practice Advisor; Heritage Foundation's Foundry blog; John Luciew at Patriot-News; Yahoo News; and the Idaho Reporter.

April 18, 2013

"Artisphere Over Budget for Third Straight Year"

The Washington Examiner's Taylor Holland writes in today's paper the Artisphere is now "over budget for the third straight year." And you wonder why the five innumerates on the Arlington County Board are set to raise your real estate taxes on Saturday?

We growled about this drain on Arlington taxpayers on June 19, 2012, and on October 26, 2012, we pointed out the tax subsidy for each Artisphere visitor was $41.85. Finally, we growled on March 24, 2013 that senior management in the county is reconsidering it's financial commitment to the artsy crowd's Artisphere.

Here's how Holland begin's his article:

"The Artisphere in Arlington County has busted its budget for a third straight year and needs an extra $800,000 from the county to stay afloat.

"Arlington County officials gave the arts center $1.6 million to start the year, but now County Manager Barbara Donnellan expects it to need as much as $2.4 million to cover its expenses.

"Artisphere spokeswoman Annalisa Meyer attributed the shortfall to low attendance, poor concession sales and underfunded salaries for the center's temporary employees. Still, Meyer said she's confident the center is "heading in the right direction."

"But many Arlington residents and organizations say they have lost faith in the center and are urging county leaders to shut it down.

"I think it's really a part of a larger pattern of launching projects in the county without carefully studying them," said resident Peter Rousselot. "We have this, the aquatics center, the streetcar. They're all examples of excessive spending that is hurting our ability to fund core services."

No wonder, members of the Arlington County Civic Federation's Revenues & Expenditures Committee are urging the County Board to adopt a robust internal audit function, as explained in a story last week at ARLnow.

April 17, 2013

Real Estate Property Taxes to Increase by 3.5 Cents?

An article by Patricia Sullivan in today's Washington Post says, "Arlington County homeowners are facing a higher tax increase than previously announced after the County Board on Tuesday ordered the manager to raise the tax rate by 3.5 cents, which would mean the average residential tax bill would go up by $277." The Arlington County Board will officially vote on the budget and tax rate on Saturday.

When County Manager Barbara Donnellan released the Fiscal Year 2014 proposed budget in February, she recommended a real estate tax rate ncrease of 3.2 cents per $100 of assessed valuation. However, the Board voted to advertise an increase of 5.0 cents. In the article, Sullivan pointed out that:

"Board members, who will vote on the budget and tax rate Saturday, restored many of the budget cuts that manager Barbara Donnellan had previously proposed, and they told her to add an additional three-tenths of a cent to the tax rate to send more money to the county schools.

< . . . >

"Residential property owners contribute half of the county’s tax revenue each year; Arlington is equally dependent upon commercial taxpayers.

"In February, Donnellan had warned of a $35 million budget gap and uncertain economic future as the federal government cut spending and federal contractors tightened their purse-strings. She had advised eliminating 46 of the county government’s 3,749 jobs and making Columbus Day, now a paid holiday, a regular workday."

ARLnow.com's report on the County Board's budget mark-up session is here.

April 16, 2013

Tax Complexity Spikes Upward

On Tax Day, yesterday, our friends at the National Taxpayers Union (NTU) released their "15th annual study of tax complexity 'A Taxing Trend.'" You can find it here.

At their blog, Government Bytes, today, Doug Kellogg writes that they took "a look at the past few studies," and " put together the graph below, which reveals a disconnect between the two major complexity indicators over the past few years, and that’s not a good thing!" Before posting the graph, let me add Kellogg's other comments:

"Since 2006, NTU has calculated a total cost for our tax complexity burden, based off of the hours demanded by paperwork and out of pocket costs like assistance from people who are actually capable of doing your taxes.

"Check out our graphs below and you can see that the hour burden is shifting relatively gradually, though it remains high. On the other hand, the bottom line cost of dealing with the tax code is shooting straight up. When you stop and realize the majority of “Obamacare” tax provisions are coming over the next year…Well, signs point to this costly complexity trend taxing our health and sanity even more in the years to come."

Here's the first graph cited by Kellogg:

The second graph cited by Kellogg is available at the above link to Government Bytes.

Staying on the topic of unnecessary tax complexity, Sita Slavov wrote last Friday at the American Enterprise Institute's magazine, The American, that America's "tax system’s unnecessary complexity creates unfairness and uncertainty. With a few reforms, it could be more growth-friendly, simple, and fair."

In a similar vein, in Accounting Today article on Friday, Michael Cohn writes:

"Complexity and inconsistency within the tax code continue to be a major problem for small businesses, with one out of four small businesses reporting that they need to spend 120 hours or more per year on the administration of federal taxes, or three full work weeks, according to a new survey."

And at International Liberty, Dan Mitchell presents "a very depressing picture of tax complexity and political corruption" in a single info graphic, i.e., showing how the tax code grew from 400 pages in 1913 to more than 72,000 pages in 2011. At the same post, Mitchell explains the flat tax in a video that is less than seven minutes.

Finally, Gallup reported yesterday that "fewer Americans now view their income taxes as fair" with 55% saying "their taxes are fair," which "is the lowest since 2001." According to Gallup:

"Perceptions of income tax fairness, perhaps surprisingly, vary little by household income level. Fifty-seven percent of those whose annual household income level is below $75,000 say their taxes are fair, as do 54% of those whose income is $75,000 or above.

"In fact, there are no notable differences by most major demographic groups. The biggest differences are based on political affiliation, with Democrats and political liberals much more likely than Republicans and conservatives to believe their taxes are fair."

We hope you made it through Tax Day 2013.

April 15, 2013

Will $75 Million 'Hole' 'Swallow' Columbia Pike Streetcar?

On Friday, we growled about the decision of the Federal Transit Administration to not include Arlington County's Columbia Pike streetcar in its Fiscal Year 2014 "Small Starts" funding plans. It would have provided Arlington County with $75 million taken from the pockets of all American taxpayers.

In an online article today, the Arlington Sun Gazette's Scott McCaffrey asks whether that $75 million "hole" "be enough to swallow streetcar proposal?"Here's the first two paragraphs of the lede from his article:

"County leaders say the decision by the federal government not to provide funding for the Columbia Pike streetcar project won’t derail their efforts to construct the line. But critics seized upon the decision to intensify calls for more scrutiny of the quarter-billion-dollar transit proposal.

“This is just the latest warning signal to Arlington that it is time to hit the pause button on the streetcar,” said Peter Rousselot, a leader of Arlingtonians for Sensible Transit, which formed in an effort to slow down the project and consider alternatives."

According to McCaffrey, " The $75 million in federal funds would have helped offset some of the as-yet-undetermined total cost of the streetcar project. The best estimate for the five-mile line is in the neighborhood of $250 million.

"(A)s-yet-undertermined? "(B)est estimate?" "(I)n the neighborhood of?" We really do have innumerates at Courthouse Plaza.

UPDATE (4/15/13). In today's Washington Examiner, Taylor Holland suggests that "Northern Virginia officials look elsewhere for streetcar funding." His lede:

"Northern Virginia lawmakers may try to tap into the state's new pot of transportation money to build a streetcar line along Columbia Pike after learning Friday that the federal government wouldn't fund the controversial plan.

"Virginia Gov. Bob McDonnell's historic transportation package calls for a 0.7 percent sales tax increase in Northern Virginia to pay for long-stalled transportation projects, particularly roads, but Arlington County officials say they're confident they can find the rest of the money they need and avoid scrapping the $249 million streetcars."

April 14, 2013

Income Tax Turns 100 This Year

In a column this weekend at Investor's Business Daily, Paul Kengor, political science professor at Grove City College in Pennsylvania, says progressives/liberals "should be celebrating right now." Kengor then explains why:

"In fact, President Obama and fellow modern progressives/liberals should be ecstatic all this year, rejoicing over the centenary of something so fundamental to their ideology, to their core goals of government, to their sense of economic and social justice — to what Obama once called "redistributive change."

"And what is this celebratory thing to the progressive mind?

"It is the progressive income tax. This year it turns 100. Its permanent establishment was set forth in two historic moments: 1) an amendment to the Constitution (the 16th Amendment), ratified February 3, 1913; and 2) its signing into law by the progressive's progressive, President Wilson, October 3, 1913.

"It was a major political victory for Wilson and fellow progressives then and still today."

Kengor later addresses the status of the income tax in 2013:

"Here in 2013, 100 years henceforth, the wealthiest Americans — the top 10% of which already pay over 70% of federal tax revenue — will be paying more in taxes this year than any time in the last 30 years.

"For progressives, this is justice. But it is also bittersweet: As progressives know deep inside, it still isn't enough. For them, it's never enough.

< . . . .>

"Democrats such Obama complain about Republican intransigence in raising tax rates but, truth be told — and as any liberal really knows — if not for Republican resistance, progressives would rarely, if ever, cut taxes."

He concludes, saying "the progressive income tax turns 100. For progressives, getting it implemented was a huge triumph. Their success in making it a permanent part of the American landscape is a more stunning achievement still."

Kudos to Professor Kengor for this 'must read' essay, and to IBD for publishing it.

April 13, 2013

Is There Growth in the President's FY 2014 Budget?

Not according to Larry Kudlow.

We growled about the introduction of the President's FY 2014 budget on Wednesday, April 10 to provide readers with an overall flavor. In a column posted yesterday at National Review Online, Larry Kudlow, an associate budget director in the first Reagan White House and host of a CNBC show, ripped the President's "growth-busting budget." The lede of his column said:

"No matter how you slice the Obama budget pie, the inescapable fact is that the president wants to get rid of the roughly $1 trillion budget-cutting sequester and substitute in a $1 trillion-plus tax hike. In other words, more spending, more taxing. Growth-busting. The GOP should just say no.

"And let me provide some counsel to my Republican friends in Washington, in particular in the House. Balanced budgets don’t create growth. This mantra is wrong. It’s growth that creates balanced budgets.

"Cut spending? That’s a pro-growth measure. Lower tax rates? Another pro-growth measure. The combination of limited government and true tax reform will balance the budget soon enough,  with government coming in at a smaller share of GDP while sufficient investment and work incentives get growth moving towards the 4 or 5 percent range.

"That kind of growth would make up for the lost ground of the past 15 years. And if you add in deregulation and a sound King Dollar, you’d have a growth budget that would propel America back into prosperity."

Kudlow also complained about the lack of serious corporate tax reform. In addition, Kudlow complained of the budget's attack on retirement savings accounts, writing:

"Then there’s the budget’s incredible and arbitrary limit or tax on — or even possible confiscation of — IRA-type tax-advantaged savings accounts. Who exactly gave the federal government the right to tell free people how much they can save for retirement? Obama wants a $3 million cap on these accounts. And he thinks $205,000 a year in some kind of annuity would “be substantially more than needed for reasonable retirement.” This is statism at its worst.

"Plus, people pay taxes when they redeem their IRAs. And on top of that, the U.S.A. needs more saving to promote more investment and create more jobs and growth. Better that savings and investment are tax free and we tax consumption instead."

For more about the "switcheroo on retirement savings accounts," see this Wall Street Journal editorial.

April 12, 2013

Columbia Pke Streetcar? Feds Say Not in Fiscal Year 2014

In a brief 4-sentence news item at 6:15 PM this evening, the Arlington Sun Gazette writes:

"Federal Transit Administration officials have opted, for now at least, not to provide $75 million in funding toward the Columbia Pike streetcar project.

"Arlington officials announced Friday afternoon that the project had not been included for fiscal 2014 funding under the federal government’s "Small Starts" initiative.

"There was no immediate reason given for why the funding was not forthcoming.

"Arlington and Fairfax officials had hoped to use the funding to offset local costs of the five-mile streetcar line, which has an estimated cost of $250 million."

The complete news item, however, increased in length by including the complete text of the County government's press release, which you can read here. The following paragraph from the two-page press release seems to be the most relevant:

"Arlington County Board Chairman J. Walter Tejada today reaffirmed the County’s commitment to the Columbia Pike Streetcar Project and noted that the County has not received any official evaluation of the project or explanation for the FTA’s decision. He cautioned against speculating about the reasons for the FTA’s action pending clarification."

In other news about the Columbia Pike streetcar, the Arlington Sun Gazette reported on the debate held Wednesday evening at Marymount University and sponsored by the Arlington Committee of 100. In a short item on Thursday, the newspaper reported that perhaps "140 people attended the dinner meeting, which featured David DeCamp representing the pro-streetcar position and Peter Rousselot urging a further study before moving forward."

Then this morning, Scott McCaffrey posted a longer piece at the Sun Gazette website about Wednesday evening's Committee of 100 streetcar debate, noting that it focused "on who would ride what kind of transit." Bus Rapid Transit (BRT) or streetcar? Here is how McCaffrey wrote about one exchange:

“Newcomers prefer rail . . . and will actually leave their cars and use rail,” DeCamp told a crowd of about 140 at the meeting . . . .

"That view is simply a myth, sniffed Peter Rousselot, a leader of the Arlingtonians for Sensible Transit, which wants there to be consideration of a modern bus rapid transit (BRT) system rather than a streetcar down the Columbia Pike corridor.

"A BRT system would be “stylish, sleek, cool” and “will attract lots of choice riders,” Rousselot said.

"Across the nation, the two types of systems – bus rapid transit and streetcar – “attract basically the same people,” he said."

By the way, the video of the March 27 Streetcar Town Hall forum at Kenmore Middle School. You can view the 2 hour, 13 minute long video at You Tube. Or if you prefer, the video is available at Arlington Streetcar, a part of the county's website, along with handouts, which present the county's side of such issues as streetcar capacity and funding.

As we growled on March 28, 2013, we recommended the website of Arlingtonians for Sensible Transit (AST) for logical and well-presented information in support of the BRT alternative. Arlington Streetcar Now has material supporting the county government's streetcar alternative.

April 11, 2013

A Thought About Principle

"Standing in the middle of the road is very dangerous; you get knocked down by the traffic from both sides."

~ Margaret Thatcher

HT BrainyQuotes

April 10, 2013

The President Introduces His FY 2014 Budget

In a video at CNBC today, John Harwood "parses" President Obama's Fiscal Year 2014 budget proposal. The video is accompanied by an article by Harwood in which he says the President is pursuing "two separate goals." Harwood writes:

"One is, as always, expressing the president's priorities. Instead of giving tax breaks for the "carried interest" of hedge fund managers, for instance, Obama would use some of the same money to provide tax credits for low-income workers, parents needing child care or small businesses. As a result, much of the budget would reshuffle existing spending and devote it to other purposes.

"The second is to lure congressional Republicans, again, into negotiations for a budget "grand bargain." That's why the White House document includes plan for reducing Medicare and Social Security spending by in ways the administration wouldn't otherwise favor.

"Since Republicans have called for large savings to those entitlement programs for the elderly, Obama aims to persuade that he's willing to compromise on that priority. His budget includes $270 billion in Medicare cuts, and $230 billion in reduced inflation adjustments for Social Security and other federal programs."

Harwood continues with his political take on the budget.

Thankfully, James Pethokoukis takes a more serious look of the budget proposal at the American Enterprise Institute's blog, AEIdeas (HT Mark Levin Show), where he points out the President's budget won't balance the federal budget until 2055. According to Pethokoukis:

"Republicans have mocked the Obama White House for talking about a “balanced approach” to debt reduction that doesn’t actually ever balance the budget. But in its 2014 budget report, Team Obama tries to create the impression that its plan does balance the budget … in the year 2055!

"From the White House Office of Management and Budget:

"The Budget reaches balance in 2055, when revenues and outlays are 21.5 percent of GDP, slightly higher than their levels during the budget surpluses of 1998-2001. The Federal Government is then projected to run surpluses over the remainder of the projection window, with publicly-held debt falling rapidly until it reaches zero in 2074 (see Chart 4–1). The 75-year fiscal gap disappears in the base case, becoming a fiscal surplus of 1.6 percent of GDP.

"Now, the White House does add the bureaucratic caveat that these projections “are not intended to be a prediction of future legislative action, nor are they intended to reflect explicit policy proposals for the years beyond 2023; rather, they are a mechanical extrapolation of the Budget policies.”

Finally, we have the "reaction" of the Committee for a Responsible Federal Budget (CRFB). Their press release today begins:

"Today, President Obama released his FY 2014 budget proposal, which combines a version of his final deficit-reduction offer from the fiscal cliff negotiations with a number of new tax and spending initiatives.

"The President’s budget proposes roughly $1.8 trillion of savings in its deficit reduction package designed to replace the sequester and put the debt on a downward path relative to the economy. When combined with the President’s new policy initiatives, the repeal of the sequester, and the President’s proposed war drawdown, this plan adds up to $1.4 trillion in deficit reduction.

"Encouragingly, the budget is projected to put the debt on a downward path relative to the economy. Public debt would fall from 77 percent of GDP in 2013 to 73 percent of GDP by 2023. Deficits in the budget would fall to below 2 percent of GDP by 2023. To achieve this, the President’s budget includes about $400 billion of health savings, $400 billion of discretionary and mandatory spending cuts, $230 billion of savings from more accurately measuring inflation, and $580 billion of additional revenues. At the same time, the budget also repeals the $1.1 trillion sequester and includes a number of new spending initiatives paid for in part with new revenue."

Separately, the CFRB looks at "The President's Budget, In One Table." In a separate "overview of the President's budget," CFRB says:

"The budget starts by filling in the policies necessary to reach the savings targets in the last fiscal cliff offer. It then adds in other initiatives, such as increased infrastructure spending and universal pre-school, and other revenue increases and spending cuts. The budget contains ten-year deficits of $5.3 trillion.

"Overall, the budget puts debt on a downward path as a percent of GDP by the end of the ten-year window although at a higher level than we have recommended. Debt does rise initially from 72.6 percent in 2012 to 78.2 percent by 2015 before falling steadily to 73 percent by 2023. As you can see below, debt is slightly higher than OMB's adjusted baseline in the near term due to upfront infrastructure and jobs measures plus the cancellation of the sequester, but it falls below the baseline by the end of the projection window."

As CFRB notes, they will have "further analysis of what is behind the numbers" in the coming days. We'll comment on that when it becomes available. However, we first wanted to provide you a brief flavor in this Growls.

April 09, 2013

Sequester This!

An editorial, posted this afternoon at Investor's Business Daily (IBD), asks how many federal agencies does it take to inspect a catfish. According to IBD, it "apparently" takes three. And IBD emphasizes they aren't joking.

The IBD editorial says it's just "one of many outrageous but all-too-true examples of billions of dollars in waste uncovered by a new government audit."

Here's how IBD introduces the third annual report on government waste and duplication from the U.S. General Accounting Office:

"The Government Accountability Office's latest annual report on government waste and duplication found 31 areas in the government that overlap, duplicate efforts or are egregiously inefficient. That's on top of the 131 found in its previous two annual reports.

"In many cases, the government has no idea whether any of these programs actually work.

"Sen. Tom Coburn (R-Okla.), who pushed for this report, figures the latest examples alone add up to $95 billion — more than the spending cuts under this year's "sequester." There are, for example, 23 agencies pushing more than 670 renewable energy programs, a quarter of which President Obama added. In wind energy alone, nine agencies threw $4 billion at 82 wind energy projects in 2011.

"Worse, the GAO found that many of these programs targeted the same wind projects, and worse still, in at least a few cases the money went to projects that likely would have been built anyway."

There are actually three GAO items. First, the 283-page report, which is the third annual report on government waste and duplication; then the testimony of the Comptroller General before the Committee on Oversight and Government Reform of the House of Representatives; and finally a GAO podcast on reducing government duplication and saving tax dollars. Here's how GAO describes what they found:

"This 2013 annual report identifies 31 areas where agencies may be able to achieve greater efficiency or effectiveness. Within these 31 areas, we include 17 areas of fragmentation, overlap, or duplication where multiple programs and activities may be creating inefficiencies. Although it may be appropriate for multiple agencies or entities to be involved in the same programmatic or policy area due to the nature or magnitude of the federal effort. The report also includes 14 areas where opportunities exist to achieve cost savings or enhance revenue collections.

"To address the issues indentified in these areas, we suggest 81 actions that the executive branch or Congress could take to reduce or eliminate fragmentation, overlap, or duplication or to achieve other financial benefits. Given that the areas identified extend across the government and that we found a range of conditions among these areas, we suggest a similarly wide range of actions for the executive branch and Congress to consider. For example, the actions we suggest in the report include, among many others, canceling a demonstration program, strengthening oversight of certain payments and investments, and limiting or reducing subsidies for a particular program."

The IBD editorial urges readers to remember all of the fragmented, overlapping, and duplicate federal programs "the next time you hear (President) Obama whine about the pain and agony caused by the sequester."

Finally, kudos to Senator Tom Coburn (R-Oklahoma) for his hard work in pushing for the report.

Arlington taxpayers concerned how their federal legislators are acting with regards to this third annual report should write their members of Congress. Contact information:

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

And tell them ACTA sent you!

April 08, 2013

And You Thought Welfare Systems Serve the Poor?

In an article at National Review Online, posted Saturday, Kevin Williamson writes about "Kentucky's runaway pensions," highlighting a non-profit organization named Seven Counties that "that provides mental-health services in the Louisville area, and it was just bankrupted by the Kentucky state pension system." Here's the background. according to Williamson:

"Though it is not a state agency, Seven Counties joined the state pension system, Kentucky Retirement Systems (KRS), in 1979. It must have sounded like a good idea at the time, and it was in fact a great deal for many years. Like practically every other government-run pension system in the country, KRS provided generous benefits to state workers, and employees of Seven Counties, too. At the same time, they have done very little to secure its ability to meet the attendant profligate financial promises. It’s a win-win for the political class: Public-sector employees earn inflated retirement benefits, but taxpayers don’t get dinged for it immediately, because that compensation is pushed off into the future. And then the bill comes due.

"Seven Counties alone is now responsible for a $227 million shortfall in its pension funding, an amount that the organization’s president, Anthony Zipple, says it could not pay in “200 years.” That is not quite true: The nonprofit’s three highest-paid employees take home nearly $1 million a year by themselves, almost enough to cover the deficit over the period of time stated. Chew on that for a second: As I argued in The Dependency Agenda, the real beneficiaries of the welfare state are the high-income contractors who provide government-funded social services. Here we have a nonprofit that is funded mostly by Medicaid, supplemented by other taxpayer-derived sources, with an employee paid more than $325,000 a year. Who says Medicaid is a program for poor people? (emphasis added)

"It will not surprise you that Mr. Zipple said that his biggest concern about health-care reform is that it would prove “too timid,” nor will it surprise you that 100 percent of the 2012 political donations from Seven Counties employees disclosed at OpenSecrets.Org went to Barack Obama, or that 100 percent of their donations in earlier years went to Democratic candidates and Emily’s List."

For the record, let me further highlight a portion of Williamsson's article (again with emphasis added):

"As I argued in The Dependency Agenda, the real beneficiaries of the welfare state are the high-income contractors who provide government-funded social services. Here we have a nonprofit that is funded mostly by Medicaid, supplemented by other taxpayer-derived sources, with an employee paid more than $325,000 a year. Who says Medicaid is a program for poor people?

To close the story about the Seven Counties pension saga, Williamson notes that "Kentucky enacted a sham pension reform in 2008," and another "more robust pension-reform bill was signed in March" that would result in pension fund payments "that more closely reflect their underlying liabilities." Seven Counties payments would increase from $9.5 million to $15.5 million. However, "(f)aced with that reality, the nonprofit announced Friday that it would file for bankruptcy."

The story of Kentucky's pension system gets worse, and you can read about it by going to the online story, but I wanted to emphasize the portion showing who really benefits from most welfare systems. It's one thing to help the truly needy, but completely another thing when those systems are abused. Kudos to Kevin Williamson for writing the article about Seven Counties and Kentucky's pension system.

April 07, 2013

Reporting on IRS Fraud Investigation Wins a Peabody

Our friends at the National Taxpayers Union posted a story at their blog, Government Bytes, about a 6-month long investigative series by TV station WTHR-TV in Indianapolis. According to the post, written by Manzanita McMahon. "WTHR recently won the highest award in journalism, the Peabody Award," for their efforts.

In her post, McMahon explained, in part, how the station won the award:

"The 6-month long investigative series that earned the award exposed the IRS for ignoring a “loophole” that allowed people here unlawfully to insert on tax forms the names of children that may not have even lived in the U.S., snagging unwarranted taxpayer cash.

"The series has struck a chord with citizens across the nation, and even inspired many IRS employees aware of the abuse to contact WTHR and share their experiences. One whistleblower confided:

"I just saw your report and there's something I need to tell you. I see this stuff every day and there isn't anything I can do about it."

"The controversy also made its way to Capitol Hill, and led to a debate in the spring of last year as to why nothing had been done about this disturbing mishandling of taxpayer dollars."

McMahon also said that after the WTHR series, "the IRS announced new reforms to how the child tax credit is allotted."

In closing, she said, "WTHR deserves a warm round of applause for affecting change in an instance where officials openly neglected their duty to ensure the law is properly enforced." We join the NTU in congratulating WTHR-TV in Indianapolis, Indiana.

April 06, 2013

Boomtown 2: Food Stamps and the Business of Government

If you weren't able to watch Sean Hannity's Fox News program last night, you can watch one of the segments here. The Government Accountability Initiative describes the program as "(h)ow the industry grew into a $75 billion-a-year giant."

The links for the other segments can be found at this Breitbart TV webpage.

One of the video clips played by Sean Hannity has Sen. Kirsten Gillibrand (D-New York) saying that every dollar spent on food stamps results in $1.71 going back into the economy. Also there's a clip of Rep. Nancy Pelosi (D-California) saying, "if you want to create jobs, the quickest way to do it is to provide more funding for food stamps." A typical Keynesian argument. However, in a Politifact segment, the Austin American-Statesman looked at a similar argument made by Rep. Lloyd Doggett (D-Texas) that "$1 of unemployment benefits boosts the economy by $1.61." In short, the American-Statesman wrote:

"In a Dec. 8, 2011, opinion piece on the Huffington Post website, the Austin Democrat quoted a little "Workin’ Man" from the Nitty Gritty Dirt Band and then listed bold-faced "Facts" including, "Fact: One economist estimates that for every $1 we spent on unemployment insurance benefits, we get $1.61 in economic activity back."

That rang a bell. We were already checking a nearly identical statement on a Web page posted by the Democrats of the U.S. House Ways and Means Committee, and we’d found that another PolitiFact writer checked a similar claim in 2010.

"Were they all the same? Basically, yes, Doggett spokeswoman Sarah Dohl told us: All three statements relied on a single estimate from Moody’s Analytics chief economist Mark Zandi."

The newspaper's Politifact explanation is quite detailed, but their "ruling" was:

"Doggett cites an economist’s projection that the country gets a 61 percent return on each additional dollar in unemployment aid. But his "fact" overlooks another fact: Economists are divided over whether unemployment aid increases GDP.  Also, Doggett’s statement specifies a figure from mid-2010 that’s been out of date for about a year. A failure to update it is like failing to update the national employment rates.

"The only certain fact here is that an economist did once estimate $1.61.

"Our sense is you can’t take Doggett’s statement to the bank. We rate it Mostly False." (emphasis added)

Breitbart News has several stories related to Sean Hannity's Boomtown 2 series. In one, Tom Fitton writing about crony capitalism and "the food stamp army," beginning:

"The Obama administration is proudly shattering welfare records with an astonishing number of people collecting public benefits long term, especially food stamps.

"In fact, as I discussed in a special to be aired on Hannity tonight, Obama and his friends have actually found a way to meld corporate cronyism with food stamp abuse to line their pockets while undermining our election systems at the same time.

"Under Obama, the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, has exploded with a record number of people – 46 million and growing – getting free groceries from the American taxpayer. Adding insult to injury, a federal audit revealed last year that many who don’t qualify for food stamps now receive them under a new “broad-based” eligibility program that disregards income and asset requirements.

"Obama says the food stamp extension is part of his intention to eradicate “food insecure households.” However, it’s really part of a massive redistribution of wealth. Last year, taxpayers were forced to pay more than $80 billion, including an estimated $750 million a year in outright fraud."

Then Tony Lee writes about how corporations "profit off (the) $75 billion food stamp industry." He also writes of how corporations are "'incentivized' to maximize food stamp transactions." Separately, he also writes about how food stamp use breaks down the "DNA of self-reliance.

Other Breitbart articles about Boomtown 2 include: Wynton Hall writing that "taxpayers have spent $15 trillion on 'War on Poverty";  in another, Hall says there are "126 federal anti-poverty programs"; and. Hall writing of how a "fast food giant lobbied to get into (the) food stamp game."

Kudos to Sean Hannity, Fox News, Breitbart News, and the Government Accountability Institute for the Boomtown 2 series.

April 05, 2013

Economy Going in the Wrong Direction?

The Wall Street Journal's Jonathan Cheng reports the March jobs report was "disappointing," and "is the latest crack in a shaky global recovery—and a test of will for investors looking to climb aboard a rally that has pushed stock benchmarks to new highs." The Journal continued:

"For weeks, investors have been growing confident about global economic prospects and looking for a pullback as a chance to pile into the stock rally. But with just 88,000 new jobs added to the U.S. economy in March, investors on Friday instead faced a new debate over whether the global recovery can power through a season that has proved volatile in the past four years."

And at the American Enterprise Institute's blog, AEIdeas, James Pethokoukis writes:

"It would take superspin powers to portray the March jobs report as anything other than a huge step in the wrong direction. The US economy added just 88,000 jobs last month, 95,000 in the private sector as public payrolls fell by 7,000. The official unemployment rate ticked down a tenth of a point to 7.6%.

1. That is a paltry number of jobs, more or less matching assumed labor force growth per month. So the economy must add at least that many jobs just to keep the labor market at current depressed levels. In other words, at 88,000 jobs a month the economy would never ever close the jobs gap.

2. The unemployment rate dropped because of a further decline in the labor force participation rate, now at its lowest level since 1979. If that rate were merely at March 2012 levels, the unemployment rate would have been 8.3%. At January 2009 levels, 11% (or 10.98%). While going back four years ignores demographic factors like baby boomer retirements, the aging of America doesn’t explain the entire drop. (Indeed, before the Great Recession, the Congressional Budget Office predicted 2013 labor force participation would be 65.2% (vs. 63.3% in March), assuming demographic changes.)

"Factoring out the retirement issue might put the adjusted unemployment rate at 9.9%, says the economics team at Hamilton Place Strategies. Also, the employment-population ratio continues to bottom feed. (See above chart)."

Here is how Pethokoukis concludes his comments about the March jobs report this way:

"I think the simplest explanation is that the economy continues to grow at a weak pace — though the first quarter might actually have been pretty strong — and the result is erratic job growth. The March number could get revised higher and in the end might not look so bad. There is certainly no reason for the Federal Reserve to back off its bond buying, and every reason for Congress to stop raising taxes and begin to implement a pro-growth agenda from high-skill immigration to cutting business taxes."

He also notes the job market "is still falling short of predictions made by the Obama economic team back in 2009," and includes the following chart:

 

Here is the link to the Department of Labor's March jobs report, technically the "employment situation summary," which undoubtedly contains more information than some of us could absorb in a lifetime, e.g., it includes tables A-1 through A-16 and B-1 through B-9.

In other news reporting, the Los Angeles Times says, "Jobs report paints a dreary picture." Finally, at Townhall.com, managing editor Kevin Glass writes:

"There are quite a few explanations for why the economy sputtered in March. The payroll tax hike from January's fiscal cliff deal might have started taking effect. It may be possible that anticipating effects from sequestration would have frozen some employers' payrolls. But what the media likely won't focus on is that Obamacare implementation has weighed heavy on the minds of employers."

Glass also includes a quotation from Paul Howard a senior fellow at the free-market Manhattan Institute. The bottom line for Glass: "this was a mediocre jobs report. What seemed like an economy poised to finally rebound in February stalled in March. Federal policy likely played a role in this - be it the tax hikes from January's fiscal cliff deal, the implementation of Obamacare provisions, or the anticipation of sequestration. People have given up looking for work en masse, and there aren't really any signs of a sharp turnaround coming."

UPDATE (4/6/13) At CNBC yesterday, Allison Linn writes:

"If you're thinking a drop in the jobless rate is reason to celebrate, bad news: You might want to keep that bottle of bubbly corked.

"The unemployment rate dipped to 7.6 percent in March, from 7.7 percent a month earlier, the Bureau of Labor Statistics reported Friday. But the drop came as nearly 500,000 Americans left the labor force, meaning they stopped working or looking for work and were no longer counted in the official employment numbers.

"Normally we'd love to see a decline in the unemployment rate. Unfortunately, this was largely due to a lot of people dropping out of the labor force," said Joel Naroff, chief economist with Naroff Economic Advisors."

The two charts below, from Zero Hedge, are posted at Walter Russell Mean's blog, Via Meadia. They quantify the "war on the young." First:

 

And the second:

 

As Means concluded, " The charts speak for themselves. Grim times for anyone who’s not already well established in their field."

UPDATE (4/7/13) At CNS News, Elizabeth Harrington writes, "There is a bright spot in the March jobless numbers, if government is your line of work," noting the unemployment rate for government workers is 3.6 percent.

April 04, 2013

A Thought on Freedom of Speech & Political Correctness

"If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter."

~ George Washington

HT Ralph Reiland column at The Washington Times

April 03, 2013

A Thought on the Burdens of Government

“The marvel of all history is the patience with which men and women submit to burdens unnecessarily laid upon them by their government.”

~ George Washington

HT Ralph Reiland column at Washington Times

April 02, 2013

Comparing the Compensation of Arlington County Teachers

We growled on November 19, 2012 about data from the Fiscal Year 2013 Washington Area Boards of Education (WABE) Guide when we compared the cost-per-student for the WABE school districts. In that comparison, the Arlington Public Schools (APS) continued as the most expensive school district in the Washington, D.C. suburbs. Below, we report that APS teachers rank first in salary and second in total compensation. 

Thanks to a question raised by a member of the Fairfax County School Board, their staff prepared "a salary and benefit comparison for surrounding jurisdictions" (question #8, FY 2014 Budget Questions and Responses, at the FCPS "budget documents" webpage). In their response, FCPS staff explained in part:

" . . .   a chart that compares the salary and benefits for a mid-career teacher for the jurisdictions that participate in the Washington Area Boards of Education (WABE) Guide. For each jurisdiction, the salary of a teacher with a master’s degree step 9 is used for the comparison. Then the benefits paid by the jurisdiction on behalf of that teacher position are calculated. For health insurance, family coverage was selected . . . Details for each jurisdiction follow." (emphasis added)

The response prepared by FCPS staff includes both an overall summary and a detailed chart, which includes the salary and the various benefit components. The table below includes 1) amount of total compensation (salary and benefits) and 2) salary (MA Step 9) from the response to Question 8:

Jurisdiction         Total Compensation / Salary, MA Step 9

  • Arlington County -- $$100,646 / $71,982
  • Alexandria City -- $104,651 1 $70,808
  • Montgomery County -- $96,629 / $67,723
  • Falls Church City -- $90,992 / $62,388
  • Prince George’s County -- $89,070 / $63,020
  • Fairfax County -- $88,657 / $58,303
  • Prince William County -- $86,276 / $58,895
  • Loudoun County -- $83,478 / $54,040
  • Manassas Park -- $81,018 / $55,758
  • Manassas City -- $78,516 / $54,197

The vision of the Arlington County Board includes being an "inclusive world-class community." We won't comment on that criteria, but it appears the APS School Board considers its teachers deserve to be paid a world-class salary.

April 01, 2013

A Thought about Political Parties

"The technique of these parties is based on the division of society into producers and consumers. They are also wont to make use of the usual hypostasis of the state in questions of fiscal policy that enables them to advocate new expenditures to be paid out of the public treasury without any particular concern on their part over how such expenses are to be defrayed, and at the same time to complain about the heavy burden of taxes.

"The other basic defect of these parties is that the demands they raise for each particular group are limitless.  There is, in their eyes, only one limit to the quantity to be demanded: the resistance put up by the other side. This is entirely keeping with their character as parties striving for privileges on behalf of special interests.  Yet parties that follow no definite program, but come into conflict in the pursuit of unlimited desires for privileges on behalf of some and for legal disabilities for others, must bring about the destruction of every political system."

~ Ludwig von Mises. from his book, "Liberalism" (written in the 1920's)

HT Patrick Jakeway at the American Thinker