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October 31, 2014

Two Newspapers Endorse Vihstadt for Arlington County Board

Last week, John Vihstadt won the endorsement of the Arlington Sun Gazette for a four-year term on the Arlington County Board, and in an editorial posted last night, he won the endorsement of the Washington Post. Below are excerpts from the two editorials:

Arlington Sun Gazette:

"The good news for Arlington voters is that there is no bad option on the Nov. 4 ballot. Both Vihstadt, who won the special election to snatch Chris Zimmerman’s seat away from the Democrats in the spring, and Howze are serious, solid community leaders. But there are clear distinctions.

"Vihstadt won a victory of landslide proportions in the spring due largely to voter dissatisfaction with the performance of the County Board and local government, a view that had festered for years and finally erupted.

"Vihstadt promised to be an independent voice, asking tough questions and demanding fiscal responsibility. It’s too soon to render a verdict on how effective his early efforts have been, but there is no question he has made an impact in his short time in office.

< snip >

"In another year, Howze might well be our choice, as we think he does want to tackle significant issues.

"But the message his election would send to the Democratic oligarchy that has run Arlington – sometimes exceptionally well, but not always so – over past decades is that the public has gotten the anger out of its system, and it’s back to business as usual. That can’t be allowed to happen.

“It’s not divisive to ask questions, and question authority,” Vihstadt said at a recent candidate forum. “If I lose, the status quo prevails.”

"He’s right, and while Alan Howze likely would be a fine County Board member – far better than he has been as a candidate – we think it’s the wrong time to turn back the clock. Vihstadt deserves a four-year term."

Washington Post:

"By almost any measure, Arlington County is a local and national success story, having remade itself over two decades — with a big assist from Metro — from a green but sleepy suburb into a still green but diverse, dynamic and highly desirable set of communities. Lately, the political comity that helped guide that transformation has frayed amid a bitter debate over a proposal to build an expensive streetcar line on fixed tracks along Columbia Pike.

"That debate headlined a special election last spring to fill a vacancy on the five-member County Board and is dominating a rematch for the same seat in Tuesday’s general election. We support the incumbent, John E. Vihstadt, a badly needed independent voice in a heavily Democratic county.

"Mr. Vihstadt, a lawyer with decades of involvement in community affairs, has opposed the streetcar project. His opponent, Democrat Alan E. Howze, also a very capable candidate, supports it.

< snip >

"Nonetheless, many Democrats have accorded Mr. Vihstadt grudging respect as someone who formulates and presents his views intelligently; he is no tea party bomb thrower. Equally important, in our view, is his insistence that the county reevaluate other expensive projects, such as a proposal for a state-of-the-art aquatic center, which he regards as unaffordable.

"Whether Mr. Vihstadt prevails or not, it’s important for Arlington to have the debate; without him, the board runs the risk of groupthink."

Throughout its history, ACTA has not endorsed candidates, and in fact our tax status precludes endorsements. However, we are pleased to growl about these two endorsements.

October 30, 2014

Could there be a Positive Benefit from a Senate Change?

Five days from now, the nation will learn if the U.S. Senate will have a "new sheriff." Will Harry Reid and the Democrats continue to control Congress' upper chamber, or will the Senate "flip" to the Republicans? That possibility seems greater this evening with the prediction by well-known Roll Call columnist Stuart Rothenberg this evening (HT Drudge Report) that "Obama’s midterm loss record could make history."

According to Rothenberg, Democrats "seem likely to lose from 5 to as many as 10 seats next week." Nate Silvers at 538 says GOP is a "slight favorite" while NY Times says "the Republicans have a moderate edge, with about a 71% chance of gaining a majority" (both as of today) although the Washington Post's Dan Balz wrote on August 6, 2014 that "three months out from November, many questions remain before the ballots can be counted."

With that context, let's turn to Demian Brday, blogging yesterday at the National Taxpayers Union's blog, Government Bytes. Brady says that "if the Senate flips, budget cutters would take reins of committees." According to his analysis:

" . . . A comparison of the spending platforms of the outgoing Democratic Chairs and the potential incoming Republican Chairs indicates that major changes could be coming to the “workshops” of the Senate: the Committees responsible for drafting legislation and setting the policy agenda in the next Congress.

"If the Senate switches, the average spending agenda of the outgoing and potential incoming Chairs could see a $232.7 billion swing as budget increasers would be replaced by net budget cutters."

Doing some number-crunching, Brady look at the "net spending agendas of outgoing and potential incoming Senate committee chairs in the 113th Congress. Two examples:

  • Appropriations Committee. The current chair is Senator Barbara Mikulski (D-Maryland) had a net spending agenda of $32.4 billion while the net spending agenda of potential chair Senator Thad Cochrane (R-Mississippi) was a minus $98.2 billion.
  • Environment and Public Works. Senator Barbara Boxer (D-California) is the current chair, and her net spending agenda is $45.6 billion. The potential chair is Senator James Imhofe (R-Oklahoma) whose net spending agenda is a minus $196.1 billion.

Click here to see how the remaining 14 committees compare. Kudos to Demian Brady for this most helpful analysis. While many pundits say there's not a "dime's worth" of difference between the two parties, there is indeed a difference as Demian's comparison shows.

If Arlington County residents have any questions about next Tuesday's, November 4, 2014, general election, they should contact Arlington County's Office of Voter Registration, or call (703) 228-3456.

October 29, 2014

Family and Economic Prosperity

Prosperity and economic prosperity are frequent topics at Growls. You can confirm that by using the search facility in the lower right-hand column.

So when the title of a new report from the American Enterprise Institute (AEI) appeared in a headline today at Hot Air, it caught my attention. The report, by W. Bradford Wilcox and Robert I. Lerman, is entitled, "For richer, for poorer: How family structures economic success in America." Following is the report's executive summary:

"This study documents five key findings about the relationships between family patterns and economic well-being in America.

  1. The retreat from marriage—a retreat that has been concentrated among lower-income Americans—plays a key role in the changing economic fortunes of American family life. We estimate that the growth in median income of families with children would be 44 percent higher if the United States enjoyed 1980 levels of married parenthood today. Further, at least 32 percent of the growth in family-income inequality since 1979 among families with children and 37 percent of the decline in men’s employment rates during that time can be linked to the decreasing number of Americans who form and maintain stable, married families.
  2. Growing up with both parents (in an intact family) is strongly associated with more education, work, and income among today’s young men and women. Young men and women from intact families enjoy an annual “intact-family premium” that amounts to $6,500 and $4,700, respectively, over the incomes of their peers from single-parent families.
  3. Men obtain a substantial “marriage premium” and women bear no marriage penalty in their individual incomes, and both men and women enjoy substantially higher family incomes, compared to peers with otherwise similar characteristics. For instance, men enjoy a marriage premium of at least $15,900 per year in their individual income compared to their single peers.
  4. These two trends reinforce each other. Growing up with both parents increases your odds of becoming highly educated, which in turn leads to higher odds of being married as an adult. Both the added education and marriage result in higher income levels. Indeed, men and women who were raised with both parents present and then go on to marry enjoy an especially high income as adults. Men and women who are currently married and were raised in an intact family enjoy an annual “family premium” in their household income that exceeds that of their unmarried peers who were raised in nonintact families by at least $42,000.
  5. The advantages of growing up in an intact family and being married extend across the population. They apply about as much to blacks and Hispanics as they do to whites. For instance, black men enjoy a marriage premium of at least $12,500 in their individual income compared to their single peers. The advantages also apply, for the most part, to men and women who are less educated. For instance, men with a high-school degree or less enjoy a marriage premium of at least $17,000 compared to their single peers.

"Given the economic importance of strong and stable families, policy makers, business executives and owners, and civic leaders should experiment with a range of public and private policies to strengthen and stabilize marriage and family life in the United States. Such efforts should focus on poor and working-class Americans, who have been most affected by the nation’s retreat from marriage. Specifically:

  1. Public policy should “do no harm” when it comes to marriage. Accordingly, policymakers should eliminate or reduce marriage penalties embedded in many of the nation’s tax and transfer policies designed to serve lower-income Americans and their families.
  2. Federal and state policy should strengthen the economic foundations of middle- and lower-income family life in three ways: (a) increase the child credit to $3,000 and extend it to both income and payroll taxes; (b) expand the maximum earned income tax credit for single, childless adults to $1,000, increasing their marriageability; and (c) expand and improve vocational education and apprenticeship programs that would strengthen the job prospects of less-educated young adults.
  3. Civic institutions—joined by a range of private and public partners, from businesses to state governments to public schools—should launch a national campaign around a “success sequence” that would encourage young adults to sequence schooling, work, marriage, and then parenthood. This campaign would stress the ways children are more likely to flourish when they are born to married parents with a secure economic foundation."

The entire report is 58-pages, which you can access here. The report was released today at an AEI event, which included discussions by two panels. You can watch the two panel discussions here, which last just under three hours.

The following chart from the report provides a policy pathway.

Kudos to the two authors of the study and to the American Enterprise Institute (AEI).

October 28, 2014

Virginia's Business Tax Climate Continues to Erode

The Tax Foundation released its state business tax climate index today. According to  the study's executive summary:

"The Tax Foundation’s State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems, and provides a road-map to improving these structures.

"The 10 best states in this year’s Index are:

1. Wyoming
2. South Dakota
3. Nevada
4. Alaska
5. Florida
6. Montana
7. New Hampshire
8. Indiana
9. Utah
10. Texas

"The absence of a major tax is a common factor among many of the top ten states. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate tax, the individual income tax, or the sales tax. Wyoming, Nevada, and South Dakota have no corporate or individual income tax; Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax.

"But this does not mean that a state cannot rank in the top ten while still levying all the major taxes. Indiana and Utah, for example, have all the major tax types, but levy them with low rates on broad bases.

"The 10 lowest ranked, or worst, states in this year’s Index are:

41. Iowa
42. Connecticut
43. Wisconsin
44. Ohio
45. Rhode Island
46. Vermont
47. Minnesota
48. California
49. New York
50. New Jersey

"The states in the bottom ten suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates. New Jersey, for example, suffers from some of the highest property tax burdens in the country, is one of just two states to levy both an inheritance and an estate tax, and maintains some of the worst structured individual income taxes in the country."

The following map of the United States shows the 10 best states (green) and 10 worst states (pumpkin):

Virginia's overall rank has eroded over the past four years, going from #23 in 2012, to #24 in 2013, to #26 in 2014, and settling in to #27 for 2015.

Figure 1 of the study, in addition to reflecting an overall ranking of #27 for 2015, also shows Virginia with a corporate tax ranking of #6, an individual tax ranking of #39, a sales  tax ranking of #6, an unemployment tax ranking of #37, and a property tax ranking of #26.

Today's Wall Street Journal commented on the study on its editorial pages ($ -- behind its paywall), saying:

"The annual ranking measures the impact of policies in place as of July 1 on five types of taxes on business activities, mainly considering the amount a state takes from its citizens but also the weight of its compliance burden . . . ."

In conclusion, the Journal said:

"Tax climate isn’t the only determinant of state prosperity. Regulation also matters, as do human capital and natural resources like Wyoming’s oil and gas. But the latter are more likely to reach their potential in states with low tax rates."

Readers of Growls who are concerned that Virginia's business tax climate has eroded from #23 just four years ago to #27 for 2015 are urged to contact Governor Terry McAuliffe and Senators and Delegates who represent Arlington County in the General Assembly.

  • Contac6 information for members of the General Assembly can be found here (using one of the "quick links").

We growled about Virginia's 2014 business tax climate here.

Kudos to Scott Drenkard and Joseph Henchman of the Tax Foundation for their work producing the 2015 state business tax climate index and to the Tax Foundation.

October 27, 2014

A Thought about Liberty and Equality

"The irony is that free people usually create far more wealth than the coerced, which makes the lower echelons better off, a fact that reminds “equality” is usually about empowering progressive elites rather than materially helping the poor. Moreover, in a free society, there are all sorts of forces — religion, constantly improving and ever cheaper technology, family pressures, honor, shame, philanthropy — that redistribute wealth either naturally or through the consent of the giver, and far more effectively than creating a huge government equalocracy that seeks power to bully others and exempt itself.

~ Victor Davis Hanson

Source: His January 14, 2014 column, posted at National Review Online.

October 23, 2014

A Thought on an Optimum Tax Rate

Note: there will likely be little if any growling until the middle of next week.

                              - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

"Back in 1971, a Scottish economist by the name of James A. Mirrlees wrote a groundbreaking paper, in which he attempted to answer the question of what an optimum income-tax regime would look like if one desired to reduce inequalities while at the same time not discouraging work and economic growth. Up to the time of Mr. Mirrlees‘ work, no one had been able to figure out the optimum trade-off between equality and. Mr. Mirrlees was awarded the Nobel Prize in economics in 1996 for his work, and was knighted in 1998.

"Mr. Mirrlees had been an adviser to the British Labor Party, which supported the high tax rates in effect at that time. He did a careful analysis of the variation of people’s skills and the effect tax rates had on their incentives to earn. Much to his surprise, he found the optimum tax rate on high earners was about 20 percent, not the 83 percent in effect at that time. He also determined that 20 percent should be the optimum rate for everyone, thus giving rise to the idea of the flat tax (which now has been adopted by several-dozen countries). In his 1971 paper, Mr. Mirrlees concluded, “I must confess that I had expected the rigorous analysis of income taxation in the utilitarian manner to provide an argument for high tax rates. It has not done so.” *emphasis added)

< snip>

"In the United States, there has been almost no relation between maximum individual tax rates and tax revenues as a percentage of gross domestic product (GDP). For example, individual-tax revenues have averaged about 7.9 percent of GDP for the past half-century, whether the maximum rate was 28 percent (after Ronald Reagan’s reform in the late 1980s), 70 percent (during the Jimmy Carter era in 1978), or 39.6 percent (when Bill Clinton was president in 1995, and also in 2013 under President Obama). All of this only goes to show that higher maximum individual income-tax rates (despite the conventional wisdom and the endless faulty estimates from the government tax-revenue forecasters) are no more likely to produce greater revenue as a share of GDP than lower rates. High rates do, however, have the clear disadvantage of causing more tax evasion, lower job creation and slower economic growth."

~ Richard W. Rahn, Senior Fellow, Cato Institute, and Chairman, Global Economic Growth

SOURCE: His October 21, 2014 column, entitled "The optimum income taxation," posted at the Washington Times.

October 22, 2014

A One-Way Pro-Streetcar Narrative from County Staff?

The Arlington Sun Gazette's Scott McCaffrey reported this morning that "anti-streetcar Arlington (County) board members irked at county PR efforts." According to McCaffrey:

"The anti-streetcar faction on the County Board represents 40 percent of board membership, but is getting zero-percent assistance from county-government staff in getting its message out to the public.

"And that, apparently, is the way it’s going to stay for now.

"Anti-streetcar board member John Vihstadt complained at the Oct. 21 meeting that county staff continue to put out a “one-way, pro-streetcar narrative” that allows no dissenting voices to be heard. He criticized a series of “false premises” and “red-herring arguments” in the materials the government disseminates.

"Vihstadt, who was elected in an April special election but faces a rematch with Democrat Alan Howze on Nov. 4, professed himself “a little disappointed [but] not completely surprised” that he and anti-streetcar colleague Libby Garvey do not get a chance to make their case through government channels. He noted that while pro-streetcar forces hold a 3-2 board majority, the last two board members elected ran on anti-streetcar platforms."

McCaffrey then explained the electoral implications for the streetcar opponents:

"Opponents of the streetcar will have their chance to wrest control of the County Board in November 2015, when the seats of pro-streetcar Democrats Walter Tejada and Mary Hynes are up for grabs. A Vihstadt victory this November would mean his side would only need to win one of those seats; a Howze victory would mean anti-streetcar advocates would need to win both seats in 2015.

"If they pull it off, streetcar opponents would be able to kill the project on Jan. 1, 2016 – before construction will have begun – but pro-streetcar forces could take back the majority, and resurrect the project, by knocking off Garvey in the 2016 general election."

In a lengthy story today, Patricia Sullivan of the Washington Post reported that "Arlington County Board race again focuses on streetcar divide." The opening of her story says:

"Arlington Democrats want desperately to believe that last spring’s special election was a fluke.

"In a county that routinely and overwhelmingly elects Democrats, their party’s nominee for an open County Board seat lost by 16 percentage points to John Vihstadt, a Republican-turned-independent who capitalized on voter opposition to a proposed streetcar line and frustration at perceived overspending.

"Now the Democratic nominee, Alan Howze, is facing off against Vihstadt for a full four-year term.

"Howze is campaigning more energetically than he did last spring, hopeful that a bitter Senate race in Virginia will spur higher turnout on Nov. 4 — including a wave of Arlington Democrats who back both him and the Columbia Pike and Crystal City streetcar project."

Sullivan also noted:

"There are signs that some Arlington voters are growing weary of the streetcar debate.

"The election “has basically become a referendum on the streetcar,” said Jim Green, who works in advertising. “I’d like a decision one way or another. We are talking this thing to death.”

Readers of Growls are urged to make their views on the Columbia Pike streetcar by: 1) voting on Tuesday, November 4, 2014; and 2) e-mailing the Arlington County Board by clicking-on the following hotlinks. Or just call them:

  • Call the Board office at (703) 228-3130

And tell them ACTA sent you!

October 21, 2014

Has LBJ's War on Poverty been Won? Is it Winnable?

No one will be surprised to learn that we've often growled about poverty and welfare (use the search facility in the right-hand column). After all, the nation spends an enormous amount of our taxes for welfare and to fight poverty. On June 20, 2014 we specifically growled about the "war on poverty' which President Lyndon Johnson declared in his January 8, 1964 State of the Union speech.

Yesterday, as the 'War on Poverty' turns 50, the Cato Institute published a detailed, 26-page Policy Analysis (Number 761, October 20, 2014). Senior fellow Michael Tanner and research assistant Charles Hughes ask whether the country is winning the war, yet.

Here is the study's executive summary:

"The War on Poverty is 50 years old. Over that time, federal and state governments have spent more than $19 trillion fighting poverty. But what have we really accomplished?

"Although far from conclusive, the evidence suggests that we have successfully reduced many of the deprivations of material poverty, especially in the early years of the War on Poverty. However, these efforts were more successful among socioeconomically stable groups such as the elderly than low-income groups facing other social problems. Moreover, other factors like the passage of the Civil Rights Act, the expansion of economic opportunities to African Americans and women, increased private charity, and general economic growth may all have played a role in whatever poverty reduction occurred.

"However, even if the War on Poverty achieved some initial success, the programs it spawned have long since reached a point of diminishing returns. In recent years we have spent more and more money on more and more programs, while realizing few, if any, additional gains. More important, the War on Poverty has failed to make those living in poverty independent or increase economic mobility among the poor and children. We may have made the lives of the poor less uncomfortable, but we have failed to truly lift people out of poverty.

"The failures of the War on Poverty should serve as an object lesson for policymakers today. Good intentions are not enough. We should not continue to throw money at failed programs in the name of compassion."

The fact is that America has spent $19 trillion on LBJ's so-called war on poverty, which is more than the national debt of almost $18 trillion, is itself astounding. More so if you consider that $19 trillion is equivalent to giving about $63,000 to every man, woman and child in America. Let's spend a few more minutes looking at how this welfare spending has grown over the years, according to Tanner and Hughes:

"The cost of the War on Poverty has in- creased dramatically from its rather narrow beginnings. In constant 2014 dollars, federal spending on welfare and anti-poverty programs has risen from $107 billion to $688 billion, a 640 percent increase, while total government welfare spending—including state and local funds—has risen from $160 billion to $981 bil- lion, a 613 percent increase (see Figure 1).

"Of course, this amount is not adjusted for growth in the population. Therefore, a better measure might be to look at welfare spending on a per capita basis, specifically per poor person (as defined by the Federal Poverty Level, discussed below). Measured this way, federal spending has risen by almost 320 percent, from $4,643 to $14,848, while total spending rose by 302 percent, from $6,972 to $21,113 (see Figure 2).

"Altogether, the United States has spent more than $19 trillion fighting poverty (in con- stant 2014 dollars). Last year alone, the federal government spent almost $700 billion, while state and local governments added nearly $300 billion more, for a total of roughly $1 trillion. That is equivalent to more than $21,000 for ev- ery person below the poverty level in America, or $63,339 for a family of three.7 While it is true that a significant portion of the actual money in these “anti-poverty” programs goes to families above the poverty line, the fact remains that we spend enough money on the welfare system to conceivably lift everyone who currently lives in poverty above the poverty threshold, which stood at $18,769 for a single mother with two children in 2013."

You're urged to spend a few minutes poring over the facts and charts that are interspersed throughout Cato's newest policy analysis, which provide a wealth of information, including many helpful charts.

Readers of Growls who are concerned about the growth of so-called entitlement spending, and how it drives the national debt, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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.

October 20, 2014

Working for the Gummint. A Great Life for Some?

The Washington Examiner's Susan Ferrechio reported today, "Government has paid millions for workers to stay home." Her reporting is based on this U.S. General Accountability Office (GAO) report published on Friday, October 17.

In the report's highlights, GAO explained their reasons for doing the audit:

"Federal agencies have the discretion to grant paid administrative leave for a variety of reasons, such as weather closures and blood donations. While paid administrative leave costs taxpayers, it has not been reviewed or reported on extensively.

"GAO was asked to examine the use of paid administrative leave. This report (1) describes paid administrative leave policies at selected federal agencies; (2) reviews practices in recording and reporting paid administrative leave and describes the number of federal employees granted such leave, and the amount and associated salary costs of such leave; and (3) describes categories for which large amounts of paid administrative leave have been charged by individual employees at selected federal agencies.

"To determine the total amount of paid administrative leave, GAO analyzed fiscal year 2011 through 2013 payroll data from OPM's Enterprise Human Resources Integration system. To review agency policies and reasons for using large amounts of administrative leave, GAO selected five agencies based in part on the percentage of employees with higher-than-average amounts of such leave."

Here is how Ms. Ferrechio begins her report:

"The federal government has shelled out more than $700 million in paid leave to more than 57,000 employees who were home from work for time periods stretching from one month to three years, a Government Accountability Office report has found.

"In a 62-page report published Monday, the GAO analyzed why so many federal employees were home and getting paid for such long periods of time and they discovered a variety of reasons.

"In many cases, employees were home awaiting the outcome of investigations into alleged misconduct and criminal actions. Some racked up paid leave for “physical fitness activities,” and others were away from work seeking professional development. Employees also took paid leave for “recuperation” from overseas work.

"Hundreds of federal employees remained at home, collecting a paycheck, for years.

"The report found that during a three-year period beginning in 2011, 263 employees remained on paid leave for one to three years at a cost of $31 million.

"In some cases, about five percent of the time, the federal government couldn’t come up with a reason why some employees were home on paid leave.

"Overall, paid leave for federal government workers, excluding holidays, cost billions of dollars from 2011 to 2013, the GAO report found, but comprised less than one percent of all federal government salaries paid during that time period.

"The vast majority of the 1.2 million federal employees analyzed in the report — about 97 percent — took fewer than 20 paid leave days, excluding holidays. More than 940,000 employees took two to five paid leave days outside of holiday breaks, the report found."

According to Ms. Ferrechio, the report was requested by Sen. Charles Grassley (R-Iowa); she wrote:

"Sen Chuck Grassley, R-Iowa, said he asked for the GAO probe after his own investigators uncovered unusual instances of paid leave. In one case, Grassley said, Inspector General of the National Archives and Records Administration, Paul Brachfeld, was put on paid leave "against his will for nearly two years" before retiring."

As Ms. Ferrechio pointed out, 97% of employees were granted fewer than 20 days of paid administrative leave. The following chart from the GAO report shows the number of employees who charged paid administrative leave, government-wide, for fiscal years 2011-2013:

Readers of Growls who are concerned that paid administrative leave is being abused are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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.

UPDATE (10/21/14): HT to Guy Benson at Townhall.com for reminding us "about the state of our 'not-a-cent-to-spare' federal government," and pointing us to coverage by the Washington Post's Lisa Rein's coverage of this latest abuse of America's taxpayers. She provides this additional background:

"The extensive use of administrative leave continues despite government personnel rules that limit paid leave for employees facing discipline to “rare circumstances” in which the employee is considered a threat. The long-standing rules were written in an effort to curb waste and deal quickly with workers accused of misconduct.

"And the comptroller general, the top federal official responsible for auditing government finances and practices, has repeatedly ruled that federal workers should not be sidelined for long periods for any reason."

October 19, 2014

Deficits, Debt and Ticking Time Bombs

A week ago, the New York Times' published an economics op-ed by Justin Wolfers, senior fellow for the Peterson Institute for International Economics who claimed "the federal budget deficit is back to normal," and threw the following sop to those who are just as concerned with the level of the national debt, writing:

"For those who are concerned about government debt, smaller deficits are surely a good thing. And indeed, because deficits are expected to remain relatively small, total public debt as a share of the economy’s total output is projected to be roughly stable over the next decade. It is only over subsequent decades that the debt is projected to rise, although any economic forecast made decades in advance comes with a sufficiently wide margin of error that there’s also a good chance that it also may fall."

On Wednesday, the Missourian published an editorial, which looked at the national debt, noting the nation "has owed money since the Revolutionary War. They also suggest it is doubtful the country will ever get out of debt although there are occasional efforts to reduce the debt every "now and then." Here's a portion of the Missourian editorial:

"In case anybody is interested, as of Monday, the national debt was $17,868,497,104,334.61. It’s higher when you are reading this since it continues to increase by an average of $2.43 billion every day since Sept. 30, 2012. Yes, that’s $2.43 billion!

"Each citizen’s share is $55,978.73. That’s based on a population of 319,201,559.

"Is anybody concerned? There is a group called the Concord Coalition, a grassroots movement to eliminate the deficit and bring entitlements down to a level that’s fair to all generations. Talk about a challenge!

"The U.S. Department of the Treasury provides daily, monthly and annual figures on the debt — to the penny.

"At the end of FY 2015, the total government debt in the United States, including federal, state and local, is expected to be $21.897 trillion; the total state debt is expected to be $1.228 trillion; and local total debt is expected to be $1.956 trillion."

Unfortunately, as the Committee for a Responsible Federal Budget (CFRFB) wrote in a paper published this week, "the recent fall in deficits is not a sign of fiscal sustainability." Following is the paper's executive summary:

"The FY2014 budget deficit totaled $483 billion, according to today’s statement from the Treasury Department. Although this is nearly 30 percent below the FY2013 deficit and 66 percent below its 2009 peak, the country remains on an unsustainable fiscal path.

"In this paper, we show:

  • Annual deficits have fallen substantially over the past five years, largely due to rapid increases in revenue (mostly from the economic recovery),  the reversal of one-time spending during the financial crisis, small decreases in defense spending, and slow growth in other areas.
  • Simply citing the 66 percent fall in deficits over the past five years without context is misleading, since it follows an almost 800 percent increase that brought deficits to record-high levels.
  • Even as deficits have fallen, debt has continued to rise, more than doubling as a percent of GDP since 2007 to record levels not seen other than during a brief period around World War II.
  • Both deficits and debt are projected to rise over the next decade and beyond, with trillion-dollar deficits returning by 2025 and debt exceeding the size of the economy before 2040, and as soon as 2030.

"Unfortunately, the recent fall in deficits is not a sign of fiscal sustainability."

The following chart show how the deficit increased from 2007 to 2011, and how they are expected to increase again beginning in 2015:

Take another look at the fourth bullet above, and especially note the expectation that trillion-dollar deficits are expected to return by 2025 and that debt will exceed the size of the economy before 2040.

The CFRFB concludes the paper with this warning:

"The fact that deficits have fallen from their trillion-plus dollar levels is an encouraging sign that the economy continues to recover. Unfortunately, Washington’s myopic focus on short-term deficits has likely slowed the recovery by cutting deficits somewhat too fast in the short term while leaving substantial imbalances in place over the long term.

"While the deficit has indeed dropped significantly, this drop followed a massive increase, was largely expected, and does not suggest the country is on a sustainable fiscal path. Currently, debt levels are at historic highs and projected to grow unsustainably over the long run.

"In only a decade, deficits are projected to again exceed $1 trillion, and within 15 to 25 years debt is projected to exceed the entire size of the economy.

"Policymakers must work together on serious tax and entitlement reforms to put debt on a clear downward path relative to the economy, not declare false victories and sweep the debt issue under the rug."

In an op-ed, posted October 8, 2014 at Investor's Business Daily, Jed Graham warns that "while the fiscal storm that struck six years ago has subsided, the apparent calm is deceptive."

Terry Jeffrey in a commentary piece for CNS News, dated October 15, 2014, frames the numbers in a more personal manner, asking, "Which will be greater: the burden of student debt on Americans who went off this fall to their first year of college, or the amount of federal debt per full-time private-sector worker when these students earn their degrees and start looking for jobs?" His answer:

"There is no doubt: It will be the amount of federal debt per full-time private-sector worker.

"As of last Friday, the total debt of the federal government was $17,858,480,029,490.28, according to the U.S. Treasury. That equaled $200,258.81 for each of the 89,177,000 full-time private-sector workers that, according to the Census Bureau, were in the United States in 2013.

"(There were a total of 105,862,000 full-time workers in the United States in 2013, according to the Census Bureau. However, 16,685,000 of these full-time workers worked for government, getting paid with tax dollars or from government borrowing. That left only 89,177,000 who were self-employed or worked for private-sector employers.)

"Federal debt per full-time private-sector worker has escalated rapidly. At the end of 2007, the total federal debt was $9,229,172,659,218.31, which equaled $101,158.25 for each of the 91,235,000 full-time private-sector workers in the United States that year. In 2000, the total federal debt was $5,662,216,013,697.37, which equaled $66,553.23 for each of the 85,078,000 full-time private-sector workers that year.

"Since 2000, federal debt per full-time private-sector worker has more than tripled."

Readers of Growls who are concerned about the country's national debate in particular, or fiscal policy in general, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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.

October 18, 2014

Will there be a 'Second ObamaCare Election'?

In a  "must read" article to be published in the October 27, 2014 issue of the Weekly Standard, Jeffrey H. Anderson makes the case that the November 4, 2014 election will be a "second ObamaCare election."

Following are the first several paragraphs of the article by Anderson, a senior fellow in health care studies at the Pacific Research Institute:

"A Gallup survey earlier this month showing that Americans oppose Obamacare by a margin of 53 to 41 percent was  the 150th poll listed by Real Clear Politics during President Obama’s second term to find Obamacare unpopular. The number that found it to be popular was zero.

"The mainstream media, meanwhile, seemingly operating in an alternative universe, think that Obamacare is here to stay. Politico writes, “Deep down, Republicans who know health care know the truth: Obamacare isn’t about to be repealed. .  .  . [T]hink of the last time a major social program was repealed after three enrollment seasons, with millions of people getting benefits. That’s right—it hasn’t happened.”

"But to conclude that the track record of major social programs indicates that Obamacare cannot be repealed requires historical cluelessness. Social Security passed the House with 92 percent of the vote (365 in favor, 30 opposed). Medicare and Medicaid (which were voted on together) passed the House with 73 percent of the vote (307 in favor, 116 opposed). Obamacare passed the House with 50.8 percent of the vote (219 in favor, 212 opposed). Moreover, support for Social Security, Medicare, and Medicaid was bipartisan. House Republicans backed Social Security by 81 to 15. House Republicans backed Medicare and Medicaid by 70 to 68. House Republicans opposed Obamacare by 178 to 0.

"There’s a big difference between major social programs that passed the House with majority support from both parties and majority support from the citizenry and a major social program passed by the House over the unanimous opposition of one of the two parties and the clear opposition of a majority of the citizenry—opposition that (at least in the case of the citizenry) remains every bit as strong an Olympiad later."

And below is Anderson's conclusion. I've left out a wealth of information-rich material that explains why Anderson believes the election on November 4, 2014 will give American voters a second opportunity to tell America's political class just what they want done with the Patient Protection and Affordable Care Act, aka ObamaCare.

"Obama and his Democratic allies said Obamacare would be good for the economy. But the 62 months since Obama launched the Obamacare debate in earnest (with his speech to the American Medical Association in June 2009) have been the 62 worst months in the past 30 years in terms of the percentage of eligible Americans who are working. That’s according to the Bureau of Labor Statistics’ own numbers for the employment-population ratio.

And that’s without even mentioning Obamacare’s unprecedented individual mandate—long its most unpopular provision—which compels private American citizens, for the first time in U.S. history, to buy a product or service of the federal government’s choosing. It’s without mentioning the Independent Payment Advisory Board, Obamacare’s unelected, quasi-legislative, largely unaccountable, and blatantly unconstitutional Medicare rationing arm. And it’s without mentioning Obamacare’s $700 billion raid on Medicare, its war on religious charities, or the dangerous presidential lawlessness it has spawned.

"What the American people have wanted for more than four years is to repeal Obamacare and replace it with a conservative alternative. That’s what they’ll tell Washington once again this November 4."

You can read the entire Weekly Standard article here.

Readers of Growls who are concerned about ObamaCare, or, if you prefer, the Patient Protection and Affordable Care Act are urged to vote on November 4, 2014 (the deadline to register to vote ended October 14, 2014). In addition, readers are urged to contact their member of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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.

October 17, 2014

And How Much Will ObamaCare Cost? More Than Expected!

Earlier this month, the Washington Post's Anna Gorman and Julie Appleby reported the states are getting set for the second enrollment period, set to start in mid-November.

With the national debt now expected to reach $18 trillion according to CNS News, it's worth asking what the Affordable Care Act (aka ObamaCare) is expected to cost.

In a timely article, posted today at Reason magazine, Jason Keisling and Nick Gillespie try to answer that question. The provide a series of efforts at estimating the cost. Their bottom line is that it will cost more than expected. According to Keiesling and Gillespie:

"As the nation prepares for the second enrollment period under The Affordable Care Act in November, there is officially no way of figuring out what Obamacare is going to do to federal deficits compared to the estimates used to push the program through Congress.

"Back in 2009, it was really important to President Obama that people understand he would not "sign a plan that adds one dime to our deficits—either now or in the future. Period." He sold the plan as costing about $938 billion in its first decade of operation (2010 through 2019) but saving about $143 billion overall because of the various taxes and other revenue it raised. A 2012 Congressional Budget Office (CBO) report figured that Obamacare would shave $109 billion off the deficit between 2013 and 2022.

"This past June, however, the CBO said it will no longer try to estimate the law's effects on the deficit. There have been too many delays, postponements, modifications, you name it, to the original bill. "Isolating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the Affordable Care Act is not possible," the CBO concluded.

"So what's going on? The deficit for fiscal year 2014, which ended on September 30, came in at "just" $483 billion and 2.8 percent of GDP, the lowest figures in years. President Obama was quick to say it was because of his signature health-care reform plan. "Healthcare has long been the single biggest driver of America’s future deficits," reports The Hill. "Healthcare is now the single biggest factor driving those deficits down."

"At the same time, the CBO (and everyone else) expects deficits to start growing again in fiscal 2016, so it's a bit premature to break out the bubbly just yet. Senate Republicans have just released a report based on CBO data claiming that Obamacare will end up adding $300 billion to federal deficits between 2015 and 2024."

About that Senate Republicans report, they write (see also separate Reason article):

"The Republican report is ultimately a political document, so its methods and conclusions deserve to be taken with more than a few grains of salt. But if past experience with massive government-run health care programs is any indicator, the odds are high that Obamacare will end up costing way more than it was supposed to.

"Indeed, all signs suggest that overall health-care spending, including the government's already-large share, will keep growing over the next decade."

Keisling and Gillespie point out the the NY Times has reported "that by 2023, all spending on health care will equal 19.3 percent of GDP, which is 'two percentage points more than last year.'" So, according to the two Reason reporters, "whether it's through taxes, increased premiums, or out-of-pocket costs, we'll be paying more for health care in the coming years."

They conclude, saying, "Government-run health-care programs have a track record of costing more than advertised." In addition, they provide three examples of how the cost of three health care programs ballooned from their initial estimates:

  • RomneyCare in Massachusetts. "Initial cost estimates came in at $472 million while actual costs were closer to $628 million for an error ratio of 1.2:1."
  • Medicare. "In 1967, Congress estimated that the nation's single-payer system for the elderly, Medicare, would cost $12 billion in 1990. The actual price tag was $110 billion, for an error ratio on 9.17:1."
  • Medicaid. "1987, Congress figured DSH payments would be less than $1 billion in 1991. Instead, they totaled $17 billion, creating an error ratio of 17:1."

Readers of Growls who are concerned about the ill effects (pun intended) of the passage and implementation of the so-called Affordable Care Act, i.e, ObamaCare, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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.

UPDATE (10/18/14): We growled on June 11, 2014 in response to the CBO giving up on projecting the long-term cost of Obamacare.

October 16, 2014

The Tax Burden on Your Cell Phone

Looking at your cell phone bill is no fun, but it would be a lot worse if you lived in the State of Washington. And 91% of Americans have a cell phone.

The Tax Foundation's Scott Mackey and Joseph Henchman published a study of cell phone taxation in 2014 (Fiscal Fact No. 441, October 8, 2014). Here's a brief excerpt from the study's executive summary:

"Cell phones are increasingly the sole means of communication and connectivity for many Americans, particularly those struggling to overcome poverty. At the end of 2013, according to surveys by the Centers for Disease Control, over 56 percent of all poor adults had only wireless service, and nearly 40 percent of all adults were wireless only.[1] Excessive taxes and fees, especially the regressive per line taxes like those imposed in Chicago and Baltimore, impose a disproportionate burden on low-income consumers.

"In September 2014, Chicago increased its 911 fee from $2.50 per month per line to $3.90 per month per line. The stated purpose of this tax increase, according to published reports, is to avoid the need for a property tax increase. Fixed per-line charges have a disproportionate impact on so-called “family share” plans, where multiple lines are billed on a single account. For example, the Chicago fee hike will increase the effective rate for consumers on some four-line plans to over 35 percent. Chicago joins Baltimore, Omaha, and New York City as cities with effective tax rates in excess of 25 percent of the customer bill.

"Congress is currently considering legislation to extend the federal moratorium on state and local taxes on Internet access. The taxes described in this report are, for the most part, imposed on wireless voice and other taxable services, not wireless Internet access. Should the moratorium not be extended by Congress, the excessive wireless taxes discussed in this report could be imposed on wireless Internet access. This could add significantly to the tax burden on wireless consumers."

Here are the key findings from their study:

  • Americans pay an average of 17.05 percent in combined federal, state, and local tax and fees on wireless service. This is comprised of a 5.82 percent federal rate and an average 11.23 percent state-local tax rate. (emphasis added)
    The five states with the highest state-local rates are: Washington State (18.6 percent), Nebraska (18.48 percent), New York (17.74 percent), Florida (16.55 percent), and Illinois (15.81 percent).
  • The five states with the lowest state-local rates are: Oregon (1.76 percent), Nevada (1.86 percent), Idaho (2.62 percent), Montana (6.00 percent), and West Virginia (6.15 percent).
  • Four cities—Chicago, Baltimore, Omaha, and New York City—have effective tax rates in excess of 25 percent of the customer bill.
  • The average rates of taxes and fees on wireless telephone services are more than two times higher than the average sales tax rates that apply to most other taxable goods and services.
  • Excessive taxes on wireless consumers disproportionately impacts poorer families.

Virginia ranks #44 on taxing cell phones with the Commonwealth having a combined rate of 11.97% (state/local - 6.54%; federal - 5.82%). Washington State ranks #1 with a combined rate of 24.42% while its neighbor Oregon ranks last -- adding on a state-local rate of 1,76% to the 5.82% federal rate.

The following chart compares cell phone tax rates to sale tax rates.

At the National Taxpayers Union blog on Friday, October 10, Government Bytes, Lee Schalk adds:

"Once again, the Tax Foundation has created an immensely helpful resource that illustrates just how lawmakers are able to tax us – sometimes without our knowledge. At NTU, we won’t stop beating the drum for lower tax rates across the board, including these stealthy wireless taxes. Be sure to share with your friends – this certainly isn’t a tax issue that Americans are very familiar with. We need to spread the word!"

Readers of Growls who are concerned about the tax burden imposed by government are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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. And thanks to the Tax Foundation's Mr. Scott and Mr. Henchman.

October 15, 2014

More on Arlington County's Per Capita Spending

On Wednesday of last week, we growled about a single number from the Virginia Auditor of Public Accounts' (VAPA) most recent comparative report of revenues and expenditures, which was the maintenance and operations expenditures that appears in Exhibit A, pages 1-9, and looked at how Arlington County compared to it's Northern Virginia neighbors.

That number is a "summary total of expenditures for the operation of general government, e.g., the courts, public safety, public works, health and welfare, education, parks and recreation, and community development. In first place was Falls Church with a total of 5,535.98 for maintenance and operations. Arlington County ranked second with 4,622.86 followed by Fairfax County 4,031.68. The state average of all counties for FY 2013, incidentally, was $3,025.44.

Today, we'll drill down into that summary number, and take a look at several departments (numbers come from exhibit C, pages 38-45 of the print edition). For example:

  • Public Safety, which includes the police and fire departments. For FY 2013, which ended June 30, 2013, Arlington’s per capita spending was $851.33 (191.93% of the state average for counties). Arlington’s spending was exceeded by both Alexandria ($893.88) and Falls Church ($854.68). Alexandria’s per capita spending was 152.57% of the average for all Virginia cities. Among it’s Northern Virginia neighboring counties, the next highest average was Fairfax County’s of $546.41 (123.19% of all Virginia counties).
  • Public Works. Includes sanitation, waste removal, and maintenance of general buildings and grounds. Arlington County’s per capita spending was $345.42 (294.06% of all Virginia counties), but it was exceed by Falls Church’s per capita spending of $480.04 (182.00% of Virginia’s cities). Among Northern Virginia counties, the next highest to Arlington was Fairfax County with a per capita spending of $156.45 (133.18% of all Virginia cities).
  • Health and Welfare. Arlington County’s per capita spending far exceeded all of its neighbors in Northern Virginia with per capita spending of $706.38 (219.06% of all Virginia counties). Alexandria’s per capita spending was $652.03 (182.19% of all Virginia cities) while the next highest county is Fairfax County -- $472.85 (146.64%).
  • Parks and Recreation. Includes parks, recreation, cultural enrichment and libraries. Arlington County significantly trailed Falls Church in per capita spending, which spent $358.86 (252.73% of all Virginia cities) although Arlington County’s per capita spending of $$259.77 (316.35% of all Virginia counties) significantly exceeded the next county, i.e., Loudoun County, which spent $138.20 per capita (168.30%).

If you believe, as we do, that a top priority of the Arlington County Board should be to spend tax dollars in an efficient and economical manner, the Board should use the numbers from the VAPA's comparative report as a base to look at the efficiency and economy of each and every county operation or program. We understand there are factors that may justify increased spending, e.g., the county's higher daytime population. Likewise, the county's population density may result in a higher per capita spending for parks and recreation.

However, many of the per capita spending figures for individual departments within Arlington County's government suggest there is significant opportunity for reducing the tax burden on Arlington County taxpayers. Growls readers who are concerned that Arlington County spending may be far too high are urged to e-mail the Arlington County Board by clicking-on the following hotlinks, or just call them:

  • Call the Board office at (703) 228-3130

And tell them ACTA sent you!

October 14, 2014

The Klieg Light Effect of Those Audits

As we've growled recently -- on October 10, October 11, and October 13, 2014 -- an active and independent audit function can act as  a powerful disinfectant when the auditor's klieg lights are turned on inefficient, uneconomical, or ineffective government.

Now comes news from the Virginia Bureau of Watchdog.org that shows the value of an independent audit function. As reported today by Katie Watson:

"At least one of Virginia’s 23 community colleges has some serious shaping up to do, a recent state audit revealed.

"Northern Virginia Community College paid $1.3 million in hourly rates of up to $290 to a firm it didn’t even hold accountable to make good on its contracts, an audit from the state’s Auditor of Public Accounts on the community college system reveals.

"“We did have a couple of findings this year that actually led us to potential waste where funds maybe could have been spent in a better manner,” said Zachary Borgerding, audit director over reporting and standards. (emphasis added)

"Northern Virginia Community College, which has multiple campuses throughout the suburbs of Washington, D.C., entered into seven contracts totaling $1.3 million to the major consulting firm ARCADIS for architectural and engineering consulting, but used the firm to manage noncapital projects in a way the audit said went beyond the parameters of community college policy. Specifically, the college paid ARCADIS’ water division, Malcolm Pirnie, which was a separate company until ARCADIS acquired it in 2009, according to Borgerding.

"The school didn’t bat an eye at paying ARCADIS hourly rates ranging $133 to $290 an hour at one point, “significantly higher than benchmark firms performing similar work at NVCC,” the audit said. NVCC didn’t assign an administrator to review contracts, and invoices were approved for payment without any review as to whether the firm had actually made good on its contract.

"On top of that, Arcadis was supposed to submit weekly reports summarizing activity for the week, but didn’t — for at least two years."

You can read the remainder of Ms. Watson's report.

Arlington County taxpayers have a direct, though small, interest in the results of the audit of Virginia's community colleges since the Arlington County Board appropriated over $30,000 to Northern Virginia Community College when they approved both the FY 2014 and FY 2015 adopted budgets. According to the FY 2015 adopted budget, more than half of the amount is a "contribution to NVCC" and "supports maintenance and operational costs not financed by General Assembly appropriations." There are also "funds (to) support scholarships and tuition assistance for part-time students."

Good work, Katie Watson!

October 13, 2014

Audit Uncovers Abuse of County Credit Cards in Iowa

Paul Brennan of the Watchdog.org's Iowa Bureau reported on Friday, October 10, that a state audit found that county credit cards were being misused. Here's an excerpt from his report:

"Last year, then Monona County Auditor Brooke Kuhlmann made news by becoming the only county auditor in Iowa ever arrested for possession of methamphetamine.

"Now she’s making news again. This time she’s accused of using taxpayer money for personal expenses during her tenure as county auditor.

"A new report from the Office of the Iowa State Auditor details how allegedly Kuhlmann used county credit cards for everything from casino visits to purchases at the iTunes store.

"The report identified more than $7,000 in inappropriate personal use of county credit cards. There were also more than $1,000 in late fees on those card because Kuhlmann did not make payments on time, the auditor said in the report.

"According to the report, Kuhlmann was responsible for a total of $8,217 in appropriate purchases and late fees.

"As auditor, Kuhlmann was the one responsible for monitoring the county’s spending for any irregularities.

"County officials discovered the improper credit card use following Kuhlmann’s arrest for possession of methamphetamine and drug paraphernalia in July 2013.

“Up until then, everything seemed fine,” Monona County Board of Supervisors Chairman Tim Jessen told Iowa Watchdog. “There was no sign of anything going wrong.”

Two things from Brennan's report stand out. The first is the brazenness of the abuse since it was committed by the auditor whose very job it was to provide the oversight, and the second is the admission by the board's chairman of there being "no sign of anything going wrong.”

Just two weeks ago, on September 29, 2014, we growled about the abuse of credit cards at the federal General Services Administration. Included was information about an audit of procurement cards conducted by Fairfax County internal auditors.

Read the remainder of Mr. Brennan's report here.

In another report by Mr. Brennan last week that involved a local jurisdiction in Iowa, albeit a part of the state's Department of Agriculture and Land Stewardship, he wrote that "lax oversight" at the Mahaska County Soil and Water Conservation District "might have drained more than $279,000 out of the district’s bank account."

About that lax oversight, Mr. Brennan wrote:

" . . . Warren Jenkins has a simple answer. Her bosses made it easy.

“The commissioners of the conservation district provided no oversight,” Jenkins, chief deputy auditor of the State of Iowa, told Iowa Watchdog.

“They did not look at the bank statements. They did not look at any of the transaction activity.”

"Like the other 99 soil and water conservation districts in the state, the district is part of the Iowa Department of Agriculture and Land Stewardship’s Division of Soil Conservation, but it is governed by a board of five commissioners. The commissioners are elected officials who serve four-year terms.

"As the secretary of soil and water, Strasser was an employee of the IDALS but was supposed to be supervised by the district’s commissioners.

In addition to her other clerical duties, Strasser was in charge of the district’s bookkeeping.

"A new report from the Office of the Iowa State Auditor details how Strasser, hired in 2006, might have started misappropriating district funds in 2007.

"Strasser’s activities did not come to light until 2013, when it was discovered the district no longer had enough money in its bank account to cover checks it had issued."

The remainer of Brennan's report is here.

As we growled last Friday, October 10, Arlington County has only a putative internal audit function although it has a general fund budget of more than $1.1 billion. That sure seems like a lot of temptation in that honey pot.

Growls readers who are concerned that Arlington County lacks a strong and dynamic internal audit function are urged to e-mail the Arlington County Board by clicking-on the following hotlinks, or just call them:

  • Call the Board office at (703) 228-3130

And tell them ACTA sent you!

October 12, 2014

A Thought on the Tea Party Movement

"One of the curious aspects of the Tea Party’s emergence during the past four years is the extent to which the mainstream media have fostered the idea that this political phenomenon represents a kind of radicalism. Certainly, some politicians of the so-called Tea Party have tossed out ideas and expressions that have been silly and warped. Does that mean, though, that the Tea Party, as a broad political movement, is radical?

"The answer is no. The Tea Party is a reactive movement, aimed at protecting the political mainstream from radical ideas, initiatives and policies of the left. Indeed, a review of American politics over, say, the last 50 years reveals that, to the extent America has been grappling with radicalism, it has been coming from the left. Then, as these ideas have gained traction through the agitations of the country’s liberal establishment, that establishment promptly labels those who resist as radicals."

~ Robert W. Merry, Political Editor, The National Interest

Source: His September 1, 2014 Commentary Column at the Washington Times.

October 11, 2014

$486 Million of U.S. Airplanes = $32,000 in Scrap Metal

Ain't gummit wunnerful?

According to Chuck Ross of the Daily Caller yesterday, "The Department of Defense converted $486 million worth of airplanes into scrap metal which it sold to an Afghan construction company for $32,000, according to a government watchdog that tracks spending in Afghanistan."

Ross then provides some of the nitty-gritty details:

"That poor return on investment is documented in two letters sent by John Sopko, the Special Inspector General for Afghan Reconstruction, to Defense Department officials, including Sec. Chuck Hagel and Air Force Secretary Deborah Lee James.

"The twenty G222 planes, which were manufactured in Italy and are used to transport equipment and troops, were not put to use in the Afghan theatre because they “could not meet operational requirements,” Sopko reported.

"Purchased in 2008, the planes were “grounded” in May 2013 “after sustained, serious performance, maintenance, and spare parts problems.”

"Instead of finding another use for them, sixteen of the airplanes were transported to a remote corner of the Kabul airport and sold by the Defense Logistics Agency for scrap at a price of six cents per pound.

"That worked out to $32,000 worth of metal, which was purchased by an Afghan construction company."

The waste of taxpayers money could be worse since four of the planes "are currently at Ramstein Air Base in Germany." There's no mention of whether they have been used.

This potential waste became known on December 10, 2013, when the Washington Examiner's Michal Conger reported:

"Nearly $500 million and five years after the Department of Defense purchased 20 refurbished transport aircraft for the Afghan Air Force, the planes sit idle in Kandahar.

"Now the Special Inspector General for Afghanistan Reconstruction wants to know what went wrong.

"The Pentagon ended the program to support the Italian-made G222 planes after it became clear they were being poorly managed, underused and racking up extra costs in spare parts.

"The DOD inspector general encouraged officials to reconsider the program in January 2013 before spending another $200 million on spare parts "for an aircraft that does not meet operational requirements, may be cost-prohibitive to fly, and for which several critical spare parts to sustain the G222 are unavailable." The $200 million was be on top of another $486 million the Pentagon was already obligated for, the IG said."

The story has thankfully gotten a great deal of attention by the MSM, including the Washington Post yesterday and USA Today, also yesterday. In the Wall Street Journal on Thursday ($ - behind paywall), the planes were referred to as "a fleet of Italian-built C-27A cargo planes."

The Business Insider was more cranky in reporting this story on Thursday, October 9. Their headline pretty much said it all: "This One $486 Million Blunder In Afghanistan Sums Up The Disaster Of Military Spending." The story included these comments:

"In a memo about "lessons learned" from the debacle, the Pentagon Inspector General for Afghanistan reconstruction project wrote that the Department of Defense had found problems with the G222 program in January 2013. The project's managing office and NATO's Afghanistan training mission command "did not properly manage the effort to obtain the spare parts needed to keep the aircraft flightworthy."

"The program ran a $486.1 million tag, but the aircraft logged only 234 of the 4,500 required hours from January through September 2012.

"Even then, at that point the aircraft were at least still physically in existence, even if they weren't really being used."

Readers of Growls who are concerned about the waste of taxpayers dollars by any government agency -- whether it's the Department of Defense or a civilian agncy -- are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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.

October 10, 2014

Kudos to the Fairfax County School Board

According to a press release today, the Fairfax County School Board has chosen to "strengthen" the district's audit functions. Here are the contents:

"The Fairfax County School Board has created an auditor general position, added a fourth member to the Audit Committee, and approved the FY 2015 audit plan.  The action was taken at the Board’s business meeting on October 9.

“The School Board’s actions demonstrate our commitment to greater transparency, program efficiency, and accountability to our community,” said Tammy Derenak Kaufax, School Board Chair.

"The Board voted unanimously to add a fourth School Board member to the membership of the Audit Committee.  The committee oversees the office of internal audit and conducts an annual evaluation of the School Board auditor.  It also reviews the annual audit plan and audit budget and submits a recommendation to the full School Board.

"The Board also decided to add a new auditor general position in the Internal Audit Office. This position will report to the School Board through the School Board Audit Committee and will be responsible for implementing a risk-based audit plan. The auditor general will direct audits of Fairfax County Public Schools’ offices, departments, schools, and programs, and will receive general direction from the Board based on the audit plan.

"The Board approved the FY 2015 internal audit work plan, which provides guidelines for contract management audits; business process-turnover audits; and time and attendance accounting management, systems, and practices audits.  It also provides guidelines for auditing staff professional development and other administrative activities."

Details about the Fairfax County School Board's auditor general can be found in the documents for agenda items 4.01. 4.02, and 4.03 on the October 9 regular school board meeting's agenda. Following is a list of several "typical tasks" to be performed:

  • Directs formal division-wide risk assessments to focus audit resources on high risk areas;
  • Supervises the appraisal of division activities in terms of efficiency, effectiveness, and compliance with applicable laws, regulations, procedures, and good management practices;
  • Prepares an annual audit work plan that identifies and prioritizes areas to be examined;
  • Prepares assessments of the financial position of funds;
  • Investigates and checks for legal compliance of expenditures and proper handling of funds;

So once again, the elected officials in Fairfax County have surpassed their elected colleagues in Arlington County. And even here in Arlington County, there remains a wide divide between the County Board and School Board. We growled on April 5, 2014 after the Arlington School Board hired an internal auditor, We also growled on August 4, 2014 when it was reported that Arlington County hired an internal auditor although "word on the street" is that he or she (the county would not even specific the person's gender) has had second thoughts on being employed by Arlington County.

Heck, Arlington County taxpayers won't even know until January 2015 on whether there will even be an independent and dynamic watchdog. That is when the Board is scheduled to receive from the Manager "an assessment of whether the audit function should be independent and to whom it should report," according to Note 33 that accompanied the FY 2015 Adopted Budget.

So kudos to the Fairfax County School Board for strengthening the school district's internal audit function.

October 09, 2014

Thoughts about the Minimum Wage

". . . The (federal government) can mandate a higher wage, but some jobs don’t produce enough economic value to bear the increase. If government could transform unskilled entry-level positions into middle-income jobs, the Soviet Union would be today’s dominant world economy. Spain and Greece would be thriving. (emphasis added)

"But here’s what middle-class business owners, who live in the real world, will do when faced with a 40% increase in labor costs. They will cut jobs and rely more on technology. Such changes are already happening in banks, gas stations, grocery stores, airports and, more recently, restaurants. Almost every restaurant chain in the country from Applebee’s to McDonald’s is testing or already implementing automated ordering with tablets or kiosks.

"The only other option is to raise prices. Yet it would be near-impossible to increase prices enough to offset the wage hike, particularly given today’s economic conditions. More important, price increases burden consumers, particularly those with low incomes who are supposed to be helped by a minimum-wage increase.

"The better policy would be to encourage the private sector to create more middle-income jobs. North Dakota enjoys the lowest unemployment rate in the country, at 2.8%, thanks to the state’s energy boom. The state minimum wage is $7.25, but entry-level employees typically make $12 to $15 an hour. This happened because the state’s dynamic economy created a demand for labor and supports increased pricing to offset increased wages."

~ Andy Puzder, CEO of CKE Restaurants

Source: His op-ed on the editorial pages of the Monday, October 6, 2014 Wall Street Journal ($ - behind paywall) in which he argues the motive for pushing a 40% increase in the minimum wage, i.e., a 40% increase in labor costs, is "political, not compassionate."  CKE Restaurants' brands include Hardee's and Carl's Jr.

October 08, 2014

Arlington Virginia Ranks 2nd in NoVa's Per Capita Spending

According to the website of the Virginia Auditor of Public Accounts, "All Virginia counties, cities, towns with a population of 3,500 or more, and towns operating a separate school division are required to submit this data to the Auditor of Public Accounts annually. The data presented represents the local government operations for the general government and enterprise activities."

The Comparative Report of Local Government Revenue ad Expenditures for the year ended June 30, 2013, i.e., for Fiscal Year 2013, is now available at the Virginia Auditor of Public Accounts' website. (The latest data available) Today, we'll take a look at just one number, -- maintenance and operations expenditures -- which appears in Exhibit A, pages 1-9. This is the "summary total of expenditures for the operation of general government, e.g., the courts, public safety, public works, health and welfare, education, parks and recreation, and community development.

The following numbers represent the per capita spending for "maintenance and operations expenditures" for the four counties and two cities of Northern Virginia. The second number is the jurisdiction's percentage of the average spending, i.e., of cities or counties.

                         Per Capita          % of Average

Alexandria          $4,162.30             131.96%

Falls Church         5,535.98              175.51%

Arlington              4,622.86              152.80%

Fairfax County      4,031.68              133.26%

Loudoun                3,815.98              126.13%

Prince William        3,316.27             109.61%

State Avg (City)      3,154.15              100.0%

State Avg (Cty)       3,025.44              100.0%

These numbers can be useful in framing questions for Arlington County Board candidates. Partisans as well as many news reporters like to put candidates on the spot by asking them which local government program should be cut. Knowing the details of per capita spending, and how much neighboring jurisdictions spend on similar programs enable candidates to provide context to their responses.

In a few days, we'll growl about the details of each of those figures, including per capita spending numbers for judicial administration, public safety, public works, health and welfare, and parks and recreation.

October 07, 2014

Defense Spending Rolls, but Northern Virginia Economy Sags

At the Watchdog.org site today, Virginia Bureau chief Kenric Ward reports "the military-industrial complex continues to roll — even as northern Virginia’s defense-dependent economy struggles." He writes:

"John Hanlin has seen the future in northern Virginia, and it doesn’t work.

"The former procurement manager for a private defense contractor was laid off as the Obama administration moved more work back into the bowels of the federal government.

“It’s taken five federal employees with a combined payroll of $1 million to do what I did at $100,000,” Hanlin told Watchdog.org in an interview.

“The government services culture is not work-oriented,” he observed.

"Hanlin’s experience illustrates how the military-industrial complex continues to roll — even as northern Virginia’s defense-dependent economy struggles.

"Despite Gov. Terry McAuliffe’s bullish pronouncements about job creation in Virginia, the outlook for Nova isn’t so robust. While the region’s overall employment rate has roughly flat-lined, offices are emptying.

"Vacancy rates of 15 to 20 percent are reported in Crystal City and some other areas of Arlington and Fairfax counties.

"Stephen Fuller, director of George Mason University’s Center for Regional Analysis, said in a speech this summer: “We’re moving things around to give a sense that things are just fine.

Veronique deRugy, policy analyst at GMU’s Mercatus Center, said the “situation is deteriorating.”

“The fundamental problem is that you had creation of wealth based on the federal government. That’s messed up,” deRugy told Watchdog.

DeRugy said the federal government cannot fix itself, or rein in spending, because its decision-making process is inherently political and outdated."

Read the remainder at Watchdog.org.

Ward writes that any economic gains will be costly to taxpayers. As he quotes Veronique deRugy:

“The Defense Department doesn’t know where the money is going. There are no clean audits. Politicians are spending money based on campaign contributions,” she said."

Readers of Growls who are concerned about the need for transparency in defense spending, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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.

October 06, 2014

School Enrollment Up 5.2%. The Cost to Taxpayers?

The Arlington Sun Gazette's Scott McCaffrey reported this morning that "Arlington (public) schools see big enrollment bump, with more students on way," writing:

"Arlington school enrollment this fall increased by the highest percentage in decades, and could surpass the 25,000 mark over the coming year on its way to what school leaders predict ultimately will be 30,000 students – and a huge new cost for county taxpayers."

The specifics of McCaffrey's reporting included:

"Arlington Public Schools’ official student count of 24,529 for the 2014-15 school year was released Oct. 6. It’s the figure – based on enrollment as of Sept. 30 – that will be submitted to state officials.

"The 2014-15 figure is up 5.2 percent from the previous year, an increase of more than 1,200 students and one that, despite the focus on growth at the elementary-school level, was significant at all levels:

  • Pre-kindergarten enrollment was up 68 students, or 6.5 percent.
  • Elementary-school enrollment (kindergarten to fifth grade) was up 584 students, or 5 percent.
  • Middle-school enrollment (grades 6 to 8) was up 251 students, or 5.4 percent.
  • High-school enrollment (grades 9 to 12) was up 310 students, or 5.3 percent.

"The final count of 24,529 is 1.3 percent higher than school officials had projected, and does not include special-education and limited-English students outside normal school years."

About the "huge new cost for county taxpayers," McCaffrey writes:

"In rough terms, the arrival of 6,000 additional students in coming years equates to a need for about $100 million more – per year – to educate them.

"Where is the money going to come from? Elected officials are still trying to figure that out.

“We’re putting on our creative hats,” County Board member Walter Tejada said."

Since when does raising taxes require a progressive politician to put on their creative hats?

Finally, McCaffrey offers this astute observation:

"In a broader context, the ongoing increase in student population could bring the School Board into more open conflict with the County Board over spending priorities, something that has been common in jurisdictions across Northern Virginia in recent years.

"The County Board supplies the bulk of what has become a half-billion-dollar annual school budget. Tejada suggested the school system will not be shortchanged even if it puts pressure on other parts of the county government’s budget."

The Arlington Public Schools press release, including links to two tables of school enrollment numbers, is available.

Growls readers who are interested in the effects of APS enrollment on the county budget and their real estate taxes can e-mail their questions and comments to the County and School Boards by clicking-on the following hotlinks, or just call them:

And tell them ACTA sent you!

October 05, 2014

It's Official: No Global Warming for 18 Years 1 Month

In a special report to Climate Depot yesterday, Britain's Christopher Monckton of Brenchley provides an update on global temperatures. Here's the introduction to Monckton's report:

"The RSS monthly satellite global temperature anomaly for September 2014 is in, and the Great Pause is now two months longer than it was last month. Would this year’s el Niño bite soon enough to stop the psychologically-significant 18-year threshold from being crossed? The official answer is No.

"Globally, September was scarcely warmer than August, which was itself some distance below the 18-year trend-line. Therefore, taking the least-squares linear-regression trend on the RSS satellite monthly global mean surface temperature anomalies, there has now been no global warming for 18 years 1 month.

"Dr Benny Peiser, our good friend at the Global Warming Policy Foundation in the UK, had anticipated the official crossing of the 18-year threshold by a day or two with an interesting note circulated to supporters on the ever-lengthening period without any global warming, and featuring our 17-years-11-months graph from last month.

"The Great Pause is the longest continuous period without any warming in the global instrumental temperature record since the satellites first watched in 1979. It has endured for a little over half the satellite temperature record. Yet the Pause coincides with a continuing, rapid increase in atmospheric CO2 concentration."

The following chart is one of several which Monckton provides in his report:

Monckton warns the so-called Great Paul may end this winter, explaining:

"The Great Pause may well come to an end by this winter. An el Niño event is underway and would normally peak during the northern-hemisphere winter. There is too little information to say how much temporary warming it will cause, though. The temperature spikes of the 1998, 2007, and 2010 el Niños are evident in Figs. 1-4.

"El Niños occur about every three or four years, though no one is entirely sure what triggers them. They cause a temporary spike in temperature, often followed by a sharp drop during the la Niña phase, as can be seen in 1999, 2008, and 2011-2012, where there was a “double-dip” la Niña that is one of the excuses for the Pause.

"The ratio of el Niños to la Niñas tends to fall during the 30-year negative or cooling phases of the Pacific Decadal Oscillation, the latest of which began in late 2001. So, though the Pause may pause or even shorten for a few months at the turn of the year, it may well resume late in 2015 . Either way, it is ever clearer that global warming has not been happening at anything like the rate predicted by the climate models, and is not at all likely to occur even at the much-reduced rate now predicted. There could be as little as 1 Cº global warming this century, not the 3-4 Cº predicted by the IPCC."

To appreciate Monckton's warming of why the Great Pause may come to an end because of an el Nino, see this chart at Dr. Roy Spencer's  website. Note the temperature spike that resulted from the 1998 el Nino warming.

Readers are encouraged to read Monckton's entire article although admittedly a bit technical. Readers of Growls who wish to gain a foothold in understanding global warming (aka, climate change, aka climate disruption) may want to begin by reading "Unstoppable Global Warming: Every 1,500 Years" by Fred S. Singer, which we recommended in an October 16, 2011 Growls.

We've growled about global warming several times (search Growls).

October 04, 2014

A Thought On Safeguarding Liberty

"'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded."

~ Friedrich August von Hayek

Source: BrainyQuote.com

October 03, 2014

Ah, the Incompetence of Gummint Welfare Administrators

On Monday, September 29, 2014, the Washington Examiner's Luke Rosiak reported that "Obamaphone use grew 100-fold in 3 years in Md. to twice the number eligible" Here's the background from Rosiak's reporting:

"Six-hundred-and-forty-five thousand Maryland residents had so-called Obamaphones in 2012 — one hundred times as many people as there were in 2009, and double the number in that state who are supposed to be eligible for the program based on their income.

"The program, officially called Lifeline, is run by the Federal Communications Commission and imposes hefty fees on every paying customer to give free phone service to low-income Americans.

"The profits to telecom companies from the free, government-provided phone service are so great that in Nebraska alone, 51 corporations, many of them who are not even traditional phone companies building infrastructure and attracting paying subscribers, fought for a piece of the pie.

"That structure allows advocates to argue that it’s not a tax and doesn’t affect the budget, and lessens the extent to which the FCC is beholden to Congress.

"Officials admitted Maryland's 10,000 percent increase over three years in a little-noticed hearing before the House's Subcommittee on Communications and Technology in April last year."

Rosiak then goes on to prove the truth of President Ronald Reagan's assertion that "(n)o government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" (BrainyQuote.com). According to Rosiak:

"Chicago area congressman Bobby Rush said it “infuriates” him that his colleagues were concerned by the rapid rise in Obamaphone usage.

"He said it should be called a “Bush-Obamaphone” because the program was expanded from land-lines to cell phones under President Bush, though the 100-fold increase took place during Obama’s presidency.

“There are some letters that I would like to enter into the record... we have a statement from the NAACP, the Leadership Council on Civil Rights and Human Rights, the United Church of Christ,” he said.

"Then the committee heard from a lobbyist for CTIA, the Wireless Association, who called the program “critical.”

"The dynamic is called “Bootleggers and Baptists,” according to Adam Smith and Bruce Yandle, authors of a new book by that title, who say that among the most successful tactics for gaining corporate welfare is when politically-connected industries that know the levers of power team up with civic groups making emotional or moral appeals, providing political cover.

"It’s a reference to when Baptists wanted no alcohol sold on Sundays, and bootleggers helped grease the wheels because the liquor stores being closed meant more profits for them.

"One of the primary providers of Obamaphone service is TracFone, which is owned by Obama fundraiser Carlos Slim."

In a follow-up yesterday, Rosiak reports:

"TracFone Wireless, the largest Obamaphone vendor, receives more than $9 per line from the federal government for each phone it distributes to the poor, but sells similar service to the general public for less than $7.

"TracFone receives $9.25 per line from the federal government for every subscriber it signs up under the Federal Communications Commission's Lifeline program, which uses fees from paying customers to subsidize poor Americans' phones. The firm has refused to tell regulators how much it actually costs to provide service, and the industry paints its involvement in the program as being altruistic.

"But one clue about how much it costs is out in the open: Anyone can buy a similar phone line on TracFone’s website for under $7 per month.

"That's even though an entity negotiating on behalf of an enormous group of people would generally get a better rate and thus not have to pay more than what an individual would be charged.

"The reimbursement rate was set based on the average cost of cell phone service years ago and is intended to subsidize the cost. Providers are not required to make Lifeline service free."

Is this a great country, or what? And it's not just the incompetence of those gummint welfare administrators that results in much of the waste, fraud and abuse of taxpayers dollars. It's the many politicians, too, who seem to think that taxpayers' money actually belongs to the government.

For the record, we've growled about aspects of the so-called Lifeline program on three separate occasions in 2013.

  • First, on March 2, we growled about cell phones, taxes and the abuse of taxpayers.
  • Then on August 25, we growled about a report in National Review Online by Jillian Melchior in which she admitted receiving three shiny cellphones although they "should never have fallen into (her) hands." Included in that Growls was a suggestion by Nolan Finley in the Detroit News that before defunding ObamaCare, Congress should first defund Obamaphones.
  • Finally, almost one year ago on October 24, 2013, we growled after Citizens Against Government Waste named Rep. Doris Matsui (D-California) it's Porker of the  Month because of her "increasingly vocal support" for expanding the Lifeline program, aka Obamaphone.

Here is a 4-minute video of Ms. Melchior being interviewed about abuse of the Lifeline program by Fox Business News' Lou Dobbs.

Readers of Growls who are concerned about waste, fraud and abuse of the Lifeline program, and  the taxes used to fund the program are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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.

October 02, 2014

How Did You Celebrate the $50 Billion Porkapalooza?

Credit Stockphoto.com

At Breitbart's Big Government today, Chriss Street reported  that "(w)ith September 30th as the end of the U.S. government’s budget year, bureaucrats facing use-it-or-lose-it rules swept up over $50 billion in leftover cash and went on the biggest one-day Porkapolooza shopping spree of the year." Additional details from Street's reporting include:

"The “system typically creates panic for federal workers scrambling to spend millions of dollars before they run out of time. It also means a huge payday for contractors scoring big awards”, according to the Fiscal Times.

"When the sequester cuts slashed $85 billion from the federal budget, supposedly crippling federal programs like Head Start and halting crucial research at the National Institutes of Health, the government continued spending tax dollars on things like 3-D pizza printers for NASA, a beachfront property loan program for millionaires, and a $300 million Army surveillance blimp that doesn’t work. These are a just a few of the egregiously stupid things that government wastes $30 billion of taxpayers cash on, according to Senator Tom Coburn’s annual “Wastebook”.

"Last year, the government spent about $50 billion the week before October 1, according to NPR’s Shankar Vedantam. The ultimate trip to the mall included impulse buys like artwork worth $562,000 for the Department of Veterans Affairs and $144,000 in toner cartridges for the Department of Agriculture. (emphasis added)

"The Pentagon, as the ultimate shop 'til you drop practitioner spent $5.5 billion on the last day of the fiscal year after the Department of Defense, sent an email encouraging employees to spend as much as they could before the clock struck midnight."

Here's the Fiscal Times report by Brianna Ehley referenced by Chriss Street above.

In a related Fiscal Times story, Ehley reported last week that "Inspector Generals submit a bill to make government agencies pay attention to their audits and act on the recommendations." Ehley explains the need for the legislation:

"Lawmakers are offering up a bill to reform the way federal auditors conduct their business after growing concerns that the Obama administration has been stonewalling their investigations.

"The Inspector General Empowerment Act would give auditors more subpoena authority over federal contractors and former federal workers, as well as strengthening oversight over the watchdogs themselves.

“IGs are the watchdogs of taxpayer dollars and this bill will support their critical work in combating waste, fraud, and abuse,” Rep. Elijah Cummings said in a statement.

"The legislation comes on the heels of a letter sent to members of Congress from the Inspector General community, claiming that the Obama administration has blocked many of them from doing their jobs.

"In one case, the Environmental Protection Agency’s inspector general said agency officials within the Chemical Safety and Hazard Investigation Board would not provide the documents required for an investigation.

"Similarly, the Peace Corps allegedly refused to give its IG records of sexual assaults against its volunteers."

Readers of Growls who are concerned about waste, fraud and abuse of federal taxpayers dollars, or just federal spending in general, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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.

October 01, 2014

The Decline of U.S. Saving and Investment

Another opportunity to growl about economic indicators. For prior Growlings on the topic, see Growls search results.

The Tax Foundation's Alan Cole, an economist, posted a 'must read' Fiscal Fact (No. 439, October 2014) today, writing that because of the decline of U.S. saving and investment, the nation is "losing the future." Here is how Cole introduces the paper:

"A society provides for its future by accumulating both physical and financial assets with lasting value. The United States, one of the wealthiest countries in the world, has long been a forward-thinking country that builds for tomorrow through saving and investment.

"However, over the last fifty years, U.S. saving and investment have eroded substantially, and during the most recent financial crisis, they collapsed almost completely. At the national level, the U.S. is essentially treading water. Citizens are barely running enough household surplus to make up for government deficits, and businesses are barely investing enough new capital to make up for the depreciation of old capital.

"Saving gives us security, while investment gives us rising incomes through enhanced productivity. America could do well with a great deal more of both.

"Currently, the U.S. tax code places substantial burdens on saving and investment. As the world has globalized, other nations have made themselves more attractive destinations for investment by changing their tax codes. The United States would be wise to follow suit."

Here are the 'key findings' from the study:

  • "Saving and investment are necessary for a society to adequately provide for its future.
  • "Saving and investment have declined substantially as a percentage of GDP over the last 40 years, and have collapsed almost entirely since the financial crisis.
  • "American private saving barely keeps pace with total government deficits. On the whole, the country saves very little.
  • "American investment barely keeps pace with depreciation; U.S. private and public capital stock and infrastructure deteriorates almost as quickly as it can be repaired or replaced with new investment.
  • "The U.S., overall, does not save enough money to fund all of the worthwhile domestic investments and relies substantially on foreign investors to make up the difference.
  • "Tax reform could help the U.S. become a forward-looking economy that invests and saves at more prudent rates."

The entire 8-page study is worth reading in its entirety.

Below is a chart from the study showing the private sector saves while government borrows:

Cole includes two more charts which taxpayers should send to their favorite member of Congress. One shows the decline of both saving and investment. The other shows that foreigners own more American assets than Americans own foreign assets. In the first chart, however, note that although the decline started before the administration of President Reagan, both saving and investment had significant bumps upward during his administration. Remember the tax cuts during his administration?

Readers of Growls who are concerned that America is losing its future because of the decline of savings and investment are urged to contact their members of Congress. Information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • 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. More importantly, kudos to Alan Cole and the Tax Foundation! Be sure you have it bookmarked.