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August 31, 2015

Federal Government has a Spending, not a Revenue Problem

In their budget book for 2015, subtitled "106 ways to reduce the size and scope of government," the Heritage Foundation provides this quote from the introduction:

"The 114th Congress has an opportunity and obligation to stop Washington’s taxpayer-financed spending spree. Over the past 20 years spending has grown 63% faster than inflation. Unless leaders emerge with the courage to change the nation’s course for the better, the future looks like more of the same as total annual spending will grow from $3.5 trillion in 2014 to $5.8 trillion in 2024."

You can read more here, including the introduction, the danger of inaction, and where to begin, among several other sub-headings.

The budget book contains eight charts, which show the growth of government, including the one below, which shows the federal government does not need higher taxes, but rather has a spending problem:

  

We encourage all Growls readers to express their outrage over the federal government's unsustainable growth to their members of Congress. Find out what your Congress Critter is doing to achieve sustainable growth for the federal government. Contact information is available at Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County, can 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 Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response, and tell them ACTA sent you.

Bookmark the Heritage Foundation!

August 30, 2015

When Bureaucrats Give Taxpayers Indigestion

Having worked for the federal government myself, I know firsthand that most federal employees work hard, and try doing their jobs to the best of their abilities. Consequently, this story last week in the Washington Examiner caused real heartburn.

According to the Examiner's Rudy Takala, the federal government "doled out billions despite shoddy paperwork." He writes:

"Staff at the National Institutes of Health continued funding for projects that failed to submit required progress reports on time, according to a report issued by the Office of Inspector General for Health and Human Services, and a majority of division heads didn't verify whether their staff had even reviewed the reports.

"The IG conducted a random sampling of grants distributed in 2011. "NIH approved 13 percent of awards for funding despite the fact that the awardee did not provide required information regarding its progress towards project objectives," the agency stated in its findings.

"If that percentage held steady in 2014, it would have applied to 6,764 of 52,034 grants issued by the NIH that year, totaling $2.73 billion of the $21 billion handed out for those projects.

"Division heads in 11 of the 27 "Institutes and Centers" comprising the NIH stated that they did nothing to ensure that their staff had reviewed the required reports, calling into question whether project managers really needed to make any progress in order to retain their federal funding.

:The IG found that the NIH continued to fund four projects that altogether removed or failed to meet their goals, at a combined cost of $7.2 million. Because no written documentation is required for funding decisions made by NIH staff, the reasons funding continued were unclear."

Takala included the following comment in his report:

"Curtis Kalin, a spokesman for taxpayer watchdog Citizens Against Government Waste, told the Washington Examiner that NIH had been "skirting the rules" and that it indicated their "flippant attitude" when it came to allocating federal dollars. Ensuring that "federal programs meet their goals is one of the most basic safeguards against wasteful spending," Kalin said."

We encourage all Growls readers to express their outrage at this latest example of government waste. Find out what your Congress Critter is doing to stop the waste and abuse of your hard-earned taxes. Contact information is available at Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County, can 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 Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response, and tell them ACTA sent you.

August 29, 2015

A Thought About Knowledge

"If you start from a belief that the most knowledgeable person on earth does not have even one percent of the total knowledge on earth, that shoots down social engineering, economic central planning, judicial activism, and innumerable other ambitious notions favored by the political Left.

"If no one has even one percent of the knowledge currently available, not counting the vast amounts of knowledge yet to be discovered, the imposition from the top of the notions favored by elites convinced of their own superior knowledge and virtue is a formula for disaster.

~ Thomas Sowell

Source: His May 16, 2007 column, posted at National Review Online. (HT Mark Perry).

August 28, 2015

Extent of Hurricane Katrina Fraud Unknown

In case you hadn't noticed, tomorrow marks the 10th anniversary since Hurricane Katrina slammed into New Orleans and the Gulf Coast. See this story today in the Atlanta Journal-Constitution and this CBS News video.

Getting far less coverage, however, is a story posted today at the Washington Examiner by Sarah Westwood reporting the extent of Katrina fraud is unknown. She writes:

"A decade after Hurricane Katrina hit the Gulf Coast with historic ferocity, the federal government still doesn't know how many taxpayer dollars were lost to waste and fraud in the aftermath of the storm.

"Botched contracts, rampant fraud and mismanaged projects squandered millions of dollars meant to help the victims of Katrina. Politicians and business owners who skimmed off the top of the government's relief effort were later jailed, with some remaining behind bars to this day.

"Hurricane Katrina "produced one of the most extraordinary displays of scams, schemes and stupefying bureaucratic bungles in modern history," the New York Times wrote of the disaster in 2006, just months after the storm.

"When former New Orleans Mayor Ray Nagin was sentenced last summer to 10 years in prison for corruption and bribery — some of which occurred during the hurricane response — he became the 17th local politician sentenced since the storm, according to the New Orleans Advocate."

"A Disaster Fraud Task Force initially established to crack down on Katrina-related fraud had charged 1,439 people by 2011 for crimes committed in the wake of Hurricanes Katrina, Rita and Wilma.

"While some set up elaborate schemes to take advantage of the money pouring into the region in late 2005, others simply gamed the poorly-planned systems put in place by entities such as the Federal Emergency Management Agency.

"The federal government ... received widespread criticism for a slow and ineffective response to Hurricane Katrina," began a 2006 inspector general report about FEMA's handling of the disaster. "Much of the criticism is warranted."

"On Sept. 8, 2005, FEMA began handing out active debit cards, each loaded with $2,000, to supposed victims of the storm at stadiums in Dallas and Houston and an air force base in San Antonio.

"Despite an initial plan to ensure applicants were eligible to receive the assistance before distributing the debit cards, the director of FEMA decided to hand out active cards instead."

Westwood concludes her reporting by saying:

"Members of Congress claimed some companies had submitted duplicate bills for debris removal to the government in order to pocket the extra funds.

"As late as 2014, the Department of Homeland Security's inspector general, which oversees FEMA, was still recommending the disaster agency attempt to recover portions of grants and other relief funding it had doled out improperly or that had since been mismanaged."

CNN * Politics reported today that a poll showed that "most say the nation is no better prepared." More precisely, CNN wrote:

"Ten years after Hurricane Katrina struck the Gulf Coast, nearly half of Americans still think the country has not learned lessons from the tragedy and is not much better prepared for future natural disasters, according to a new CNN/ORC poll.

"The survey, released Friday, shows 51% of Americans said the U.S. is just as vulnerable as it was to Katrina-like emergencies as it was in August 2005. That's up from 48% saying so one year after the storm in a survey by CNN/USA Today/Gallup."

Well, at least it's Friday, and the federal government has been closed for at least six hours.

August 27, 2015

Think Voter Fraud is Rare? Not so Fast!

A letter-writer to the editor of the Spokane Spokesman-Review, yesterday, wrote, "The Brennan Center for Justice at New York University School of Law notes that one is more likely to be struck by lightning than to encounter an actual case of voter fraud." And in a July 23, 2015 story in the Winston-Salem Journal, "Lorraine Minnite, a political science professor at Rutgers University, said that voter fraud is rare nationally and in North Carolina."

Finally, the DesMoines Register posted an Associated Press story on August 5, 2015 from Fairfield, Iowa, which noted, "After 2½ years of delays, a prosecutor has dropped an election misconduct charge against an ex-felon accused of illegally voting in the 2012 presidential election." According to the AP:

"The dismissal is another setback for a state effort to criminally punish ineligible voters who participated — or tried to participate — in elections. Under a two-year investigation involving former Secretary of State Matt Schultz and the Division of Criminal Investigation, about two dozen people, including ex-felons and non-U.S. citizens, were charged with registering and/or voting illegally.

"Schultz, a Republican, defended the program as ensuring election integrity. He was a proponent of a plan requiring voters to show identification, which has been blocked by Democrats who say it would disproportionately disenfranchise voters who tend to support them.

"Democrats and civil libertarians, who note in-person voter fraud is extremely rare, called the investigation a waste of money that targeted some who were confused about their voting rights and lacked criminal intent. Five others charged as part of the crackdown are still awaiting trial." (emphasis added)

That said, in a story earlier today at PJ Media, David Steinberg writes, "As a prerequisite to lawsuits, a legal foundation has put all 141 counties on notice that their voter rolls are in violation of federal law, not to mention a national embarrassment" because those 141 counties "have more registered voters than people alive." Steinberg added, "The Public Interest Legal Foundation (PILF), of which PJ Media’s J. Christian Adams is president, has done admirable work in convincing the country that voter fraud is a widespread problem and an embarrassment to the country. We need clean voter rolls and Voter ID now, and an end to this cavalier attitude towards securing our fundamental right."

Here is a portion of PILF's press release(see PJ Media story for link):

"The Public Interest Legal Foundation (PILF) has put 141 counties on notice across the United States that they have more registered voters than people alive. PILF has sent 141 statutory notice letters to county election officials in 21 states. The letters are a prerequisite to bringing a lawsuit against those counties under Section 8 of the federal National Voter Registration Act (NVRA).

"The letters inform the target counties that it appears they are violating the NVRA because they are not properly maintaining the voter rolls. The NVRA (also known as Motor Voter) requires state and local election officials to properly maintain voter rolls and ensure that only eligible voters are registered to vote. Having more registrants than eligible citizens alive indicates that election officials have failed to properly maintain voter rolls.

"States with counties which received a notice letter are (# of counties): Michigan (24), Kentucky (18), Illinois (17), Indiana (11), Alabama (10), Colorado (10), Texas (9), Nebraska (7), New Mexico (5), South Dakota (5), Kansas (4), Mississippi (4), Louisiana (3), West Virginia (3), Georgia (2), Iowa (2), Montana (2), North Carolina (2), Arizona, Missouri, New York (1 each). Federally produced data show the letter recipients have more registrants than living eligible citizens alive. (A sample letter is can be found here.)

"Lawyers for PILF have previously brought lawsuits against other counties that failed to clean up voter rolls after receiving a notice letter. The notice letters also seek access to public information about voter roll maintenance efforts. The United States Justice Department also can bring lawsuits to fix corrupted voter rolls but has failed to do so during the Obama administration.

“Corrupted voter rolls provide the perfect environment for voter fraud,” said J. Christian Adams, President and General Counsel of PILF. “Close elections tainted by voter fraud turned control of the United States Senate in 2009. Too much is at stake in 2016 to allow that to happen again.”

"The Public Interest Legal Foundation will monitor responses by the 141 counties and remedial clean-up efforts. Federal law requires that a party sending a notice letter wait 90 days before filing a lawsuit.  The entire list of counties who received the notice letter can be found here."

The Washington Free Beacon today also carried news about the 141 counties with "more voters than people," including:

"Data provided by the group also shows that some counties have voter registration rates that exceed 150 percent.

"Franklin County, located in Illinois, contains the highest voter registration rate of any county on the list at 190 percent. Franklin is followed by Pulaski County, also located in Illinois. Pulaski boasts a 176 percent voter registration rate, according to the group.

"Adams said former Attorney General Eric Holder and current AG Loretta Lynch refused to enforce the law because they don’t have a problem with corrupted voter rolls.

“Eric Holder and Loretta Lynch have deliberately refused to enforce this law because they have no problem with corrupted voter rolls,” Christian Adams told the Washington Free Beacon in an email statement. “They don’t like the law, so they don’t enforce it. It’s a pattern that has come to characterize this Justice Department.”

Consequently, a story today from the Center for Public Integrity is not surprising. According to Public Integrity, "old equipment and partisan battles threaten election integrity, in Ohio and nationwide." As a result, they write, "Fourteen months prior to presidential contest, key questions remain: who will be able to vote, and will their votes be counted accurately?" It's surprising, therefore, that there is so much blow-back about voter ID laws.

The good news, obviously, is that Virginia has no counties where there are "more registrants than living eligible citizens alive." That should not, however, keep local and state voter registration offices from reviewing, and re-reviewing, voting procedures.

UPDATE (8/29/15): Carl Bialik, who blogs for the Wall Street Journal at The Numbers, which "examines the way numbers are used, and abused." He devoted his September 1, 2012 column to "counting voter fraud." Here's a portion of his column:

"Backers of voter-ID laws say the extent of fraud is beside the point. “We don’t pass laws against fraud to stop election results from changing,” said J. Christian Adams, an election lawyer in Alexandria, Va., and advocate for voter-ID laws who blogs about election law. “We pass laws against voter fraud because the system must be free from corruption.” He rejected the notion that corrupt election officials wouldn’t enforce the laws. “You don’t facilitate criminal activity in any other area of life by saying officials won’t enforce laws against fraud, murder, theft,” Adams added.

"Efforts to measure the extent of voter fraud by compiling criminal cases have indicated that the problem isn’t particularly widespread. One study last month, conducted by a group of journalism students through a project called News21, found 2,068 cases of alleged voter fraud in the U.S. since 2000, including 10 cases of voter impersonation.

"Groups that back voter-ID laws, many of which are conservative, dismissed the report as the work of a project funded by left-wing foundations. “This was done in a professional, objective manner” without influence from funders, responded Stephen K. Doig, a professor of journalism at Arizona State University, who oversaw the News21 reporters. “We went as far as we possibly could, putting in an incredible amount of effort.”

"This included adding about 100 cases found from news-archive searches, as well as 268 cases in which law-enforcement agencies didn’t disclose the name of the accused person. “To avoid being accused of lowballing the number, we put in everything we found,” Doig said. “We scoured the earth to try to find actual cases of people doing this.”

"However, no study can include all cases of voter fraud because not all are caught.”I don’t see a good way to add that in,” Doig said of cases that go undetected. “That’s outside of any scientific method I can think of.”

UPDATE (8/29/15): In this article in the June 13, 2012 issue of US News & World Report, Hans Von Spakovsky begins his "voter fraud is a proven election manipulation tactic" column by saying:

"The Supreme Court answered this question in 2008 when it upheld Indiana's voter ID law. "Flagrant examples of such fraud … have been documented throughout this Nation's history by respected historians and journalists," the court said, "[and] not only is the risk of voter fraud real but that it could affect the outcome of a close election." But ask voters in Troy, N.Y., Lincoln County, W.Va., and Florida whether voter fraud is a real problem.

"Four local officials and party activists were convicted in 2011 of voter fraud in Troy for forging enough absentee ballots to "likely have tipped the city council and county elections" in 2009. Two veteran Democratic political operatives said voter fraud is an accepted way of winning elections. One of them who pled guilty, Anthony DeFiglio, told police that such fraud was a "normal political tactic."

August 26, 2015

A Thought on Taxes, Politicians, and Redistribution

"Despite an old saying that taxes are the price we pay for civilization, an absolute majority of the record-breaking tax money collected by the federal government today is simply transferred by politicians from people who are not likely to vote for them to people who are likelier to vote for them."

~ Thomas Sowell

Source: His August 17, 2015 "Random Thoughts" column, posted at Investor's Business Daily.

August 25, 2015

Federal Government Will Collect a Lot of Taxes, Spend More

This morning, the Congressional Budget Office(CBO) released their semi-annual Budget and Economic Outlook report for the years 2015 to 20125. According to Scott Greenberg, at the Tax Foundation's Tax Policy blog, the report "forecasts the federal budget deficit over the next ten years, as well as several other economic indicators. An important part of this forecast is CBO’s projection of federal revenues, which determine whether the federal government will bring in enough money in taxes to pay for its spending programs."

Greenberg identifies his  "four tax takeaways" from the CBO report, explaining each:

  • Tax collections have grown significantly in 2015.
  • This year’s growth in federal tax revenue was largely unexpected, and is the main reason why the deficit has fallen.
  • In the next ten years, the individual income tax will become an increasingly important source of federal revenue.
  • Over the next ten years, federal revenues will be higher than the historical average.

The CBO's 2015-2025 Budget and Economic Forecast can be accessed here. Their overall conclusion from the summary says:

"According to the Congressional Budget Office’s estimates, this year’s deficit will be noticeably smaller than what the agency projected in March, and fiscal year 2015 will mark the sixth consecutive year in which the deficit has declined as a percentage of gross domestic product (GDP) since it peaked in 2009. Over the next 10 years, however, the budget outlook remains much the same as CBO described earlier this year: If current laws generally remain unchanged, within a few years the deficit will begin to rise again relative to GDP, and by 2025, debt held by the public will be higher relative to the size of the economy than it is now.

"CBO’s economic forecast, which serves as the basis for its budget projections, anticipates that the economy will expand modestly this year, at a solid pace in calendar years 2016 and 2017, and at a more moderate pace in subsequent years. The pace of growth over the next few years is expected to reduce the quantity of underused resources, or “slack,” in the economy, lowering the unemployment rate and putting upward pressure on compensation as well as on inflation and interest rates."

In addition, CBO's report summary makes three important points:
  1. The Budget Deficit for 2015 Will Be Smaller Than Last Year’s
  2. Rising Deficits After 2018 Are Projected to Gradually Boost Debt Relative to GDP
  3. The Economy Is Expected to Grow Modestly This Year and at a Solid Pace for the Next Few Years

Not surprisingly, the report is filled with numbers, tables, charts, and figures, which begin on the report cover. For example, the cover shows total revenues in 2015 will be 18.2% of GDP in 2015 and 18.3% in 2025. However, total outlays are expected to grow from 20.6% in 2015 to 22.0% in 2025. As a result, the annual deficit would grow from 2.4% of GDP in 2015 to 3.7% by 2025. All of that growth in outlays, unfortunately, results from the growth of the two large, so-called entitlement programs, Medicare and Social Security.

This morning, Keith Hall, CBO director, briefed the press on the CBO's budget and economic analyses. The C-SPAN video lasts 43 minutes. His briefing slides are available at the CBO blog.

In news coverage on the CBO report this evening, the headline on MCClatchy's report, which says "short term good, long term blah," pretty much says it all.

The Washington Examiner's Joseph Lawler includes this quote in his report on the CBO's latest release of their budget and economic outlook:

"Republican Mike Enzi of Wyoming, chairman of the Senate Budget Committee, attributed the falling deficit to spending caps put in place as part of negotiations over the federal debt ceiling.

"Today's report from CBO demonstrates the tremendous impact the budget caps approved as part of the Budget Control Act have had on our overspending as the nation's annual deficit forecast for 2015 will be at the lowest level in years," Enzi said in a statement. "Our nation's long-term debt outlook, however, is not so rosy. I would caution those who would use this report as an opportunity to take these short term-savings and push for more spending."

So, while the federal government is set to collect more taxes, it's also set to spend an ever larger share of GDP on the largest of the so-called entitlement programs. Unfortunately, in an ever more dangerous world, spending on defense is expected to decrease from 3.3% of GDP to 2.6% of GDP.

Do you know what your Congress Critters on Capitol Hill are doing to bring the federal budget under control? We urge Growls readers to communicate with their members of Congress, and find out. Contact information is available at Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County, can 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 Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response, and tell them ACTA sent you.

UPDATE (8/26/15): At their blog, the Committee for a Responsible Federal Budget (CRFB) concludes their analysis of the CBO's updated outlook by writing:

"CBO shows an unsustainable fiscal outlook under current law, and an even more dangerous one if policymakers continue to act irresponsibly. Lawmakers will therefore need to strictly abide by pay-as-you-go rules and take steps to control the growth of entitlement spending, while enacting other tax and spending reforms to put debt on a downward path over the long run."

UPDATE (8/26/15): In writing about the CBO's new report, the Washington Times' Stephen Dinan writes:

“The growth in debt is not sustainable,” CBO Director Keith Hall said in presenting the estimates. “At some point, it’s going to get to a very high level. Obviously, you can’t predict tipping points, but at some point this becomes a problem.”

"Democrats saw the short-term outlook as progress and said it’s time to close tax breaks and bring in more revenue for spending on investments such as infrastructure.

"Republicans kept their focus on the longer-term warnings in the CBO report. They noted that taxes will remain higher than their historic average over the past five decades but deficits will persist because spending will still outpace revenue.

"Budget watchdogs pleaded with all sides to go beyond the numbers and talk about solutions to persistent debt.

“I don’t know how anyone can declare victory when trillion-dollar deficits are just on the horizon,” said Judd Gregg, a former senator and a co-chairman of the advocacy group Fix the Debt. “While deficits are down this year, the real story is that they are on the rise and that our national debt is at record-high levels and growing."

"Watchdogs pleaded with presidential candidates to start talking about the national debt in their campaigns."

UPDATE (8/27/15): The headline of an editorial, posted last night for today's Investor's Business Daily, says, "The nation's budget outlook is worse than you think." Here are the first and last paragraphs:

"The bad news is that the country is headed toward $1 trillion deficits in 10 years, according to the Congressional Budget Office. The worse news is that, if history is any guide, this forecast is probably way too optimistic.

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"The CBO's latest grim 10-year forecast can be avoided. But only if lawmakers take it as a best-case scenario and act accordingly."

(UPDATE (8/27/15): Yesterday, at the American Thinker blog, Rick Moran quotes the Washington Times article, above, and then concludes:

"As a political issue, the debt is not very sexy.  At the moment, it is only remotely connected to people's everyday lives.  But once the deficits begin rising toward a trillion dollars again, people are going to have to sit up and take notice.

"A lot of that increase in the deficit will come from a massive increase in servicing the debt.  With interest rates at zero, debt servicing is less than $250 billion.  But once the Fed starts to bring interest rates back to historic norms, debt servicing will skyrocket, perhaps as high as $800 billion.  It's easy to imagine the impact on defense spending and other vital government programs that the increase in debt servicing will have.

"Sadly, it appears that nothing will be done about the structural deficit caused by rapidly increasing payments to Social Security and Medicare recipients.  In fact, not much will happen until the crisis is already upon us, and the solution then will be far more wrenching than if we began today to address the problem."

August 24, 2015

The August Porker of the Month is . . .(Drumroll, Please)

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

Citizens Against Government Waste (CAGW) has nominated their Porker of the Month, and the selection should bring a glow to taxpayers who have struggled over the years to prepare their tax returns by the dreaded April 15 deadline. Consequently, taxpayers are likely to be pleased that CAGW has "named Internal Revenue Service (IRS) Commissioner John Koskinen its August Porker of the Month for his long litany of incompetence and obstruction as head of the reviled agency."

Here's the justification behind CAGW's nomination of IRS Commissioner John Koskinen to be the August 2015 Porker of the Month:

"Commissioner Koskinen’s resumé includes five years as the non-executive Chairman of Freddie Mac and Chair of the President’s Council on Year 2000 Conversion, which was tasked with saving America from Y2K.  He was confirmed as commissioner on December 20, 2013, shortly after the exposure of the Lois Lerner political targeting scandal.  At the time, expectations for both the agency and his performance were quite low.  But he has repeatedly found ways to stoop lower.

"During the targeting investigation, Commissioner Koskinen repeatedly stonewalled members of Congress in the search for Lois Lerner’s emails.  According to the Treasury Inspector General for Tax Administration (TIGTA), Koskinen’s IRS did not bother performing an in-depth search for the emails.  In the face of a congressional subpoena, the IRS erased backup tapes containing as many as 24,000 emails from Lerner.  Koskinen’s ambivalence to seek the truth may stem from his statement during a March 26, 2014 House Oversight and Government Reform Committee hearing that he believes the IRS never engaged in targeting in the first place, even though that fact is no longer in dispute.  As stated in a July 23, 2015 Government Accountability Office report, “targeting is indeed possible in the audit process,” and more than two years after the scandal gained national attention, “the IRS has not taken sufficient steps to prevent targeting Americans based on their personal beliefs.”

"Beyond the scandal, the IRS is not able to discharge basic functions with Koskinen at the helm.  IRS officials hung up on 8.8 million Americans who called their help line during the 2014 tax filing season, and local assistance centers did not receive updated paperwork until February 28, 2015, nearly halfway through the filing season.

"The ceaseless refrain from Commissioner Koskinen when criticized is to blame congressional budget cuts for IRS failures.  This response rings hollow in the face of the IRS spending $4.3 million on public opinion polling in 2014 and nearly $4 million on office furniture.  On May 5, 2015, TIGTA investigators found that the IRS issued $5.6 billion in potentially phony education tax credits in 2014 alone.  The growing epidemic of Stolen Identity Refund Fraud allowed $5.8 billion to be paid out to fraudulent filers in 2013.  A TIGTA report on April 14, 2015 found 1,580 IRS employees willfully did not pay taxes, and 18,300 who unintentionally did not pay.  Even worse, 108 of those employees received bonuses totaling nearly $145,000.  Despite all of this evidence that his agency is inept or worse, Commissioner Koskinen refused to allow bonuses in the IRS to be cut from 2014 to 2015.

"The last straw came when the The Washington Post reported on August 17, 2015 that a cyber-attack on the agency that occurred earlier this year exposed the tax return information of an estimated 610,000 Americans and was “far more widespread than the Internal Revenue Service first disclosed.”

"CAGW President Tom Schatz said, “Commissioner Koskinen has an extensive and dubious track record of evasive, incompetent, and hostile behavior to taxpayers and their representatives.  I concur with House Oversight Committee Chairman Jason Chaffetz (R-Utah) that it is long past time for him to leave and be replaced with an individual who holds taxpayers and their interests in higher esteem.”

CAGW's justification is fully documented with links provided in CAGW's announcement.

And kudos to Citizens Against Government Waste (CAGW) for their continuing efforts to ferret out waste, fraud, and abuse.

August 23, 2015

Climate Crisis, Inc.: The New Military-Industrial Complex?

In his televised farewell address on January 17, 1961, President Dwight Eisenhower ended "his presidential term by warning the nation about the increasing power of the military-industrial complex." According to History.com:

"His remarks . . . were particularly significant since Ike had famously served the nation as military commander of the Allied forces during WWII. Eisenhower urged his successors to strike a balance between a strong national defense and diplomacy in dealing with the Soviet Union. He did not suggest arms reduction and in fact acknowledged that the bomb was an effective deterrent to nuclear war. However, cognizant that America’s peacetime defense policy had changed drastically since his military career, Eisenhower expressed concerns about the growing influence of what he termed the military-industrial complex."

Fast-forward 54 years. Paul Driessen, senior policy adviser for the Committee For A Constructive Tomorrow (CFACT), reviewed professor Larry Bell's (Forbes bio here) new book, "Scared Witless: Prophets and Profits of Climate Doom" (available here at Barnes & Noble).

According to Driessen, "$1.5 trillion and Larry Bell book explain how profiteers of climate doom keep the money flowing." Here is a portion of Driessen's book review, posted yesterday at Townhall.com:

"No warming in 18 years, no category 3-5 hurricane hitting the USA in ten years, seas rising at barely six inches a century: computer models and hysteria are consistently contradicted by Real World experiences.

"So how do White House, EPA, UN, EU, Big Green, Big Wind, liberal media, and even Google, GE and Defense Department officials justify their fixation on climate change as the greatest crisis facing humanity? How do they excuse saying government must control our energy system, our economy and nearly every aspect of our lives – deciding which jobs will be protected and which ones destroyed, even who will live and who will die – in the name of saving the planet? What drives their intense ideology?

"The answer is simple. The Climate Crisis & Renewable Energy Industry has become a $1.5-trillion-a-year business! That’s equal to the annual economic activity generated by the entire US nonprofit sector, or all savings over the past ten years from consumers switching to generic drugs. By comparison, annual revenues for much-vilified Koch Industries are about $115 billion, for ExxonMobil around $365 billion.

"According to a 200-page analysis by the Climate Change Business Journal, this Climate Industrial Complex can be divided into nine segments: low carbon and renewable power; carbon capture and storage; energy storage, like batteries; energy efficiency; green buildings; transportation; carbon trading; climate change adaptation; and consulting and research. Consulting alone is a $27-billion-per-year industry that handles “reputation management” for companies and tries to link weather events, food shortages and other problems to climate change. Research includes engineering R&D and climate studies.

"The $1.5-trillion price tag appears to exclude most of the Big Green environmentalism industry, a $13.4-billion-per-year business in the USA alone. The MacArthur Foundation just gave another $50 million to global warming alarmist groups. Ex-NY Mayor Michael Bloomberg and Chesapeake Energy gave the Sierra Club $105 million to wage war on coal (shortly before the Club began waging war on natural gas and Chesapeake Energy, in what some see as poetic justice). Warren Buffett, numerous “progressive” foundations, Vladimir Putin cronies and countless companies also give endless millions to Big Green."

Later in the book review, Driessen writes:

"Scared Witless also lays bare the real reasons for climate fanaticism, aside from lining pockets. As one prominent politician and UN or EPA bureaucrat after another has proudly and openly said, their “true ambition” is to institute “a new global order” … “ global governance” … “redistribution of the world’s resources” … an end to “hegemonic” capitalism … and “a profound transformation” of “attitudes and lifestyles,” energy systems and “the global economic development model.”

In other words, these unelected, unaccountable US, EU and UN bureaucrats want complete control over our industries; over everything we make, grow, ship, eat and do; and over every aspect of our lives, livelihoods, living standards and liberties. And they intend to “ride the global warming issue” all the way to this complete control, “even if the theory of global warming is wrong” … “even if there is no scientific evidence to back the greenhouse effect” … “even if the science of global warming is all phony.”

"If millions of people lose their jobs in the process, if millions of retirees die from hypothermia because they cannot afford to heat their homes properly, if millions of Africans and Asians die because they are denied access to reliable, affordable carbon-based electricity – so be it. Climate Crisis, Inc. doesn’t care.

"This global warming industry survives and thrives only because of secretive, fraudulent climate science; constant collusion between regulators and pressure groups; and a steady stream of government policies, regulations, preferences, subsidies and mandates – and taxes and penalties on its competitors. CCI gives lavishly to politicians who keep the gravy train on track, while its well-funded attack dogs respond quickly, aggressively and viciously to anyone who dares to challenge its orthodoxies or funding."

You may want to bookmark Paul Driessen's review of Larry Bell's book since I'm guessing that you'll frequently be providing copies to your friends. And note his advice:

"Climate Crisis, Inc. is a wealthy, nasty behemoth. But it is a house of cards. Become informed. Get involved. Fight back. And elect representatives – and a president – who also have the backbone to do so."

While questioning the orthodoxy, take a few minutes to read Barbara Hollingsworth's article, posted on Thursday at CNSNews.com, in which she writes about recent comments by Dr. John Christy, climatologist and director of the Earth System Science Center at the University of Alabama/Huntsville. Hollingsworth's lede:

"We have a “moral imperative” to burn carbon dioxide-emitting fossil fuels because the energy they provide is a “liberator” of humanity, says Dr. John Christy, a climatologist and director of the Earth System Science Center at the University of Alabama, Huntsville.

“We are not morally bad people for taking carbon and turning it into the energy that offers life to humanity in a world that would otherwise be brutal,” Christy wrote in a recent oped. "On the contrary, we are good people for doing so."

Also worth noting in Hollingsworth's article is what Dr. Christy has to say about so-called renewable sources of energy:

“Cost and reliability – both of those are factors in renewables. They’re just not able to produce the amount of energy a modern economy needs,” he told CNSNews.com. “And they have demonstrated that over and over. The only renewables you see out there, by and large, are those that are heavily subsidized, so their cost is very high. They’re just not as affordable.

"And the poorest people on the planet aren’t going to pay the highest price for energy. That’s just a fact,” he stated.

"Christy added that during the next year or so, there will likely be “a bump in global temperatures from the huge El Nino that’s occurring out in the Pacific. So be ready for a bunch of press about ‘warmest month, warmest year’ and so on due to this El Nino.

“It will be couched in terms of human-caused global warming, but no one can prove how much warming is due to humans and how much is due to Mother Nature. And [global temperatures] will come down off that when that El Nino is spent,” he told CNSNews.com."

The CNS News article is also worth bookmarking. In a related  article from September 2013, Barbara Hollingsworth discusses Dr. Christy's analysis of the climate "predictions made by 73 computer models cited in the United Nation’s latest Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (5AR)."

Take a few minutes, and find out what your member(s) of Congress believe(s) about global warming. In growling on Thursday, August 20, 2015, we provided contact information for Senators' Warner and Kaine, and Representative Beyer. And remember to tell them that ACTA sent you.

August 22, 2015

Arlington County's Budget Woes are Over?

An ARLnow.com news story, posted at WTOP Radio on Thursday, says, "Arlington County’s public art program is seeking a new 'Public Art Project Manager.'"

According to Arlington County's job posting, the salary ranges from almost $49,000 to over $90,000. The minimum requirent is a "Bachelor's degree majoring in an art or a design-related discipline (e.g., Fine Arts, Art History, Arts Administration, Landscape Architecture, Urban Planning or Urban Design), plus two years experience in arts administration, public arts or design-related discipline."

The story notes:

"Project managers work under Angela Adams, the public art administrator.

"The position became available after one of the former project managers moved to a different department to take a part-time job, said Jim Byers, marketing director for Arlington Cultural Affairs. Byers could not say who moved from the department because it’s a personnel matter, he said.

"The public art department website currently lists Deirdre Ehlen and Aliza Schiff as project managers."

In addition, the story points out, "Arlington’s public art program recently celebrated its 30th anniversary."

Remember back four months ago when the Arlington County Board proudly crowed that it balanced the FY 2016 budget with no increase in the real estate tax rate? The press release also said the Board fully-funded the schools, funded an internal auditor position, and increased funding for both public safety and economic development. The bottom line, though, was that the the average homeowner would "see their tax and fee burden rise from $7,286 to $7,567 – a four percent increase. That translates to about $23 a month or $281 a year."

Well, if the county can still afford to hire a public arts project manager, perhaps the FY 2016 budget wasn't as fiscally responsible as the County Board would want you to believe.

Growls readers who haven't communicated with the Arlington County Board recently are urged to tell them what you think about the county's decision to spend $100,000 or so to hire a public art project manager. Just click-on the link below:

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

And tell them ACTA sent you.

August 21, 2015

Another Tale of Federal Incompetence

Liberals are fond of arguing for the end "to tax breaks for fossil fuels," as recently reported by Devin Henry in The Hill.

It seems, however, that taxpayers have to argue for a "fair return on taxpayer coal." At least that's how Taxpayers for Common Sense (TCS) frames the issue in today's Weekly Wastebasket (Volume XX, No. 34). TCS writes, in part:

"Taxpayers have been losing big on the sale of coal mined from federal land for decades. But hopefully that’s about to change. The Bureau of Land Management (BLM), the feds’ land manager within the Department of the Interior, says they are finally considering doing something about it. We took them at their word and gave them some words of our own.

"On Tuesday, the BLM hosted its fourth “listening session” on how it can best ensure that American taxpayers receive a fair return on federal coal. These sessions have been taking place across the country and Taxpayers for Common Sense has been on the move. Recently TCS spoke at the Washington, D.C.; Billings, MT; and Denver, CO sessions to deliver the taxpayer view. Based on the public input they receive during these sessions, BLM will likely propose new policies for the coal program, including potentially raising the royalty rate, in addition to the changes it has already proposed. As we have said before, there are a lot of problems with the federal coal program that BLM needs to fix.

"TCS told officials at BLM that they should take this opportunity to make some dramatic changes. Many of the industry spokespeople complained that the sky is falling, wincing at any prospect of reform. But the fact is taxpayers have not been getting a fair return for the development of all natural resources for several decades and it’s not just about coal. One of our core principles is that the federal government shouldn’t be giving away public assets. And development of federal coal has been among the worst – if not the worst – in terms of shortchanging taxpayers.

"Our testimony focused on the changes that have occurred in the marketplace for coal since BLM last updated the federal coal program more than 25 years ago. One of the biggest shifts is that coal companies are increasingly mining coal from federal land to export to foreign markets where prices are much higher. The program has to adapt to this new dynamic. BLM determines the Fair Market Value of the coal before it sells the rights to mine it, but it has been using the domestic price which undervalues the coal and fails to deliver taxpayers a fair return. What’s more, BLM uses existing leases for reference when it calculates fair market value for subsequent sales, so undervaluing one lease can create a domino effect where future leases are also undervalued.

"The other problem we focused on in our testimony is the lack of competition for federal coal leases. In 2013, the Interior Department Inspector General (IG) documented that more than 80 percent of the sales for coal leases in Wyoming’s Powder River Basin had only one bid in the past 20 years, and none had more than two bidders. The IG attributed this lack of competition to BLM’s decision in 1990 to discontinue large-scale regional lease sales and use smaller scale lease sales, known as Lease by Application (LBA), to continue or extend the life of existing mines. Under this system, BLM allows coal companies to effectively draw the tracts they want to lease, a process that typically results in tracts that do not generate competitive bids because the location and configuration limit their appeal to other companies."

Read the remaining portion of TCS's weekly wastebasket here.

BLM officials need "listening tours" and to be told about the benefits of market competition? Sheesh! Sounds like time to sell-off feederal lands containing coal fields.

If you agree, go to yesterday's Growls, and take a minute and write or call your member(s)of Congress. They may not do what you want them to do very often, but their offices efficiently track incoming communications.

 

August 20, 2015

Does Your Latte Taste Better at Taxpayers Expense

Wondering whether forking out almost $5.00 at your local Starbucks is worth the price? Apparently you wouldn't have to worry if you were employed by the U.S. Department of Homeland Security, according to a report by Ali Meyer, who posted a story yesterday for the Washington Free Beacon.

According to Meyer's reporting:

"Department of Homeland Security (DHS) employees used a government charge card to make purchases totaling $31,413 at Starbucks, according to an audit by the DHS Inspector General (IG).

"The IG conducted the audit to see whether DHS implemented quality internal controls for the usage of the government charge card to prevent illegal, improper, or erroneous purchases.

"The IG found that DHS did not have sufficient oversight over these purchases and as a result a moderate level of risk remains that DHS will not prevent illegal, improper or erroneous purchases in the future. From fiscal year 2012 to 2014, DHS made transactions totaling $400 million per year using this government card.

"Transactions made with the government purchase card are subject to the rules in the DHS Purchase Card Manual. Problems arose when transactions did not comply with the manual because they either lacked documentation such as receipts or approval by a Department coordinator.

"Nearly half, or 49 percent, of the sampled transactions reviewed by the IG, valued at $206,903, did not comply with at least one of the requirements set forth in the purchase card manual."

Her reporting is based upon this DHS Office of Inspector General audit report, and this press release for the audit report.

We urge Growls readers to ask their members of Congress what they are doing to oversee the use of government credit cards. Contact information is available at Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County, can 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 Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response, and tell them ACTA sent you.

August 19, 2015

A Thought on 'Tax Cuts for the Rich'

"We fight for and against not men and things as they are, but for and against the caricatures we make of them.”

~ J.A. Schumpeter, History of Economic Analysis, page 90

Source: Thomas Sowell's "Trickle Down Theory and Tax Cuts for the Rich," Hoover Institution Press, posted at tsowell.com.

August 18, 2015

Did So-Called Quantitative Easing (QE) Boost Economy?

CNBC's finance writer, Jeff Cox, reported earlier today that according to an official of the St. Louis Federal Reserve Bank, there is "no evidence QE boosted economy."

Here's how Cox begins:

"The Federal Reserve is putting some of its post-crisis actions under a magnifying glass and not liking everything it sees.

"In a white paper dissecting the U.S. central bank's actions to stem the financial crisis in 2008 and 2009, Stephen D. Williamson, vice president of the St. Louis Fed, finds fault with three key policy tenets.

"Specifically, he believes the zero interest rates in place since 2008 that were designed to spark good inflation actually have resulted in just the opposite. And he believes the "forward guidance" the Fed has used to communicate its intentions has instead been a muddle of broken vows that has served only to confuse investors. Finally, he asserts that quantitative easing, or the monthly debt purchases that swelled the central bank's balance sheet past the $4.5 trillion mark, have at best a tenuous link to actual economic improvements.

"Williamson is quick to acknowledge that then-Chairman Ben Bernanke's Fed, through liquidity programs like the Term Auction Facility that injected cash into banks, "helped to assure that the Fed's Great Depression errors were not repeated.

"But as for spurring inflation, reducing employment or otherwise generating sustained economic activity, the results, particularly for QE, are "at best best mixed." In addition to muted inflation, gross domestic product has yet to eclipse 2.5 percent for any calendar year during the recovery, while wage gains, and consequently living standards, have been mired around 2 percent or less."

Here's the link to the 16-page white paper referenced in the second paragraph of Jeff Cox's CNBC article. The Economist magazine has this March 9, 2015 article explaining quantitative easing.

The key takeaway from Jeff Cox's article is:

"There is no work, to my knowledge, that establishes a link from QE to the ultimate goals of the Fed—inflation and real economic activity. Indeed, casual evidence suggests that QE has been ineffective in increasing inflation," Williamson wrote.

"For example, in spite of massive central bank asset purchases in the U.S., the Fed is currently falling short of its 2 percent inflation target," he added. "Further, Switzerland and Japan, which have balance sheets that are much larger than that of the U.S., relative to GDP, have been experiencing very low inflation or deflation."

"The primary place where QE seems to have worked is in the stock market, where the S&P 500 has soared by 215 percent since the recession lows in March 2009. Elsewhere, though, deflation fears have permeated and interest rates have remained low."

While Cox's article should be read in its entirety, it's worth noting the provisos on the white paper:

"The views expressed are those of the individual authors and do not necessarily reflect official positions of the Federal Reserve Bank of St. Louis, the Federal Reserve System, or the Board of Governors.

"Federal Reserve Bank of St. Louis Working Papers are preliminary materials circulated to stimulate discussion and critical comment. References in publications to Federal Reserve Bank of St. Louis Working Papers (other than an acknowledgment that the writer has had access to unpublished material) should be cleared with the author or authors."

August 17, 2015

Your Federal Tax Dollars at Work? Not!

In an editorial scheduled for tomorrow's issue of Investor's Business Daily (IBD), the business, financial, and economics daily newspaper writes that the Transportation Security Administration (TSA) "spent $160 million for scanners with a 96% failure rate."

According to Investor's Business Daily's editorial:

"When Congress decided to let the federal government take over airport security in the wake of 9/11, critics said it would only make matters worse. Fourteen years later, it looks like the critics had it exactly right.

"On Monday, Politico broke the news that the federally run TSA has spent $160 million — or more than $150,000 per unit — on body scanners meant to prevent fliers from bringing contraband onto planes.
And what did taxpayers get for their money?

"A recent security audit found that TSA scanners failed to stop explosives and weapons 96% of the time.

"Sen. Ron Johnson said that the scanners "weren't even catching metal." That's worse than the TSA did in 2004-05, when it screening process missed "only" 70% of the time.

"This is just the latest in a long string of alarming TSA failures in fielding technology, screening workers and keeping its workers from abusing passengers.

"Fully $40 million of the $160 million, for example, went for "naked" X-ray scanners that the TSA later pulled from airports. Another recent audit found the TSA failed to identify 73 airport workers who were on terrorist watch lists. A congressional report in 2011 found that the TSA suffered 25,000 security breaches during the previous decade. And accounts of miscreant TSA agents abusing passengers are legion."

Here is the link to the Politico story, which is cited in the IBD editorial. There are several additional links in the editorial.

Neither of Virginia's two senators are listed as members of the Senate's Homeland Security & Governmental Affairs Committee.

Time to privatize TSA? Sure seems like it!

August 16, 2015

A Thought About the New Politics and the American Dream

"The biggest impact of the new politics, however, will be felt by the new generation. Some of their attitudes are certainly congenial to the progressive positions in such areas as interracial and gay marriage, and a certain commitment to greater social justice. Yet they might find they, too, need a little “justice” themselves, since their incomes, adjusted for inflation, are actually lower than those of their counterparts in 2000, or even 1980. They may be better educated than their predecessors, but it’s not quite paying off.

"Take, for example, that more millennials are living with their parents than in predecessor generations. Many also are burdened with enormous student debt, which makes moving forward, for example, by starting a business or buying a house, more difficult. Most disturbingly, pessimism about the future is greatest among the youngest millennials, those still in high school.

"This decline in prospects – as evidenced by consistently weak income and growth numbers – could, ultimately, reshape politics. Millennials may have different social attitudes than their parents, but that doesn’t mean they reject their parents’ aspirational dream, most notably to buy a house, preferably with some decent space. Although they have been far less able to achieve homeownership, surveys consistently show that most millennials want to own a house, get more space and seem increasingly willing to move to the suburbs, even the exurbs, to get it."

~ Joel Kotkin, R.C. Hobbs Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism

Source: His column, "Obama, the Left downsizing the American Dream, posted at the Orange County Register.

August 15, 2015

Sequestration, Deficits, Growth, and Politics

On Wednesday, August 12, Michael Tasselmyer posted a short comment, at the National Taxpayers Union Foundation's blog, Government Byes, concerning a request from Senator Bernie Sanders (I-VT) to the Congressional Budget Office "to analyze the macroeconomic effects of repealing the sequestration budget caps on discretionary spending."

Here is the background, according to Tasselmyer (links copied from original):

" . . . CBO Director Keith Hall wrote in a letter that repealing the sequester could increase GDP and employment. However, any short term gain would come at a long term price: the agency also said that repealing sequester caps would increase deficits and result in lower output and income than projected under current law.

"Sanders, the ranking member on the Senate Budget Committee, commented on CBO's findings in a statement: "These arbitrary sequestration caps have never made any sense, and now we see even more clearly the implications for our workers. ... If Congress does not act to end sequestration, we're looking at the loss of as many as 1.4 million jobs over the next two years."

Tasselmyer then provides the following analysis:

"However, the Senator's statement ignores several realities about the CBO's projections that should be considered.

  • Economic gains from repealing sequester are uncertain. CBO projects that undoing the spending caps would increase GDP by anywhere from 0.2 to 1 percent over the next two years, and employment by the equivalent of 300,000 to 1.4 million full-time jobs. That is a very wide and highly variable range, of which Senator Sanders only cited the most optimistic ends.
  • The assumptions behind CBO's projections matter. Namely, those that directly correlate increased government spending with greater economic growth. By definition, GDP -- which is the product of consumption, investment, government spending, and net exports -- will increase any time the government spends more money. However, GDP is not the only measure of an economy's strength, and whether public spending actually stimulates the economy is the subject of continued debate among economists.
  • The long term economic implications would reverse any immediate growth. In CBO's own words: "Although eliminating the reductions to the spending caps for fiscal years 2016 and 2017 would increase output and employment over the next few years, the resulting increases in federal deficits would, in the longer term, make the nation's output and income lower than they would be otherwise." (Italics added for emphasis.)
  • Repealing the caps would reduce private investment. Without spending caps in place, federal spending would increase by about $159 billion over the next three years. That would lead to higher deficits that "would start to gradually reduce -- or crowd out -- private investment in productive capital because the portion of people's savings used to buy government securities would not be available to finance private investment."
"The economic benefits of repealing sequestration are uncertain, at best, and would likely be offset by the long-term losses that higher deficits would cause." (Emphasis in the original)

The Congressional Budget Office (CBO) also released an August 2015 update to its required report on sequestration last week. The summary from the report says:

"CBO is required by law to issue a report by August 15 of each year that provides estimates of the caps on discretionary budget authority in effect for each fiscal year through 2021. CBO has updated its estimates of the caps for 2015 since it issued its previous report on the topic in January 2015. In that earlier report, CBO estimated that the appropriations for 2015 did not exceed the caps. CBO’s assessment remains unchanged—the discretionary appropriations provided to date for 2015 do not exceed the caps, and thus, by CBO’s estimates, a further sequestration (or cancellation of budgetary resources) will not be required as a result of appropriation actions this year.

"However, the authority to determine whether a sequestration is required and, if so, exactly how to make the necessary cuts in budget authority rests with the Administration’s Office of Management and Budget (OMB). That agency, in a report issued in March after enactment of the Department of Homeland Security Appropriations Act, 2015 (Public Law 114-4), also found that, at that time, appropriations for 2015 were at or below the caps."

Perhaps someone will suggest to Sen. Sanders that he sit down with several of Thomas Sowell's books. As Sowell has explained, there are no solutions, only economic trade-offs. For a short explanation, see Yahoo Answer's explanation.  For a longer explanation, see chapter 3 of Sowell's book, "Knowledge and Decisions," available at Google Books. There is also this You Tube Video where Sowell explains the concept of economic trade-offs to Fred Barnes; the accompany text includes this quote from another of Sowell's books:

'In the tragic vision, individual sufferings and social evils are inherent in the innate deficiencies of all human beings, whether these deficiencies are in knowledge, wisdom, morality, or courage. Moreover, the available resources are always inadequate to fulfill all the desires of all the people. Thus there are no "solutions" in the tragic vision, but only trade-offs that still leave many unfulfilled and much unhappiness in the world.'

~ Thomas Sowell, 'The Vision of the Anointed' p. 113

August 14, 2015

Latest Aquatics Center Proposal "Draws Mixed Reaction"

The Arlington Sun Gazette's Scott McCaffrey reported this morning:

"A nascent proposal for Arlington and Alexandria to work together in building the stalled Long Bridge Park aquatics center has generated mixed reviews.

"Arlington officials on Aug. 12 announced that both localities would survey residents in coming months about the prospect of working together on the Crystal City project, which was put on ice two years ago after construction bids came in well over projections and projected operating deficits ballooned.

"The joint-use proposal is one of several that could be reviewed as Arlington officials attempt to jump-start interest in the project."

We frequently growled about this Arlington County Board vanity project although not recently. The oldest Growls, according to a search, is June 6, 2012, when we noted the Arlington County Civic Federation voted 25-6 to urge the County Board to pull funding for Long Branch Park. Then on October 4, 2012, we growled and asked if the county needed a 'Taj Mahal' aquatic center. We also growled on November 2 and November 3, 2012 to urge voters to vote NO on the parks bond referendum. Most recently, we growled on March 20, 2015, when Arlington County officials said they may scale-back this boondoggle vanity project. Use the search facility in the right-hand column to find other Growlings about the aquatics center.

Back to today's news. McCaffrey continued his reporting by writing:

“We are keeping our eyes wide open for partners,” said Susan Kalish, a spokesman for the county government’s Department of Parks and Recreation.

"Kalish called it “serendipitous that Arlington and Alexandria were doing a needs assessment with their community and have money in their capital-improvement plans for an aquatics facility around the same time.”

"Arlington residents will be surveyed about the proposal as part of community discussion of the county’s public-spaces master plan, set to be unveiled in September. Alexandria residents will be asked if they’d rather see a partnership for the Long Bridge Park site than the proposed expansion of a pool facility at the city’s Chinquapin Park."

McCaffrey provides opposing comments by two residents, reporting:

“I consider it worth exploring,” McDermott said. “My preference would be for Arlington to be able to do this on its own, but if a partnership makes an aquatics, health and fitness center become a reality, I would support it.”

"More circumspect is veteran county budget-watcher Wayne Kubicki, who said there remain far more questions than answers – not simply about the partnership, but about the project as a whole."

He also includes comments by local builder, Terry Showman:

"Terry Showman, an Arlington-based builder who has been active in planning-and-zoning issues for two decades, wondered aloud why Alexandria might wish to hitch its wagon to Arlington’s aquatics center. His advice to city leaders: “Steer clear.”

"“With our track record, why would anyone want to partner with a government who designs million-dollar bus stops and the aforementioned, unaffordable original Long Bridge pool?” Showman asked. “It seems to me that finding a partner to work with Arlington County officials is a little like finding a partner for Bernie Madoff.”

“How much bad publicity can you get in 10 years of trying to build this park? The county must have set a record in futility by now,” Showman said. “If the county could reorganize itself with staff and board members exuding common sense, then maybe someone would think about partnering with us on a project.”

If you haven't followed the saga of the Long Branch Park vanity project, take a few minutes to read Scott McCaffrey's complete article since it provides a comprehensive history of the project.

On Wednesday afternoon, ARLnow.com reported on the Arlington County Board's possible partnership with Alexandria.

If you don't want to wait for the County Board's survey, take a few moments to write to the Arlington County Board. Just click-on the link below:

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

And tell them ACTA sent you.

August 13, 2015

On Economic Mobility, Economic Freedom, and Prosperity

"Historically, our nation has enjoyed remarkable economic mobility. About 60 percent of the households that were in the lowest income quintile in 1999 were in a higher quintile ten years  later. During the same decade, almost 40 per- cent of the richest households fell to a lower quintile. This is a nation where you can rise or fall. It is a nation where you can climb the economic ladder based not on who you are born to, or what class you are born into, but based on your talents, your passion, your perseverance, and the content of your character.

"Economic freedom and the prosperity it generates reduce poverty like nothing else. Studies consistently confirm that countries with higher levels of economic freedom have poverty levels as much as 75 percent lower than countries that are less free."

~ Ted Cruz, U.S. Senator (Texas)

Source: Adapted for Imprimis from his May 11, 2013 speech at Hillsdale College's 161st Commencement.

August 12, 2015

Arlington County Loses TSA, "Disappointed but not Surprised"

Earlier this year, on March 13, we growled about the challenges of economic development in Arlington County. The lede of the Growls said:

"At the monthly meeting of the Arlington County Civic Federation on Tuesday evening, March 3, 2015, delegates heard the chair of Arlington County Economic Development Commission, Sally Duran, discuss "the importance of a flourishing business community which will substantially benefit Arlington taxpayers." The slides from her PowerPoint presentation are available here. The Civic Federation website provides additional, related information as well."

The Growls was quite extensive in its discussion of the importance of Arlington County's commercial tax base, especially to residential property owners.  Consequently, a story today at ARLnow.com caught our attention because it said, "Arlington Loses Another Big Government Office Tenant." Here's how ARLnow.com framed their story:

"The Transportation Security Administration will move from its headquarters in Pentagon City to a new office in Alexandria, the federal government announced today.

"TSA currently occupies a complex at 601 and 701 12th Street S. in Pentagon City, across from the Pentagon City mall.

"It’s planning to move to the Victory Center building at 5001 Eisenhower Avenue, near the Van Dorn Metro station, in about two years. (In 2013, the TSA renewed its lease in Pentagon City for five years.)

"The General Services Administration touted the new lease as a money-saving move that will save taxpayers more than $95 million over a 15-year lease. The government is paying rent of $36 per square foot, more than 25 percent below projected market rents, and getting $50 million for tenant fit-out costs and moving expenses."

ARLnow.com then adds:

"This is just the latest office loss for Arlington County, which is coping with relatively high office vacancy rates.

"The U.S. Fish and Wildlife Service moved its headquarters from Ballston to Falls Church last year, while the National Science Foundation is planning to move its headquarters and more than 2,000 employees from Ballston to Alexandria by 2017. In both cases, the GSA said the moves would save millions of dollars in leasing costs.

"Victor Hoskins, who took over as the county’s head of economic development earlier this year, said the county was disappointed but not surprised by the deal."

In commenting on the issue in March, your humble scribe Growled:

"Instead of increasing the bureaucracy, Arlington's economic development department should develop a plan that involves ways of reducing the tax and regulatory burden for the Arlington County business community, including recommendations by which the Virginia General Assembly can partner with the County Board in those reductions."

The ARLnow.com story has a number of links, which we did not recover. However, here is the link to the GSA press release on which they based their story.

As we growled in March, readers who are Arlington County taxpayers are urged to write or call the Arlington County Board to tell them it's time to reduce the tax and regulatory burden of Arlington's business community to ensure their competitiveness with neighboring jurisdictions. Just click-on the link below:

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

And tell them ACTA sent you.

UPDATE (8/13/15): In a Washington Post article, posted earlier last evening for today's print edition, Jonathan O'Connell and Patricia Sullivan report:

"The deal constitutes one of the largest commercial real-estate leases signed in the Washington area this year. It is comparable to a roughly 700,000-square-foot lease that Fannie Mae signed to move into a new building downtown that will replace the current offices of The Washington Post.

< . . . >

"Alexandria has been planning street and infrastructure improvements in the Eisenhower Avenue area for the past 18 months, Euille said.

"He dismissed concerns about whether the addition of nearly 4,000 workers would create traffic problems, noting that the TSA building will have on-site parking and is near the underused Van Dorn station.

August 11, 2015

A Thought on Taxation

"When a new source of taxation is found it never means, in practice, that an old source is abandoned. It merely means that the politicians have two ways of milking the taxpayer where they had only one before."

~ H.L. Mencken

Sourc:page 33, "As Certain as Death: Quotations About Taxes," 2010, compiled by Jeffrey L. Yablon, TaxAnalysts.com.

August 10, 2015

Six Changes Every Tax Reform Plan Should Include

Over the past two days, we growled about taxes and tax proposals -- August 8, 2015 and August 9, 2015, noting there have been recent tax reform proposals, and, consequently, the need for a foundation for looking at them.

So we were pleased to see a post today by Andrew Lundeen at the Tax Foundation's Tax Policy Blog titled the same as the title of this Growls. Here's how Lundeen sets-up his discussion (embedded links not included):

"The need for tax reform is clear. Economic growth has been sluggish for a number of years, workforce participation is down, wages are stagnant, and the U.S. tax code is increasingly out of step with those of our major trading partners.

"A number of presidential candidates and members of Congress have presented big ideas to overhaul our outdated tax code. Some policymakers are talking about flat taxes, value-added taxes, cash-flow taxes, or hybrid reform plans.

"Many of these plans move toward a simple principle: they tax each dollar of income one time, which makes them neutral between the decision to spend a dollar today or save and invest a dollar to spend tomorrow.

"This is important because one of this biggest problems with the current tax code is that a dollar of income can face up to four layers of taxation when all is said and done: 1) it’s taxed when you earn it and pay an income tax; 2) it’s taxed when a business you invest in earns a profit and pays a business income tax; 3) it’s taxed when you realize returns to investment and pay taxes on capital gains and dividends; and 4) it’s taxed when you pass away or give it as a gift through estate and gift taxes."

As noted above, Lundeen identifies six changes every tax reform proposal should include. I won't try to comment on each of the changes since Lundeen explains each in considerable detail. Suffice it to say the six elements are:

  1. Make the Tax Rates Competitive for Businesses
  2. Move to a Territorial Tax System
  3. Correctly Define Business Income with Full Expensing
  4. Integrate the Corporate and Individual Tax Systems
  5. Create Universal Savings Accounts
  6. Repeal the Estate Tax

In his conclusion, Lundeen writes:

"These six changes would fix all the major issues with the current tax code. Corporate integration, universal savings accounts, and estate tax repeal would eliminate the multiple layers of taxation, yet still ensure that every dollar of income is taxed once, but only one. Allowing businesses to fully expense capital investment would correctly define business income as revenue minus costs and eliminate the current tax on business investment. A lower corporate tax rate and a shift to a territorial tax system would make U.S. businesses competitive on an international scale. Likewise, a lower tax rate on non-corporate businesses would help those businesses invest and grow.

"The result of these changes would be a pro-growth, neutral tax system that makes the United States competitive, creates jobs and lifts wages for workers across industries, and allows taxpayers to save and invest for the future.

"This type of tax system would raise living standards for all U.S. taxpayers and that should be the goal of any serious tax reform."

Kudos to Andrew Lundeed and the Tax Foundation for this informative post.

August 09, 2015

Did Reagan Tax Cuts Pay for Themselves?

In a column posted on Friday at Investor's Business Daily (IBD), Arthur Laffer takes on the question of whether the Reagan tax cuts "paid for themselves." Specifically, Laffer's lede for the column is:

"During the Reagan years, "federal income taxes" as a percentage of GDP went from 9.1% in 1981 to 8% in 1989. And to James Pethokoukis of the American Enterprise Institute and others, this means the "Reagan tax cuts didn't pay for themselves."

Laffer, who was a member of President Reagan's Economic Policy Advisory Baord, seems to be referring to a April 22, 2015 The Week column by James Pethokoukis, who specifically wrote:

" . . . For starters, the Reagan tax cuts didn't pay for themselves, despite what Paul subtly suggests. Income tax revenue fell from 9.1 percent of GDP in 1981 to 8 percent in 1989. A 2006 Bush administration study found Reagan's 1981 tax cuts lost an average of $200 billion a year, in today's dollars, over their first four years. A 2004 study by two Bush economists estimated that in the long run, "about 17 percent of a cut in labor taxes is recouped through higher economic growth. The comparable figure for a cut in capital taxes is about 50 percent."

"Even Reagan's economic team didn't think their tax cuts would be revenue neutral."

Admittedly, Pethokoukis does add that "all of this is hardly evidence the Reagan tax cuts failed. Far from it." He also points to this April 1996 report from the Joint Economic Committee, which discusses "The Reagan Tax Cuts: Lessons for Tax Reform." He then concludes the column arguing that efforts should, instead, be devoted "to creating a broad portfolio of pro-growth policies — deregulation, education, public investment, labor market reforms, and, yes, some tax cuts — to boost the economy's growth potential. Because that's what Reagan would do in the 21st century. At least I would like to think so."

Now, let's get back to Laffer's column. Laffer's explanation is quite detailed, but here is how he gets started:

"But wait. Income tax revenues from the top 1% of income earners rose like mad as a share of GDP. In 1981, the top 1% of income tax filers paid total income taxes equal to 1.5% of GDP. In 1989, the top 1% paid a full 2% of GDP in income taxes. From 1981 to 1989, the highest marginal income tax rate, which is the rate paid by the highest income earners, fell from 70% to 28%.

"Think about it: The highest income tax rate paid by the top 1% of income earners fell by 60% (from 70% to 28%), yet the top 1% of income earners paid 33% more in income taxes as a share of GDP.

"From 1981 to 1989, total employment as a share of the adult population rose by 4 percentage points, which, in human terms, is an additional 7.4 million people employed above and beyond the number of people who would have been employed if employment as a share of population had remained at the 1981 level.

"These people got their jobs because employers and job creators found hiring them more attractive in part because of the tax cuts.

"Additional employment, of course, raises payroll and income taxes. For payroll taxes alone, the higher employment added $14 billion in taxes annually. For income taxes, there would be an equally as large increase in tax revenues."

For the record, in a June 20, 2015 article about Senator Rand Paul's tax plan, the Washington Examiner's economics writer, Joseph Lawler, points out:

"It is an "astoundingly good plan," said Arthur Laffer, "and it will put the rest of the candidates on their toes." Laffer, a former Reagan administration economist who is regarded as the father of supply-side economics, was credited by Paul with helping to develop the plan."

In closing his article, Laffer points to two charts that accompany the article, and says, "Look at the charts above and see if you don't think this is a period of outstanding economic growth. The charts are the broadest measures of economic performance and are available to anyone. They paint the correct picture of the effects of the Reagan tax rate cuts," adding, "I think these two charts say it all."

One of the two charts referenced by Laffer is below:


Laffer concludes by asking, "what do you think the U.S. economy would look like today if, for the whole period of 1980 through 2015, we had kept the highest marginal income tax rate at 70% starting at $108,300 of income, a capital gains tax rate on nominal capital gains at 45% and an income tax that started out at $2,300 with a rate of 14%?"

If you didn't read yesterday's Growls about tax reform and economic growth, please take a minute to read it. Hopefully, the next GOP "debate" will focus more closely on the candidates' pro-growth economic policies. Not only Reagan-like tax cuts but also the issues raised by James Pethokoukis, i.e., deregulation, education, and labor market reforms.

Until then, write to your member of Congress to find out what pro-growth policies they are supporting. We've provided contact information for members of Congress when we growled on July 24, 2015 and in our June 16, 2015 Growls. And be sure to tell them ACTA sent you.

James Pethokoukis blogs at the American Enterprise Institute. Arthur Laffer is the founder and chairman of Laffer Associates; the Laffer Center at the Pacific Research Institute, and is named after Laffer.

August 08, 2015

Tax Reform and Economic Growth

The Heritage Foundation's Curtis Dubay, a research fellow in tax and economic policy, has written a new, 6-page Backgrounder (No. 3041, August 3, 2015) on new tax reform proposals and their potential for economic growth. Here's the paper's abstract:

"Tax reform is vital to restoring the economy and improving prosperity and opportunity for American families. A new generation of tax reform plans that improve the tax system while simultaneously cutting taxes can better spur the economy than traditional tax reform that was revenue neutral. The plan released earlier this year by Senators Mike Lee (R–UT) and Marco Rubio (R–FL) was the first of this new wave of plans. However, tax-cutting reform brings with it new challenges that traditional tax reform did not need to address. Foremost among them are raising a sufficient amount of revenue and the relative size of tax cuts for the various income groups. Both issues are easier to address if Congress fully adopts dynamic scoring for tax reform plans."

Here are the key points, which Dubay identifies:

  1. A new generation of tax-cutting tax reform plans have recently been released, led by the plan from Senators Mike Lee (R–UT) and Marco Rubio (R–FL).
  2. Tax-cutting reform plans cut taxes, as their name suggests, whereas traditional tax reform was both revenue and distributionally neutral.
  3. Tax-cutting reform plans have greater potential for economic growth and, therefore, can better improve opportunity and prosperity for American families than traditional tax reform because a lower revenue target allows them to establish more pro-growth policies.
  4. Tax-cutting plans face challenges not posed by traditional tax reform. They need to address how they will meet certain revenue requirements and determine how they will shift the tax burden among various income groups.
  5. Both challenges can be overcome more easily if Congress fully adopts dynamic scoring.

Since a recent poll has shown that "few Americans expect (an) economically bright future," taxpayers need to arm themselves with a knowledge of the various tax reform proposals being discussed and their potential to generate economic growth. Dubay's paper is valuable because it provides factors which should be considered, e.g., efficiency of raising revenue, economic growth, revenue neutrality, and methodology for distributing tax cuts.

Kudos to Curtis Dubay and the Heritage Foundation for publishing this paper.

August 07, 2015

A Thought on Taxation

"There is no part of the administration of government that requires extensive information and a thorough knowledge of the principles of political economy, so much as the business of taxation. The man who understands those principles best will be least likely to resort to oppressive expedients, or sacrifice any particular class of citizens to the procurement of revenue. It might be demonstrated that the most productive system of finance will always be the least burdensome."

~ Alexander Hamilton, Federalist No. 35

Source: Founder's Quote Database, Patriot Post.

August 06, 2015

Taxpayer Subsidies Driving Up College Tuition

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

~ Ronald Reagan (BrainyQuote.com)

William Shugart, research director at the Independent Institute and professor at Utah State University has an article at the American Thinker in which he explains "how taxpayer subsidies for students drive up college tuition."

According to Shugart:

"Many observers have been puzzled by the relentless increase in tuitions charged by private and public schools alike -- at a growth rate greater than that of any component of the consumer price index, including health care. Some blame the price increases on the greed of campus administrators. But that assessment is an unfair oversimplification that fails to ask: what has enabled schools to hike tuitions so much?

"Most U.S. colleges and universities, whether public or private, operate as not-for-profit entities, but that doesn’t mean they are run like charities indifferent to the bottom line. If the tuition at a school is, say, $10,000 per year, and some third party finances half that amount by providing a scholarship or low-interest loan, it’s wishful thinking to believe that the student will then pay only $5,000 per year. That conclusion would follow only if the tuition charge remains unchanged – and that outcome is only a pipe dream.

"An economically rational college administrator will want to raise the tuition sticker price to as much as $15,000 per year, so as to capture some or all of the third-party payment, while leaving the student’s out-of-pocket cost the same. That way the school gets the extra money that has become available, but it doesn’t risk driving away cost-conscious applicants for admission.

"Where does that extra $5,000 go? If history is any guide, precious little goes to current faculty salaries or the hiring of additional teachers (which would reduce average class sizes). Instead the money is allocated to expanding the school’s administrative staff – more assistants to the president or provost, and to more college bureaucrats with little or no classroom teaching responsibilities. Although these staffers surely will defend their positions vigorously, they contribute indirectly at best to the instructional, research, and service missions of their institutions."

Shugart's concludes, "The time is long past to end taxpayer subsidies to institutions of higher education and to restore market pricing and market discipline to America’s colleges and universities. A post-secondary education is a privilege, not a right for which everyone qualifies or merits."

The 51-page study from the Federal Reserve Bank of New York is here (Staff Report 733, July 2015). The authors are David Lucca, Taylor Nadauld, and Karen Shen. There is a notation the findings are preliminary and "to stimulate discussion and elicit comments." (HT to Paul Caron, publisher of Tax Prof Blog for posting about this report; Caron also links to a August 2, 2015 Wall Street Journal article, but behind the WSJ paywall). Here's the abstract from the Fed paper:

"When students fund their education through loans, changes in student borrowing and tuition are interlinked. Higher tuition costs raise loan demand, but loan supply also affects equilibrium tuition costs—for example, by relaxing students’ funding constraints. To resolve this simultaneity problem, we exploit detailed student-level financial data and changes in federal student aid programs to identify the impact of increased student loan funding on tuition. We find that institutions more exposed to changes in the subsidized federal loan program increased their tuition disproportionately around these policy changes, with a sizable pass-through effect on tuition of about 65 percent. We also find that Pell Grant aid and the unsubsidized federal loan program have pass-through effects on tuition, although these are economically and statistically not as strong. The subsidized loan effect on tuition is most pronounced for expensive, private institutions that are somewhat, but not among the most, selective."

Unfortunately, the Fed paper hasn't received a great deal of coverage by the "mainstream media." The study was well-covered by Newsweek on August 5, 2015, however. Their reporting included:

"By the authors’ calculation, there is about a 65 percent pass-through effect on federal student loans. In other words, for every $3 increase in such loans, colleges and universities raise tuition by $2.

"It is very good to have a study by so unimpeachable a source as the New York Fed supporting the conclusion that quite a few others have reached over the years: Increasing student aid to make college “more affordable” is something of an impossibility. The more “generous” the government becomes with grants and loans, the more schools raise their rates.

"Other studies have reached the same conclusion.

"In his 2009 paper Financial Aid in Theory and Practice, Andrew Gillen showed that the Bennett Hypothesis was true, although more so at some institutions than others. In their 2012 study, Stephanie Riegg Cellini and Claudia Goldin found that for-profit schools unquestionably raised tuitions to capture increases in federal aid."

The WSJ also wrote about the Fed study on July 19, 2015, and it's not behind their paywall. In addition, Aaron Bandler writes about the study at Townhall.com on July 15, 2015. Bandler links to a Washington Free Beacon article, which noted "federal student loans increase tuition, not enrollment. The Free Beacon article noted:

"Loans up 126 percent from 2001-2012, tuition up 47 percent in the same time frame."

Importantly, Bandler also points out the following:

"The federal government has a virtual monopoly over the student loan system after it was nationalized by Obamacare. As a result, any student can get a loan regardless of their ability to pay it back, and now those who are graduating are having to deal with these burdensome debts. In fact, the class of 2015 is the most indebted class ever, with the average debt per graduate being slightly over $35,000. The stories on post-graduate students in previous years paying off their loans are heartbreaking.

"And naturally, the cost of college is increasing as a result of the federal student loan program. Basic economics: higher demand results in higher costs. With a higher demand of students, schools can build new buildings, hire new administrators, etc. that is paid for through tuition hikes because of the massive amounts of federal student loans flooding the market."

Please write to your member of Congress to find out what they are doing to bring the cost of college tuition under control. We've provided contact information for members of Congress when we growled on July 24, 2015 and in our June 16, 2015 Growls.

Ask for a written response. And tell them ACTA sent you, too.

August 05, 2015

Arlington County + Virginia Hospital Center to Forge Deal

Tina Reed, staff reporter for Washington Business Journal, reported yesterday that "Arlington County plans to make a deal with Virginia Hospital Center for a parcel of county property the health center has been eyeing for expansion." (HT ARLnow.com)

Additional details in Reed's report included:

"Acting County Manager Mark Schwartz said he intends to sign a memorandum of understanding for the 5-acre Edison property adjacent to the hospital, on 1701 N. George Mason Drive in Arlington. Schwartz plans to discuss the agreement at a Sept. 9 community meeting before presenting it to the county board.

"Virginia Hospital Center is "a critical part of our infrastructure and demand is increasing for their services," Schwartz said. "We want to do what we can to allow them to grow in a thoughtful way."

"Terms of the deal, such as the value of the property, are not yet available because they are contingent on the county board's approvals for use of the property, Schwartz said. Density limits based on the hospital plans could change the property's valuation, for example."

As noted in the 8/8/15 update, I've linked to an Arlington County webpage -- headlined, "County considering selling land to Virginia Hospital Center for Expansion." Of special interest is the 14-page, June 1, 2015 VHC document listing "a set of preliminary questions for which the County requires answers," which you can find under "First Step: Land Transaction."

We look forward to reviewing the details. As the saying goes, 'the devil's in the details.'

There is no press release, yet, with even a framework of the deal. Growls readers unable to attend the  community meeting on Wednesday, September 9, however, are urged to write or call the Arlington County Board. Just click-on the link below:

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

And tell them ACTA sent you!

UPDATE (8/8/15): There is an Arlington County webpage containing a great deal of information about the proposed land swap. This includes the land transaction; master planning; community input; and, information about Virginia Hospital Center. There is also a list of properties owned by VHC. (HT to Suzanne Sundburg for the link to the county webpage)

August 03, 2015

An In-Depth Look at the State of Federal Inspectors General

In a four-part series during December 2014, the online Washington Examiner looked at "the state of the inspectors general." Kudos to Mark Flatten for the series.

In part 1, Flatten looks at how "IGs form front line of war on waste and fraud," but also notes "weak links remain ." He begins with a profile of the IG community, but also describes problems within the IG community. For example:

"Even investigators within IG offices have faced retaliation for reporting internal wrongdoing or attempts to withhold embarrassing findings, according to congressional reports.

"The worst offenders tend to be inspectors general who are in interim positions, meaning they have not been recommended for permanent appointment by the president or confirmed by the Senate.

"But even some confirmed IGs have been accused of being too cozy with the agency bosses they are supposed to be watching.

“Too many IGs are concerned about their status within the agency,” said Sen. Charles Grassley, an Iowa Republican who for 20 years as been a champion for federal whistleblowers and a critic of weak IGs."

Then, in part 2, Flatten points out that "temporary IGs are subject to agency manipulators covering up agency waste." Here's a portion of his reporting in this part:

"Interim IGs such as Kendall are notorious for becoming the toadies of agency management, even though they are supposed to be independent, according to critics in Congress and outside watchdog groups.

"There are now 10 interim IGs among 72 positions across the federal government. Kendall is the longest-serving IG in an interim position.

"The longest vacancy had been at the State Department, where temporary IGs ran the office for nearly six years before Steve Linick was confirmed for the permanent job in September 2013.

"IGs are supposed to report jointly to Congress and the president. But the president appoints them and is the only one who can fire them.

"Even permanent IGs are subject to pressure to avoid embarrassing the administration or agency heads, critics say."

Part 3 covers the "bad things" that "happen to whistleblowers when watchdogs become attack dogs." Here's Flatten's lede of this part:

"Terrance Peterson was trained in the military to report wrongdoing, regardless of the consequences.

"That code of integrity did not serve him well after he reported wrongdoing to the Department of Veterans Affairs inspector general.

"In January 2013, Peterson complained to the IG about unsanitary conditions at the Wilmington, Del., VA hospital where he worked. He had filed previous complaints that veterans faced needless delays in getting care.

"The IG turned Peterson’s charges over to agency administrators so they could investigate themselves. They found they did nothing wrong and the case was dropped."

Finally, in part 4, Flatten concludes there are "(f)ew fixes available for problem IGs." Flatten's conclusion:

"Ultimately, the most effective tool to drive out weak inspectors general is publicly shaming them, Grassley said.

“I found that by bringing the right information public and raising enough Cain, I got IGs fired,” Grassley said. “If every congressman would take a look at IGs and support them or get rid of them accordingly by going public, I think it would make a big difference.”

Kudos to Mark Flatten and the Washington Examiner for devoting the resources to provide taxpayers this in-depth look at the community of inspectors general.

Please consider writing to your member of Congress to find out what they are doing to what they to oversee the federal inspectors genera. We've provided contact information for members of Congress when we growled on July 24, 2015 and in our June 16, 2015 Growls.

Ask for a written response. And tell them ACTA sent you, too.

August 02, 2015

President Reagan's Legacy: Lower Taxes Worldwide

In his column for the Investor's Business Daily's weekend edition, Stephen Moore asserts:

"The living legacy of Reaganomics, or supply-side economics, is that tax rates keep falling all over the world. Imitation really is the sincerest form of flattery.

"After Reagan cut the top marginal individual income tax rate from 70% in the late 1970s to 28% by the end of his presidency in 1989, a funny thing happened: Rates started falling like dominoes in nearly every corner of the globe. The punitive rates of 60%, 70% and more that were the worldwide norm in the '70s are today almost all gone — and seem as outdated as Bee Gees music.

"Consider evidence compiled by the World Bank and the Organization for Economic Co-operation and Development. The average personal income tax rate of industrialized countries in 1980 was 64%. It fell to 50% in 1995 and by 2010 stood at 41% — all in all, a decline of one-third."

And it's not just reducing individual tax rates. According to Moore, "Tax-cutting has been even more pronounced on the corporate side. Since the start of the Reagan era, the average rate in industrialized nations on corporate income has fallen nearly in half — from 48% to 25%."

Here's the basis for Moore's argument:

"Reagan changed the way the world looked at taxes as the U.S. economy experienced one of its strongest and longest booms, with 40 million new jobs created over the next 18 years. Bill Clinton raised income tax rates, but he also cut capital gains taxes to 20% from 28%.

"From 1982 to 2005, middle-class Americans' after-inflation income rose by nearly a third.

"The U.S. began sucking capital out of the economies of other nations as jobs and businesses flowed back to America. Other industrialized nations had to respond by cutting their tax rates in order to stem the outflow and keep their economies afloat.

"Yet this still isn't accepted wisdom . . . ."

Admittedly, there is no clear consensus on the Reagan-era tax cuts. For example, in a February 3, 2011 Washington Times article, Stephen Dinan quotes a critic who has just published a book on President Reagan:

“If you look at the specifics of his agenda — cutting federal spending — well, he didn’t. … He readjusted [taxes] somewhat, but total federal tax takes were the same when he left office as when he came in,” said Michael Schaller, a professor at the University of Arizona who has just published a book, “Ronald Reagan.” “Somehow those details are forgotten, and what we tend to remember is the ceremonial president who tends to evoke a sense of pride and can-do spirit.”

“Parts of him have aged very well — the Reagan image. Even I, who disagreed with almost all the substance of his policies, have come to have a higher regard for his skills. I think those will last, you can’t deny them,” Mr. Schaller said. “The public Reagan is probably here to stay, like the public FDR, the public Teddy Roosevelt. That’s pretty well enshrined now. I think the substance of the policy is still much contested.”

A September 12, 2010 article at CNN*Money reminds us "it's worth considering just what Reagan did -- and didn't do -- as lawmakers grapple with many of the same issues that their 1980s counterparts faced: a deep recession, high deficits and a rip-roaring political divide over taxes."

It's also important to recognize that, as the Regan Foundation reminds us, when President Reagan took the oath of office on January 20, 1981, "the country was experiencing some of (the) bleakest economic times since the Depression. Taxes were high, unemployment was high, interest rates were high and the national spirit was low."

Peter Sperry, an economics fellow at the Heritage Foundation, wrote a more extensive Backgrounder (No. 1414, March 1, 2001) on the Reagan economic record. He also points to another Backgrounder (No. 1415, March 5, 2001) on tax rates and class warfare.

The Institute for Research on the Economics of Taxation (IRET0 published a 34-page Policy Bulletin (No. 102, November 11, 2011) on Reagan era tax policies, and includes the modeling of the Reagan tax changes. It includes numerous tables and charts.

Thomas Sowell weighed in with a paper in 2012, published by the Hoover Institution (Publication No. 635), that dealt with the "trickle down" theory and "tax cuts for the rich" -- terms used by the left to argue against Reagan tax cuts.

A search at the Tax Foundation produces a list of documents on Reagan tax cuts, includinga comparison of Kennedy, Reagan, and Bus tax cuts, by William Ahern, (Fiscal Fact 15, August 24, 2004).

Finally, there's this short study, dated approximately 1994, from Congress' Joint Economic Committee (JEC) on the Reagan tax cuts, which provides lessons for tax reform.

August 01, 2015

Crisis and the Continued Sustainability of Medicare

The Washington Examiner's Barbara Boland reported on President Obama's weekly address this morning, noting President Obama used his weekly address t o celebrate the 50th Anniversary of Medicare and Medicaid. She specifically noted:

"According to Obama, those who say "Medicare and Medicaid are in crisis" are doing so as "a political excuse to cut their funding, privatize them, or phase them out entirely."

A video of the President's address, including a transcript, is available at RealClearPolitics. Here's the complete paragraph of what he said about Medicare and Medicaid being in crisis:

"And a great country keeps the promises it makes. Today, we’re often told that Medicare and Medicaid are in crisis. But that’s usually a political excuse to cut their funding, privatize them, or phase them out entirely -- all of which would undermine their core guarantee. The truth is, these programs aren’t in crisis. Nor have they kept us from cutting our deficits by two-thirds since I took office. What is true is that every month, another 250,000 Americans turn 65 years old, and become eligible for Medicare. And we all deserve a health care system that delivers efficient, high-quality care. So to keep these programs strong, we’ll have to make smart changes over time, just like we always have."

Let's take a look at where the truth lies. In an editorial last week, after Medicare's latest annual report was released, Investor's Business Daily (IBD) wrote:

"President Obama's top economists, Jeff Zients and Jason Furman, claim that the new Medicare Trustees Report "confirms the major progress that has been made in recent years in improving the financial position of the Medicare program."

"Medicare's Hospital Insurance Trust Fund will remain solvent until 2030, they say, which is 13 years longer than it was before ObamaCare. Plus, they say, growth in per-beneficiary spending was just 2.3% last year, "less than one-half of the 5.5 average rate from 2000 to 2010."

"But this sunny outlook doesn't stand up to even the slightest scrutiny.

"Medicare is still a fiscal time bomb. As the nearby chart shows, its hospital insurance deficits will hit $110 billion in 2031 — the first year after its trust fund runs out of money. Annual deficits will eventually top $1 trillion a year.

"Even that is a fantasy, since it assumes ObamaCare's steep Medicare provider payment cuts actually happen. Even Medicare's trustees are skeptical.

"Buried in an appendix, the report admits that "there is substantial uncertainty" regarding the likelihood that those cuts will be feasible. (link in the original)

"They are so deep, the report says, that what Medicare pays will "fall increasingly below providers' costs." By 2019, for example, as many as 15% of hospitals will have negative Medicare margins, it says. And the only way to avoid such massive losses would be for doctors and hospitals to "generate and sustain unprecedented levels of productivity gains."

Note footnote 3 on page 4 of that Trustees Report, which says in part, "At the request of the Trustees, the Office of the Actuary at CMS has prepared a set of  illustrative Medicare projects under a hypothetical modification to current law."

In its conclusion, IBD's editorial said, "Medicare remains in financial jeopardy and is in need of serious reform. Any politician who pretends otherwise is doing taxpayers and retirees a huge disservice."

Along the same line, in an article posted at Economics21, Charles Blahous, recently a Social Security and Medicare public trustee and senior research fellow at George Mason University's Mercatus Center, writes that Medicare "is on an unsustainable path." Although quite detailed, Blahous provides several helpful charts. For example, one chart shows Medicare's declining worker/beneficiary ration -- currently about 3.1, and headed towards 2.3 in 2035. A significant decrease from where it stood in 2007, i.e., 3.8.

The following chart from Charles Blahous' article shows that Medicare's HI Trust Fund ratio has dropped even from 2014 to 2015:

  

In her reporting for the Washington Examiner, Boland provided the following fiscal data:

"Medicare and Medicaid account for over a third of all U.S. health spending, and gross spending on Medicare in 2015 is expected to total $634 billion, reported Barron's. While spending on these programs started rather modestly in 1965, they have risen from 2 percent of GDP in 1985 to almost 5 percent in 2014.

"Unfunded liabilities like Medicare, Medicaid, and Social Security eat up 47% of Federal spending currently, and are projected to grow in the future as the baby-boomer generation retires and health care costs skyrocket, according to the Cato Institute, a D.C.-based think-tank. Medicare and Medicaid's "unfunded liabilities for the next 75 years exceed $45 trillion, nearly three times the officially acknowledged national debt," Barron's reported." (link in the original)

Shannon Muchmore provides a more readable article at ModernHealthcare.com. An Associated Press report is posted at ABC News. Finally, the Wall Street Journal says the outlook (behind the WSJ's paywall) of the two entitlement programs are "better but still bleak."

Take a few minutes, and write to your member of Congress to find out what they are doing to make Social Security and Medicare sustainable. We've provided contact information for members of Congress when we growled on July 24, 2015 and in our June 16, 2015 Growls.

And tell them ACTA sent you.

UPDATE (8/2/15) At the American Thinker blog today, Rick Moran concludes his post about the President's claim that Medicare and Medicaid are not in crisis this way:

"The president's assertion that these two, gargantuan federal health care programs are not in crisis is a lie. And unless something is done to put Medicare and Medicaid on a sustainable path, the two programs will end up busting the budget, crowding out funding for vital priorities like national defense, and failing to deliver on their promises of even minimum health care for seniors and the poor."