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July 30, 2016

An Alert for the Next Few Days

Your humble scribe will be away for a few days. Consequently, growling may be light until the middle of next week.

~ El Growler Grande.

July 29, 2016

How Slow can the U.S. Economy Grow? Is 1.2 Slow Enough?

Late this morning, CNBC's Jeff Cox wrote, "While 2016's anemic growth level isn't an automatic disqualifier for an interest rate increase, the bar just got a little higher."

Cox continues his reporting by writing:

"Friday's gross domestic product reading fell below even the dimming hopes on Wall Street. The 1.2 percent growth ratein the second quarter combined with a downward revision to the first three months of the year to produce an average growth rate of just 1 percent.

"In total, it was far below the Wall Street forecast of 2.6 percent second-quarter growth and didn't lend a lot of credence to a Fed statement earlier this week that sounded more confident on the economy. (The Atlanta Fed was much closer, forecasting 1.8 percent.)

"In short, they are not numbers upon which a rate hawk would want to hang one's hat.

""We're tired of talking about rate hikes when it's not going to happen for a while," Diane Swonk of DS Economics told CNBC. "I really think the Fed is sidelined until the end of the year.

"Or, perhaps, longer.

"Market expectations for the next Fed hike had been sliding as the release of the GDP report got closer, and they plunged afterward. The fed funds futures market Friday morning was indicating just a 34.4 percent chance of a rate rise this year, with the next move pushed out until well into 2017. A day earlier, the futures market had moved to just over 50 percent for a 2016 move. The Fed last hiked in December 2015, which was the first move after eight years of keeping the overnight rate near zero."

He points out that "GDP growth is just one input for the central bank," However, he adds, Friday's data "offered some hope."

Meanwhile, at Bloomberg News today, Sho Chandra reports, "The U.S. economy expanded less than forecast in the second quarter after a weaker start to the year than previously estimated as companies slimmed down inventories and remained wary of investing amid shaky global demand."  He then adds:

"Gross domestic product rose at a 1.2 percent annualized rate after a 0.8 percent advance the prior quarter, Commerce Department figures showed Friday in Washington. The median forecast of economists surveyed by Bloomberg called for a 2.5 percent second-quarter increase.

"The report raises the risk to the outlook at a time Federal Reserve policy makers are looking for sustained improvement. While consumers were resilient last quarter, businesses were cautious -- cutting back on investment and aggressively reducing stockpiles amid weak global markets, heightened uncertainty and the lingering drag from a stronger dollar.

“We’re just muddling through," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, who had forecast a 1 percent gain in second-quarter GDP. “Consumer spending looks good, but the problem is that the rest of the economy is soft. The economy remains vulnerable to downside risks. The Fed is right to be cautious."

Finally, at the Wall Street Journal, Eric Morath and Jeffrey Sparshott also report on the disappointing 1.2% GDP growth, writing:

"Economic growth is now tracking at a 1% rate in 2016—the weakest start to a year since 2011—when combined with a downwardly revised reading for the first quarter. That makes for an annual average rate of 2.1% growth since the end of the recession, the weakest pace of any expansion since at least 1949. (emphasis added)

"The output figures are in some ways discordant with other gauges of the economy. The unemployment rate stands at 4.9% after a streak of strong job gains, wages have begun to pick up, and home sales hit a post-recession high last month.

"Consumer spending also remains strong. Personal consumption, which accounts for more than two-thirds of economic output, expanded at a 4.2% rate in the second quarter, the best gain since late 2014.

"On the downside, the third straight quarter of reduced business investment, a large paring back of inventories and declining government spending cut into those gains."

The Journal story includes a very helpful chart showing the average GDP growth, at an annualized rate, during each expansion, ranging from the 7.6% rate during the 1949-1953 expansion; the 5.6% growth during the 1958-1960 expansion, 4.4% growth during 1980-1981; and, 4.3% during 1982-1990. Even the 2.8% growth during 2001-2007 significantly outpaces the 2.1% growth during the 2009-2016 expansion.

In addition, the Chicago Tribune asks, "Is the economy really recovering? Wake up and smell the GDP" while Barron's quips, "Well, that was disappointing."

Just yesterday, we growled that 13 states had negative growth in the 1st quarter, and linked to four Growls just since May of this year.

Readers are encouraged to call or write their Congressional representatives to encourage them to discuss economic growth. Use the links at yesterday's Growls to reach your members in Congress. At some point, politicians will be held accountable.

July 28, 2016

Thirteen States Had Negatve Growth in 2016's 1st Quarter

Frequent Growls readers know that GDP and economic growth are frequent topics that I growl about if for no other reason that it's the least painful of the ways out of the country's economic morass -- see the May 1, 2016, May 9, 2016, May 28, 2016, and June 21, 2016 Growls.

Consequently, it was disconcerting to read today's Washington Free Beacon article by Ali Meyer saying "Seven states have registered negative economic growth for two consecutive quarters, which is generally characterized as a recession, according to data released Thursday by the Bureau of Economic Analysis."

Meyer continued, writing:

"Real gross domestic product is the bureau’s most comprehensive measure of U.S. economic activity. It is an inflation-adjusted measure of each state’s prices for the goods and services produced for all industries within that state.

"Iowa, Nebraska, New Mexico, Oklahoma, Montana, Wyoming, and Alaska had consecutive quarters of negative economic growth in the fourth quarter of 2015 and the first quarter of 2016.

"According to the report, the economies of 37 states and the District of Columbia grew in the first quarter of 2016. The economies of 13 states shrank."

Oil and gas production and agriculture were the primary sectors dragging down the economies of the 13 states. Links to source material is in the original.

Take a few minutes to write your members of Congress to urge them to support policies that will result in economic growth. For example, tax reform and significant reductions in the regulatory burden. Contact information is available at the Library of Congress' Congress.gov. 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.

July 27, 2016

Maryland's U.S. Senator Now a Two-time Porker of the Month

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

Citizens Against Government Waste (CAGW) announced today they have "named Sen. Barbara Mikulski (D-Md.) its July Porker of the Month for her reckless push to bring back wasteful and corruptive earmarks." (emphasis in the original).

Here's how CAGW justified naming Maryland's outgoing U.S. Senator as their July 2016 Porker of the Month:

"At her last Senate Appropriations Committee markup, the retiring Sen. Mikulski uncorked a stem-winding defense of the thoroughly disgraced practice of earmarking.  “If I could say one thing to all of you:  Bring back congressionally directed projects,” she said, “I loved the earmarks I could do!”  Sen. Mikulski employed the same tired defense of pork-barrel behavior:  using taxpayer dollars for local projects would “grease the wheels” for large and often controversial spending bills.

"According to CAGW’s seven-point criteria, pork-barrel projects are funded for a specific purpose in circumvention of normal budget procedures.  Since 1991, Congress has approved 110,442 earmarks costing taxpayers $323.1 billion.  After high-profile boondoggles such as the Bridge to Nowhere in Alaska, and a decade of scandals that resulted in jail terms for Reps. Randy “Duke” Cunningham (R-Calif.) and Bob Ney (R-Ohio), and lobbyist Jack Abramoff, Congress declared a moratorium on earmarks in 2011.  However, as documented in CAGW’s 2016 Congressional Pig Book, earmarks are making an unwelcome comeback as lawmakers are engaging in the practice behind closed doors and outside of public view.

"CAGW has chronicled the litany of scandals and conflicts of interest that arose in the era of profligate earmarking.  Often, pork projects were directed for selfish personal political reasons, such as repaving a specific road next to a representative’s home; used as a kickback to a campaign contributor; or directed toward ludicrous local ventures like the infamous teapot museum in South Carolina and the indoor rainforest in Iowa.

"Contrary to Sen. Mikulski’s view, taxpayer money is not a lawmaker’s personal piggy bank, with dollars doled out to anyone he or she sees fit, regardless of merit or importance.  Sen. Mikulski’s retirement wish to bring back this clearly wasteful and corrupt practice should not be granted under any circumstances.

"For publicly calling for a return of pork-barrel earmarks, following her long career of diverting more than $620 million in earmarks to her state, CAGW names Sen. Barbara Mikulski its July Porker of the Month."

A search of the Growls database disclosed this is the second time in less than a year that Maryland's U.S. Senator has been selected as a big-time spending Porker of the Month. In a September 30, 2016 Growls, your humble scribe reported Senator Barbara Mikulski was selected by CAGW to be their September 2015 Porker of the Month "for her leading role in the effort to bust the very spending caps she voted for and President Obama agreed to in 2011." (emphasis in the original)

In addition, we growled on July 11, 2008:

"Taxpayers for Common Sense (TCS) reported this week that committee chairman, U.S. Sen. Barbara Mikulski (D-MD) and Ranking Member, Sen. Richard Shelby (R-AL) have scarfed up $122 million (almost 26%) of the earmarks in the FY 2009 Senate Commerce-Justice-Science appropriations bill. The bill contains 552 earmarks worth $471.4 million. According to TCS:

“Their states benefit from two of the largest earmarks in the legislation, including $30 million to the University of Alabama in Tuscaloosa for an interdisciplinary science and engineering teaching and research corridor and $20 million for Maryland and Virginia, to aid watermen in the Chesapeake Bay with new work opportunities, including but not limited to aquaculture, restoration and research.”

"Taxpayers can read the TCS article for the other pork projects paid for by all Americans, but that will benefit the politically elite. Time for the revolution"

At this week's Democratic National Convention, Senator Mikulski "formally nominated her friend and former Senate colleague Hillary Clinton for president on the Wells Fargo Center convention stage Tuesday, along with U.S. Rep. John Lewis of Georgia," according to Annapolis' Capital Gazette today.

Take a few minutes to write your members of Congress to tell them about the need for a sustainable federal budget. Contact information is available at the Library of Congress' Congress.gov. 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.

Kudus to Citizens Against Government Waste (CAGW) and the likely more liberal Taxpayers for Common Sense for their continuing efforts to bring about sanity in the federal government.

July 26, 2016

November Ballot's Bond Questions to be More Detailed

The Washington Post's Patricia Sullivan reported yesterday that bond questions to be on the November ballot will be "far more detailed this year."

Here's how she introduced the story:

"Arlington County Board and school officials will spell out in unprecedented detail this fall how they plan to spend borrowed money for long-term capital projects — a response to several years’ demands from residents for more transparency.

"Voters will be asked in November, as they are every two years, whether to allow the county to borrow money by issuing general obligation bonds to pay for new schools, facilities, transportation and parks projects.

"But while in 2014 a typical ballot question sought $105.8 million in bonds to “fund the design and construction of various school facility projects including new elementary schools, building additions for additional classroom space and maintenance capital projects,” a question on the ballot this fall for $138.8 million in school construction will spell out five specific schools or projects, with costs attached to each one.

"The decision to expand the explanations were a direct result of citizens’ complaints that they were not being told enough about what the county was borrowing . . . ."

Sullivan traces the cause for greater detail back to a 2012 parks bond, writing:

"In 2012, some voters staged a “vote no” campaign for a $50.5 million parks-and-recreation bond issue, because the wording of the ballot question failed to note that 80 percent of the money would be spent on a controversial Long Bridge aquatics center.

"The bond request passed, but about 36 percent voted no, nearly twice the typical no vote for such a question. It was a rare example of voter pushback in a county that has not turned down a bond question since 1979."

She then quotes County Board member John Vihstadt (I) and, also, Audrey Clement, who is running for a Board seat, writing:

"County Board members, who approved the wording of the questions Tuesday night, said they were happy with the expanded explanations, even though some residents have requested even more detail.

"Those supporting the wording include John Vihstadt (I), who based his 2014 election campaign on opposition to what he called extravagant spending on capital projects.

“You’ve come a long way with providing the details voters deserve when they are voting on multimillion-dollar initiatives like this,” he told the county manager at the board’s workshop meeting earlier this month. “I’m hopeful that the County Board will work to provide even greater details in future years,” he said later.

"Audrey Clement, who as a school board candidate in 2014 objected to the terse description of school projects that would be paid for with bond funding, said the 2016 version is much more explicit.

"Clement, who is running an independent campaign for County Board against incumbent Libby Garvey (D) this fall, said she still disagrees with some of the spending plans but is glad voters will know what the county and schools intend to do with the money."

Here, again, is the link to Patricia Sullivan's Washington Post article.

The local news website, ARLnow.com, reported on the four bond issues, Wednesday, July 20, 2016, focusing primarily on the dollar amounts and how the money is being allocated:

"As part of its latest Capital Improvement Plan, the Arlington County Board last night approved a new slate of bond referenda that will appear on the ballot this fall.

"The county has proposed four bonds for voters to consider. In total the bonds add up to some $315.8 million.

  • Metro and Transportation — $58,785,000
  • Local Parks and Recreation — $19,310,000
  • Community Infrastructure — $98,850,000
  • Arlington Public Schools — $138,830,000

The Arlington County Board considered the bond resolutions/questions at it's recessed meeting on July 19, 2016 as Agenda Item #58, which immediately followed item #57, the adoption of the FY 2017-2017 Capital Improvement Plan. The press release for the CIP and bond questions is here.

We agree the greater detail will provide voters with the information they need to know what the county and schools plan to use the money for. However, a more important issue is how the bond questions are worded, and the need to limit the flexibility in how funds can be diverted between projects.

Growls readers are urged to write to the Arlington County Board to express your views on the bond questions that will be on the November 8, 2016 ballot. Just click-on the link below:

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

And tell them ACTA sent you.

July 25, 2016

Presidential Candidates: Adress the Debt and Budget Outlook!

On Saturday, we growled after the nation's debt reached $19.4 trillion last Tuesday, July 19, 2016, noting the following lede in a CNS News article by Terry Jeffrey:

"The federal debt moved above $19,400,000,000,000 for the first time as of the close of business on Tuesday, according to the data released today by the U.S. Treasury."

We also growled that Congress passed the “Bipartisan Budget Act on October 30, 2015, and the President signed a few days later. The law suspended the legal debt limit until March 15, 2017. We also noted that columnist Veronique de Rugy had observed there had been only "vague policy options" addressing the national debt on the campaign trail. So much for bipartisan government?

Consequently, we note this significant post on the blog of the National Taxpayers Union Foundation.  On July 22, 2016, Demian Brady, Director of Research, wrote, "The Presidential Candidates Should Address the Federal Debt and Dismal Budget Outlook," what should be "a wake-up call to policymakers and the next President who, shortly upon taking office, will face a decision when the debt ceiling is reset next March."

Here's a portion of what Brady wrote:

" . . . . Since enactment of (the Bipartisan Budget Act of 2015) law, the debt has grown by $5 billion per day, on average, as the government continues to spend more than it collects in taxes.

"The trend will continue, despite a projected increase in tax revenues. Over the next three decades, federal tax receipts will grow as a share of the economy, but will be outpaced by a spike in spending according to a CBO long-term budget outlook. These are the finding of the latest long-term budget outlook by the Congressional Budget Office (CBO). Like recent versions of this annual report, the outlook isn’t good. CBO foresees a rising tide of deficits, driven by growth in outlays for Social Security and federal healthcare programs (especially Medicare). And of course, as annual deficits continue their ascent, net interest payments on the debt will rise sharply as a percentage of Gross Domestic Product (GDP).

"From 2000 through 2015, tax receipts have averaged 16.8 percent of GDP. CBO projected revenues will total 18.1 percent of GDP this year, and rise to an average of 19.1 per year in the long-term, representing an historic level of taxation. No ten-year period since 1940 saw a higher annual average than 18.3 percent; this high-mark was recorded twice: from 1992 to 2001 and from 1993 through 2002.

"CBO found that an aging population will drive outlays for Social Security and federal healthcare programs: "By 2046, projected spending for those programs for people 65 or older accounts for about half of all federal noninterest spending." Social Security will grow from 4.9 percent of GDP in 2016 to 6.3 percent in the long-term. Total federal spending for the major health care programs, including Medicare, Medicaid, and the Children’s Health Insurance Program, and the Affordable Care Act, rose from 2.0 percent of GDP in 1985 to 5.5 percent in 2016, and is projected to rise to 8.9 percent by 2046.

"Mandatory debt interest payments will also rise, putting additional pressure on the budget by limiting the amount of funding available for other programs. CBO forecasts that debt interest payments will balloon from 1.4 percent to 5.1 percent of GDP. And, of course, as annual deficits are allowed to accumulate, the federal deficit will swell. CBO forecasts that federal debt would reach 141 percent of GDP, far exceeding the 1946 peak of 101 percent. CBO notes that its prognostications are uncertain so far into the future, but that under several possible scenarios, debt could be as much as two times higher than it is now. An outside analysis of the report finds that the level of debt is likely even worse than CBO’s prognosis."

Brady closes the post this way:

" . . . And it must be noted that while entitlement programs are leading the spending surge, both Donald Trump and Hillary Clinton have vowed not to implement cost-saving reforms to Social Security. Trump has stated at rallies, “We're going to save your Social Security without making any cuts. Mark my words.” Yet there is not one mention of “Social Security” on his campaign website indicating how he would achieve this. He has also replied to AARP that, “The key to preserving Social Security is to have an economy that is robust and growing.” He has also promised to cut out “waste, fraud, and abuse” in the system. If successful, these would help the situation, but more substantive reforms would still be needed to address Social Security’s looming insolvency.

"Clinton on the other hand has proposals to expand the level of benefits paid out through the system by an average of $12.3 billion per year. She would also increase the maximum earnings, currently $118,500, on which individuals pay Social Security taxes. This massive tax increase would be expected to extend the solvency of the Trust Fund, but it would also lead to higher benefit payments over the long-term and could adversely impact wages and employment as employers must also pay for their share.

"Donald Trump and Hillary Clinton have each provided more specifics regarding where they would increase spending than on ways to rein in the federal budget. Libertarian candidate Gary Johnson on the other hand, has identified specific federal programs and agencies he would seek to eliminate for savings. While it is unclear whether his polling numbers will be high enough to earn him an invitation to the presidential debates, the looming debt crisis should be part of those conversations when the candidates take the stage."

Here, again, is the link to the complete Brady post.

Since Congress did not have the backbone to stand-up to the executive branch in October 2015, and since we will have a new president beginning January 20, 2017,  it's important we learn the details of what each presidential candidate has planned in order to "make the budget sustainable again."

Unfortunately, neither major political party's presidential candidate's website -- Hillary Clinton here and Donald Trump here -- includes a page whether citizens and voters can provide feedback. Perhaps you can use Twitter to communicate with them.

Take a few minutes to write your members of Congress to tell them of the importance of ensuring the national debt is made sustainable. Contact information is available at the Library of Congress' Congress.gov. 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.

Kudus to the National Taxpayers Union for their efforts to bring about a sustainable federal budget. For more information about the National Taxpayers Union, click here.

July 24, 2016

A Thought on the National Debt

"We must not let our rulers load us with perpetual debt."

~ Thomas Jefferson, 1816, letter to Samuel Kercheval

Source: Founders' Quote Database, The Patriot Post.

July 23, 2016

So Much for Bipartisanship

CNS News' Terry Jeffrey reported on Wednesday that the prveious day -- Tuesday, July 19, 2016 -- "The federal debt moved above $19,400,000,000,000 for the first time as of the close of business on Tuesday, according to the data released today by the U.S. Treasury."

Jeffrey explains what happened (embedded links in the original):

"At the close of business on Monday, July 18, the total federal debt was $19,391,094,247,028.26, according to the Treasury. By the close of business on Tuesday, July 19, it had risen to $19,402,361,890,929.46.

"On Friday, Oct. 30, 2015, Congress passed the “Bipartisan Budget Act,” which suspended the legal debt limit until March 15, 2017. President Obama signed that bill into law on Monday, Nov. 2, 2015.

"At the close of business on Oct. 30, the federal debt stood at $18,152,981,685,747.52.

"In the less than nine months since then, the federal debt has increased by $1,249,380,205,181.94."

He then explains the bipartisanship aspect:

"Title IX of the Bipartisan Budget Act is entitled “Temporary Extension of Public Debt Limit.” The Congressional Research Service summary explains that part of the law this way: “The public debt limit is suspended through March 15, 2017. On March 16, 2017, the limit is increased to accommodate obligations issued during the suspension period.”

"Prior to President Obama signing the Bipartisan Budget Act, the Treasury had been in a "debt issuance suspension period" that Treasury Secretary Jacob Lew had declared on March 16, 2015. During that "debt issuance suspension period" the Treasury took what it calls "extraordinary measures" to prevent the debt from exceeding what was then the legal limit."

Today's narrative, according to the mainstream media, is that the two major political parties should get along, i.e., do things in a bipartisan manner. So, rather than Congress having the backbone to force the executive branch to start a process to "make America sustainable again," as Veronique de Rugy suggests Republicans call one of the four-days of the Republican National Convention. Her phrase would channel such themes as the first day's "make America safe again." As she described in her most recent Investor's Business Daily op-ed, she was hoping to hear more than "the vague policy options" that had been de rigeur on the campaign trails.

So because Congress did not have the backbone to stand-up to the executive branch, Americans are burdened with an additional $1.249 trillion in debt, or about $3,800 for every American man, woman and child. Although some of the $1.249 trillion would have still been added, the country's fiscal affairs would be on a path to achieving sustainability. For more information on federal government shutdowns, click-here to visit Wikipedia.

Take a few minutes to write your members of Congress to find out what they are doing to ensure the budgets of the United States are sustainable. Contact information is available at the Library of Congress' Congress.gov. 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.

July 22, 2016

Time to Let the Sun Set on Solar Energy Tax Credits

In a recent 14-page study,"The Sun Should Set on Solar Socialism," Citizens Against Government Waste (CAGW) argues that Congress should "lower the boom on an up-front subsidy like the" investment tax credit (ITC).

But let's start with an introduction to the solar tax credits, though. According to CAGW:

"To the extent that taxpayers pay attention to renewable energy policy, they are likely to be most familiar with the infamous solar panel manufacturer Solyndra, which received $535 million from the Department of Energy’s Loan Guarantee Program (LGP) before the company went bankrupt in 2011. This well-publicized boondoggle opened the door for greater scrutiny of all renewable energy programs and subsidies, which include loan guarantees, grants, tax incentives, and tax credits. Although various parts of these programs are available for biofuels, fuel cells, geothermal, hydrogen, hydropower, solar, and wind, solar is now drawing the most scrutiny because of the amount of federal and state government support it needs to maintain viability.

"Energy subsidies have been around since the 1970s, but really took off after Congress passed the Energy Policy Act of 2005. The legislation dramatically changed U.S. energy policy by creating commercial and residential tax incentives and loan guarantees for energy production of several types. The Act implemented or extended tax reductions for various forms of energy, including nuclear power, fossil fuels, biofuels, and “clean coal.” It also extended existing subsidies, such as the renewable electricity production credit. Funding for many of these programs was significantly expanded in the American Recovery and Reinvestment Act of 2009 (ARRA), better known as the stimulus bill.

"Despite the best efforts of experts to determine how much taxpayers are paying for renewable energy subsidies, there is no comprehensive estimate of their cost. A May 5, 2015 Massachusetts Institute of Technology (MIT) Energy Initiative report, “The Future of Solar Energy,” found that “there is no authoritative compilation of total spending to support the deployment of solar technologies – at the national level or for any particular state – let alone a breakdown of total spending across subsidy programs.” A July 2015 University of California at Berkeley Energy Institute at Haas Business School study stated that the total tax expenditures for the four largest federal “clean energy” tax credits, which include the weatherization of homes, the installation of solar panels, and the purchase of hybrid and electric vehicles, had cost more than $18 billion since 2006.

"Tax expenditures for alternative electricity generation cost $13.7 billion from 2004-2015, with the investment tax credit (ITC) and production tax credit (PTC) accounting for $11.5 billion of that total, according to the IRS. However, the agency is not required to collect project-level data for either tax credit, so the total generating capacity supported by these tax expenditures is unknown. The LGP has more than $40 billion available for loans, and the Section 1603 tax credits for renewable energy that were created in the ARRA cost taxpayers $24.5 billion for 101,364 projects, as of July 30, 2015."

CAGW notes that section 48 of the Internal Revenue Code (IRC) provides a 30% "credit for qualifying 'energy property'" while section 25D allows for a 30% residential energy efficient property credit.

According to the study, there are "problems with the policy itself." For example:

"Publications and public remarks by renewable energy industry proponents are replete with allusions to the ITC as essential for these energy sources to vie effectively with fossil fuels, create jobs, and provide a fantastic return on “investment.” In other words, the tax credits are all things to all people."

They also note, "One of the largest solar companies, SolarCity, "has been sending a mixed message on solar subsidies and especially the ITC . . . . On June 1, 2015, the company’s chairman of the board, Elon Musk, told CNBC that “none of the (solar) incentives are necessary, but they are all helpful.” In fairness to Musk, he also went on to split a hair in the same interview, arguing that the real value of tax breaks is to accelerate the adoption of solar power rather than to prop it up – a point somewhat in sync with the energy finance partnership study."

In addition, the study says, "the efforts to subsidize solar have not just failed to lower its cost, they have also led to waste, fraud, abuse and mismanagement. Perhaps these results were inevitable when the government created a new, lucrative program and provided little accountability." The study also says, "A 2012 GAO audit found program overlap among some 65 different federally-funded and- managed initiatives to support solar energy. More than half supported only solar projects while the remaining initiatives funded solar and other renewable technologies." (emphasis added)

The study is certainly well-researched with 62 footnotes.

The study concludes by saying:

"Although subsidies doled out by Congress can become as ensconced as Washington’s monuments, there is an encouraging precedent for ending the ITC. The other icon of tax support for renewable energy, the windmill, was set free from the federal dole and sent out to seek its fortune when Congress allowed the wind production tax credit to expire at the end of 2014. A bid to restart the credit in the spring of 2015 was shot down in the Senate after even wind-state senators agreed to let wind power sink or swim on its own.

"The least Congress can do is lower the boom on an up-front subsidy like the ITC. Like the wind PTC, it has yet to deliver on promises that it will help to foster a sustainable, reliable, credible component of the U.S. energy portfolio. Indeed, it will not be clear that the power of the sun is viable in helping to power America’s homes and businesses until its federal purse strings are severed, setting free the solar industry and taxpayers."

Take a few minutes to write your members of Congress to urge them to end these wasteful energy tax credits since they have failed to foster a sustainable and reliable renewable energy portfolio. Contact information is available at the Library of Congress' Thomas website (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.

Kudos to CAGW for this well-researched and well-written study on two renewable energy tax credits. For more information about Citizens Against Government Waste, visit their website.

July 21, 2016

A Thought about Ideologues

"In general, politicians are rank opportunists, but at least most of them are malleable and attuned to public opinion.

“Ideologues are far more anti-empirical — and thus dangerous.”

~ Victor Davis Hanson

Source: his June 23, 2016 column, posted in the Washington Times.

Victor Davis Hanson is a classicist and historian with the Hoover Institution at Stanford University.

July 20, 2016

A Thought on Public Opinion

"Public opinion sets bounds to every government, and is the real sovereign in every free one."

~ James Madison, 1791

Source: Founders' Quotes Database, The Patriot Post.

July 19, 2016

A Thought about Censorship

"In the modern world, those who have power, but not the ability to convince others, often resort to censorship, or attempt to legally or forcibly ban ideas, products, like guns and sugary drinks, or practices that they disapprove of. A couple a months ago, a number of Democratic attorneys general initiated an effort to go after certain corporations, advocacy organizations and think tanks for allegedly disseminating “false” information about global warming. In fact, the information in question has been open to considerable scientific debate and, even if it was not, dissent from the views of the power elite is protected by the First Amendment. Even more disturbing is a quote from the Reason Foundation’s Shikha Dalmia that the Democrats, as part of their party platform, have pledged to use the “Department of Justice to investigate alleged corporate fraud on the part of fossil fuel companies who have reportedly misled shareholders and the public on the scientific reality of climate change.” This is nothing more than an attempt to use government force to quash dissenting views.

"In the past, some religious fundamentalists were advocates of censorship and book burnings. Perhaps the most famous in America was Anthony Comstock, who created the New York Society for the Suppression of Vice in 1873. He and his followers destroyed books and other materials they considered “lewd.” Congress even passed the Comstock Law to make such destruction and repression legal. Thus, it is most ironic that many of those who were part of the free speech movement in the 1960s and 1970s, fighting such laws, have now become a real threat to freedom in their insistence on political correctness and willingness to prosecute those who do not conform."

~ Richard W. Rahn

Source: his 7/19/16 column, "Book burners and gun banners," posted at the Washington Times.

Richard W. Rahn is on the board of the American Council for Capital Formation and is chairman of Improbable Success Productions. Also see his Wikipedia entry.

July 18, 2016

More "Government is the Problem." A Regulatory Example.

An article last Friday, by Elizabeth Harrington, in the Washington Free Beacon (HT Potemkin) says a new energy efficiency regulation issued by the U.S. Department of Energy to regulate wine refrigerators will "cost small businesses $12,500 each."

Harrington writes, in part:

"The Department of Energy now has a specific regulation for wine refrigerators.

"The agency released a final rule Friday requiring manufacturers to test the energy efficiency of refrigerators used for wine. It estimated the rule would cost the average small business $12,500 to test whether their equipment meets specifications.

“This final rule classifies a variety of refrigeration products that are collectively described as ‘miscellaneous refrigeration products’–i.e., ‘MREFs,’ as a covered product under Part A of Title III of the Energy Policy and Conservation Act (‘EPCA’), as amended,” the agency said. “These products include different types of refrigeration devices that include one or more compartments that maintain higher temperatures than typical refrigerator compartments, such as wine chillers and beverage coolers.”

"The agency said the $12,500 testing cost is “unlikely to represent a significant economic impact for small businesses.”

"The rule goes into effect in 30 days. Wine refrigerators will now be tested for temperature settings and energy use."

The final regulation "spans 159 pages," she adds, and notes, ”There was much discussion about the exact definition of the term "cooler" in the final reg.

As President Reagan said in his first inaugural address, "government is the problem."

We've growled several times recently about the regulatory state. On May 2, 2016, we growled that Uncle Sam, Esq., has a legal army of 25,060, larger than the combined TOP 7 private sector law firms (24,411). A week later, on May 10, 2016, we growled that regulatory costs were making so-called affordable housing unaffordable. Later in May -- on May 24, 2016 -- we growled that individuals and business were drowning in red tape.

Speaker Paul Ryan has announced several task forces, including one to reduce regulatory burdens. The regulation of wine coolers should be one item on its plate.

What are your members of Congress doing to reduce the regulatory burden? Growls readers are encouraged to write their representatives in Congress to find out. Contact information is available at the Library of Congress' Thomas website (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.

July 17, 2016

Aggressive Panhandling Clouds Metrorail's Future

The headline of a Washington Post online story, posted Thursday, July 14, 2016, says, "Metro board chairman warns of asking jurisdictions for up to $100 million each"

The story, reported by the Post's Martine Powers, begins this way:

"With a looming budget deficit and no clear solution in sight, the Metro board chairman, Jack Evans, is pushing to nail down a fiscal 2018 spending plan by November — months earlier than usual.

"The move by Evans is a signal that the transit agency is preparing to ask the District, Maryland and Virginia for additional money if fares are not raised or the federal government does not come forward with more funding.

"The budget for the coming fiscal year is usually finalized by January, but Evans wants Metro finance officials to make haste so the board can pass a budget before state legislatures swing into session, Evans said at Thursday’s board meeting.

“We need to move quicker than usual,” he said.

"If Metro does not find a new source of revenue, Evans warned, the agency could end up needing to request as much as $75 million to $100 million per jurisdiction so that the system can continue to function — a heavy burden for lawmakers who already believe they are spending far too much for substandard service."

She reports the WMATA chairman's panhandling "came at the end of a board meeting where independent consultants outlined a laundry list of Metro’s problems and recommendations for improvement: retooling workers’ compensation and pensions, increasing revenue from parking, finding a way to perform rail-car and bus maintenance more cheaply, and identifying a more efficient model to provide paratransit services."

She describes some of those problems this way:

"One of the board’s biggest concerns: Metro’s full-time staff has increased by an average of 5 percent a year since 2011 — a particular consideration given the subway’s steady slide in ridership in recent years.

"Buoyed by dozens of graphs and charts depicting Metro’s financial woes, consultant Tyler Duvall of McKinsey & Company indicated that Metro was paying significantly more for expenses than comparable transit agencies.

"If fringe benefits had grown at the same rate as they did at the New York City Transit Authority between 2011 and 2015, Metro would have saved $25 million, according to the McKinsey report."

To fully understand WMATA's problems, Ms. Powers article is worth reading in its entirety since the problems described above are just a few of the problems described.

It's worth noting that Arlington County taxpayers contributed almost $30 million to WMATA in FY 2015 out of the county's general fund. That's in addition to fares paid by Arlington residents and employer subsidies. Moreover, those contributions grew at a rate of 8.3% from 2001 through 2015 while total county spending "only" grew at 5.1% over the same 15 period.

Perhaps it's also time to have our own version of a Brexit vote. Would the Metro board chairman wake-up to the need for better governance if Arlington County held a successful ARLexit referendum?

We also growled about Metro spending on May 15, 2016, after Metro reported that it is facing an $18 million budget shortfall in the next decade.

Growls readers are urged to write to members of the Arlington County Board to express their opinion on the WMATA board chairman's efforts to squeeze $100 million from every Metro jurisdiction. Just click-on the link below:

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

And tell them ACTA sent you.

July 16, 2016

A Thought about 'American Populism"

"Bad economic times breed angry politics. We remain in bad economic times, irrespective of what our leaders in Washington say, and the political climate is getting more and more angry. America is moving into a period of heightened populism of both left and right. The result will be increasing political polarization on top of the polarization we already have experienced in recent years. The next couple of election cycles will be raucous.

"To understand all this, it helps to understand populism as a recurrent American political impulse and also to understand its conservative and liberal variants.

"As a general outlook, populism is the angry response of people who feel abused by people and institutions more wealthy or more powerful than themselves. It could be the followers of President Andrew Jackson in the 1830s, who thrilled at his effort to kill the Second Bank of the United States because it represented too much concentrated economic power. It could be the Southern farmer circa 1890 — beset by a constricted money supply, low crop prices and pressures from the town banker — who felt that the politicians always seemed to favor that banker over him. It could be the followers of Louisiana’s Huey Long in the 1930s, who felt that the great villain of the Depression era was the big financial establishment of Wall Street.

"The central cry of the populist is the need to smash institutions of entrenched power that, in the populist view, distort the American system to benefit themselves at the expense of the broad mass of citizens. When William Jennings Bryan, one of history’s greatest populists, ran for president in 1896, his campaign was touted as “the masses vs. the classes.” Populists particularly go after people who can be labeled as American “oligarchs” or “plutocrats.”

"There are two strains of populism in the American political tradition, though — liberal and conservative. Both are rising in today’s political environment."

~ Robert W. Merry

Source: his June 2, 2014 commentary column, posted in the Washington Times.

Robert W. Merry is a contributing editor, and former political editor, at the National Interest and an author of books on American history and foreign policy.

July 15, 2016

British Prove the Gipper Wrong?

In one of President Ronald Reagan's famous quotations, he said, "Government programs, once launched, never disappear." Here's the full quote, according to BrainyQuote.com:

"No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!"

I'm guessing our former President may be smiling today, though. Yesterday, the Daily Caller reported that "Britain SHUTS DOWN Its Global Warming Agency." Specifically, the Daily Caller's Andrew Follett reported, in part:

"Britain’s new government abolished its Department of Energy and Climate Change (DECC) Thursday morning, ridding the country of its global warming bureaucracy.

"Officials stated that the DECC has been abolished and U.K.’s environmental policy is will be transferred to a new ministry called the Department of Business, Energy and Industrial Strategy. Some former DECC’s functions will be outright abolished, while others will be handed back to the new ministry.

"The new agency will be headed by Greg Clark, who has a record of opposing wind power, causing environmentalists to panic. British wind companies, particularly ones that specialize in offshore wind power, were already worried that Brexit places the government subsidies and easy access to financing at risk. The industry is deeply dependent on these subsidies to make projects more economically viable.

"The backlash against British wind power occurred when the country’s  government was already forced to take emergency measures to keep the lights on and official government analysis suggests the country could have insufficient electricity on a windless or cloudy days to meet demand. Brownouts and blackouts caused by wind and solar power have already impacted the U.K."

HT to Tom Lifson of the American Thinker, who observes:

"Governments needing to cut expenditures can find ample pickings in green energy subsidies and global warming bureaucracies."

Follett concluded his article by writing, "Polling indicates that energy prices were so high that 38 percent of British households have cut back essential purchases, like food, to pay their energy bills. Another 59 percent of homes were worried about how they are going to pay energy bills."

Meanwhile, here in the United States, not only is Congress pushing such high cost programs as the President's Clean Power Plan, according to this story last week in The Hill, but 19 Democrats in the U.S. Senate, led by Sen. Sheldon Whitehouse (D-Rhode Island), took to the floor of the Senate Monday to attack fossil fuel companies and conservative think tanks and other organizations for their skepticism about global warming, as reported by William O'Keefe and Economics21. Here's a portion of what O'Keefe wrote:

"On July 11, 19 Democratic senators, led by Senator Sheldon Whitehouse (D-RI), took to the floor to attack fossil fuel companies for engaging in a “web of denial” about climate change.  Senator Whitehouse and his like-minded colleagues are using climate change as a Trojan Horse to hide their environmental agenda and their hostility to the economic benefits derived from using fossil fuels.

"Senator Whitehouse’s resolution claims that fossil fuel companies have engaged in a “misinformation campaign to mislead the public and cast doubt in order to protect their financial interest.”  It also claims that think tanks, public relations firms and other organizations have been funded to give legitimacy to this campaign and are part of this web of denial. These senators base their allegation on a sound bite—“the science is settled”—that is derived from the radical tactics of activists like Saul Alinsky.  Sound bites are not evidence."

Will the U. S. Congress be looking to see if much of the federal government's global warming bureaucracy can likewise be eliminated? Growls readers are encouraged to write their representatives in Congress to find out. Contact information is available at the Library of Congress' Thomas website (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.

July 14, 2016

Virginia Slips in Ranking of Places to do Business

Carol Hazard of the Richmond Times-Dispatch writes in a story posted Tuesday at the Charlottesville Daily Progress that "Virginia continues to slip in a prominent ranking of the best states for doing business."

According to Hazard:

"The state came in at No. 13 on this year’s list of America’s Top States for Business, released Tuesday by CNBC. It was ranked the third-best place for business in 2012.

“The Old Dominion stands superior for workforce and business friendliness, but high costs and weak infrastructure hurt,” the business-focused news channel said on its website.

"Virginia tied with Wyoming for 13th. Last year, Virginia was 12th, down from No. 8 in 2014 and No. 5 in 2013.
“This is a continuation of a troubling trend,” said Barry DuVal, president and chief executive officer of the Virginia Chamber of Commerce.

"He noted how Virginia is losing ground in other national rankings, including the Forbes magazine list of the best places for business. The state came in at No. 7 last year on that list, down from No. 4 the previous year.

“The most prominent reason is job growth in Virginia, which has trended below the national average,” he said."

She describes the methodology for ranking the states this way:

"States were scored on more than 60 measures of competitiveness based on input from business and policy experts, official government sources, the CNBC Global CFO Council and the states themselves.

"They received points based on their rankings in each metric, which were separated into 10 broad categories and weighted based on how frequently each is used as a selling point in state economic development marketing materials."

Here's a second copy of the link to the entire story.

Could if be that Virginia Governor Terry McAuliffe is doing too much traveling, and not enough managing, of the Commonwealth? Growls readers wishing to comment about Virginia's latest business ranking are urged to write to Governor McAuliffe. Click-on the following link:

Growls readers who are concerned that Virginia is moving in the wrong direction as a place to do business are also urged to provide their comments to their state legislators. The following legislators represent Arlington County in the Virginia General Assembly: Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Mark Levine). Contact information for members of the General Assembly can be found here  -- use one of the "quick links" to locate the senator and delegate who represent you.

And tell them ACTA sent you.

July 13, 2016

Arlington County Board Set to Approve $320 Million in Bonds

The Arlington Sun Gazette reports today that "Arlington voters will be asked to approve four bond referendums totaling nearly $320 million on Nov. 8, based on a package put together by county staff and on its way to County Board approval."

Additional details in the Sun Gazette story include:

"The largest single bond – totaling $138.8 million – will support projects requested by the School Board. Other bonds slated to be placed on the ballot include $98.85 million for community infrastructure, $58.79 million for transportation and $19.3 million for parks and recreation.

"Among items on the community-infrastructure bond is $46 million for redevelopment of the Lubber Run Community Center. Also part of that package are funds for the county government’s share of a garage at the new elementary school adjacent to Thomas Jefferson Middle School, plus funding for planning and design of the new Fire Station #8.

"A total of $12 million in bond funding would go to support the ongoing Neighborhood Conservation program."

Growls readers are urged to write to members of the Arlington County Board to express their opinion on the size or content of the bond referenda that will  be on the ballot in November. Just click-on the link below:

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

And tell them ACTA sent you.

July 12, 2016

,A Thought on Immigration

"[T]he policy or advantage of [immigration] taking place in a body (I mean the settling of them in a body) may be much questioned; for, by so doing, they retain the Language, habits and principles (good or bad) which they bring with them. Whereas by an intermixture with our people, they, or their descendants, get assimilated to our customs, measures and laws: in a word, soon become one people."

~ George Washington, 1794, letter to John Adams

Source: Founders' Quote Database, The Patriot Post.

July 11, 2016

Arlington County's Artisphere Just Won't Go Away!

At the Saturday, July 16, 2016 meeting of the Arlington County Board, the Board is being asked (agenda item #34) to consider: "Procurement of an Arts Truck through acceptance and appropriation of funding from the Arlington Community Foundation and transfer and appropriation of Cultural Affairs Trust and Agency account balances." Specifically, the Board is being asked to:

"Authorize the County Manager or his designee to execute a grant agreement to accept $29,532 in funds from the Arlington Community Foundation (ACF) as part of a funding package to procure a mobile Arts Truck and begin Fiscal Year (FY) 2017 programming. (2) Transfer $39,960 in one-time art funding from the Cultural Events ($10,220) and Art Gallery ($28,740) Trust and Agency accounts to the General Fund. In addition, (3) appropriate $29,532 in ACF grant funds (101.350900) and $39,960 in one-time art funding (101.399900) to Arlington Economic Development (101.71601) to procure a mobile Arts Truck and begin FY 2017 programming."

As the Arlington Sun Gazette's Scott McCaffrey explains today, "Left over Artisphere cash" will be used to pay for a so-called "arts truck." More specifcally, he writes:

"Leftover funds connected to the shuttered Artisphere will be used to support a new “arts truck” that will take programming to the streets of the community later this year.

"Arlington County Board members on July 16 are expected to agree to the proposal and accept a grant from the Arlington Community Foundation for the project, which county officials say can be accomplished without further impact on tax dollars.

"The nearly $30,000 in cash will come from a fund managed by the foundation on behalf of the county government to solicit contributions in support of the Artisphere, a government-run Rosslyn arts center that bled a sea of red ink during the three years it was in operation.

"The foundation funding will be supplemented with available county funding to purchase the vehicle for about $55,000 and launch pilot programming over the coming year.

"The Artisphere opened in the former Newseum space to fanfare in 2011, part of the Arlington government’s pre-recession ambition to achieve what it calls “world-class” status. But, as county officials quickly came to realize, the arts effort was doomed from the start – its location drew few visitors and projected revenues were wildly overstated. In its first year of operation, the center cost Arlington taxpayers $41 in subsidies for every person who ventured inside, and subsequent efforts to stanch the bleeding were only nominally successful.

"In 2015, County Board members, who already had been forced to bail out Signature Theatre and were coming under increasing fire for what critics described as vanity projects, pulled the plug on Artisphere operations by refusing to fund it for the subsequent fiscal year."

The County Manager's report to the Board discusses the "arts truck" this way:

"When closing the Artisphere, the County Manager and County Board made a commitment to continue programming for artistic and cultural events, specifically through the use of mobile and periodic programming along major commercial corridors. Cultural Affairs staff believes that an Arts Truck that delivers innovative, professionally-curated pop-up style arts events is an excellent mechanism for expanding the reach of arts, entertainment and culture throughout the Arlington community.

"Programming for the Arts Truck may include:

  • Pop-up visual arts exhibits
  • Lunchtime mini-concerts
  • Lounge and learn educational and civic programming
  • Temporary public arts activities

"All programming will take place in publicly-accessible space and will be accessible as required by law. Cultural Affairs will obtain any requisite permits and adhere to County regulations whenever the Arts Truck is deployed."

Today's ARLnow.com clarifies what will be spent, writing:

"The truck is expected to cost about $55,000. Another $14,000 is being allocated for one-time costs and 'pilot programming.'

"Nearly $30,000 of the costs is being provided by donations that were made to Artisphere but never spent. Close to $40,000 is being provided by existing Arlington County arts funds."

Unfortunately, what is not discussed is the ongoing costs beyond FY 2017, and how those costs will affect other cultural affairs programming. Not to mention the time that will be devoted to preparing the justification to accompany an application to some association to award the county for it's innovative 'arts truck.'

Growls readers are urged to write to members of the Arlington County Board to express their opinions on spendthrift projects such as an 'arts truck.' Just click-on the link below:

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

And tell them ACTA sent you.

July 10, 2016

Another Pension Funding Problem on the Horizon

In a commentary for e21 last week (the economic project of the Manhattan Institute), Charles Blahous writes about "the worsening pension problem nobody talks about."

He "is a senior research fellow for the Mercatus Center, a research fellow for the Hoover Institution, and a contributor to E21, and "recently served as a public trustee for Social Security and Medicare." Here's the context for the commentary:

"In contrast with the well-documented financing shortfalls in Social Security and state/local/Puerto Rican pensions, another pension funding problem generally receives less attention: private sector employer-provided pensions insured by the Pension Benefit Guaranty Corporation (PBGC). Unlike defined contribution (DC) retirement saving plans such as 401(k)s, which are fully funded by definition, defined-benefit (DB) pensions can exhibit sharp differences between benefit promises and funding capability. Whenever DB funding is insufficient to finance promised benefits, someone is in for an unpleasant surprise: very possibly the worker who depends on those benefits, and potentially the taxpayer later called upon to make up the shortfall. Employer-provided pensions are increasingly facing such threats, as the following backgrounder explains.

"PBGC insures employer-provided pensions. The PBGC is a government-chartered corporation that insures single-employer and multiemployer DB pensions. Many employers promise such pension benefits to their workers and are required by federal law to contribute funding to them under certain rules. These employers are also required to pay premiums to the PBGC to finance insurance for these benefits." (Emphasis in the original)

PBGC insures two types of private pension plans, single-employer plans and multiemployer plans, and they are treated differently.

According to Blahous, "PBGC’s insurance program is in financial trouble." How serious? He writes:

". . . In its annual report for FY2015, PBGC estimated a net deficit (liabilities exceeding assets) of $76.3 billion in its combined insurance programs, consisting of a $24.1 billion deficit in its single-employer program and a $52.3 billion deficit in its multiemployer program. Both the total deficit and the multiemployer program deficit were the largest in history. A more recent update projected a median deficit of $52.9 billion and a mean deficit of $55.5 billion in the multiemployer program. The specifics are startling: the fiscal year 2015 $52.3 billion deficit estimate consisted of $54.2 billion in liabilities against only $1.9 billion in assets. On June 17, Labor Secretary Thomas Perez wrote to Congressional leaders to state that “insolvency of PBGC’s multiemployer insurance program would devastate the retirement benefits of 1 million to 1.5 million participants and their families,” and that “we must address the funding and other challenges of the multiemployer insurance program before it is too late.”

He goes on to describes the following points:

  • The financial troubles are rapidly growing worse.
  • Funding problems are caused largely by lax funding rules and inadequate premium assessments.
  • Employer pensions are not backstopped by the taxpayer – yet.
  • Periodically legislated pension funding relief has worsened the problem.
  • PBGC’s accounting methods provide some early warning but time is nevertheless short.

"In sum," Blahous writes, "systemic underfunding in employer-provided pensions remains an enormous challenge facing plan sponsors. Unless it is successfully addressed, it threatens to become a still bigger problem confronting millions of workers and potentially federal taxpayers as well."

Here again is the link to the entire commentary.

And what is Congress doing? Making things worse, as Blahous describes. We encourage Growls readers to write to their representatives in Congress to share their opinions about private pension insurance and the Pension Benefit Guaranty Corporation (PBGC). Contact information is available at the Library of Congress' Thomas website (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.

Kudus to e21 to read about economic policies for the 21st century, and to the Manhattan Institute.

July 09, 2016

The Genius of Renewable Energy Standards. Not!

Earlier this week, in an op-ed in Investor's Business Daily. Timothy Considine, an energy economist at the University of Wyoming, argues there is "a recent trend of states moving away from RPS (Renewable energy Portfolio Standards), which exist in mandatory form in 29 states and Washington D.C., ranging from 75% in Vermont to 10% in Wisconsin. Last year, West Virginia and Kansas repealed their RPS. And the year before that, Ohio paused its RPS. Currently, proposed legislation exists in numerous statehouses to cut or scrap RPS."

The reason, Considine explains:

". . .  Cost. According to the Brookings Institution, wind power is twice as expensive as conventional power, and solar power is three times as expensive. These higher energy costs are passed on to electrical ratepayers, depressing economic output and disproportionately hurting the poor, who spend a larger fraction of their incomes on electricity.

"My new RPS research sheds more light on the degree and scope of these costs and explains how they impact various states differently. Understandably, I find that states with moderate RPS goals experience moderate rate increases, while states with ambitious RPS goals experience more significant rate increases.

"For instance, Nevada's 25% RPS will increase state electricity prices by 16% in 2020. But Wisconsin's 10% mandate will only increase its state's electricity prices by 4% in 2020. (According to Energy Information Administration data, residential electricity prices are currently 29% higher in states with mandatory RPS than in states without them.)

He then writes. "The economic costs associated with the higher electricity rates go beyond just reducing spending among ratepayers, who now must devote more of their income to their electric bill," explaining:

" . . . Since energy is an essential factor of production and consumption activities, businesses pass along higher rates in the form of higher prices for customers.

"As a result, net economic output in states with RPS is reduced -- often by billions of dollars. I conclude, for instance, that Colorado's 30% RPS will reduce its economic output by $2 billion in 2020. New Mexico's 20% RPS will reduce its economic output by $444 million in 2020.

"Less economic output means fewer jobs. I expect RPS to cost thousands of jobs per state, varying based on each state's unique labor market. I estimate that North Carolina's 12.5% RPS will cost it 43,000 jobs in 2020, for example."

It's true that RPS do create some jobs in building and maintaining solar, wind and other renewable capacity, but these job gains are dwarfed by the job losses caused by reduced economic output."

The U.S. Energy Information Agency provides the following "quick fact" about Virginia's RPS:

"Virginia established a voluntary renewable portfolio standard to encourage investor-owned utilities to procure a portion of the electricity sold in Virginia from renewable energy resources. In 2014, 6.5% of the state’s net electricity generation came from renewable energy, three-fourths of which was biomass."

Additional information about Virginia's RPS is available at this Dominion Power webpage.

In addition, Virginia's State Corporation Commission maintains a webpage where you can access Appalachian Power's and Dominion Virginia Power's annual reports on renewable energy. They also note, "The 2007 General Assembly passed legislation that, among other provisions, established incentives to implement a renewable energy portfolio standard program."

Growls readers who are concerned about the higher costs of electricity resulting from the General Assembly's imposition of a RPS in Virginia are urged to provide their comments, including repeal of Virginia's RPS mandate, to their state legislators. The following legislators represent Arlington County in the Virginia General Assembly: Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Mark Levine). Contact information for members of the General Assembly can be found here  -- use one of the "quick links" to locate the senator and delegate who represent you.

And tell them ACTA sent you.

Kudos to Investor's Business Daily, especially their exemplary editorial page.

July 08, 2016

Just Who is Setting the Priorities for the Federal Government?

Long-time Growls readers know the national debt has been a frequent topic for ElGrowlerGrande. Most recently May 12, 2016, March 29, 2016, and March 15, 2016.

Apparently, the message about the pending federal bankruptcy has not gotten through to the some lower-level bureaucrats buried deep inside the U.S. Department of Transportation. According to the Washington Free Beacon's Elizabeth Harrington yesterday:

"The Department of Transportation is spending over $3 million to create a national bicycle information center, which will provide research on “livability.”

"The government released a grant opportunity last month soliciting responses to create the center that prioritizes biking and walking over driving.

"The Federal Highway Administration is seeking an organization to “operate a national pedestrian and bicycle information center,” according to the grant. The center will also “conduct pedestrian and bicycle research, tracking, and technical assistance activities, including safe and accessible roadway design, livability, equity, ladders of opportunity, and economics.”

"Additionally, the center for bicyclists will focus on enhancing the “safety of pedestrians and bicyclists on our Nation’s roadways.”

"The center will place an “emphasis on pedestrians and bicyclists” when promoting an “integrated, convenient, and safe transportation system.”

"The Department of Transportation estimates that the center will cost $3,125,000, but the project could cost as much as $3,906,250."

Ms. Harrington also writes:

"The government already runs numerous bicycle safety websites, including one by the National Highway Traffic Safety Administration, which offers a two-page instruction guide for how to put on a bicycle helmet.

"The agency also already funds a website called the “Pedestrian and Bicycle Information Center,” which includes data and statistics. It also has a page devoted to “social justice issues related to walking and bicycling.”

We encourage Growls readers to write to their representatives in Congress to share their opinions about the national debt and how priorities are set. Contact information is available at the Library of Congress' Thomas website (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.

July 07, 2016

A Thought about Taxes

"When there's a single thief, it's robbery. When there are a thousand thieves, it's taxation."

~ Vanya Cohen

Source: QuoteGarden.com.

July 06, 2016

Arlington School Board Avoids the Hard Work

The Arlington Sun Gazette's Scott McCaffrey reports that at last Thursday's school board meeting, members "opted to increase the budget for renovation and expansion of McKinley Elementary School by 4 percent rather than make cuts in the project’s scope."

According to McCaffrey:

"The two options were on the table after unforeseen conditions emerged on the site, including discovery of an underground spring and previously undocumented utilities.

"School Board members had two options: Either increase the budget by about $942,000, or make cuts in the scope of the work. Board members unanimously opted to add the funding.

"As a result, the total budget for the project will rise to $22.93 million. It’s possible that the original budget may still be met, since it includes contingency funding for excess construction costs that may, or may not, materialize.

"The complications found during work also have pushed back the project’s schedule, with the school’s three-story addition and gym space, originally expected to be completed this month, not likely to be ready until November. Improvements to the parking lot and school fields, originally anticipated to be completed later this year, likely won’t be ready until April 2017, school officials said."

As the late Bob Atkins liked to say when speaking to the Arlington County Board, "mistakes were made."

Unfortunately, it seems that no one is ever held accountable. Guess the choice for the School Board, or the County Board for that matter, between increasing spending or making tough prioritization decisions is much easier when you see taxpayers with deep pockets.

The budget adjustment for the McKinley Elementary School renovation/addition project was item G.1. on the Arlington School Board's July 1 meeting agenda.

Growls readers are encouraged to provide their thoughts to the Arlington School Board. Just click-on the link below to pop-up a pre-addressed e-mail:

  • Call the School Board office at (703) 228-6015

And tell them ACTA sent you.

July 05, 2016

Virginia Ranks #31 on Property Taxes

As they do most weeks, Tax Foundation published another map enabling taxpayers to quickly assess how their state compares to the other 49. This week's map provides taxpayers a look at where Virginia stands on property taxes.

The Tax Foundation first provides some context:

"States tax real property in a variety of ways: some impose a rate or a millage—the amount of tax per thousand dollars of value—on the fair market value of the property, while others impose it on some percentage (the assessment ratio) of the market value, yielding an assessed value.

"Some states have equalization requirements, ensuring uniformity across the state. Sometimes caps limit the degree to which one’s property taxes can rise in a given year, and sometimes rate adjustments are mandated after assessments to ensure uniformity or maintenance of revenues. Abatements are often available to certain taxpayers, like veterans or senior citizens. And of course, property tax rates are set by political subdivisions at a variety of levels: not only by cities and counties, but often also by school boards, fire departments, and utility commissions."

Jared Walczak, who authored the Tax Policy blog post, then explains how the numbers on the map were arrived at:

"Today’s map cuts through this clutter, presenting effective tax rates on owner-occupied housing. This is the average amount of residential property tax actually paid, expressed as a percentage of home value. Some states with high property taxes, like New Hampshire and Texas, rely heavily on property taxes in lieu of other major tax categories; others, like New Jersey and Illinois, impose high property taxes alongside high rates in the other major tax categories."

Below is the map, and shows that Virginia with an effective property tax rate of 0.81% ranks #31 among the states:

Here are the five states with the highest effective property tax rates and the five states with the lowest effective tax rates:

  • #1 -- New Jersey (2.11%)
  • #2 -- New Hampshire (1.99%)
  • #3 -- Illinois (1.98%)
  • #4 -- Wisconsin (1.74%)
  • #5 -- Vermont (1.70%)

                 --

  • #46 -- Washington, DC (0.54%)
  • #47 -- Wyoming (0.1%)
  • #48 -- Louisiana (0.41%)
  • #49 -- Alabama (0.40%)
  • #50 -- Hawaii (0.28%)

Concerned that Virginia's property tax rate is too high? If so, Growls readers are urged to write to members of 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.

July 04, 2016

A Thought about the Fourth of July

"Let the Fourth of July always be a reminder that here in this land, for the first time, it was decided that man is born with certain God-given rights; that government is only a convenience created and managed by the people, with no powers of its own except those voluntarily granted to it by the people. We sometimes forget that great truth, and we never should. Happy Fourth of July."

~ Ronald Reagan

Source: ReaganFoundation.org.

July 03, 2016

Federal Spending and the Powerball Jackpot

At the beginning of 2016, readers may recall the frenzy generated as the amount of the Powerball lottery climbed towards $1.6 billion. As reported by USA Today on January 14, 2016, "The Powerball lightning bolt finally struck. Lucky ticket holders in three states — California, Florida and Tennessee — will split the record $1.6 billion Powerball jackpot that lured millions of lottery hopefuls into a frenzied buying spree." Winners have the option of choosing annual payments or a lump sum.

Although there were three winning tickets, the record jackpot provided George Mason University's Mercatus Center's senior research fellow Veronique deRugy the opportunity to compare the "immense sum" of the Powerball jackpot to another equally "immense sum," i.e., federal budget, whether on an annual or daily basis. Both numbers are so immense, she points out, that it's "hard to wrap our minds around."

Accoording to deRugy, "In fiscal year 2015, the federal government spent $3,700 billion (or $3.7 trillion), which is more than $10 billion per day." She writes:

" . . . although the Powerball jackpot was massive, it was considerably smaller than how much the federal government spent per day, on average, last year. Indeed, the federal government spent almost half a billion dollars per hour. That means that it would have taken Uncle Sam only 3.8 hours to spend the entire jackpot!"

She also provided the following chart that compares the Powerball jackpot and federal spending:

 

"It’s worth noting, she concludes, " that the federal government was also a winner. Assuming the three jackpot winners took the lump sum payout, the federal government will end up collecting around $400 million in taxes on it. Again, that is a massive sum, but it’s only equal to about one hour of federal spending."

Here again is the link to "Federal Spending in Perspective: The Powerball Jackpot."

If you are concerned about the immense size of the federal budget, take a few minutes to write your member of Congress. Contact information is available at the Library of Congress' Thomas website (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.

July 02, 2016

Politics, Political Claims, and Facts

Earlier this week, the House Select Committee on Benghazi, chaired by Rep. Trey Gowdy (R-S.C.), released their long-awaited report, according to this story by Alex Pappas of the Daily Caller.

At Conservative Review, Chris Pandolfo wrote that "House Democrats were quick to blast the report," and quoted the committee's ranking minority member, who "called the Republican report "partisan" but could offer no additional comment because "we haven't read it."

Meanwhile, the Washington Free Beacon's Elizabeth Harrington reports that Democrats are angered because the investigation cost over $7 million, specifically writing, "A spending tracker of the investigation created by Democratic members of the committee showed a total $7,161,432 spent as of Tuesday afternoon."

However, Harrington further reported:

"The amount is less than the federal government’s investments in studies about the “relationship between gender and glaciers,” a soap opera and instructional videos on how to put a condom on a cucumber, and research on male engineering students’ “microagressions” against women.

"The National Science Foundation spent $412,930 on a study that published scientific results on the “relationship between gender and glaciers.” The results concluded that “ice is not just ice,” and instructed scientists to take a “feminist postcolonial” approach when studying melting ice caps and climate change.

"The soap opera series “Love, Sex, and Choices” has received $3,134,199 from the National Institutes of Health for 12 episodes about HIV. One episode viewed by the Washington Free Beacon begins with a graphic oral sex scene between a woman and her ex, while a child plays in the other room.

The National Endowment for the Arts recently spent $20,000 for a play about “rape culture,” and the Environmental Protection Agency has invested $90,000 in technology to track how long Americans spend in the shower when they stay in hotels.

"Another National Science Foundation project has spent $548,459 videotaping male college engineering students while they work in labs to see if they are causing women to experience “microaggressions.”

"Finally, a joint project by the U.S. Department of Agriculture and the National Institutes of Health has spent $3,541,583 on a series of anti-obesity hip-hop songs, such as the Barry White-inspired “Bake Don’t Fry” that urges kids to lay off the French Fries.

"The above mentioned taxpayer-funded projects total $7,747,171, over $500,000 more than what Congress spent investigating the Benghazi terrorist attack."

Enough of political hypocrisy. Given the number of claims the Select Committee was merely rehashing "old information," Pappas provides a list of “'new facts' uncovered by the probe, with corresponding page numbers in the released report." Here are the first three 'new facts' that Pappas cites:

  • Despite President Obama and Secretary of Defense Leon Panetta’s clear orders to deploy military assets, nothing was sent to Benghazi, and nothing was en route to Libya at the time the last two Americans were killed almost 8 hours after the attacks began. [pg. 141]
  • With Ambassador Stevens missing, the White House convened a roughly two-hour meeting at 7:30 PM, which resulted in action items focused on a YouTube video, and others containing the phrases “[i]f any deployment is made,” and “Libya must agree to any deployment,” and “[w]ill not deploy until order comes to go to either Tripoli or Benghazi.” [pg. 115]
  • The Vice Chairman of the Joint Chiefs of Staff typically would have participated in the White House meeting, but did not attend because he went home to host a dinner party for foreign dignitaries. [pg. 107]

In the press conference announcing release of the report, the Daily Caller's Steve Guest writes that Gowdy repeatedly "called on Americans to read the committee’s full report, arguing that it can be done 'in less time than our fellow Americans were under attack in Benghazi.'" The committee's full report, including the press release, is available here. Scroll down to the bottom for for links to the five sections of the report as well as appendices A through L.

As always, we encourage Growls readers to write to their representatives in Congress to share your opinions about the Benghazi report, and whether Congress will take action to implement the recommendations of the Select Committee. For example, the committee recommends that the House amend its rules so that all committees are authorized to take depositions. Or that all committees establish oversight subcommittees. Contact information is available at the Library of Congress' Thomas website (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.

July 01, 2016

ObamaCare Insurers Looking for Larger Bailouts

As Ed Morrissey wrote yesterday in The Fiscal Times, "Insurers helped cheerlead the creation of Obamacare, with plenty of encouragement – and pressure – from Democrats and the Obama administration." He added, "As long as the Affordable Care Act included an individual mandate that forced Americans to buy its product, insurers offered political cover for the government takeover of the individual-plan marketplaces. With the prospect of tens of millions of new customers forced into the market for comprehensive health-insurance plans, whether they needed that coverage or not, underwriters saw potential for a massive windfall of profits."

Now, six years later, we learn from Paige Cunningham at the Washington Examiner, "Insurers losing money from Obamacare plans will get a collective $7.8 billion to make up for their losses through the law's reinsurance program, the Obama administration announced Thursday." She adds:

"The Centers for Medicare and Medicaid Services will pay out $7.8 billion to 497 insurance issuers around the country, the agency announced. Insurers will get compensated for 55 percent of their claims, slightly higher than the 50 percent compensation rate originally planned.

"The reinsurance program is one of three programs within Obamacare meant to distribute the risk in such a way that insurers find it financially feasible to cover all those who apply, regardless of health status. The programs compensate insurers with disproportionately sicker, more expensive enrollees with money paid out mainly by insurers with a healthier, less expensive customer pool. Republicans have accused the administration of making $3.5 billion in improper payments through the reinsurance program to help "prop up" insurers who are sustaining losses by participating in Obamacare.

"Last year, payments into the reinsurance program slightly exceeded its $7.9 billion in payouts. But one of the other programs, known as risk corridors program, fell far short in payments to insurers, giving them just 12 percent of what they sought."

Morrissey continued his op-ed, writing:

"Six years later, those dreams have failed to materialize. Now some insurers want taxpayers to provide them the profits to which they feel entitled -- not through superior products and services, but through lawsuits.

"Earlier this month, Blue Cross Blue Shield of North Carolina joined a growing list of insurers suing the Department of Health and Human Services for more subsidies from the risk-corridor program. Congress set up the program to indemnify insurers who took losses in the first three years of Obamacare with funds generated from taxes on “excess profits” from some insurers. The point of the program was to allow insurers to use the first few years to grasp the utilization cycle and to scale premiums accordingly.

"As with most of the ACA’s plans, this soon went awry. Utilization rates went off the charts, in large part because younger and healthier consumers balked at buying comprehensive coverage with deductibles so high as to guarantee that they would see no benefit from them. The predicted large windfall from “excess profit” taxes never materialized, but the losses requiring indemnification went far beyond expectations.

"In response, HHS started shifting funds appropriated by Congress to the risk-corridor program, which would have resulted in an almost-unlimited bailout of the insurers. Senator Marco Rubio led a fight in Congress to bar use of any appropriated funds for risk-corridor subsidies, which the White House was forced to accept as part of a budget deal. As a result, HHS can only divvy up the revenues from taxes received through the ACA, and that leaves insurers holding the bag."

In April 2016, Peter Sullivan reported for The Hill, "Health insurance companies are amplifying their warnings about the financial sustainability of the ObamaCare marketplaces as they seek approval for premium increases next year." Sullivan added:

"Insurers say they are losing money on their ObamaCare plans at a rapid rate, and some have begun to talk about dropping out of the marketplaces altogether.

“Something has to give,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.”

"While analysts expect the market to stabilize once premiums rise and more young, healthy people sign up, some observers have not ruled out the possibility of a collapse of the market, known in insurance parlance as a “death spiral.”

"In the short term, there is a growing likelihood that insurers will push for substantial premium increases, creating a political problem for Democrats in an election year.

"Insurers have been pounding the drum about problems with ObamaCare pricing.

"The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage from employers.

"And a report from McKinsey & Company found that in the individual market, which includes the ObamaCare marketplaces, insurers lost money in 41 states in 2014, and were only profitable in 9 states."

Do you agree the federal government should be responsible for providing healthcare? For crony capital-sized, seemingly unlimited, subsidies? Or, do you believe that individuals should be responsible for their own healthcare? And even if you believe the government has a role in healthcare, shouldn't it at least be sustainable? And do you know what your members of Congress are doing to reform the Affordable Care Act, aka ObamaCare?  Write to them to find out. Contact information is available at the Library of Congress' Thomas website (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.