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White House to Try Rescission to Cut Federal Spending


Monday May 7th, 2018   •   Posted by Craig Eyermann at 6:42am PDT   •  

4542732 - text of budget and scissors, concept of budget cut In a sign of how badly the increased spending contained in the 2018 omnibus spending bill that he signed into law on March 23 is going over with many in his political party, President Donald Trump is planning to try an almost never-used legislative procedure to try to retroactively cut $25 billion of spending from the $1.3 billion bill.

Robert Donachie of the Daily Caller discusses the plan:

President Donald Trump’s administration is going to roll out a recision package in the coming weeks that will roll back $25 billion from the $1.3 trillion spending bill Congress passed in April, a source with first-hand knowledge told The Daily Caller News Foundation....

The White House was expected to release a recision package—a request to rescind funds Congress previously appropriated—Tuesday, but that did not materialize. The administration was reportedly looking at rolling back between $30 and $60 billion from the $1.3 trillion spending bill.

So it is already not looking good for the prospects to roll back a portion of the net spending increase that passed in the omnibus spending bill. That spending increase was over $100 billion more than what President Trump had outlined in his 2018 fiscal year budget proposal, so attempting to trim the bill by just $25 billion would be falling far short of the amount by which the discretionary portion of the U.S. government’s expenditures increased above what President Trump had indicated he wanted for the year.

Partly, that’s due to the U.S. government’s 2018 fiscal year already being more than half over. It began on October 1, 2017, and will run through September 30, 2018. Since we’re now in May 2018, much of that money will already have been spent.

Worse, there’s no guarantee that the U.S. Congress, which was all too willing to hike its spending to cut deals to get the budget passed, will follow through on what it would need to do. Donachie describes what would happen once the White House sends a rescission request to the Congress:

A recision package would make its way from the White House to the House and Senate appropriations committees, where lawmakers would have up to 25 days to amend, approve or shoot down the president’s proposal.

If lawmakers on the respective appropriation committees fail to do something within the 25 day timeframe, the package would likely make its way out of committee, where the full House and Senate bodies would have the opportunity to act.

House and Senate lawmakers would have 45 days to consider the rescission package. If they disprove of the president’s proposal, the White House would then be forced release the withheld funds to the federal agencies.

Without the approval of a simple majority in both the House of Representatives and Senate, that latter outcome would represent the most likely outcome, in which the whole exercise would be little more than political theater.

If President Trump is really serious about putting on more than a show in making the Congress consider a rescission package, he will need to pack it with examples of the U.S. government’s most outrageously wasteful spending that provides regular Americans with little-to-no benefit. That’s the only way to make such retroactive spending cuts too difficult for the elected politicians of Washington, D.C., to avoid acting upon without consequences from the voters in this election year.

We’ll see what happens. If it ever happens.

Pensions for Bureaucrats Crowding Out Essential Services


Thursday May 3rd, 2018   •   Posted by Craig Eyermann at 7:04am PDT   •  

92426308 - big bomb of money hundred dollar bills with a burning wick. little time before the explosion. the concept of financial crisis State and local governments across America are increasingly strapped for cash. One major culprit is diverting money away from the essential services they provide, including police, fire, school, road repair, and emergency services.

That culprit is the excessively generous pensions and other benefits for public employees. Mary Williams Walsh of the New York Times tells the story of how one retired state government employee is collecting over $76,000 a month, or $912,000 a year, in pension benefits.

Joseph Robertson, an eye surgeon who retired as head of the Oregon Health & Science University last fall, receives the state’s largest government pension.

It is $76,111.

Per month.

That is considerably more than the average Oregon family earns in a year.

Oregon—like many other states and cities, including New Jersey, Kentucky and Connecticut—is caught in a fiscal squeeze of its own making. Its economy is growing, but the cost of its state-run pension system is growing faster. More government workers are retiring, including more than 2,000, like Dr. Robertson, who get pensions exceeding $100,000 a year.

The state is not the most profligate pension payer in America, but its spiraling costs are notable in part because Oregon enjoys a reputation for fiscal discipline. Its experience shows how faulty financial decisions by states can eventually swamp local communities.

And swamp them they do. Walsh describes the fiscal impact on the communities who are burdened by excessive benefits being claimed by state and local government employees:

The bill is borne by taxpayers. Oregon’s Public Employees Retirement System has told cities, counties, school districts and other local entities to contribute more to keep the system afloat. They can neither negotiate nor raise local taxes fast enough to keep up. As a result, pensions are crowding out other spending. Essential services are slashed.

It’s not just Oregon. It’s happening in communities all across the United States, from Connecticut to California, where government services for residents are being cut to provide pension benefits to local government employees.

Worse, when many of these pension-strapped local governments go to the voters seeking tax increases to pay for things that many in their communities want, like higher teacher pay, they are instead finding that the new tax collections will instead be diverted to pay pension and retirement benefits to former government employees.

In San Francisco, the school board wants voters to approve a $298 “parcel tax” on real estate, ostensibly to raise $50 million to pay teachers a living wage.

“That’s a worthy objective, but it’s not the real reason,” said David Crane, a former trustee of the California teachers’ pension system. He said the school district’s retirement costs had grown by $50 million over the last five years, devouring resources that would have gone to teachers.

Walsh’s article goes on to describe how many bureaucrats gamed the system they crafted to guarantee their lavish retirements at the public’s expense. It’s well worth the time to read the whole thing.

As for how to fix the situation, state and local governments have few options. In many of the places with the worse fiscal predicaments, such as Connecticut, Illinois and California, local government employees hold a disproportionate share of political power, which limits the ability of fiscally responsible reformers to repair the situation. In many cases, it takes bankruptcy proceedings to provide the leverage needed to stop the bureaucrats from being able to place their personal interests ahead of the public that they claim to serve.

The system must, however, be repaired. At a minimum, laws must be imposed to stop fiscally abusive practices like public employee pension spiking and double-dipping, which is the right place to begin. Converting pensions from defined benefit to defined contribution programs, as are common in the private sector, would also go a long way to protecting communities from public employees by making their pensions fiscally sustainable.

Otherwise, excessively generous public employee pensions will be little more than a ticking time bomb for many communities.

California BANANA Republic Punishes Workers


Tuesday May 1st, 2018   •   Posted by K. Lloyd Billingsley at 4:36am PDT   •  

California is not short on people, but many have a tough time finding an affordable place to live. The state’s housing crisis is particularly acute in cities such as San Francisco, so state senator Scott Weiner thought he would do something about it. He teamed with fellow senator Nancy Skinner to write SB 827, which changed zoning regulations to allow medium sized multi-unit buildings near transit stops. In the dense Bay Area, where commuting is a nightmare, this seemed a common-sense solution. 

In “Smart Growth Housing Bill is a Game-Changer,” Robert Gannon argued that SB 827 would help the state meet its climate goals and help solve the housing shortage. Trouble is, “most cities, including Oakland and Berkeley, have longstanding laws that block smart growth, particularly in high-income neighborhoods. For years, these exclusionary zoning laws, backed by influential and wealthy NIMBYs (Not in My Backyard), have stymied transit-oriented development.” To the great surprise of Weiner, SB 827 drew furious opposition. The authors knocked down the minimum heights from eight stories to five in areas near transit hubs, but it was all for naught. 

“Opposed by virtually every Californian in a position of power,” Henry Grabar argued in Slate,“Wiener’s bill failed in a Sacramento committee.” This was because the measure set out to “upend the entire framework for the past century of American racial politics and wealth building.” It was all about “gentrification and displacement,” and the wealthy opposing “communities of color.”

In Vox, Mathew Iglesias made a case that “there is plenty of room for more population density in California” and that “there’s simply no good alternative to increasing the quantity of dwellings available in the expensive parts of expensive metropolitan areas.” One solution would be by “re-legalizing market-rate construction,” but that won’t happen under the dominant ethos of BANANA, “Build Absolutely Nothing Anywhere Near Anyone.” Politicians are inclining to rent control, but as affordable housing developer Scott Labarge argues, rent control will only worsen California’s housing crisis. And with the death of SB 827, Iglesias writes, “people will still find a place to live, but their life prospects will be permanently the worse for it.”

The EPA’s Cone of Silence


Monday April 30th, 2018   •   Posted by Craig Eyermann at 6:26am PDT   •  

When I was a kid, I would often come home in the afternoons after school to old reruns of episodes from the 1960s comedy Get Smart airing on a local TV station, which featured the misadventures of Maxwell Smart, a secret agent who fielded an array of high-tech spy gadgets that, aside from a shoe phone, never seemed to work as intended.

One of those gadgets was a device known as the “Cone of Silence”, which was meant to allow the show’s spies to have conversations that couldn’t be monitored by outsiders, but which didn’t work at all, which became a recurring joke on the show. The following clip of the show features the Cone of Silence in action:

That vintage show has become relevant again today because the top secret spy agency known as the Environmental Protection Agency decided to unlawfully spend $43,000 to install its own version of the Cone of Silence to facilitate its adminstrators’ ability to have secure conversations. Michael Biesecker of the Los Angeles Times reports on the findings of the General Accountability Office (GAO):

An internal government watchdog says the Environmental Protection Agency violated federal spending laws when purchasing a $43,000 soundproof privacy booth for Administrator Scott Pruitt to make private phone calls in his office.

The Government Accountability Office issued its findings Monday in a letter to Senate Democrats who had requested a review of Pruitt’s spending.

GAO General Counsel Thomas Armstrong determined that EPA’s purchase of the booth violated federal law prohibiting agencies from spending more than $5,000 for redecorating, furnishings or other improvements to the offices of presidential appointees without informing Congress. Because EPA used federal money in a manner specifically prohibited by law, Armstrong said the agency also violated the Antideficiency Act, and is legally obligated to report that violation to Congress.

As wasteful spending in the federal government goes, the EPA’s installation of its own Cone of Silence technology is a small offense against fiscal discipline, costing the equivalent of one-year’s pay for a low level bureaucrat (not counting their very generous benefits package)!

In theory, bureaucrats found guilty of violating the Antideficiency Act can be prosecuted and jailed for as much as one year. In practice, Timothy Cama of The Hill confirms that no bureaucrat ever has.

Adding to the spy drama, Cama also reports on EPA chief administrator Scott Pruitt’s congressional testimony, in which he revealed that the agency’s new $43,000 soundproof booth was installed without ever having been approved by Pruitt.

Pruitt later in the hearing went a step further, saying he didn’t even approve the privacy booth expenditure.

“Career individuals at the agency took that process through and signed off on it all the way through,” Pruitt told Rep. Tony Cardenas (D-Calif.). “I was not involved in the approval of the $43,000, and if I’d known about it, congressman, I would have refused it.”

He explained the genesis of the booth as well.

“I did have a phone call that came in, of a sensitive nature, and I did not have access to secure communications. I gave direction to my staff to address that,” Pruitt said.

“And out of that came a $43,000 expenditure that I did not approve,” he continued.

Only in Washington D.C. would a recurring gag from a late-1960s television show ever become part of the U.S. government’s ongoing wasteful spending comedy over fifty years later.

Waste in Federal Spending


Friday April 27th, 2018   •   Posted by Craig Eyermann at 6:57am PDT   •  

Every year, the General Accountability Office issues a report identifying areas where the U.S. government wastefully spends money because it has too many departments stepping all over themselves to spend money to do the same things.

2018 is no different. This year’s report highlights several opportunities to save money without any negative impact to whatever it is that the government is supposed to achieve in how it is spending the money. Here is a sample of the kind of money that’s available to be saved:

  • The Department of Defense (DOD) could potentially save approximately $527 million over 5 years by minimizing unnecessary overlap and duplication in its U.S. distribution centers for troop support goods.
  • The Department of Energy may be able to reduce certain risks and save tens of billions of dollars by adopting alternative approaches to treat a portion of its low-activity radioactive waste at its Hanford Site.
  • The Department of Veterans Affairs could potentially save tens of millions of dollars when acquiring medical and surgical supplies by better adhering to supply chain practices of leading hospitals.
  • The Coast Guard should close its boat stations that provide unnecessarily duplicative search and rescue coverage to improve operations and potentially save millions of dollars.
  • Congress and the Internal Revenue Service could realize hundreds of millions of dollars in savings and increased revenues by enhancing online services and improving efforts to prevent identity theft refund fraud.
  • Medicare could save $1 to 2 billion annually if Congress equalized the rates paid for certain health care services, which often vary depending on where the service is performed.
  • DOD could achieve billions of dollars in savings over the next several years by continuing to employ best management practices on its weapon systems acquisition programs.
  • Congress could consider modifying how Medicare pays certain cancer hospitals to achieve almost $500 million annually in program savings.

Overall, the GAO has identified no fewer than 365 actions that the U.S. government could take to stop wastefully spending as much money as it does.

A million here and a million there, and suddenly we’re talking about a serious amount of taxpayer dollars that can stop being wasted!

Why Government Employee Pensions Will Be Taxpayers’ Main Squeeze


Friday April 27th, 2018   •   Posted by K. Lloyd Billingsley at 4:00am PDT   •  

Even Jerry Brown knows that government employee pensions have put California in a bad place. Prospects for reform recently took a hit when the Senate Public Employee Retirement Committee killed John Moorlach’s SB 1031 and 1032, which would have let local governments avoid CalPERS termination fees and limited cost-of-living hikes for future employees. The committee also killed Steve Glazer’s SB 1149, which would have allowed state workers to opt for a 401(K) instead of a pension plan. Glazer told the committee “we’re going off a fiscal cliff” but Connie Leyva rejected his reform saying, “I just think we need to do everything we can to get our young people into defined-benefit plans.” Those are the plans that have the state heading toward the fiscal cliff. 

CALmatters’ Dan Walters notes the vast unfunded liabilities and shows that CalPERS is trying to fix the shortfalls by ramping up mandatory “contributions” from public agencies, so “the squeeze is destined to get even tighter.” Cities now paying 50 cents into CalPERS for every dollar of police officers’ salaries be paying 75 or 80 cents within a few years. This will hit local governments and “their taxpayers even harder.” Cities will be hitting up taxpayers for sales-tax increases “but they won’t be telling those voters the truth about why new revenue is needed, fearing candor would spark a backlash.”

As a report from the Pew Charitable Trust notes, “many state retirement systems are on an unsustainable course.” In 2016, the state pension funds “reported a $1.4 trillion deficit—representing a $295 billion jump from 2015 and the 15th annual increase in pension debt since 2000. Overall, state plans disclosed assets of just $2.6 trillion to cover total pension liabilities of $4 trillion.”

Groupthink the Key to Success in Government “Science”


Wednesday April 25th, 2018   •   Posted by K. Lloyd Billingsley at 5:11pm PDT   •  

Scientific studies must be reproducible because replication allows others to examine the data and methodology, and the possibility of reaching different conclusions. If a study is not reproducible it is not really science at all, and that is now common, according to David Randall and Christopher Welser, authors of The Irreproducibility Crisis of Modern Science: Cause, Consequences and the Road to Reform, a new study from the National Association of Scholars. Randall and Welser ascribe the problem of irreproducibility to the search for fashionable “positive results” that tell politicians what they want to hear and pave the way for lucrative government grants and prestigious positions. Another problem is “groupthink” which “inhibits attempts to check results, since replication studies can undermine comfortable beliefs.”

William Happer, emeritus professor of physics at Princeton University, notes in an afterword to the book that research on the harmful effects of carbon dioxide was published by “scientists” in peer-reviewed journals, but “almost none of it is reproducible.” So, “science that touches on political agendas has contributed more than its share of problems to the irreproducibility crisis.” That crisis has been in the news of late. 

Embattled EPA administrator Scott Pruitt recently announced, “the science that we use is going to be transparent. It’s going to be reproducible.” That fueled an angry response from Gina McCarthy, EPA boss from 2013-2017, and Janet McCabe, her assistant in the EPA Office of Air and Radiation. They contend that EPA data is sound but some of the data is “confidential,” and they opposed measures to make data publicly available for independent analysis and reproduction of results. 

If researchers fail to make data and methodology available, one skeptic notes in the NAS study, nobody has any obligation to believe anything they produce. Readers might also recall that on McCarthy’s watch, readers may recall, in 2015 the EPA dumped millions of gallons of toxic waste into the Animas River. Gina McCarthy was not fired, and she now directs the Center for Health and the Global Environment at Harvard. 

Time for New Budgeting Rules


Monday April 23rd, 2018   •   Posted by Craig Eyermann at 6:03am PDT   •  

37700410 - out of control words on a warning sign showing danger of uncontrollable behavior, mismanagement or not following or obeying rules and laws The process for setting a sound fiscal budget for the U.S. government is badly broken. So much so that the chair of the Senate’s budget committee, Mike Enzi, is suggesting that his congressional committee should be eliminated altogether.

Alexander Bolton of The Hill reports on the provocative proposal:

Enzi’s seemingly radical suggestion comes as a special bipartisan committee prepares to hold its first hearing on reforming the budgetary process, which Speaker Paul Ryan (R-Wis.), a former House Budget Committee chairman, this weekend called “irreparably broken.”

Enzi said in 2016 that he would be open to scrapping the Budget Committee as part of a larger effort to reform the congressional spending process, a GOP aide explained, adding that the chairman doesn’t plan to shut down his own committee anytime soon.

Congress has missed the requirement set out by the Congressional Budget Act to pass a concurrent budget resolution by April 15, and GOP lawmakers say they do not expect to pass a budget before the end of this election year.

For U.S. politicians, addressing any aspect of the budget these days means having to confront the unpleasant reality of trying to sustain the excessive levels of spending they desire, where they must either vote to impose higher taxes on the middle class or to cut spending on popular programs to have any chance of reaching a fiscal balance.

It’s not just the current Republican majority in the Senate that is proving unequal to the task of establishing an effective process for setting the budget of the U.S. government. It was also clearly evident when the Senate was controlled by a Democrat party majority led by Harry Reid, which famously failed to even try to pass any kind of budget for years on end during the Obama administration.

Consequently, no matter which party controls the Congress, trillion dollar annual deficits are likely to increasingly be the result of a budgeting process that doesn’t work, where the Budget committees in both the House and Senate have little-to-no success to show for their existence. Especially in the last decade.

Something needs to change. The last major reform of the budgeting process was the 1974 Congressional Budget and Impoundment Control Act, which was meant to fix the federal government’s budgeting process, but which instead inaugurated the era of frequent federal government shutdowns and ballooning deficits as part of Washington D.C.’s political “business-as-usual”. It created the apparently useless Budget committee and oversight system on Capitol Hill.

The Joint Select Committee on Budget and Appropriations Process Reform, which will be considering the potential actions that the U.S. Congress might take to get the U.S. government’s fiscal house in order, held its first meeting last week. Whether anything will come of it remains to be seen, but it will be the place to watch to see how seriously U.S. politicians are taking the need to establish greater fiscal discipline over the U.S. government’s spending while its hearings are ongoing.

The real test will be when any reform proposals are put before the entire U.S. Congress. Unfortunately, following the passage of the Bipartisan Budget Act of 2018, we know that body’s membership is filled with far too many politicians who reap benefits from the status quo set in 1974 and the absence of restraints on the excessive spending they desire to be willing to do much to rein in their power.

Unless something changes to dramatically increase the political pressure upon them to commit to reforms that benefit the nation against their established interests.

An Earth Day Meditation for Millennials


Friday April 20th, 2018   •   Posted by K. Lloyd Billingsley at 4:08am PDT   •  

April 22 marks Earth Day and millennials might think it goes back at least 100 years, or maybe all the way to the nation’s founding. Actually, Earth Day started only 48 years ago in 1970, but it was an occasion of significance. As Randy Simmons, Ryan M. Yonk and Kenneth J. Sim showed in Nature Unbound: Bureaucracy versus the Environment, Earth Day launched the modern environmental movement. The core belief of this movement was that human beings were a kind of invasive species and that if humans are not around, nature returns to a pristine state of harmony and balance. As the authors show, disturbance and change, not balance and harmony, best describe nature. 

Earth Day prompted legislators to pass the Clean Water Act (1972), the Clean Air Act (1973), the Endangered Species Act (1973) and to create bureaucracies such as the Environmental Protection Agency, with a current budget of $6.1 billion. This Earth Day, millennials might ponder how in 2015 the EPA spilled three million gallons of toxic wastewater in southern Colorado’s Animas River, polluting an entire river system and creating a certified ecological disaster. Millennials might wonder why EPA boss Gina McCarthy did not get fired. That is because, whatever damage they may cause to the environment, federal agencies are essentially a no-fire zone, with little if any accountability. So powerful bureaucracies and their unelected bosses are not exactly worthy of celebration. 

All age groups might think of Earth Day as a religious holiday because it hails a kind of fundamentalist pantheism. In effect, it immanentizes the eschaton with a secular version of Biblical prophecies. This new religion also issues commandments that have little to do with empirical inquiry and marshals considerable hostility to human rights, especially property rights. 

As Nature Unbound shows, human beings are part of nature. The environment does better when public policy respects that reality and protects property rights instead of violating them. When Earth Day recognizes that reality, it will truly be worthy of celebration.

Government Fat Cats Bulk Up on Taxpayer Dollars


Tuesday April 17th, 2018   •   Posted by K. Lloyd Billingsley at 4:29am PDT   •  

Many taxpayers have seen little economic gain in recent years but the salaries of government education bureaucrats “have exploded” as the Sacramento Bee reports. Sarah Koligian of the Folsom Cordova Unified School District gets $240,000 and Christopher Hoffman of Elk Grove Unified bags $330,951, more than the $324,029 of Sacramento State University boss Robert Nelson. Next year it will balloon to$342,232,and the whopper salaries come with benefits such as car allowances, travel pay and such.

School board bosses try to make the case that the superintendents are like the CEOs of major corporations and should be compensated accordingly. The comparison might be valid if Costco got customers’ money even if they decided to shop at Walmart. A government bureaucracy with captive clients and guaranteed state funding is not equal to a corporation in any way. The huge salaries of bureaucrats, taxpayers should note, are not tied to any gains in student achievement, reductions in truancy, or savings in administrative costs. Instead, as we have noted, the huge salaries and outlandish raises are based on comparisons with other school districts. So no wonder the state sometimes fails to release salary information, even when requested to do so.

Government monopoly education is a collective farm of ignorance, mediocrity and failure. In this system, taxpayer dollars must trickle down through multiple layers of bureaucratic sediment. They money keeps coming, regardless of results and the biggest beneficiaries are superintendents, essentially bagmen and public relations specialists. Twin Rivers Unified boss Steve Martinez bagged raises of $25,000 in 2014 and $20,000 in 2015. That helped boost his 2013 salary by 43 percent to the current level of $308,112, and this year the district increased his retirement contribution from $7,500 to $21,000. Taxpayers remember, it’s all for the children.

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