MyGovCost News & Blog

Randal Mills is stepping down as president of the California Institute for Regenerative Medicine, but that’s not the news. The $3 billion state stem-cell agency is running out of money and according to David Jensen of the California Stem Cell Report, founder Robert Klein “is talking about asking California voters for another $5 billion.” Klein, a wealthy real estate developer, is now with Americans For Cures, which beats the drum for “public funding for stem cell research.”

As taxpayers will recall, Klein was the prime mover of the 2004 Proposition 71, which promised life-saving cures and therapies for a host of diseases, plus a revenue stream from the royalties. A ballpark figure for the royalties is zero because CIRM has failed to create any of the promised cures and therapies. As Jensen delicately puts it, “so far the agency has not backed a stem cell therapy that is widely available.” It’s a $3 billion bust, in other words, but false promises, lack of results and wasteful spending have never prevented California politicians from lending a hand.

The push for $5 billion comes from Art Torres, the former state senator and Democratic Party boss CIRM hired in the early going and immediately tripled his salary. As we noted, former Pete Wilson cabinet secretary Joe Rodota also likes the new $5 billion but wants to fold CIRM into the University of California. He claims this would “build an army of new companies working on cures,” allow the UC to hire more professors, and even reduce the cost of higher education.

Klein might float the $5 billion bond issue in 2018 or 2020. Voters and taxpayers might recall that CIRM handed 90 percent of its grants to institutions with links to past or present board members and the CIRM board was very kind to for-profit companies for whom Klein had lobbied. Based on the record so far, another $5 billion will produce none of the cures and therapies CIRM failed to produce with $3 billion. On the other hand, another $5 billion is certain to secure more conflict of interest, more sinecures for washed-up politicians, and more absurd salaries for bosses. Last year, CIRM paid president C. Randal Mills $573,000, higher than the President of the United States and more than three times the $173,987 salary of governor Jerry Brown.

The filing deadline has passed so taxpayers might take inventory of what government is doing with their money. By the April 28 order of U.S. District judge Jon Tigar, taxpayers will be paying for undergarments known as binders or compression tops that flatten the chest of transgender inmates at women’s prisons. Such inmates at men’s prisons may have sandals, t-shirts and walking shoes. Judge Tigar ruled that they must now have pajamas, nightgowns, robes and scarves, along with “access” to bracelets, earrings, hair brushes and hair clips. Taxpayers who find this disturbing should remember that, in at least one case, they paid for a convicted murderer’s sex-change operation.

That would be Shiloh Heavenly Quine, who as Rodney Quine murdered Shahid Ali Baig, a father of three, and stole his car. Quine claimed he was really a woman and wanted the state to pay for his tuck and roll job, but his demand was denied. Enter judge Jon Tigar, an appointee of the 44th president, who assigned himself to Quine’s case and appointed a team of San Francisco lawyers and the Transgender Law Center to represent the convict. Tigar ruled that the denial of a sex-change operation constituted “deliberate indifference” to the murderer’s medical needs, and was therefore “cruel and unusual punishment.” In 2015 California agreed to pay and on January 5, 2017, Rodney Quine duly got the “reassignment,” surgery at a cost to taxpayers of $100,000. The state duly transferred Quine from Mule Creek, a tough men’s prison, to the women’s prison at Chowchilla where life will be much easier. And thanks to judge Tigar, a one-man robed politburo, taxpayers will now be springing for Shiloh Heavenly Quine’s jewelry and sartorial needs, right down to the bracelets, earrings and compression tops. It’s the kind of change taxpayers can’t believe in.

In case you missed it over the weekend, there’s big news from Washington D.C. regarding the U.S. government’s budget for the rest of its 2017 fiscal year – no federal government shutdown!

Reuters reports:

Negotiators in the U.S. Congress reached a deal late on Sunday on around $1 trillion in federal funding that would avert a government shutdown later this week, while handing President Donald Trump a down payment on his promised military build-up.

The full House of Representatives and Senate must still approve the bipartisan pact, which would be the first major legislation to clear Congress since Trump became president on Jan. 20.

Prompt passage of the legislation was expected this week.

The funds, which should have been locked into place seven months ago with the start of fiscal 2017 on Oct. 1, would pay for an array of federal programs from airport and border security operations to soldiers’ pay, medical research, foreign aid, space exploration, and education.

“The agreement will move the needle forward on conservative priorities and will ensure that the essential functions of the federal government are maintained, said Jennifer Hing, a spokeswoman for Republicans on the House Appropriations Committee.

What the budget deal won’t do is provide funding to start construction President Trump’s desired border wall before the end of the U.S. government’s 2017 fiscal year on September 30, 2017. Instead, any funding for that initiative would be negotiated as part of the federal government’s 2018 fiscal year, which begins on October 1, 2017.

That doesn’t mean however that President Trump is walking away empty-handed. The new budget deal would immediately increase funding for border enforcement activities.

Several other important White House initiatives were rejected by the Republican and Democratic negotiators, including money for a wall on the U.S.-Mexico border that Trump has argued is needed to stop illegal immigrants and drugs.

Instead, congressional negotiators settled on $1.5 billion more for border security, including more money for new technology and repairing existing infrastructure, the aide said.

Other key points in the deal include a commitment from President Trump to continue subsidy payments to health insurance companies that charge below-cost premiums on the Affordable Care Act’s health insurance exchanges, where the corporate welfare is expected to keep the program from failing before the end of the government’s 2017 fiscal year.

The U.S. government is also providing a bailout to Puerto Rico’s Medicaid program, assisting that U.S. territory’s government as it officially enters into Title III bankruptcy proceedings.

The budget deal is unusual because it suggests a break in the kind of political brinksmanship that has come to typify Federal Government Shutdown Theater, where no deals are made until the last possible minute. Commenting at Hot Air, Andrew Malcolm is amazed that the political negotiations didn’t drag out longer.

Sitting down? This is not The Onion.

Republicans and Democrats have reached bipartisan agreement on a spending bill that would last not for a week or month. But for five whole months. This would seem to avoid a partial government shutdown for now.

Yes, you’re right, in a properly-functioning Congress, budgets would be crafted for an entire fiscal year, allowing agencies to plan ahead. But, hey, let’s be thankful for five-month blessings. The last, last-minute spending agreement to come out of Congress was last Friday. And it lasts for seven whole days.

The new interim budget agreement, announced late Sunday night, involves about $1 trillion in spending. It’s something called “a compromise.” You’ve rarely seen such a thing on Capitol Hill in recent years.

Malcolm goes on to note that the “compromise” involves an agreement between politicians to spend more tax dollars, rather than less. So at least some things haven’t changed about how Washington D.C. operates.

Dainius Puras is professor of child psychiatry at Vilnius University in Lithuania, a Distinguished Visitor with the O’Neill Institute for National and Global Health Law at Georgetown University, and a “Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of health,” with the United Nations. In that capacity, on February 2, in a letter obtained by the Washington Post, Dr. Puras wrote to acting U.S. Secretary of State Thomas Shannon about his “serious concern” that repeal of the Affordable Care Act would strip Americans of their rights. “There is a strong presumption” Dr. Puras wrote, “that retrogressive measures taken in relation to the right to health are not permissible,” under international law.

Actually, doc, the United States has no obligation to heed a “Special Rapporteur” or anybody else from the United Nations, particularly on health. The UN has admitted its role in a 2010 cholera epidemic in Haiti that killed nearly 10,000 people and afflicted 800,000. Doctors Without Borders estimates the number of deaths at three times higher. Aside from that and other lapses, the UN is unaccountable international bureaucracy heavily subsidized by U.S. taxpayers.

As we noted, UN salaries are more than 50 percent higher than U.S. government executive salaries, and the actual salary is 161.3 percent of what the UN pay chart shows. For all its peace rhetoric, the UN has failed to prevent wars such as the 1980-88 Iran-Iraq conflict and has been useless against terrorism. The UN has promoted collectivist schemes such as the North-South Economic Dialogue and New World Information Order, a design for international press censorship. And don’t forget, Kurt Waldheim, UN Secretary General from 1972-1982, was a Nazi war criminal. After this emerged, Waldheim still got his gold-plated pension.

Meanwhile, the Trump administration should ignore Dr. Puras and replace the ACA with a system that empowers patients, not government. That done, start scaling back payments to the UN, which is really the United Governments, wasteful, counterproductive and intrusive.

President Trump’s new tax plan will cut seven tax brackets down to three, with rates of 10, 25 and 35 percent. The Trump plan also drops the top rate of taxation from 39.6 to 35 percent. The corporate income tax rate falls from 35 to 15 percent, and the estate tax is eliminated. Those who see this as serious tax reform might consider what the plan does not do.

It does not change the basic system, which statist types call “progressive,” of punishing high earners with higher rates of taxation. The plan is not a flat tax, and a drop of less than 5 percent in the most punitive rate is essentially tokenism. On the other hand, the plan does not “give” anything to anybody, as statists contend. To allow workers to keep more of what they earn is not to give them anything.

The government currently gets workers’ money before they do, in the form of withholding from their paychecks. This practice dates from World War II and was supposed to be temporary. As a matter of basic justice, nobody should get workers’ money before they do. This is sheer government greed and the Trump plan leaves it in place.

The Trump plan does nothing to reduce the power of the Internal Revenue Service, a powerful, intrusive agency that violates basic rights by presuming guilt in tax matters. The previous president deployed the IRS against groups that favor lower taxes, limited government, and clean elections. The point man for that campaign was IRS boss John Koskinen, a terrible administrator and professional prevaricator. He should have been fired long ago and probably prosecuted, but President Trump has kept Koskinen in place. Turns out, on one of Trump’s first major real-estate deals back in the day, John Koskinen handled the sale as vice president of the Palmieri Company.

This kind of cronyism is typical of Washington. Like other presidents, Donald Trump talks a good game on reform, but he’s essentially an establishment man. His tax plan tinkers with a ponderous code, and the president is content to leave basic injustices in place. The harder you work, the more government takes, and the government still gets your money before you do.

University of California President Janet Napolitano, the former Secretary of the U.S. Department of Homeland Security and also the former governor of the state of Arizona, appears to have been caught by California state auditors with her hand in the proverbial public tax dollar cookie jar.

Writing at Coyote Blog, Warren Meyer, who runs a business that manages campgrounds at publicly-owned parks and forests, remembers that another California state agency’s bureaucrats were also caught hiding state taxpayer funds from the state’s legislature, and even used the same excuses now being offered up by Napolitano and her fellow university administrators.

Pretty much the entire management team of California State Parks got fired for doing almost the exact same thing, with the exact same excuses.

California state parks Director Ruth Coleman resigned and her second-in-command was fired Friday after officials discovered the department has been sitting on “hidden assets” totalling [sic] nearly $54 million.

The money accumulated over 12 years in two special funds the department uses to collect revenue and pay for operations: $20.4 million in the Parks and Recreation Fund, and $33.5 million in the Off Highway Vehicle Trust Fund.

The money accumulated, state officials said, because the parks department had a pattern of under-reporting the actual size of the funds in its regular dealings with the state Department of Finance.

Ms. Coleman (who I worked with a few times and liked) was frankly an easier “kill” because, while long tenured in the state parks job, she really did not have a lot of political muscle. Napolitano does. Relying on consistent standards would say Napolitano should go, but government has never been about applying consistent standards, only power. So we shall see.

With such a history, perhaps a good question to ask is how many other California state government agencies are similarly attempting to stash taxpayer funds out of the sight of the state’s taxpayers? If that unethical practice is likewise occurring at multiple state agencies, it might provide the leverage needed by responsible state officials to clean house and to oust the politically-entrenched administrators at the University of California.

When we last checked in with the University of California they were spending $504 million, more than half a billion dollars, on a computer system that was supposed to cost $156 million. The UCPath project costs taxpayers three times as much as announced, and remains four years behind schedule. UC president Janet Napolitano also spent nearly $1 million to investigate inept UC Davis chancellor Linda Katehi, who cost taxpayers nearly $2 million by pepper spraying students peacefully protesting tuition hikes. As former Arizona governor Napolitano beats the drum for more tuition hikes, up pops a surprise.

According to a new report from California’s state auditor, the UC office of the president is hiding more than $175 million in discretionary reserves. More than one third of this represents unspent funds from a campus assessment. The office of the president wanted to hike this assessment even though the funds were unspent. The office of the president did not disclose the reserves it has accumulated nor did it inform the UC regents of the annual undisclosed budget of $77-114 million it created to spend the funds. The UC office of the president hiked administrative spending by 28 percent over three years but lacks methods for tracking the administrative expenses. Further, the office “intentionally interfered” with investigators and tampered with the responses of the various UC campuses, removing statements critical of the office of the president.

The auditor wants more legislative oversight but UC problems go beyond financial deception and wasteful spending. From 2009 to 2013, Janet Napolitano headed the federal Department of Homeland Security but she can’t maintain order and civil discourse on UC campuses. Indeed, Berkeley explodes into violence over any speaker less than worshipful of political correctness. In security and financial accountability Janet Napolitano is a bust. The UC regents should show her the door at the first opportunity. Taxpayers and students alike will thank them for it.

As we recently noted, the University of California is spending $504 million on UCPath, a computer payroll system that was supposed to cost $156 million. UC bosses have spent $327 million on UCPath, but it remains four years behind schedule. That’s quite a performance by a university system that regards itself as the greatest in the world, and tasked with educating the best and brightest. In bureaucratic inefficiency, however, the UC is getting some stiff competition from the Cal State University system, the nation’s largest, with 474,600 students and more than 49,000 faculty and staff at 23 campuses.

According to a new report from California’s state auditor, Cal State is adding management personnel – vice presidents, deans and such – at double the rate of other employees, including faculty, 15 percent to seven percent. While bulking up on non-teaching bureaucrats, Cal State bosses are also hiking management pay. According to the auditor, “at one campus at least 70 management personnel received raises totaling more than $175,000 annually and were not supported by current written performance evaluations, and another campus improperly classified eight assistant coaches as management personnel to increase their salaries.” And they say to themselves, what a wonderful world, but there’s more. “Many campuses cannot demonstrate that they are adequately monitoring their budgets,” and “state law exempts CSU from many budget oversight mechanisms applicable to other state agencies.” The state does not “require CSU to specify how it used state appropriations to improve student success.” So none of the spending is tied to actual achievement, and accountability is nowhere in evidence.

In the wake of the auditor’s report, CSU chancellor Timothy White explained, “it is important to recognize the CSU’s management staffing levels and administrative costs are lower than other similar higher education institutions both within California and nationally.” In other words, other places pay more, so we must have it too, regardless of need or merit. This is the sort of thing one would expect from a teenager complaining about her allowance, and all too typical of California government.

One of the great difficulties of trying to describe the sheer amount of money that the U.S. government processes each year is that the numbers are so large that they lose all sense of human proportions.

The Manhattan Institute’s Brian Riedl took on the challenge for the amount of money that the U.S. government will either spend, tax, or borrow during 2017, breaking these categories down into their basic components by expressing them in terms of the average U.S. household.

Unfortunately, those numbers and how they fit together can still be pretty hard to visualize, which presents a new challenge — one which I hope the following chart showing the “arch” of U.S. government spending, taxes and borrowing communicates. (Please click the chart to open a larger version of it!)

Why show this data in the form of an arch? In order for the U.S. government to sustain its spending, it has to be supported by a combination of the income, payroll, and excise taxes along with the fees and other non-tax revenues it collects. If those taxes fall short of supporting the column of spending, that gap has to be made up with debt; the U.S. government must borrow so that it can spend as much as elected politicians and federal government employees choose.

Visually, an arch makes that connection. But perhaps just as importantly, its spending leg reveals the major components of how the U.S. government spends the money it obtained through imposing taxes or borrowing.

In the chart above, we’ve organized the spending leg from the largest expenditure category to the smallest, so that looking from the bottom of the arch to the top makes it easy to see where most of the U.S. government’s spending goes. Those spending programs include Social Security, Medicare, anti-poverty programs (which predominantly means low-income health insurance programs like Medicaid and the Affordable Care Act, but also includes nutrition and housing assistance programs), defense spending, net interest payments on the national debt, veterans benefits, federal government employee retirement benefits, education, and, finally, a large number of smaller government programs and agencies whose spending has been grouped together.

The arch of U.S. government spending also provides a visual indication of how much of that spending has to be supported by borrowing, which provides a gateway into thinking about how the amount of spending would have to be changed so that it could be supported without borrowing or without adding to the burden of taxes. Do you nibble at the top, where most of the U.S. government’s smaller discretionary spending programs are positioned? Or do you preserve those and reduce the size of the bigger “mandatory” expenditure portions of the spending leg? Or do you not touch the spending leg at all and choose to increase the burden of taxes and/or borrowing?

At various times in U.S. history, elected politicians have chosen to do each of these things. Sometimes simultaneously.

The arch format can provide a lot more insight than you would ever get from a more typical bar chart presentation of this kind of data, much like what the U.S. Treasury Department regularly features on the covers of its monthly treasury statements.

I admit that I may be a bit biased, in that I grew up in St. Louis and am probably predisposed to appreciate the aesthetics of the arch, but when a simple visual element can communicate such a wealth of information, it’s hard not to take notice, and you don’t have to be from the Show Me State to see it!

In recent years the University of California has been hiking tuition, and when students at UC Davis held a peaceful protest, campus police pepper sprayed them. The ensuing $1 million settlement was mostly waste, with attorneys and consultants cashing in on every hand. In response to funding cuts, the bloated UC bureaucracy began to enroll more nonresident students who pay higher tuition, as the state auditor noted, disadvantaging the California students for whom the UC system was primarily created to serve. Taxpayers should note that UC bosses are now indulging more waste on a very costly computer system.

The highly touted UCPath system for payroll and personnel was supposed to cost $156 million and save $100 million a year. As UC mouthpiece Ricardo Vazquez told reporters, the cost will now be a whopping $504 million, including a $26 million contingency in the final year of the project’s budget. Vazquez blames additional expenses on “additional staff,” so apparently the regular crew was not up to the task. So far, the university has spent $327 million but the UCPath project remains, count ‘em, four years behind schedule. As with government in general, things always cost more and take longer than the package that officials pitch to the public.

If taxpayers wonder whom to hold accountable, they might consider UC chancellor Janet Napolitano. The former Arizona governor and Department of Homeland Security boss has been acting like the U.S. Secretary of State, travelling abroad and making grandiose political pronouncements. On the other hand, Napolitano is a politician, not an educator, and a poor choice for the UC post in the first place. Taxpayers might also note that on Napolitano’s watch free speech and civility are not exactly thriving on UC campuses, particularly Berkeley, home of the Free Speech Movement. At the University of California, taxpayers and students alike don’t get what they pay for.