The new White House director of the Office of Management and Budget (OMB), Mick Mulvaney, is looking for help to create a list of federal government agencies that can be either eliminated or have their budgets greatly reduced because they do things that have become unnecessary.
Whether it’s because the agencies have obsolete missions or because their activities are duplicated by other government agencies, Mulvaney’s invitation offers to ordinary Americans a rare opportunity to make their voices heard. The OMB launched a special website last week to collect their input.
“Give us your ideas and help us fix your government so that it serves you, instead of the other way around,” Office of Management and Budget (OMB) Director Mick Mulvaney implores Americans in a new White House video.
Standing in a room full of regulations created by the federal government in just the past two years, Mulvaney pleads with citizens to “Help me fix it” as he introduces a new White House webpage where Americans can suggest specific ways to “eliminate unnecessary agencies” and “drain the swamp.”
At the White House’s “Reorganizing the Executive Branch” webpage, Americans have until June 12, 2017 to tell the Trump Administration:
- Which agency, board or commission to reform,
- How to reform it,
- The benefits of that reform,
- Which agencies, boards, commissions, and programs should be eliminated,
- Management reform suggestions, and
- Any other suggestions (and/or links to full proposals)
That’s an opportunity that I couldn’t afford to pass up, so today, I’m nominating as a candidate for elimination what is perhaps the most useless federal agency on the government’s books: the National Technical Information Service (NTIS).
The agency bills itself as “the official source for government-sponsored U.S. and worldwide scientific, technical, engineering, and business-related information,” which sounds like it might be useful, and may certainly have been so back in the 1950s when the agency was first created. However, multiple Government Accountability Office (GAO) reports in recent years have confirmed NTIS to be wasteful, ineffective, and obsolete.
In years past, the NTIS operated as a single-stop clearinghouse for making U.S. government research and information available to the public. Unfortunately for the agency and its 102 bureaucrats, who on average earn over $88,835 per year, about 95% of the information it provides can be easily found for free on the Internet using modern search engines like Google.
In fact, there have been bipartisan calls to eliminate the NTIS, and a number of U.S. senators have even specifically proposed bills aimed at eliminating the agency, with names like the “Just Google It” Act and the “Let Me Google That for You” Act.
And yet, the NTIS has continued to survive, in no small part because it appears to allow federal bureaucrats in other government agencies with the means to get around having to comply with the accountability rules specified by the Federal Acquisition Regulation, as U.S. Senator Claire McCaskill indicated was happening in a 2013 congressional hearing.
NTIS offers services such as Web hosting and database management, but McCaskill said it has employed third parties to do the actual work for government agencies. That approach allows federal agencies to get around the FAR’s contracting rules, she argued.
In his testimony, Borzino said NTIS provides information services for federal agencies, including distribution and fulfillment, scanning and digitization, e-training and knowledge management, as well as Web services and cloud computing.
A perplexed McCaskill asked how much the agency relied on private contractors to fulfill some its services. The General Services Administration “offers most of the services you offer….We can’t find any IT services that GSA doesn’t offer.”
That overlap with the GSA’s functions suggests that there’s little, if any, valid need for the NTIS — and certainly not at anywhere near its current level of funding. Eliminating the agency altogether would save U.S. taxpayers over $50 million per year. No one will likely even notice, other than federal bureaucrats at other agencies who are looking to circumvent IT-related federal accountability rules.
In terms of savings, elimination of the NTIS would remove only a proverbial drop in the bucket of government spending, but it’s far from the only agency worth eliminating. You can nominate your own entries at the OMB’s Reorganizing the Executive Branch web site.
As a candidate, Donald Trump contended, “there’s tremendous waste, fraud and abuse” in the federal government, an easily verified reality. As we noted, a recent internal study exposed $125 billion in administrative waste in Pentagon business operations, where the purchasing bureaucracy alone counted 207,000 full-time workers. The Environmental Protection Agency allowed “policy advisor” John Beale to skip out on years of work on the claim that he also worked for the CIA, and the EPA even paid him retention bonuses.
In his pledges to “drain the swamp,” Trump was particularly hard on lobbyists. Now, as Eric Lipton, Ben Protess and Andrew Lenhren contend in the New York Times, “President Trump is populating the White House and federal agencies with former lobbyists, lawyers and consultants who in many cases are helping to craft new policies for the same industries in which they recently earned a paycheck.”
White House energy advisor Michael Catanzaro, for example, is a former lobbyist for the oil and gas industry. In similar style, Chad Wolf lobbied for the Transportation Security Administration to spend big bucks on a new screening device. Wolf is now chief of staff at the TSA, which is evaluating this same device for possible purchase. By the reporters count, more than 40 former lobbyists now jostle in the White House and broader federal government.
As a television personality, one of Donald Trump’s signature lines was “You’re fired!” That has been missing from the script of President Trump, but not for lack of opportunity. It would be hard to think of a government official more loathsome than IRS boss John Koskinen, who did his best to cover up the IRS campaign to target groups that promote limited government and election integrity.
Republicans have been making a case for Trump to fire Koskinen, but the president has not done so. As Fox News reports, Trump and Koskinen “do have a history.” In 1975, when Trump made a deal to purchase New York’s Commodore Hotel from the bankrupt Penn Central Transportation Company, John Koskinen handled the sale as vice president of the Palmieri Company. As they say, it’s all who you know. The swamp may well be spreading, and the president doesn’t have much to say about it.
California government employees represented by the Service Employees International Union (SEIU) will soon be getting “bonus checks” of $2,500. It remains unclear what this “bonus” is for, but it is not tied to any performance measure such as greater efficiency or accountability. The office of California’s state controller, which sends out the checks, had planned to issue the bonus money as “discrete checks.” Trouble is, this would be considered supplemental income and taxed at a higher rate. So the controller plans to combine the bonuses with the state employees’ regular pay, allowing for taxation at the normal rate. How this might go down with the IRS remains uncertain, but taxpayers should know what is going on.
This is the state doing special favors for the SEIU, the biggest union in state government with some 95,000 workers. As we noted, the SEIU likes to demonstrate outside the state capitol proclaiming, “We’re letting them know this is our house!” The SEIU bosses are right about that. They help elect big-government, tax-hiking politicians such as Jerry Brown, who then give the SEIU essentially everything they want. Last December the state gave the SEIU a 42-month deal hiking government employees’ pay by 11.5 percent, with the $2500 “bonus” now conveniently tucked into regular pay.
According to the Bureau of Labor Statistics, a full 84.1 percent of California workers, a vast majority, are not union members. Those embattled workers might try to recall the last time the state did anything to make their tax burden lighter. The last time the state refunded surplus money to taxpayers was 1987, when George Deukmejian was governor. Thirty years later, California workers pay the highest income and sales taxes in the nation. The state is now coming back for more with a $5.2 billion hike to fix the roads Caltrans has neglected to maintain. This will further punish the workers with higher prices for gasoline and diesel.
Tomorrow, April 18, 2017, is Tax Day in the United States, the date by which all Americans who earned income in 2016 must either file their income tax returns and send a payment to the IRS or file for an extension to file their income tax returns for 2016 later this year.
It’s no secret that the U.S. government runs in the red, where it spends far more than it collects in revenues, but what may surprise many Americans as they pay their income taxes is that the U.S. government has already been collecting record levels of taxes this year. Terrence P. Jeffrey of CNSNews describes that surprising finding from data reported in the U.S. Treasury’s monthly statements.
The federal government collected record amounts of both individual income taxes and payroll taxes through the first six months of fiscal 2017 (Oct. 1, 2016 through the end of March), according to the Monthly Treasury Statement.
Through March, the federal government collected approximately $695,391,000,000 in individual income taxes. That is about $7,387,280,000 more than the $688,003,720,000 in individual income taxes (in constant 2017 dollars) that the federal government collected in the first six months of fiscal 2016.
The federal government also collected $547,491,000,000 in Social Security and other payroll taxes during the first six months of fiscal 2017. That is about $2,731,820,000 more than the $544,491,000,000 in Social Security and other payroll taxes (in constant 2017 dollars) that the government collected in the first six months of fiscal 2016.
Despite collecting record amounts of individual income taxes and payroll taxes, the Treasury still ran a deficit of $526,855,000,000 in the first six months of fiscal 2017.
The chart below reveals how the U.S. government’s cumulative spending and tax collections for its current Fiscal Year 2017 (FY 2017) compares with that for last year (FY 2016).
The chart also reveals the explanation for why the U.S. government is running in the red. At no time during the year does the cumulative spending of the U.S. government ever drop below the cumulative combined amount of the income and payroll taxes it withholds from American paychecks and the student loan debt payments it collects from Americans who borrowed money from the government.
Unlike the money it collects through taxes and student loan payments, where the ever-changing state of the U.S. economy can greatly affect the incomes of tax-paying Americans, the U.S. government has full control over the amount of money that it spends. If U.S. politicians really wanted to get serious about improving the fiscal health of the U.S. government without imposing an even greater tax burden on regular Americans who are already paying record amounts of taxes, they would take steps to more closely match the amount of federal spending to the amount of revenue that the U.S. Treasury actually collects each month rather than allow its spending to continue running on autopilot.
As for how to cut spending, science has some very clear answers. For politicians however, that the federal government’s spending remains so untouched and so steady from year to year is a problem that can be attributed to their misplaced priorities.
During winter storms back in February, the emergency spillway of the Oroville dam failed, forcing the evacuation of nearly 200,000 people. Engineers had known for decades that the rock-and-soil spillway was unreliable but did nothing. California Rep. John Garamendi said the spillway “worked fine until it had to be used.” Governor Jerry Brown said, “I’m glad we found out about it.” California taxpayers, particularly those who were evacuated deserve full disclosure of the dam’s history, maintenance and potential for failure. Trouble is, the governor and state water bosses are blocking access to records about the dam’s design specifications, federal inspection reports, technical documents, and other crucial information.
Department of Water Resources officials and local law enforcement claim it is a security matter, lest the information “fall into the wrong hands,” as Butte County Sheriff Kory Honea explained, meaning terrorists who could “create havoc or harm.” So as DWR boss Bill Croyle told reporters, “There is going to be a level of security over certain types of information.” Governor Brown has been uncritical of the gag order but California taxpayers should not be fooled. To all but the willfully blind, politicians and bureaucrats are simply hiding years of negligence, faulty oversight, and misguided spending.
In similar style, when whistleblowers called for a criminal investigation of safety lapses on the new span of the Bay Bridge, the politicians charged with oversight did nothing.
When informed of the bridge’s lingering safety risks, Brown famously replied “I mean, look, shit happens.” With the Oroville spillway failure, Brown told reporters “we live in a world of risk. Stuff happens and we respond.” The withholding of crucial information on some bogus security excuse is not the response those at risk had in mind. As Oroville resident Beth Bello told reporters, the terrorist issue is “completely irrelevant” to what happened. On the other hand, if the dam’s structural integrity is at risk, that is “more of a threat than a terrorist.”
Nearly one year ago, the U.S. territory of Puerto Rico officially defaulted on its debts. In response to that default, and the looming threat even larger defaults the U.S. Congress passed an emergency debt relief bill to rescue the territorial government of Puerto Rico, which President Obama signed into law on June 30, 2016.
That bailout has become relevant again today because Puerto Rico is rapidly approaching a key deadline set by that law, which unless the territorial government and its creditors can come to terms, will lead to “restructuring” proceedings, similar to what a failed business or local government goes through when they declare bankruptcy. Reuters reports:
Bankruptcy for Puerto Rico is looking ever more likely as the clock ticks down toward a May 1 deadline to restructure $70 billion in debt, ramping up uncertainty for anyone betting on returns from the island’s widely held U.S. municipal bonds.
When U.S. Congress last year passed the Puerto Rico rescue law dubbed PROMESA, it froze creditor lawsuits against the island so its federally appointed oversight board and creditors could negotiate out of court on the biggest debt restructuring in U.S. municipal history.
The freeze expires on May 1, however, and an extension by Congress is “not going to happen,” said a Republican aide to the House Committee on Natural Resources, which is in charge of territory matters.
A round of mediated talks is scheduled to begin on Thursday. But absent an agreement soon, a growing number of analysts say Puerto Rico will seek protection from creditors under PROMESA’s court-sanctioned restructuring process, akin to U.S. bankruptcy.
Without a deal between Puerto Rico’s government and its creditors, it is highly likely that the territory will be the first “state-level” government in the United States to go into bankruptcy.
The forced removal of Mr. David Dao from a United Airlines flight has touched off outrage around the world, justifiably so. The airline should have adjudicated the overbooking issue before the boarding process, and as UA CEO Oscar Munoz said, nobody should ever be treated that way. The video of the removal grabbed worldwide attention and prompted some to demand more government regulation of the airline industry. As Marc Scribner of the Competitive Enterprise Institute notes, excessive regulation is a major part of the problem.
The airlines “face greatly reduced competitive pressures thanks to government policy.”
The four largest U.S. air carriers, their unions, and their political allies “have been waging a war on meager proposals to expand foreign international air travel competition.” The potential competition includes Norwegian Air and three Gulf-based carriers with high rates of customer satisfaction. More carriers in the U.S. market would expand passengers’ choices and reduce the cases of overbooking and heavy-handed removals. On the other hand, overbooking is hardly the only inconvenience in air travel.
All passengers must submit to a thorough screening process by the federal Transportation Security Administration. The TSA often adds humiliation to their famous Two Minutes Inconvenience and even if courteous and professional, the screeners don’t do much good. As we noted, in 2015 a Department of Homeland Security team was able to get weapons, mock bombs and other items through the screening. The failure rate was a full 95 percent, which passengers might not find comforting. Passengers might also want to recall September 11, 2001.
With all their vast powers and mega-billion budgets, the FBI, CIA, NSA and all the entire U.S. “intelligence community” could not prevent terrorists from entering the United States, and openly training to fly airliners but not land them. The intelligence community failed to intercept the terrorists’ flight plans and keep them off the airliners. Once aboard, nobody removed the terrorists and they completed their deadly mission. Like the overbooking problem and Mr. Dao’s forcible removal, the back story is government failure.
“President Trump’s proposed budget is an out and out theft from the least of us to give to those with the most.” That is Bay Area Democrat Delaine Eastin in the April 5 San Jose Mercury News. The piece notes that Eastin is a candidate for governor and a former state education superintendent but says nothing of her record in that powerful post. On Eastin’s watch from 1995 to 2003 the state was funding an interlocking directorate of “Community Based Organizations.” The CBOs, in turn, were to use the money for citizenship classes and English language instruction for immigrant children. Instead CBO bosses were spending it on political activism, the purchase of new homes, and luxury items such as Mercedes-Benz automobiles and jewelry. The CBO that got the most, some $7 million, was Hermandad Mexicana Nacional, founded by Bert Corona, a Communist Party activist going back to the 1930s.
When state auditors Robert Cervantes and James Lindberg began investigating the CBOs, Corona complained to Delaine Eastin. She did not put a stop to the massive fraud and theft of public funds. Instead she reprimanded and demoted the whistleblowers, who were also on the receiving end of threats from Corona, a Stalinist with a record of violence. The whistleblowers took legal action and the state wasted more taxpayer dollars defending Eastin. Cervantes got his job back plus a monetary settlement. In 2002, a jury awarded Mr. Lindberg $4.5 million and held Delaine Eastin personally liable for nearly $1.4 million in non-economic damages and $150,000 in punitive damages because she had “acted with malice” toward him. The award was reduced to $4 million and Eastin’s punitive damages dropped, but by then the damage had been done.
“Taxpayers’ money was ripped off, and politicians were at least compliant, if not complicit,” wrote Dan Walters of the Sacramento Bee. “Those who tried to set things right were punished and the taxpayers were tapped again to compensate them. Finally, taxpayers’ money meant to educate children is, instead, being spent to fight a whistle-blower. What’s wrong with this picture? Everything.”
During the campaign for governor, parents, students and taxpayers alike should monitor how much Eastin’s record comes into play. To paraphrase Milan Kundera, the triumph of accountability over government corruption is the triumph of memory over forgetting.
The Mercatus Center’s RegData project has created a database of federal regulations and used it in some pretty interesting ways to describe their cost to both American businesses and regular Americans.
One of those ways involved estimating how much time it would take to read through the entire Code of Federal Regulations at the average reading speed of 300 words per minute.
The result? Over 5,727 hours! The infographic they put together to share that figure also shows how that compares to several popular works of literature.
That’s a lot of time! Now if you’d like to estimate the cost, say if you either own or work for a business that’s affected by federal regulations, finding out how those regulations will affect you and the things you do will require hiring a lawyer to read through the regulations. Who will likely be paid anywhere from $140 to $495 per hour (based on average 2012 rates) depending on their experience to read how those federal regulations might impact you at your work.
Assuming that reading the federal regulations that apply to your business only require the same 17 hour time commitment as reading The Hunger Games trilogy, it would cost anywhere from $2,380 to $8,415 just to discover how they might affect your business. And if there are any questions about how to interpret the regulations, then the legal bill would only go up from there.
Next, multiply those figures above by the number of businesses like yours that may also be exposed to the same regulations, and you can get a sense of the drain they can have on the industry in which you work.
And that’s just to read the federal regulations that might apply to you at your job! Complying with those same regulations carries a whole additional set of costs above and beyond what simply reading the regulations cost.
Since the middle of 2016, the city of Dallas has been dealing with a Texas-sized problem for one of its public employee pension funds. Specifically, the Dallas Police and Fire Pension System was so at risk of becoming insolvent that the city’s retired firefighters and police officers were effectively conducting a run on the bank, so to speak, by using a policy that permitted them to cash out their pensions in lump sum withdrawals.
Back in December 2016, Dallas’ city government acted to stop the retired public employees’ run on the pension fund by eliminating the policy that allowed them to withdraw the balance of their pensions accounts to protect their wealth. Unfortunately, the problems for the city of Dallas didn’t end there, because the risk of insolvency for the city’s troubled Police and Fire Pension System wrecked the city’s credit rating, making it more costly for it to borrow money to fund improvements in its public infrastructure and other public programs.
To fix both problems, the city’s leaders were looking to potentially hike the municipal property tax rates that it imposes on Dallas residents by as much as 130% of their 2016 levels.
That plan however fell apart earlier this week when Dallas’ mayor, Mike Rawlings, withdrew his support for a bill before the Texas state legislature that would use a massive infusion of taxpayer funds to bail out the failing pension fund. But it wasn’t just the big increase in property taxes that would be imposed on Dallas’ residents that prompted his objections. It was a clause in the bill that would require the city to fund the pensions of “phantom” police officers and fire fighters.
What he’s adamantly against is a clause that he says would result in the city putting in another billion plus dollars to the failing fund over 30 years.
He says the clause would require the city to pay the 34.5 percent contribution rate even on officers and firefighters that it does not hire and even on raises that it may or may not give.
The clause sets a baseline number of officers and firefighters. In the case of police, that’s three officers per thousand. The clause would also automatically assume that a certain level of raises given.
“Basically you’re paying on phantom employees, not real employees,” Rawlings said. “We just can’t enter into an agreement with that degree of commitment for the city. No business would do it this way. We cannot find another pension fund in American where someone pays into a fund based on future employees. It’s just not done and it should not start here in the State of Texas.”
Given that the pension fund had partially gotten into trouble because it held a large number of phantom real estate assets for which it was forced to write down their value, that may not seem like such a bad pairing. As a matter of sound policy however, public employee pension funds should only exist for actual public employees and should only hold real assets with valuations that match what they can reasonably be liquidated for if they were forced to be sold.
The story of Dallas’ failing public employee pension fund is revealing because although it has factors that make it unique when compared to other government employee pension funds, how elected politicians are attempting to fix it is telling us a lot about how other local and state governments will attempt to fix their own failing public employee pension funds. Of which, it seems like nearly all are at risk.
The only thing we know for sure is that regular taxpayers will be stuck with the bill for bailing out the overly generous pension benefits of government employees that were promised by the public officials they worked to elect.
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