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If you count up the number of civilians who work for the U.S. federal government, you’ll find that nearly one out of eight work for the Department of Veterans Affairs, primarily in the federal government-run, single payer-style health care and hospital system that has been established to specifically deal with the medical needs of military veterans.

The VA has been wracked in recent weeks by reports of negligence on the part of the department’s managers and admininistrators, who allegedly have implemented a unique health care rationing scheme aimed at making the system appear to be meeting the needs of ailing veterans, but is instead denying critical care to them.

The rationing scheme involves the use of multiple waiting lists for veterans seeking medical care at a number of VA health care facilities across the United States. Here, a number of facilities have been discovered to be maintaining an “official” waiting list, which is meant to communicate the VA is successfully limiting waiting times to 14 days or less before providing care. But in reality, the “official” waiting list is a fraud, as these facilities would appear to also be maintaining secret waiting lists – ones where the veterans seeking care are effectively placed in a virtual waiting room where months pass before they can even get on a schedule to receive care.

That kind of deception carries a real human cost, as the story first broke in Phoenix, where as many as 40 veterans have died before receiving care after seeking it from the VA as they were placed on the facility’s secret wait list instead. Since that story first broke, it would appear that this secret rationing system has been adopted at a number of Veterans Administration facilities across the nation – something that could only happen with the knowledge and assent of the Department’s administrators.

In other words, the situation being discovered by the public today is not an isolated incident resulting from the actions of a few rogue administrators at a local facility. Instead, it is the result of deliberate actions taken on the part of the department’s top administrators, which we can see by the system of incentives they created to reward those who adopted the secret wait list scheme and punish those who did not.

Germaine Clarno is a VA social worker and employee representative in Chicago. She alleges there are multiple secret waiting lists of veterans kept at the Hines VA Medical Center.

Asked which divisions of the hospital kept the secret waiting lists, Clarno says, “Employees are coming to me from all over the hospital, from outpatient, inpatient, surgery, radiology.”

Clarno says veterans were put on secret waiting lists when they called for appointments, but they wouldn’t formally get an appointment booked in the computer until one came up within the VA’s goal of 14 days. The purpose of the lists, she says, was to hide how often veterans were not being seen on time.

Clarno says the purpose of the lists was “to make numbers look better for their own recognition and for bonuses.”

The VA grants bonuses to executives and doctors, partly based on short wait times. Whistleblowers — including Dr. Sam Foote, who revealed the scandal in Phoenix, where up to 40 veterans may have died — believe bonuses give an incentive to conceal delays in care.

The savings from denying timely medical care to veterans could very well have provided the funds needed to pay out the reported bonuses to the VA’s bureaucrats.

Meanwhile, there were consequences for those bureaucrats who didn’t go along with and adopt the VA’s secret health care rationing scheme:

Clerks at the Department of Veterans Affairs clinic in Fort Collins were instructed last year how to falsify appointment records so it appeared the small staff of doctors was seeing patients within the agency’s goal of 14 days, according to the investigation.

A copy of the findings by the VA’s Office of Medical Inspector was provided to USA TODAY.

Many of the 6,300 veterans treated at the outpatient clinic waited months to be seen. If the clerical staff allowed records to reflect that veterans waited longer than 14 days, they were punished by being placed on a “bad boy list,” the report shows.

Bureaucrats don’t like being on their bosses’ “bad boy lists”, because it denies them opportunities for advancement and reward. Combined with the bonuses that would be paid out for those who reported that they satisfied their bosses’ performance goals, we can only conclude that the government’s bureaucrats were doubly incented to impose the VA’s secret health care rationing scheme on the unsuspecting Americans veterans who trust and depend upon them.

Once again, we find that when given a choice between meeting the real needs of regular Americans or doing things that only benefit themselves, the government’s bureaucrats choose their own interests over those of the American people.

And this is how they’re treating the people who volunteered to put their lives on the line at a moment’s notice by serving in the nation’s military. Just imagine how the same kind of twisted incentives will lead the administrators of the Department of Health and Human Services to act when they decide its time to start rationing the kind of health care that people get through Medicaid, Medicare and the Affordable Care Act. Especially if their bonuses and promotions on the line.

Image Credit: American Legion – Epidemic of VA Mismanagement

As we have noted, the new eastern span of the Bay Bridge cost $6.4 billion, a full $5 billion more than the original estimate, and the project came in ten years late. The delay of a decade, however, was not sufficient to resolve serious safety problems with the bridge. Those were the subject of hearings in Sacramento in which one whistleblower called for a criminal investigation. The revelations suggested such an investigation was entirely warranted but it never took place. Now, as this report notes, Caltrans is dismissing the safety concerns.

Caltrans concludes that apart from ongoing tests of anchor rods, no concerns exist. Caltrans did not mention the corrosion in the protected chambers that house the main cable anchorage, which have been detailed in news reports.

Caltrans boss Tony Anziano dismissed concerns raised by independent experts. What we have here is a massive state agency essentially investigating itself, a dynamic that also emerged in the hearing.

Senator Mark DeSaulnier, who conducted the proceedings, observed that “Caltrans audits itself,” unlike procedures in states such as Texas, and that in Caltrans “you don’t go after the trouble, you go after the troublemaker.” DeSaulnier told Caltrans bosses “I don’t believe you” and cited “a deliberate and willful attempt to obfuscate what is happening to the public.” But he did not follow up on the call for a “criminal investigation.” Instead the California Highway Patrol was to conduct an “administrative inquiry” which taxpayers may be forgiven for seeing as a coverup.

In the hearing DeSaulnier charged that cost overruns and lingering safety issues had eroded public confidence and made Californians “adverse to taxes.” These taxes were needed for other “infrastructure” projects that DeSaulnier said would promote economic growth. He gave no examples but the prime candidate is surely the state’s $68 billion high-speed rail project.

That project, and the $6.4 billion Bay Bridge, confirm that politicians are adverse to waste and allergic to reform. That’s why they back boondoggles, fail to launch criminal investigations, and let a massive state agency like Caltrans essentially investigate itself.

Most taxpayers will be unfamiliar with the National Telecommunications and Information Administration (NTIA), but they might want to get up to speed for several reasons. The NTIA is “the Executive Branch agency that is principally responsible by law for advising the President on telecommunications and information policy issues.” The NTIA’s programs and policymaking focus is “largely on expanding broadband Internet access” and “ensuring that the Internet remains an engine for continued innovation and economic growth.” These goals are “critical to America’s competitiveness in the 21st century global economy and to addressing many of the nation’s most pressing needs, such as improving education, health care, and public safety.” What the NTIA has done to expand Internet access and competitiveness remains uncertain, but now some politicians want to expand its role.

Senator Ed Markey and Rep. Hakeem Jeffries have introduced the Hate Crime Reporting Act of 2014, a bill that would deploy the NTIA to “update a report on the use of telecommunications, including the Internet in the commission of hate crimes.” As this report noted, lawmakers want to monitor and control speech on radio, television and the Internet for “hate” and material that government snoops deem to be encouraging “violent acts.”

The Act does not specify what, exactly, constitutes “hate”, but federal bureaucrats will make the call. In current conditions, as this report notes, “hate” can be anything less than worshipful of the current administration. This troubles civil libertarians who call the legislation “dangerous” and charge that it is not up to politicians and the federal government to “define for a free people what speech is and is not, acceptable.”

The Act likely stands little chance of becoming law, but it shows that politicians are out to monitor and control speech. A similar offensive recently surfaced in the Federal Communications Commission. Both should be seen as the deployment of the machinery of government against critics, opponents, and the public at large.

The NTIA is “located within the U.S. Department of Commerce,” a mammoth bureaucracy that wields a budget of some $8 billion but is hardly an engine of economic growth.

How much does the average American household spend to cover the cost of government regulations?

Answering that question can be difficult, because Americans pay that cost every time they make any kind of transaction. Because it’s a cost of doing business, it gets directly passed along to every consumer and is incorporated into the cost of everything you might buy.

But it’s not an impossible question to answer. Mark Tapscott describes how one economist calculated the cost of regulations on American household consumers:

Wayne Crews of the Competitive Enterprise Institute provides a definitive answer to that question today with publication of the latest edition of his annual compilation, “10,000 Commandments: An annual snapshot of the federal regulatory state.”

Crews estimates the annual cost of compliance with the record number of new federal rules and regulations issued under President Obama at $1.863 trillion.

That works out to a $14,974 “hidden tax” every year for the average U.S. household. That’s 23 percent of the $65,596 annual average household income in America.

Most regulations are developed to achieve one goal: to make it too costly for potential competitors to today’s dominant business interests to compete with them, which allows those dominant business interests to keep their prices higher than they otherwise could and maintain their dominant position. Politicians in both parties go along with the scheme because their corporate cronies take some of that extra money to support their political and personal interests.

That’s how “public servants” get rich.

Insider trading is normally conducted by individuals with access to public companies’ information. But as this report notes, governments also conduct “insider trading in jobs” as shown by the case of Gerardo Lopez, a sergeant-at-arms in the California Senate.

In 2012 Lopez was involved in a gunfight at his house that left one person dead and three injured. Toxicology tests showed that Lopez was on drugs at the time of the gunfight, but Lopez’s boss, chief sergeant-at-arms Tony Beard, hushed up that information. Senate boss Darrell Steinberg duly kept Lopez on the payroll.

As it turns out, Lopez’s wife, Jennifer Delao, works for Steinberg in his policy unit, and Lopez’s mother, Dina Hidalgo, is a big wheel in the Senate’s human resources department. So the Senate is a version of “All in the Family.” When the toxicology report finally emerged, Steinberg fired Lopez but his mother recused herself from involvement in the termination. And Tony Beard, son of a former California Assembly chief sergeant-at-arms, conveniently resigned. Beyond nepotism and secrecy, redundancy is also going on here.

Sergeants-at-arms are supposed to be guards, but actually the California Highway Patrol polices the Capitol building and grounds. As this report notes, the sergeants maintain decorum but also “ease legislators’ lives by providing lifts to and from the airport and running whatever other errands their bosses may need done.” And many others on the legislative payroll are expected to work on campaigns as “in effect taxpayer-financed campaign workers.” Overall the personnel practices are “as arbitrary and opaque as any third-world dictatorship, with no accountability for who gets hired and fired and why.”

Steinberg said he plans to “expeditiously investigate” whether Dina Hidalgo helped family members get jobs in the Senate and claims, “I intend to update the Senate’s personnel policy in a very thorough way.” Taxpayers have good reason to remain doubtful on both counts.

As we previously observed, in November 2012 the ballot featured four measures on taxes and spending. The Senate Governance and Finance Committee held hearings on these measures, and the California Channel gave voters statewide a chance to gain insights from the testimony. Unfortunately, senate President pro Tem Darrell Steinberg blocked citizens’ access by killing the live broadcast. And in a lame apology Steinberg said, “I pride myself on being open and transparent.”

George Will writes of a new state-based initiative to amend the U.S. Constitution to regain control over the federal government’s spending:

From the Goldwater Institute, the fertile frontal lobe of the conservative movement’s brain, comes an innovative idea that is gaining traction in Alaska, Arizona and Georgia, and its advocates may bring it to at least 35 other state legislatures. It would use the Constitution’s Article V to move the nation back toward the limited government the Constitution’s Framers thought their document guaranteed.

The Compact for America is the innovation of the Goldwater Institute’s Nick Dranias, who proposes a constitutional convention carefully called under Article V to enact a balanced-budget amendment written precisely enough to preclude evasion by the political class.

Here is the text of the proposed Constitutional amendment:

Total federal government outlays shall not exceed receipts unless the excess of outlays is financed exclusively by debt, which initially shall be authorized to be 105 percent of outstanding debt on the date the amendment is ratified. Congress may increase the authorized debt only if a majority of state legislatures approve an unconditional, single-subject measure proposing the amount of such increase. Whenever outstanding debt exceeds 98 percent of the set limit, the president shall designate for impoundment specific expenditures sufficient to keep debt below the authorized level. The impoundment shall occur in 30 days unless Congress designates an alternative impoundment of the same or greater amount. Any bill for a new or increased general revenue tax shall require a two-thirds vote of both houses of Congress — except for a bill that reduces or eliminates an existing tax exemption, deduction or credit, or that “provides for a new end-user sales tax which would completely replace every existing income tax levied by” the U.S. government.

Nick Dranias translates the legalese of his draft amendment into English for how it would work:

… the Compact uses an agreement among the states to advance and ratify a powerful balanced budget amendment. The amendment would limit spending to cash flow from taxes except for borrowing from a constitutionally-fixed line of credit—to handle cash flow volatility and emergencies.

To ensure that line of credit is not abused, the core of the Compact’s amendment is a requirement of outside oversight for any proposed increase in the federal debt. Specifically, any increase in the federal debt limit would require approval from a referendum of the states.

By design, the Compact makes the goal of achieving a balanced budget amendment obtainable—not an armchair pipe dream. The Compact transforms the amendment by convention process into a “turn-key” operation, allowing the states to agree in advance to everything it involves – from the text of the proposed amendment, to the application to Congress, to delegate appointments and instructions, to the selection of the convention location and rules, to the ultimate legislative ratification of the amendment. This cuts the number of enactments needed to get the job done under Article V of the United States Constitution by more than 60%. It also prohibits the oft-cited fear of a runaway convention.

With this powerful balanced budget amendment in place, Washington would no longer have the ability to set its own credit limit and write itself a blank check.

The most interesting part of the proposed amendment is the method by which it might be enacted – using a method that was provided for in Article V of the U.S. Constitution, but which has never been utilized: a convention of two-thirds of the state legislatures. That approach would effectively limit the Constitutional Convention to just the issue at hand: drafting an effective balanced budget amendment, which would nearly eliminate the potential for a complete Constitutional rewrite, which would be a risk in a general Constitutional Convention.

Looking at the proposal itself, there are things to like and things not to like.

Starting with the things to like, the proposed amendment properly focuses on the federal government’s spending (outlays) as the benchmark for establishing how much the national debt would be authorized to change from one budget year to the next. This is a good thing because the federal government has full control over how much it spends (despite any claims of bureaucrats and politicians to the contrary!) What it doesn’t have is full control over its revenue, which can fluctuate greatly from year to year as the economic health of the nation changes.

The control mechanism is interesting. When adopted, it automatically resets the national debt ceiling to be 105% of the current national debt. But once the national debt level rises to be within 2% of that limit, the President has to specify spending cuts to keep the national debt from rising above that level, which have to be implemented within 30 days, unless the U.S. Congress acts to approve different specific spending cuts of an equal or greater amount.

Unless the federal government’s receipts from taxes and fees rise enough to create more spending room. As long as the total amount of spending stays below 98% of the constitutional national debt ceiling, elected officials would largely be free to spend money as they see fit.

To prevent a tax-hike free-for-all that would potentially enable a government spending free-for-all under the terms of the proposed amendment, a two-thirds vote for new or increased taxes in both houses of Congress would be required.

The part that’s not necessarily so likeable, certainly from the perspective of U.S. taxpayers, would be the easier-to-reach threshold of a simple majority vote to eliminate tax deductions, exemptions and credits, which would likely become the preferred means for the federal government to increase its tax collections if the proposed amendment were added to the U.S. Constitution in its current form.

Also not necessarily so likeable is the provision that promotes an “end-user” sales tax. In effect, this is really a value-added tax which, if it really fully replaced all income taxes, is something that could be pretty desirable. In practice however, it would have its own set of advantages and disadvantages.

But because the proposed amendment doesn’t outright repeal the sixteenth amendment, which is what permits the federal government to collect income taxes in the first place, there’s little chance of that transition occurring, as most politicians will be unwilling to give up access to the money that they believe they can reliably collect through income taxes.

And that would be the thing that hangs up the proposed amendment for balancing the budget from getting the state-by-state consensus needed to move forward. A more tightly focused amendment would likely stand a better chance at success.

Taxpayers prone to wonder why government is so wasteful should take a hard look at government-employee pensions in general and the practice of double-dipping in particular. As this report notes, Bill Carnahan, head of the Southern California Public Power Authority, took both his full-time salary and his pension at the same time, and he did so for more than a decade.

This long-term double-dip largesse was to compensate for a salary Carnahan perceived as too low, and not up to the standards of the private market. Taxpayers might wonder about that. Carnahan got $194,100, with an annual base of $150,000, a $4,500 performance bonus, and $39,600 to cover “overhead” such as car expenses, medical and dental insurance, and other items. The deal surged to as much as $271,000, plus the inflation-adjusted pension of $3,750 a month. Carnahan was living the dream.

When the California Public Employees Retirement System (CalPERS) wanted the pension money back, the Power Authority promptly wrote the checks. But CalPERS now says Carnahan needs to personally pay back $508,985.44. His former wife, who got part of the benefits, at one point owed some $139,000. The parties are now wrangling over these overpayments, but some realities are evident.

Pensions are actually for retirement. Nobody should be able to work full time and draw their full salary and pension at the same time. CalPERS is right to want the money back, but since it took more than a decade to expose the double-dipping, accountability and transparency are obviously lacking. Likewise, pensions are not a means to bulk up an already fat compensation package. With no apology to Mr. Carnahan and his employers, the notion that government salaries lag behind the market is another ruling-class superstition.

To reduce the cost of government, legislators need to make pension reform a top priority. Double-dipping should be one of their primary targets.

A cartoon, like a picture, is worth a thousand words. Nonetheless, I’ll risk adding a few more to this one.

In case you haven’t heard, French economist Thomas Piketty’s book, “Capital in the Twenty-First Century,” is a runaway best seller. In Professor Piketty’s view, under capitalism, the rich get richer (because they own the high-return capital) and all others just scrape by. As a result, income inequality grows. His solution: tax the hell out of the rich. He advocates a global graduated tax on anyone with more than $1.4 million in net worth and an income tax of 80 percent on any income over $500,000 or so.

Perhaps Professor Piketty has spent too much time under the hot Riviera sun or teaching graduate classes. He has somehow forgotten some of the basics taught in Economics 101: incentives matter to behavior and, if you want less of something, put a tax on it. In Professor Piketty’s idealized world, as in the cartoon, we will have a much more equal standard of living. Unfortunately it will be at a standard that most of us would find unsatisfactory.

In 2004, California’s $3 billion Stem Cell Research and Cures Act, Proposition 71, promised life-saving cures and therapies for a host of afflictions. Voters approved the measure, which created the California Institute for Regenerative Medicine (CIRM). Ten years later CIRM has spent nearly $2 billion, but as this report notes, “No cures have yet resulted from CIRM’s spending.” So on its own terms CIRM is a bust, and also something of a scam.

As this report notes, CIRM directed a full 91 percent of its research funding to institutions with representatives on its own governing board. Likewise, the CIRM board overruled the Institute’s own scientific reviewers, who twice rejected a proposal to fund a for-profit company on whose behalf CIRM founder Robert Klein had lobbied. The CIRM board went ahead and gave the money to the company anyway. Klein, a wealthy real-estate developer, wrote Proposition 71 to make himself chairman and in 2008 started paying himself $150,000.

CIRM also hired non-scientist Art Torres, a former state Democratic Party boss, and immediately tripled his salary to $225,000. CIRM pays president Alan Trounson $490,008, more than the President of the United States. Trounson is now leaving, and the new CIRM boss may bag more than $500,000 a year to head a wasteful state agency that has produced “no cures.” Even a supporter on the single state body that oversees CIRM says he would have a hard time voting for Proposition 71 again. One can’t blame him, but the measure offers educational value.

If taxpayers want to keep down the cost of government, they should be wary of any measure that, like Proposition 71, comes insulated from legislative oversight. Such measures are likely to channel money to supporters and their cronies, and provide a soft landing spot for washed-up politicians. Above all, taxpayers should be on guard for initiatives that wear a white coat and promise more than they can deliver. CIRM is a prime example of that. A ballpark figure for what it should get in future is zero.

Back in 2012 analysts were predicting that the federal bailout of mortgage finance giants Fannie Mae and Freddie Mac would be the most expensive government rescue of the financial crisis. At the time the cost was $153 billion and rising, and those costs would continue to climb regardless of federal plans for the agencies. According to this report, Fannie Mae and Freddie Mac have “taken $187.5 billion in taxpayer aid since 2008” and “could require an additional bailout of as much as $190 billion in a severe economic downturn.” In the worst circumstances, by some estimates, the companies would need $84 billion to $190 billion by the end of 2015.

This comes despite efforts to “wind down” the federal agencies under a policy to scale back mortgage investment portfolios and shed employees. But as this report notes, these two government-sponsored enterprises did not shrink much at all, and remain huge players in the mortgage finance business. Layoffs in the Washington, DC, office were offset by hiring at regional offices such as Dallas. During federal government conservatorship, in fact, Fannie Mae gained 1200 employees. There was really no plan to reform operations going forward, and congressional momentum to wind down has abated. Meanwhile, economic growth has been meager and the housing market is hardly thriving. So it’s not out of the question that Fannie Mae and Freddie Mac could soon need another $190 billion from taxpayers.

“Take a load off, Fannie,” The Band sang in its 1968 hit “The Weight.” But Fannie Mae, Freddie Mac, and the federal government did not take the load off. Indeed, they made it heavier. So embattled taxpayers may soon be singing, “you put the load right on me.”