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It can be argued that the U.S. government has an excessive spending problem, where the politicians that American voters send to Washington D.C. in each election seem to have very little appetite to rein in their free-spending habits, where the opportunity to spend other people’s money on things that can make them more popular in their districts and states and thereby keep themselves in their seats of power is too good to ever willingly give up.

Unless they’re forced to by a new constitutional amendment, that is! Writing in the Washington Post, opinion columnist George Will recently reflected on his view for the need for a new balanced budget proposal.

The federal debt held by the public was 39 percent of gross domestic product 10?years ago; it is 75 percent today. Before last month’s tax changes, the debt was projected to reach 91 percent in 10 years. No one knows whether the tax changes will hasten this; no one should assume that they will not. No one knows at what percentage the debt’s deleterious effect on economic growth becomes severe; no sensible person doubts that there is such a point.

We will discover that point the hard way, unless Congress promptly sends to the states for prompt ratification a constitutional amendment requiring balanced budgets. The amendment proposed by R. Glenn Hubbard, dean of Columbia University’s business school, and Tim Kane, economist at the Hoover Institution at Stanford University, would limit each year’s total spending to the median annual revenue of the previous seven years, allowing temporary deficits to be authorized in emergencies by congressional supermajorities.

Because reverence for the Constitution is imperiled by tinkering with it, and because the supply of ideas for improving Madison’s document always exceeds society’s supply of Madisonian wisdom, the document should be amended rarely and reluctantly. Today, however, a balanced-budget amendment is required to counter two developments: the abandonment of the original understanding of the Constitution and the death of the political morality that expressed that understanding.

In focusing on the publicly-held portion of the U.S. national debt, Will is understating the full magnitude of the U.S. government’s total public debt outstanding, which through the end of the government’s 2017 fiscal year, already exceeds 103% of the nation’s gross domestic product.

But even with the U.S. national debt being that much worse of a burden, does it make sense to impose a constitutional restriction like the balanced budget amendment proposal he cites to compel U.S. politicians to restrain their spending? Why set such a complicated approach for setting an annual spending limit for the U.S. government into the U.S. Constitution? Won’t politicians game the system to get out from under its restrictions?

Will argues that yes, they will, which is why the nation needs a balanced budget amendment:

Critics of a balanced-budget amendment warn that Congress will evade it by means of creative bookkeeping, stealthy spending through unfunded mandates on state governments and the private sector, the promiscuous declarations of spurious “emergencies” and other subterfuges. Such critics inadvertently make the case for the amendment by assuming that the political class is untrustworthy. And that the people’s representatives unfortunately are representative of those who elect them.

What do you think? Is it time for a new balanced budget amendment? And if so, what might be a better way to put the U.S. government onto a more sustainable and fiscally responsible path?

The recently passed federal tax bill lowers the corporate rate from 35 to 21 percent, reduces rates in five of the seven tax brackets, and according to the New York Times will cut taxes for about 75 percent of filers in 2018. The bill also caps the amount of state taxes filers can deduct on their federal return at $10,000, and that displeases politicians in California.

State Senate boss Kevin de Leon has responded with the Protect California Taxpayers Act, which will allow Californians to pay their state income taxes as though they were a charitable donation, and therefore fully deductible. The money would go into a California Excellence Fund run by the treasurer’s office and wind up in the state budget. GOP strategist Bill Whelan calls it a “twofer” for California, directing more money to Sacramento and less to the federal government. On the other hand, the Sacramento Bee sees it as just another loophole and “a short-term solution,” with critics even in the state capital. California taxpayers could be forgiven for taking another view.

The Golden State deploys the top marginal income-tax rate of 13.3 percent and the highest base sales tax at 7.5 percent. Senate boss de Leon did not for a second consider that these punitive rates might be too high and that workers would benefit from lower taxes. Instead he wants workers to pay the same high rates, in effect, under the table. This affliction is known as taxoholism, the mindset that high taxes are always a good thing and which automatically resists tax reductions of any kind at any level. Another victim is hereditary, recurring governor Jerry Brown. He denounced the tax-limiting Proposition 13 as “fraud” and a “rip-off,” but it passed with 65 percent of the vote. Brown then proclaimed himself a “born-again tax cutter,” which was never true. He now supports the nation’s highest taxes with evangelical fervor and recently layered on a $5.2 billion gasoline tax that will further punish California workers. They should understand that taxoholics represent the government, not the people.

The week between the Christmas and New Year’s often makes for a slow news week, where all the hubbub and activity of the holidays work to refocus the attention of Americans on their families and friends rather than what’s going on in their communities or is happening in Washington D.C.

Since this is my first post of 2018 (Lloyd’s article on Feds Fast Food Junkthought is MyGovCost’s inaugural post of the year), I thought it would be a good time to look in on three stories involving either corruption, bad behavior or outright greed involving either national, state or local government officials that came to light over the holidays. Each of the three were featured as “picks of the week” by RealClearInvestigations, a nonpartisan news site that aggregates investigative reporting from high quality sources throughout the country.

New York Times: The Most Expensive Mile of Subway Track on Earth

Doing absolutely nothing: It’s nice work if you can get it, and 200 subway construction workers did, at a rate of $1,000 per day each. That’s just one example of the exorbitant costs to expand New York’s regional transit network, according to a New York Times investigation. The paper found that public officials for years stood by as politically connected labor unions, construction companies and consulting firms reaped the public spending largesse — billions of dollars that could gone to repair existing subways. The estimated cost of the Long Island Rail Road project, known as “East Side Access,” has ballooned to $12 billion, or nearly $3.5 billion for each new mile of track — seven times the average elsewhere in the world.

Open the Books: Federal Bureaucrats Making $200K Increase 165%

Between fiscal year 2010 and 2016, the number of federal employees making $200,000 or more increased by 165 percent, says a watchdog group that crunches government statistics. Furthermore, nearly 30,000 rank-and-file federal employees who received more than $190,823 out-earned each of the 50 state governors. At 78 departments and independent agencies, the average employee made $100,000 or more. Additionally, on average, federal employees receive 10 federal holidays, 13 sick days, and 20 vacation days per year.

Center for Public Integrity: The Trouble With Lawmakers’ Side Gigs

State legislators around the country often have other jobs that they juggle with their official duties. Some do mundane and evidently blameless work, like Stephen Meeks, who some hungry central Arkansans might know better as the pizza delivery guy. But an investigation finds that many others exploit their legislative work in favor of their businesses — a less savory way to grab a slice.

2018 has the potential to be a year of reform for putting more effective restraints upon the graft and corruption that all too often comes at the public’s expense with price tags of millions of dollars. We can only hope that the more honest among today’s politicians can rise up to meet that potential.

The “farm to fork” movement has brought farmers’ markets to the heart of urban areas and they have long been a hit in cities such as Davis, California. Those who patronize farmers markets might be surprised to learn that they are “white spaces,” in which the “habits of white people are normalized.” Farmers’ markets also cause “environmental gentrification” and are “exclusionary” because the locals cannot afford the food or “feel excluded from these new spaces.” Worse, “the most insidious part of this gentrification process is that alternative food initiatives work against the community activists and residents who first mobilized to fight environmental injustices and provide these amenities but have significantly less political and economic clout than developers and real estate professionals.”

That is from the book Just Green Enough, the chapter “Alternative food and gentrification: Farmers’ markets, community gardens and the transformation of urban neighborhoods,” by San Diego State University professors Pascale Joassart-Marcelli and Fernando Bosco. The professors teach courses such as “Food Justice” and “Geography of Food.” Their contention that farmers’ markets are racist doesn’t merit a response. On the other hand, there is reason it should trouble taxpayers.

To research “the role of food in structuring everyday life in immigrant and low-income urban neighborhoods,” professors Joassart-Marcelli and Bosco received funding from the National Science Foundation. The NSF is “an independent federal agency created by Congress in 1950 to promote the progress of science; to advance the national health, prosperity, and welfare,” and other good things. “With an annual budget of $7.5 billion the NSF is the funding source for approximately 24 percent of all federally supported basic research conducted by America’s colleges and universities.” The NSF determines which research “would be the most fruitful investment of taxpayer dollars,” but the notion that farmers’ markets are racist managed to get through the NSF’s “merit review process.” Sub-junkthought should not be normalized, let alone funded by taxpayers. In the new year, Congress should take a weed-whacker to the NSF budget, staff and management.

Following the passage of the Tax Cuts and Jobs Act of 2017, what would it take for the U.S. Congress to put the U.S. government’s spending on a course to zero out the U.S. government’s budget deficit by 2027?

That question is more of a thought experiment than something that we think is likely to happen, but the results of some simple math are shown in the following chart:

Right now, under current law and the CBO’s assumptions for what economic growth will be over the next ten years, the CBO projects that the U.S. government’s spending would increase at an average rate of $258 billion per year, from $3.927 trillion to $6.499 trillion.

But, if the growth of the U.S. government’s spending were restrained to rise by $111 billion per year over the next decade, the U.S. government would balance its annual budget, zeroing out the deficit.

Writing at National Review, Kevin Williamson considers where the U.S. stands today and what that kind of spending restraint would mean:

The United States is on an unsustainable fiscal trajectory. That does not mean that there is an economic crisis right around the corner, today, tomorrow, or in six months. But if nothing is done, entitlement spending will grow beyond our ability to pay for it, even with substantial future tax increases. Military spending is a heavy contributor to our fiscal burden, too, and it could and should be reduced, but that will first require rethinking our national-security posture and our worldwide military capabilities. For the military, the mission determines the budget, but much of federal spending would be more properly organized the other way around. And as much fun as it is to mock Harry Reid’s federally subsidized cowboy-poetry festivals and the critical national effort to get monkeys high on cocaine, basically all of federal spending goes to a handful of programs: Social Security, Medicare, Medicaid, national defense, and interest on the debt. Everything else—from the federal highways to staffing the embassies to the FBI—adds up to about 20 cents on the federal spending dollar. If interest rates go up, then debt service could become a radically larger expense—think about an outlay roughly the size of the Department of Defense budget—very quickly.

Which is to say, there’s no way to fix our finances without doing the things that nobody—especially Republicans—wants to do, meaning some combination of cuts to military spending, reform of Social Security and Medicare, and tax increases. The less you want of one, the more you’re going to need of the others.

There are ideas for reforming the biggest ticket spending categories in the U.S. government’s annual budget out there that would both improve the nation’s fiscal situation and improve the quality of what Americans get from these most costly of government programs. While they may not close the gap between the government’s annual tax collections and its annual spending in the next 10 years, they can succeed in narrowing the gap between the two, which would certainly be an improvement over where we would end up with so much excessive federal government spending on today’s autopilot course.

The Republicans’ victorious tax bill lowers the corporate rate from 35 to 21 percent but is nothing approaching a flat tax because it retains, count ‘em, seven tax brackets. According to the New York Times it will cut taxes for about 75 percent of filers in 2018, but nobody should consider it a gift. Allowing workers to keep more of the money they have earned does not constitute a gift, and the government still gets the workers’ money before they do through withholding, a relic of World War II. Even so, while not a gift, the tax package is not, as Democrats charge, an example of “trickle down” economics.

As statists have it, the government gives tax cuts to “the rich” in the hopes that some of their wealth will trickle down to the workers. The true dynamic is different. The harder one works and the more one earns, the more government grabs through taxes. Statists call this “progressive” taxation but it’s really punitive. Government sets out to redistribute the money to those whom politicians deem the most worthy, in many cases those who, as Mencken put it, vote for a living rather than work for a living. Trouble is, the money must trickle down through multiple layers of highly absorbent bureaucratic sediment. So a workers’ dollar cannot travel from, say, Topeka to Washington DC, go out and party on the town, then return intact as a full dollar to anybody in Topeka.

In California, the state with the highest rate of income tax at 13.3 percent, K-12 education is by law the biggest budget outlay currently at about $76.6 billion. This money must trickle down through state, county and local bureaucracies before it reaches the classroom. That is the true trickle-down dynamic in action. Letting workers keep more of what they earn is not trickle-down, and not a gift at any time of year. When workers are the first to get their own earnings, before greedy government grabs it, true tax reform could be at hand.

It’s back! It was just two weeks ago that the U.S. Congress delayed a scheduled presentation of federal government shutdown theater until the holidays, and now that the holidays have come, the U.S. Congress has… delayed what could have been a Christmas pageant episode of federal government shutdown theater for another month. Mike DeBonis and Erica Werner of The Washington Post have the story:

Congress passed a stopgap spending bill Thursday, averting a partial government shutdown at midnight Friday but pushing into January showdowns on spending, immigration, health care and national security.

Among the issues still to be resolved is federal aid for victims of recent hurricanes and wildfires. The House on Thursday passed a separate $81 billion disaster relief bill, but the Senate did not immediately take it up amid Democratic objections.

The stopgap extends federal funding through Jan. 19 and provides temporary extensions of the Children’s Health Insurance Program, which has languished politically since it expired in October, a veterans health-care program and a warrantless surveillance program set to expire Jan. 1.

In the interest of helping everyone concerned about the ever-looming showing of federal government shutdown theater make it through the holidays, we’re going to present University of Georgia economist Jeffrey Dorfman’s list of 10 Things You Need To Know About The Debt Ceiling And Potential Government Shutdown in the political environment of late 2017 and early 2018. Here are the first eight:

1. Congress must do something to authorize government debt.

2. Extraordinary measures are really just internal borrowing between accounts.

3. Not raising the debt ceiling does not mean a default or not paying our debts.

4. Not raising the debt ceiling does not mean not paying for things already bought.

5. Spending can be cut to balance the budget, but not without cutting entitlements.

6. In the case of a government shutdown, the president gets to decide who is essential and keeps working.

7. Government workers will be paid in the end.

8. Congress was supposed to have this all done before October 1, but is fighting over how much more to spend.

Dorfman provides a short commentary for each item in his article, which are well worth the time to read. MyGovCost readers may most appreciate items #9 and #10 from the list, which we’re quoting in full:

9. We keep hitting the debt ceiling because of spending.

Even with sequestration, the federal government is not in a bind because of too little spending. Federal government spending, even after adjusting for population growth and inflation has grown by $1.1 trillion since the end of President Clinton’s second term. That means that in real, per capita terms, the federal government is spending over 35% more than it did just 17 years ago. Spending is the root of our budget problems.

10. It’s not the tax cuts.

Federal government revenue is actually up 4.6% since the end of the Clinton presidency after adjusting for population growth and inflation. Even with the Bush tax cuts (mostly made permanent under President Obama), the federal government collects more money today than it did when it last had a budget surplus. The government doesn’t need more money; it needs to do and spend less.

The following chart showing the Congressional Budget Office’s projected spending and tax collections for the U.S. government both before and after the 2017 Tax Cuts and Jobs Act confirm the source of the problem is primarily the result of excessive spending that has not yet been adequately addressed.

Putting the federal government’s spending onto a slower growth trajectory needs to be a high priority for the U.S. Congress in 2018. Whether or not it will be is doubtful given that both major parties would like to increase spending (be sure to read Dorfman’s comments for Item #8 on his list!)

Have a happy holiday and Merry Christmas season from all of us here at the Independent Institute‘s MyGovCost!

The U.S. Department of the Interior (DOI), whose mission is to “protect and manage the Nation’s natural resources and cultural heritage”, employs over 70,000 bureaucrats and spends over $12 billion per year. According to a recent ABC News report, the federal government department has a problem with a number of its managers creating a negative work environment for its employees, which has just resulted in the firings of a number of senior managers.

Interior Secretary Ryan Zinke revealed today he has fired four senior managers at the Interior Department for inappropriate conduct, including sexual harassment.

“I’ve already removed four senior leaders that were guilty of inappropriate behavior and I will remove four hundred more if necessary. Intimidation, harassment and discrimination is a cancer to any organization. However deep it goes, we will remove it from Interior,” Zinke said in a video posted on the agency’s website today.

Interior spokeswoman Heather Swift said in an email the department could not provide any specific information on the people who were fired but said they generally “abused their authority to intimidate or harass fellow employees. This includes but is not limited to sexual harassment.”

The firings have come after the Interior Department released the results of an internal survey of its employees. ABC News describes the survey’s results:

The department released the results of a workplace survey Thursday where 35 percent of employees said they were harassed in the last year, with 8 percent saying they were sexually harassed. More than 200 employees who responded to that survey also reported experiencing sexual assault. About 28,300 employees responded to the survey which is 44 percent of the agency’s workforce, according to the release.

The survey was primarily conducted during the first two months of 2017 among employees who were on the DOI’s payroll as of December 10, 2016. According to the Interior Department’s press release announcing the full survey’s results, is “the first of its scope done across the federal government”. As such, it is largely capturing bad behavior on the part of the department’s bureaucrats that was tolerated by previous DOI leaders and White House administrations.

And this is just the Interior Department. What will similar large-scale workplace surveys find for other federal agencies that have long track records of bad and abusive behavior on the part of their own bureaucrats, such as the EPA, the IRS and the VA?

On Monday December 18, the Amtrak Cascades 501 headed out on its inaugural trip on a new route in Washington state when it ran off the tracks near DuPont, sending 13 cars into traffic on busy Interstate 5 below. The train carried 86 people and at this writing at least three are dead and more than 100 injured. As the Seattle Times reports, the engineer was running the train at 80 mph in a 30-mph zone. The $181 million retrofit on the railway line was to included Positive Train Control technology that can prevent excessive speed. Amtrak CEO Richard Anderson told reporters that PTC is not yet operating in that area.

As we noted, despite a 2008 mandate, Amtrak bosses have failed to install PTC on busy routes. In May 2015 near Philadelphia, engineer Brandon Bostian hurtled Amtrak 188 through a 50-mph curve at a full 106 miles per hour, more than twice the limit. The ensuing crash killed eight people and injured more than 100. Bostian claimed his train was “under attack by projectiles,” which caused him to be “disoriented” and he National Transportation Safety Board offered a version of that far-fetched theory. Bostian even filed a personal injury suit against Amtrak, which duly placed him on unpaid administrative leave. The speedy government employee faced eight counts of involuntary manslaughter, one count of causing or risking a catastrophe, and 238 counts of reckless endangerment, but this September, a judge ruled that there was not enough evidence to warrant a criminal trial.

At this writing, neither Amtrak nor the National Transportation Safety Board has named the Cascades 501 engineer. Based on the even deadlier Philadelphia crash, Amtrak is not likely to fire that person, and dismissal of any Amtrak bosses is even less likely, if not impossible. Even in cases of multiple fatalities, government employees and bureaucrats alike enjoy special protection. Amtrak agreed to pay $265 million to settle victims’ claims in the 2015 crash, so taxpayers should expect similar massive payouts in the recent case. Taxpayers should also recall that Amtrak is certified money loser, requiring some $1 billion in subsidies every year. America’s government rail system remains insolvent and unsafe at any speed.

At one time, Senator Harry Reid of Nevada was one of the most powerful members of the U.S. Congress, if not its most powerful member. He retired after a 30-year career at the end of 2016.

Nearly a year later, his name has come back into the news because of the uncovering of a secret program operated through the U.S. Department of Defense, which turns out to have spent $22 million to secretly hunt Unidentified Flying Objects (UFOs) since 2007 thanks to the then-Senator’s request, where much of the money spent to do so has gone to a Nevada-based aerospace company whose principals were frequent contributors to the Senator’s election campaigns. The New York Times reports:

The Defense Department has never before acknowledged the existence of the program, which it says it shut down in 2012. But its backers say that, while the Pentagon ended funding for the effort at that time, the program remains in existence. For the past five years, they say, officials with the program have continued to investigate episodes brought to them by service members, while also carrying out their other Defense Department duties.

The shadowy program — parts of it remain classified — began in 2007, and initially it was largely funded at the request of Harry Reid, the Nevada Democrat who was the Senate majority leader at the time and who has long had an interest in space phenomena. Most of the money went to an aerospace research company run by a billionaire entrepreneur and longtime friend of Mr. Reid’s, Robert Bigelow, who is currently working with NASA to produce expandable craft for humans to use in space….

Mr. Reid, who retired from Congress this year, said he was proud of the program. “I’m not embarrassed or ashamed or sorry I got this thing going,” Mr. Reid said in a recent interview in Nevada. “I think it’s one of the good things I did in my congressional service. I’ve done something that no one has done before.”

It might be more accurate to describe former-Senator Reid’s achievement as little more than a token demonstration of his then-great power, in which he compelled the Pentagon to spend $22 million over nearly 10 years to chase UFOs to directly benefit an influential campaign contributor without having any debate in the U.S. Congress on whether that was a worthwhile objective for the U.S. government to dedicate its limited resources to pursue.

It turns out that was by design, where Reid purposely conspired with two other senators with histories of shady backroom dealings, Ted Stevens of Alaska and Daniel Inouye of Hawaii, to keep the nation’s other 97 senators and the entire House of Representatives in the dark.

None of the three senators wanted a public debate on the Senate floor about the funding for the program, Mr. Reid said. “This was so-called black money,” he said. “Stevens knows about it, Inouye knows about it. But that was it, and that’s how we wanted it.” Mr. Reid was referring to the Pentagon budget for classified programs.

In 2008, Senator Ted Stevens was convicted over ethics charges involving disclosing gifts, which were subsequently dismissed in 2009. Stevens died in a plane crash in 2010. Meanwhile, Senator Inouye passed away in 2012. In 2009, Paul Kiel of ProPublica reported that Inouye abused his own personal clout to obtain a bailout for his personal bank, and in 2014, he was posthumously identified as having sexually-harassed a female Senator by the New York Times.

The U.S. government spends a lot of money on some pretty stupid things, and at $22 million, the spending to support Harry Reid’s personal pursuit of evidence of alien UFOs ranks low on the most wasteful things the federal government has ever done, but the abuse of power combined with the avoidance of honesty and transparency in establishing the secret program and the shell game of finances that has allowed it to continue long after it its apparent termination date are all evidence of a more serious failure of accountability to the public.

That failure of accountability to the American people was no accident. It was done entirely on purpose, for the express purpose of subverting the budgetary rules that are meant to keep wasteful spending on the part of politicians and bureaucrats from happening, by a clique of powerful politicians that the system relies upon to follow the rules in order to work.

Failure was not left to chance in this case, and that is the enduring legacy and lesson of Senator Harry Reid’s personal pet project to hunt UFOs using taxpayer money.