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The Late Edition: September 12, 2012
Today’s Taxpayers News!
A number of Democrats in the House and Senate appear willing to work with Republicans in order to formulate a plan for debt reduction through friendlier tax structures. But will the President be willing to compromise as well?
Hundreds of groups which represent business, including the U.S. Chamber of Commerce and the National Federation of Independent Business, sent a letter to President Obama and Congress. The Groups beseeched lawmakers to address the fiscal realities that lay before us and work to avoid the sequester and its assortment of tax hikes and spending cuts.0 Comments | Post a Comment | Sign up for NTU Action Alerts
The Late Edition: September 11, 2012
Today’s Taxpayers News!
NTU’s Pete Sepp wrote a piece for The Hill commending the Senate Appropriations Committee’s decision to direct funding towards the SM-3 missile defense program known as Block IB. This program would be ready for use earlier than the second option, Block IIB; and is a less costly, but proven, option.
On November 6th Californians will vote on a ballot measure, “Proposition 30”, which would increase sales taxes by one-fourth of a cent and add a surcharge to those with incomes exceeding $250,000 a year.
Asserting that California’s fiscal recovery is imperative in order for the rest of the nation to pull out of the economic downturn, the US Chamber of Commerce has revealed its California Jobs and Growth Agenda; which offers the Golden State real solutions for balancing its budget and revitalizing its economy.
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Speaking of Taxpayers, September 7th (AUDIO): “No-Brainer” Bills Congress Should Pass
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A discussion of 10 "No-Brainer" bills Congress can pass to increase government accountability, reduce wasteful spending, and improve the economy as a whole. Also, the "Fiscal Five" takes a look at soda taxes, property taxes, and more.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Transfer Payments Rise 34 % Under Obama, Taxpayers Lose Out Big Time
Fortune senior editor-at-large Shawn Tully recently took a look at just what goods and services taxpayers have reaped from the 17.8% rise in spending---almost one trillion dollars---since President Obama took office in the last quarter of 2008. Did the flurry of spending lead to increased services for taxpayers or investments in infrastructure to make the US economy stronger and more competitive?
It turns out, the majority of that nearly one trillion dollars didn’t purchase better roads or schools, or even pay the janitors, teachers, and law enforcement personnel whose salaries taxpayers foot the bill for in return for the services they provide:
From late 2008 until today, spending on government goods and services rose just .1% annually, adjusted for inflation. The real shocker is investment: It dropped 3.71% a year in real terms. So the almost 18% rise in spending failed to provide substantially more government services, and furnished a lot less money for the highly touted necessity of rebuilding America's infrastructure.
So where did all that money go, if it was not purchasing us better services or investing in our infrastructure? Unfortunately, the vast majority of that additional spending was funneled towards a ballooning new category of government spending called “transfer payments”:
Government transfer payments are defined as expenditures for which no good, service or upgrade in infrastructure is expected in return. The government collects the money in the form of taxes and new borrowing, then writes the checks to consumers and, to a lesser extent, companies in the form of subsidies.
In other words, the US, already up to the eyeballs in debt and borrowing nearly 40 cents of every dollar we spend, frittered away almost one trillion dollars over the past four years…to move money around from one group of individuals to another. The three largest transfer payment categories are Social Security, Medicare, and Medicaid, but fast on their heels are unemployment benefits, food stamps, and a myriad of subsidies for everything from solar panel manufacturers to ethanol producers.
Unfortunately for taxpayers and anyone concerned about the nation’s spending addiction, the trend for transfers is a definitively upward trajectory: transfer payments have increased by nearly $800 billion a year since 2008, a staggering 34% increase.
The lesson? Massive amounts of government spending do not automatically equate to more goods and services for taxpayers, or a stronger economy overall. If the US is going to set itself on a sustainable fiscal path, it will need to stop taking capitol from the private sector to pay for the inflated social welfare state, and return that capitol to the taxpayers and small business owners who are the real engines of America.1 Comments | Post a Comment | Sign up for NTU Action Alerts
In a recent commentary piece the Heritage Foundation’s Robert Rector explains the US Census Bureau’s ability to distort the reality of poverty, making it appear more severe than it truly is in order to continue expanding the social welfare state at the expense of taxpayers.
According to Rector, a leading expert on poverty and welfare, the Census Bureau does not take into account any of the numerous social welfare programs an individual or family may already be benefiting from when calculating the family’s income for poverty-measurement purposes.
For example, the poverty level cutoff for a family of four in 2011 was approximately $23,000 dollars, meaning that any family earning less than this from wages would automatically be counted towards the overall national poverty rate. What is misleading about this system of calculation is that a family whose earned income is $23,000 could still be benefiting from a variety of welfare programs—food stamps, subsidized housing, Medicaid, and the earned income tax credit to name just a few—thus boosting the family’s effective revenues up above the so-called poverty line by hundreds or even thousands of dollars annually.
The result? The poverty level appears higher than it actually is, giving social welfare enthusiasts the ammunition to call for increasing government spending, while draining taxpayers and racking up massive deficits:
“In other words, government now spends on welfare five times the amount needed to raise all families out of poverty---and is about to spend even more.”
Last year welfare spending for a variety of anti-poverty programs totaled $927 billion dollars, excluding three of the largest social programs—Social Security, Medicare, and Unemployment Insurance. And if the past 48 years since the “War on Poverty” began in 1964 are any indication of future spending, that number will continue upwards.
The Census Bureau’s misleading poverty calculations are just another example of the willingness of Washington bureaucrats to use any excuse to leech taxpayers dry in order to fund an ever-growing social welfare state. These findings are even more upsetting in light of the Obama administration’s gutting of Clinton-era welfare reform by executive fiat.
This is another worthy example of spending more than necessary and fixing less than is needed.
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From the "I'm So Glad We Reauthorized That" File: More Ex-Im Bank Fail
It’s well known these days that green energy endeavors are extremely sound investments, especially for the U.S. government, whose track-record in this area is not at all besmirched by one costly failure after another after another after another.
That’s why it is such a total shock that immediately after securing an Export-Import Bank (Ex-Im Bank) backed loan, the Denmark-based LM Wind Power turned around and laid off more than 200 U.S. workers. Apart from the fact that one government backed green energy venture after another has lost money or gone under, there was no way Ex-Im Bank could have seen this coming; probably the details below from The Washington Free Beacon were closely guarded secrets:
When LM Wind Power came to Little Rock, Arkansas, in 2007, it said it would employ 1,000 people by 2012. But the global economic crunch led to diminishing demand. Three months before its loan guarantee was finalized, LM Wind Power announced its profits had fallen 41 percent last year.
LM Wind Power also has had numerous citations for workplace safety violations. The Department Of Labor’s Occupational Safety and Health Administration cited the firm 11 times in an investigation beginning October 2010 for exposing workers to unsafe conditions and noted the company had demonstrated a “continued pattern of failing to comply” with OSHA standards.
In 2010, LM Wind Power Blades was cited with OSHA violations because of conditions that killed a worker.
The Department of Energy has been getting a lot of attention for its failed Title 17 taxpayer-backed loan guarantee program, but it’s far from the only agency that deserves close scrutiny (if not elimination) for persistent forays into doomed green energy projects. Like a slot-machine addict, the weekly news of government funded failures seem to serve as no reason why the next big investment won’t be the one that finally pays out.
Again, despite repeated and costly failures in the green energy industry, the Heritage Foundation reports that Ex-Im Bank recently made a $2 BILLION loan for green projects such as wind and solar energy in South Africa – not several years ago when everyone was still flush, not last summer before the news of Solyndra broke, but last week - after numerous and costly failures:
“To now, Ex-Im Bank has not cost the taxpayer money. But there are strong reasons to think this loan is a mistake. When SolarReserve or some of its South African partners go under in the next couple years, Ex-Im will face renewed congressional demands that it be curbed or closed,” said Heritage’s Derek Scissors, senior research fellow in Asian Studies.
On top of the fact that Ex-Im Bank’s market-distorting actions are well-outside the role of government and seriously poor fiscal policy, the repeated bad investments and inherent cronyism within the institution should have been more than enough reason to oppose reauthorizing the bank. The Examiner’s Tim Carney sums up the cronyist connection here:
For years, I have been saying that green energy is the place to look if you’re looking for tales of cronyism, corruption, and corporate welfare. It has all the elements: profits dependent on subsidies, customers that are often government-protected monopolies, deep involvement of finance types ranging from Goldman Sachs to politically connected VC, PE, and hedge funds.
These elements are all too alive and well within Ex-Im Bank. You can read more about the crony capitalists at the helm here.
With no sign of being afflicted by simple logic in the near future and with so many bad projects out there still to fund it’s a good thing that a “compromise” was struck to reauthorize Ex-Im Bank just a few short months ago. Outside of Washington, compromises tend to mean that each side of a fight loses a bit to meet somewhere in the middle. In this instance, the middle was a massive funding increase from $100 billion to $140 billion, so there are still plenty of funds to throw down the green energy money pit.
PS: In other green energy news, Fisker Automotive, known best for it’s very flammable high end Fisker Karma hybrid cars and recipient of millions of dollars in DOE loans, just named its new CEO, who is the former head of Chevy Volt at GM. Chevy Volt, it should be noted, made no money and costs taxpayers thousands of dollars per car. This should end well.
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Despite Expensive Missteps, Ryan Solid on Fiscal Issues and Spending Reform
With Republican Presidential candidate Mitt Romney’s weekend announcement that he has selected Congressman Paul Ryan (R-WI) as his vice presidential pick, many voters are seeking to learn more about the seven term fiscal hawk, and author of the Ryan Budget.
One of the key tools NTU offers to help taxpayers and voters evaluate how members of Congress stack up when it comes to taxes and spending is the comprehensive NTU Rates Congress. As discussed in more detail HERE, Ryan has an above average lifetime rating of 75%, including six “Taxpayers’ Friend” awards.
However, a few of the reasons those Ratings are not higher have also earned Ryan criticism from fiscal conservatives - they include Ryan’s votes for the TARP bailout, the auto bailout, Medicare Part D, No Child Left Behind, the debt ceiling, and Davis-Bacon wage controls.
Still, Ryan has taken a leadership position in addressing the nation’s impending entitlement insolvency and ballooning public debt, championing his budget blueprint to responsibly transition the United States to a more sustainable fiscal path. According to the Congressional Budget Office, Ryan’s proposal would reduce deficits by $3.26 trillion from 2013 through 2022 when compared to President Obama’s plan. In addition, the Ryan Plan would simplify income taxes with two tax rates of 10% and 25%, compared to the current six brackets.
Ryan’s most significant reform would be with regards to Medicare. If Congress continues to spend as they have, debt will reach 194% of GDP by 2040, but if Ryan’s budget were adopted debt would be a mere 38 % of GDP, saving taxpayers trillions of dollars.
Paul Ryan deserves much credit from taxpayers for shifting the debate in Congress to solutions for the big fiscal crises that face America on entitlements, debt, and run-away spending.
Whichever duo is elected this November, a set of extremely pressing budgetary concerns will await them. Bringing Paul Ryan onto the ticket as Vice Presidential nominee is a good sign for taxpayers and voters who are starving for a plan to address our long-term debt and budget concerns without recovery-crushing tax hikes.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Last month the United States Department of Housing and Urban Development (HUD) awarded nearly 5 million dollars in taxpayer-funded grants to 15 organizations through its “Tenant Resource Network”; which, according to the HUD website:
“make[s] grants to qualified nonprofit organizations to assist, inform, educate and engage tenants living in certain Section 8-assisted properties at risk of losing affordability protections or project-based rental assistance.”
In other words, taxpayers are not only being forced to fund Section 8 housing for “low-income” tenants, but they are also being forced to subsidize efforts which ensure a steady stream of taxpayer dollars will continue to be poured into the program, even as the federal government regularly runs an annual deficit of over $1 trillion dollars.
These grants came under fire for waste and abuse nearly ten years ago and were subsequently squelched until June of this year when HUD unveiled them again as a so-called “new” initiative. Apparently the department has forgotten the 2003 HUD Office of the Inspector General findings in the Semi Annual Report to Congress, which noted that ineligible recipients received funds and funds were misdirected to lobbying efforts:
“In our grantee audit report we identified $600,000 of ineligible costs and over $1.6 million of unsupported costs. In addition, nine grantees used a portion of their Section 514 funds for lobbying activities directed at Congress…”
This is simply another example of an irresponsible federal government attempting to fix a problem by creating several more, and putting taxpayers on the hook to pay for its newfangled social welfare programs while recklessly adding to the nation’s already disastrous deficit.
On a brighter note, Congresswoman Diane Black (R-TN), has been working to eliminate this wasteful abuse of our hard-earned dollars, and has sponsored a bill called the Stop Tenant Organizing Promotion Act (STOP Act), which fiscal conservatives can support via the YouCut Initiative which could save taxpayers $100 million dollars over ten years.
It’s not going to fix the deficit, but it’s certainly not chump change to those of us who have to earn a living.
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There’s no getting around it—California is underwater. State officials are constantly telling taxpayers that they aren’t coughing up enough money to fund “essential” services, necessitating huge tax hikes or savage program cuts (or both) to make ends meet. But my mother always said, “Actions speak louder than words,” and California’s actions say that legislators’ spending addiction is alive and well.
Despite facing unprecedented budget challenges, last Friday the State Senate approved funding for America’s first “bullet” train. It’s supposed to shoot from San Francisco to Los Angeles, but right now it’s aimed squarely at the taxpayers’ collective wallet. Total cost of this monstrosity is estimated to be $203 billion. Terms like “irresponsible” and “out-of-control” don’t even begin to describe the madness of the Senate’s vote. High speed rail will be catastrophic for the state budget.
Of course, this project comes with promises of instantly lowering the state’s 10.8 percent unemployment rate, eliminating traffic congestion, and saving Mother Earth. Hate to break it to you, but the chances of really, really fast train solving your state’s problems are slim to none (closer to none).This project is a boondoggle of the highest order.
But there’s an even bigger problem: they quite literally don’t have the money. The geniuses in the legislature passed a budget with $4.75 billion in funds that don’t exist for the high-speed rail project with the hope that taxpayers will approve massive tax increases on the November ballot to cover it. California has higher tax burdens than all but five states and a business tax climate that’s worse than all but two states. Appropriating dollars based on the hope that citizens approve even higher taxes is just reckless and foolish.
It’s time to organize and fight back. The citizens of Californian must send Governor Brown and his cronies a message in November by rejecting his tax increases. Not only has Brown authorized billions of dollars for the bullet train disaster, but he's attempting to raise the sales tax to 7.5 percent and impose an income tax increase on those making more than $250,000 per year (rates for Californians making more than $1 million will jump from 10.3 percent to 13.3 percent).
The insanity has already gone too far. Fifteen thousand California millionaires abandoned ship from 2000-2003, and the state’s “leaders” have done absolutely nothing to stop the bleeding since then. If this financial bullet hits its mark, how will California survive?
The good news is that there are some signs that the people of California are sick of sinking. In a July 5 poll, 1 in 3 voters said they would be less likely to support Governor Brown’s tax increases if funding for the train was approved because they understand that a state that’s appropriating dollars it doesn’t have is not being responsible with the ones it does.0 Comments | Post a Comment | Sign up for NTU Action Alerts
CBO Reports: FY2012 for the Win with Record Spending and Debt
Congrats, America! We’re on track to both spend more than $3 trillion and to rack up an over $1 trillion deficit for the FOURTH year in a ROW! Yes, we are that good. Sure, it took us 220-some odd years to break that record back in 2009, but since then it’s been nothing but spend, spend, spend.
Nine months into FY2012, the CBO reports that the federal government has run up a $905 billion deficit in just the first nine months, twice as high as any annual deficits prior to FY 2009. So far, we’ve spent a total of $2.705 trillion in the fiscal year, more than any year prior to FY 2007 – and that’s with three months left in the fiscal year. What really sets this accomplishment apart is that we’ve been able to keep up the pace of deficit spending (33.1% of all spending so far this year has been borrowed) even with more taxpayer funds flowing into the government coffers. The $1.824 trillion in taxes that have been collected so far are up 5.2% over the same time last year.
In June alone, spending was up $24 billion over the same period last year. Interestingly, one of the biggest drivers was your friend, and mine, TARP. Who could have ever foreseen that a program could cost more than anticipated?
TARP: Outlays rose by $62 billion, mainly because adjustments to the estimated costs of earlier transactions reduced outlays by $42 billion in 2011 and increased them by $21 billion in 2012.
As we continue to maintain record high spending and deficit levels year after year, one can only wonder – how much worse could it get next year? Luckily, Congress is looking at even more spending with an almost $1 trillion Farm Bill on the table, an army of new IRS agents to hire to enforce ObamaCare, and looming Social Security shortfalls, just to name a few budget busters on the horizon.
Unless real changes are made, and made quickly, I’m sure we’ll be able to beat these numbers next time around.
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