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The F-35 Joint Strike Fighter Program has ground to a halt yet again. Toward the end of June, a pilot at Eglin Air Force Base in Florida was about to begin a routine training exercise when the tail of his F-35 caught on fire. Following that incident, Pentagon officials decided to ground the jets indefinitely on July 3rd. The fleet had previously been grounded in early June due to an oil leak during flight. Unfortunately for proponents of the acquisition, this news comes right before several exhibition events in the UK. At the Farnborough International Airshow, the Pentagon and Lockheed Martin (the company building the jets) had planned on demonstrating the F-35’s capabilities. The much-anticipated jet is now highly unlikely to be seen at Farnborough, which runs from July 14-20.
The planned demonstration at the airshow this week was geared to garner interest in the F-35 from potential buyers. More orders of F-35 jets would lower the price of each, but Lockheed Martin has only seen cancellations lately. Canadian authorities recently paused their order of F-35s, stating a need to view other options through a procurement competition. Italy already cut its original order from 131 jets to 90, and speculation suggests they will cut that number further. Australian officials had similar thoughts, reassessing their schedule for purchasing the troubled planes. For the Pentagon, this means the price of each jet will rise. For taxpayers footing the bill, more of their dollars will be pledged to this enormously expensive acquisition.
The F-35 Joint Strike Fighter Program has repeatedly exceeded cost estimates and failed to meet deadlines. In 2001, the Government Accountability Office (GAO) estimated the entire program would cost $233 billion. In 2012, when the program had already missed every operational deadline by at least four years, GAO reassessed costs to reach $395.7 billion. In 2005, the Air Force expected to be the first military branch to receive its F-35s, but that deadline has since moved to 2016. The Marines will now be getting their jets beginning in 2015, nine years later than originally planned. The Navy will receive their jets last in 2018, a full ten years late. As timelines extend, costs grow. Research, Development, Test, and Evaluation (RDT&E) continuing longer than planned adds costs the Pentagon never predicted. If this portion of the program is complete by 2018, the additional RDT&E will cost taxpayers $39.1 billion. With no certainly that the F-35s will be operational by the new deadline, costs could continue to soar.
The Cost Assessment Program Evaluation (CAPE) office estimated in 2012 that the long-term costs of procuring and operating F-35s will be $1.45 trillion over 50 to 60 years. While taxpayers have invested considerably in the F-35 jets, it is better to stop investments now than continue to waste resources on a broken program. With dangerous malfunctions, demand dropping, and no end in sight, Congress should immediately reevaluate the future of the F-35 Joint Strike Fighter Program. Some have suggested scrapping the program altogether in favor of procuring upgrades of proven designs like the F-18 or renovating venerable performers such as the A-10. Others, including NTU, have suggested a hybrid fleet that allows a right-sized purchase of F-35s for the Air Force (assuming performance issues are resolved). Either way, elected officials owe our service people and taxpayers a more thoughtful, vigorously overseen procurement process.
If ever there were a time for a prudent pause in a terribly troubled program, it is now.1 Comments | Post a Comment | Sign up for NTU Action Alerts
Florida’s 19th Special House Election: A Budgetary Guide
In what some are calling a quiet election, there’s still a lot to be said. Though the challenges of taking drug tests have largely been replaced with who can help create the most jobs in the next five months, before the next election for the same office, Florida residents are asking the same questions of candidates as they did in Florida’s other recent special House election: What will you do in Washington, D.C.? Especially in the wake of their last Congressman, Trey Radel, who resigned after being arrested for possession of cocaine.
In just a couple of short months, three front runners have emerged to battle for the 19th District’s seat: businessman Curt Clawson (R), businesswoman and former political activist April Freeman (D), and former health worker Ray Netherwood (L). Each candidate offers different general solutions to America’s fiscal ills but details have yet to come out about how each would actually change the federal budget. However, by using a methodology similar to National Taxpayers Union Foundation’s (NTUF) BillTally project, taxpayers can see where the candidates stand on at least some of the spending issues. For this brief study, we took direct quotes and campaign materials of candidates and matched them with budget and legislative data to see exactly what the differences and similarities are.
Similar to the New Jersey Special Senate and Florida’s 13th Special House elections, details were few and far between. Even with the campaigns releasing economic plans and platform summaries, we’re still left asking what will they do if elected as the House of Representative’s newest member?
Check out the entire line-by-line analysis of all three candidates. As with NTUF’s other BillTally and campaign studies, only changes in current spending are recorded (similar to the Congressional Budget Office). The reports do not include changes in revenues or costs outside the federal government. Below are summaries of each candidates’ proposals.
Curt Clawson (R) has proposed two (out of 12) quantifiable policies that NTUF was able to score. Combined, they would decrease annual spending by $395.8 billion. The largest budget-influencing item that he supports would cap federal expenditures at 19 percent of GDP, which would be implemented using the “Penny Plan,” which would cut spending by one percent each year as long as the budget is not balanced.
April Freeman (D) has two (out of 12) policy items that NTUF could fiscally score. Together, they would increase spending by $20.203 billion each year for the next five years. Her largest quantifiable proposal would overhaul the immigration system.
Ray Netherwood (L) had one proposal that NTUF could identify. It would be to replace the current income-based tax system with a national sales tax, known as the Fair Tax. The measure would cut an average $19 billion in federal outlays for each of the next five years.
Normally, there would be some overlap between the candidates’ platforms. In the other Florida Special Election, the front runners supported increasing current spending by $180 million per year to delay a scheduled rate increase for the National Flood Insurance Program. That was not the case in this House race, although the three candidates were not asked similar questions when interviewed by the same source.
What does this mean for taxpayers and residents of the 19th District? It’s time for the campaigns to give Americans more details. While candidates are asking Floridians for their vote, taxpayers are asking for the roadmap of each candidate’s path to reach a better and expanding economy. As highlighted above and in the full report, the absence of budgetary facts and figures opens the possibility that all of the candidates could have much larger or smaller spending aspirations in mind. Clawson, Freeman, or Netherwood need only clarify their intentions with dollar figures to help complete this report and help educate Americans on important and pressing issues that we’re all facing.
Note: National Taxpayers Union Foundation is a 501(c)3 nonprofit organization. Our research efforts are intended only to educate Americans on how their tax dollars are being or will be spent by those in office, seeking office, or in appointed positions. For more information on NTUF go here.2 Comments | Post a Comment | Sign up for NTU Action Alerts
You've probably seen plenty of photographs of Marine One, the President's specially outfitted Naval helicopter, taking off from the South Lawn of the White House and soaring over D.C. to wherever the Chief Executive's destination may be that day. But did you know that there are 19 of those choppers, and even after $3.2 billion worth of investment, they're still in need of upgrades?
That's the story being published by The Washington Post, which reports that the Navy is close to awarding a contract to upgrade the President's fleet of choppers (some of which are more than 40 years old). The job never got done last time because costs quickly escalated beyond what the government was willing to pay, forcing the Pentagon to cancel its purchasing plans in 2009 just after President Obama took office.
The program has only just begun, but already some defense specialists have some concerns:
"There appears to be only one bid on the project - led by the company that lost out last time - and some fear that the lack of competition could again lead to escalating costs. Another red flag: The Defense Department granted the Navy a waiver saying that bidders don't have to build prototypes, which can help to reduce cost and risks. ... While declining to provide a cost for the program, [the Navy] said it would be "significantly less" than the $13 billion price tag it reached before the previous contract was canceled. The first helicopters could be available by the end of 2020 "if everything goes ideally," [they] said."
The Government Accountability Office (GAO) recently defended the Navy's decision to not require a prototype, stating in a report that the costs to provide them would exceed any savings they might generate. Navy officials say they have done "due diligence" to ensure that the project is completed on time and within budget, with a focus on existing and proven technology. However, some lawmakers and defense watchdogs are worried that once the project begins, there would be nothing stopping the winning bidder from scaling up the scope of the construction plans beyond an initially proposed budget. As John Pike of GlobalSecurity.org put it to The Post, "[the contractor] will sell you as much helicopter as you're willing to pay for. And nothing is too good for the president."
The Navy is expected to announce the winning bidder within a few weeks, although officials would not comment on how many applications it had received for the project. It remains to be seen whether the Pentagon can learn from its past mistakes and keep the new process as open and transparent as it claims it will.1 Comments | Post a Comment | Sign up for NTU Action Alerts
Today the Center for International Policy’s Director of Arms and Security Project, William Hartung (a colleague of NTU’s), released a critical report disputing the number of jobs generated by the costly F-35 joint strike fighter program. The report also raises questions concerning the use of foreign contractors and Lockheed campaign contributions.
Fittingly entitled, “Promising the Sky: Pork Barrel Politics and the F-35 Combat Aircraft,” some of the significant findings of the report include:
According to the most recent Selective Acquisitions Report, the total cost for the F-35 program, including both the aircraft and engine subprograms, is $391.2 billion. Other, more inclusive estimates put that total much higher. Despite the program’s numerous setbacks, delays, cost increases, and engineering problems, lawmakers have nonetheless given the F-35 one pass after another. One of the major reasons for the lack of serious scrutiny the F-35 has received has been the repeated claims by military Keynesians that the program is an important “job creator of the highest order, a program that has a home in almost every state.”
This new report reinforces critics’ (NTU among them) arguments that funding for the F-35 shouldn’t be on autopilot. Further, the report underscores the need to apply new scrutiny to not only the F-35, but other major weapons systems as well. NTU has long held that the F-35 program has not adequately justified its huge appetite for taxpayer dollars. We have discussed options such as scrapping the B and C variants in joint reports with the R Street Institute as well as U.S. PIRG. Given the disparate values and goals of our partner institutions, the fact that both reports would put the F-35 under the spotlight is a clear indicator that it’s time to take a hard look at the program now..
Getting to the truth about the job-creator myth that has grown up around the F-35 is an important part of reexamining and rethinking how taxpayer funds are spent at the Pentagon. Now, as Mr. Hartung concludes his report, “…Congress and the executive branch can feel free to debate the future of the F-35 on its strategic merits, not pork barrel politics.”2 Comments | Post a Comment | Sign up for NTU Action Alerts
After last week, it’s tough to accuse the Medium Extended Air Defense System (MEADS) missile of “failure to launch” in the technical sense. Too bad it’s long failed at fiscal responsibility.
In a town known for creating supreme ironies, last Wednesday’s successful test of MEADS at the White Sands Missile Range was among the “supreme-est”. Hailed by its prime contractor as the “culmination of three countries working together” (the U.S., Germany, and Italy), the, ahem, upshot of the test for the Pentagon will be … well, nothing. That’s because the U.S. decided not to procure MEADS for operation in the field.
Having fallen a good ten years behind schedule and far over-budget, MEADS was already looked like a flightless bird to taxpayers, but its lack of military utility also called for its grounding. In a joint 2011 study released with the U.S. Public Interest Research Group, NTU advocated ending MEADS because at the time our allies had no “plans to purchase the system when finished and the Patriot system can be expanded and improved to provide similar capabilities to MEADS.” Unfortunately, Congress kept stringing the program along, most recently through a $380 million earmark in the Continuing Resolution passed in March of 2013 intended to complete its operational testing phase and allow the U.S. to fulfill its putative obligations to its international partners. But that was to be our final taxpayer-funded journey for the “missile to nowhere.”
Many say the plug could, and should, have been pulled earlier. In a 2011 letter to then-Defense Secretary Gates, NTU argued that, “Whatever controversy there may be over the maturity or viability of MEADS, it is clear that U.S. taxpayers will gain little from a further government expenditure.” The Pentagon’s reply to our letter argued that the fees for terminating MEADS that the U.S. would have to pay to its two allies (Germany and Italy) were not worth the savings of backing out at that point.
Yet, our resourceful colleagues at Citizens Against Government Waste found a smoking gun, or perhaps more appropriately, smoking rocket motor (HT to CAGW’s clever website, misguidedmissile.org). In a statement released right after the White Sands test, CAGW noted:
"For several years, DOD officials stated that cancelling the program was prohibitive without agreement from Germany and Italy because of high unilateral termination costs. However, a confidential DOD report to Congress obtained by CAGW concluded that the U.S. could withdraw from the contract without committing additional money or paying termination fees."
Oops. So taxpayers may very well have had a quicker way out of this mess after all.
In the we-couldn’t-have-said-it-better category, we’ll give the final word to our good friend Tom Schatz, President of CAGW, who noted:
"Taxpayers are all too familiar with DOD boondoggles that receive funding long after they are proven wasteful, and [the] duplicative test of the costly and unsuccessful MEADS program is unfortunately a perfect example. Given the DOD’s sequester cuts, and the fact that neither President Obama nor Members of Congress requested funding for the program in FY 2014, the test was a waste of federal funds that should have been allotted to fund ongoing and necessary DOD programs."
Here’s hoping that after this episode of throwing good money after bad, MEADS just keeps “on going” … away from our wallets.1 Comments | Post a Comment | Sign up for NTU Action Alerts
All too many federal agencies can be cited for having budgetary skeletons in their closet, and U.S. Customs and Border Protection (CBP) is no exception. From poorly managing a drone fleet purchase, to making questionable demands for more employees, CBP has raised fears for the security of taxpayers’ wallets in the past. Yet, Congress has an opportunity to ease future fears, over a controversial new CBP project, before it can cause a fiscal fright.
Two years ago, the U.S. Department of Homeland Security (DHS) concluded a letter of intent with the United Arab Emirates to build a “pre-clearance” facility at Abu Dhabi airport which would allow travelers to the U.S. to clear customs before arriving on American soil. So far, so good: pre-clearance can not only save time and reduce congestion at U.S. points of entry, it can also help ease the way for tourists who contribute to economic activity while visiting here.
Now for the not-so-good:
All these drawbacks lead to one long question: Given CBP’s service challenges at existing airports, is it really a good idea to plow ahead with a facility whose use will be comparatively scarce in the near term, and give another leg-up to an airline backed by its own government as well as ours, at the expense of an already overtaxed flying public?
And “overtaxed” is an understatement. As NTU has often noted, the typical overall government tax and fee burden of 20 percent on a $300 domestic airfare is higher than the average effective rate a middle-class American is likely to pay on his or her 1040 income tax return. International air travelers can have it even worse, with impositions such as separate departure and arrival taxes along with a passenger agricultural inspection fee (which the Obama Administration ill-advisedly considered raising in 2009) and a customs fee.
Proponents of the CBP station at Abu Dhabi argue that the investment of U.S. tax dollars will be minimal since UAE will pick up 85 percent of the project’s expense under the current agreement. But that’s little comfort to tax-weary travelers in America (see above), who remain worried that whatever share they will be forced to commit could escalate if construction or operating costs are not contained. Meanwhile, there’s that pesky matter of how best to apply CBP’s fee collections as well as appropriations from general funds – should they be used to expedite higher-priority passenger and cargo entry-exit services?
Many Members of Congress seem to think so. In June, the House of Representatives passed an amended FY 2014 DHS Appropriations Bill specifically blocking the Abu Dhabi pre-clearance scheme. In May, a bi-partisan group of 11 Senators echoed the sentiment of their House colleagues in a separate letter to DHS Secretary Janet Napolitano, questioning whether the agency’s “decision was made as a result of a risk based analysis.”
Alas, earlier this month DHS announced it was moving forward with a data-sharing agreement that could pave the way for the facility’s activation, even as it faces a concerted petition effort from interested industry groups with considerable clout.
Regardless of the politics involved, the taxpayer aspects of the issue deserve further exploration – that goes not only for the Abu Dhabi pact but also the ever-troubling direction of the Ex-Im Bank. Allowing the free market and fiscal responsibility to sort out needs from niceties would provide some badly-needed bone-rattling for those accustomed to budgetary business as usual in Washington.3 Comments | Post a Comment | Sign up for NTU Action Alerts
The 2014 National Defense Authorization Act (NDAA), H.R. 1960, is on the floor today in the House. Currently, the federal government’s expenditures, including last year’s defense budget of $486.3 billion, have placed the United States in a financial crisis. Now Washington is attempting to increase that massive amount to $552.1 billion, exceeding the sequester allocation by $52 billion.
Proponents of a large military have frequently called upon citizens’ patriotism for a carte blanche and then abused that blank check. When forced to address waste and overspending, they have instead cut high profile defense programs and publicly painted the sequester as dangerous. Congress and the military should be focused on implementing efficiency in spending what was allotted under the sequester. A recent study completed by NTU and R Street outlined 100 recommendations which could save the government approximately $1.9 trillion by 2023 by reducing weapons systems, personnel and compensation, and programs and processes while continuing to provide for the safety of American citizens. These cuts include frivolous, politically spurred agendas like the continued production of Abram tanks which the Army insists that they do not want, but are defended by some in Congress because they "create jobs."
While America’s security is of utmost importance, economic stability is a central part of this equation and cannot be overlooked. As the United States is scheduled to significantly scale back wartime activity in the Middle East, the wartime budget should likewise contract to reflect peacetime levels. It is imperative that lawmakers pare back excessive expenditures in the 2014 NDAA and work toward fiscal sustainability.1 Comments | Post a Comment | Sign up for NTU Action Alerts
(AUDIO) Speaking of Taxpayers: Defending America, Defending Taxpayers
Subscribe to NTU's podcast "Speaking of Taxpayers" via iTunes!
The authors of a new study on trimming the defense budget from a conservative perspective, NTU's Pete Sepp and R Street's Andrew Moylan, join the podcast to discuss their report. And the IRS returns to the Outrage of the Week!0 Comments | Post a Comment | Sign up for NTU Action Alerts
If it was up to General Ray Odierno, Congress wouldn't allocate $436 million towards building and upgrading new Abrams tanks. "[W]e would use that money in a different way," the Army chief of staff said recently.
The issue? Lawmakers (particularly in Ohio, where many production plants are located) are reluctant to cut off funding for the Abrams tank program, which provides jobs for industrial workers and a steady source of revenue for defense contractors. So even though the Army has explicitly stated that it doesn't need the nearly half billion dollars in federal support for the program, Congress wants to spend the money anyway.
The push for more tank funding comes on the heels of the Defense Department's 2014 budget request, which made clear that it wants to avoid the budget cuts it's facing after sequestration -- the request included $526.6 billion in discretionary spending, more than $52 billion above the amount allowed under the provisions of the Budget Control Act. Included in that total are proposals to fund costly programs such as the F-35 fighter jet renovations ($8.4 billion), nuclear attack submarines ($5.4 billion), and additional funding for "cyber operations" ($4.7 billion).
What's more, the existing Army tank force is, on average, less than 3 years old. According to the AP:
Last year, over 170 Members of Congress supported additional tank funding. Members on both sides of the aisle who continue to support the investment program cite the boon it provides to local economies. Senator Rob Portman (R-OH) said "People can't sit around for three years on unemployment insurance and wait for the government to come back. ... That supply chain is going to be much more costly and much more inefficient to create if you mothball the plant."1 Comments | Post a Comment | Sign up for NTU Action Alerts
Sixty-five days past due, the President has released his Fiscal Year 2014 budget request. The National Taxpayers Union Foundation analyzed the data, and posted some of our findings here. We found a lot of overlap between the President's previous proposals and his "new" ones he submitted Wednesday morning. In addition, it assumes historic levels of tax revenue -- which rely on rather optimistic economic projections -- to pay the bills.
The same can be said of the Department of Defense (DoD) budget. Earlier this week I posted a run-down of some of the proposals we were likely to see in the DoD budget. Now that the official budget is out, let's take a closer look.
The President is pushing for a return to pre-sequester spending levels. The DoD budget requests $526.6 billion in discretionary spending. The problem? That's more than $52 billion more than it's actually allowed to spend under the provisions of the Budget Control Act (BCA). It may be just a political move, but unless the President can strike a deal that turns back the BCA spending limit, he'll have to find a way to work with the $475 billion he's slated to get instead.
Some feasible savings proposals are mixed with more weapons spending. The President has proposed halting the Army's Ground Combat Vehicle (GCV) program, and has suggested further rounds of base re-alignment and closures (BRAC). The BRAC program wouldn't begin until at least 2016, in order to give local economies a chance to prepare for the upfront costs. However, it would consolidate excess materials and facilities that DoD has itself acknowledged are unnecessary: in 2005 it was determined that as much as 24 percent of DoD facilities were not needed. Closing those facilities could offer significant long-term savings for taxpayers. As far as the GCV program is concerned, CBO has determined that retaining current units would save over $24 billion with "essentially no programmatic risk" to the service.
Speaking of weapons technology funding, the President opted to continue subsidizing the F-35 fighter jet development and procurement program to the tune of $8.4 billion. Just before the sequester deadline earlier this year, NTU's Nan Swift opined on some of the controversy surrounding the program. Additionally, the budget includes $5.4 billion for nuclear attack submarines, $4.7 billion for "cyber operations," and $1.7 billion for a new air-craft carrier.
Some "savings" -- in exchange for more spending elsewhere. In keeping with last year's practice, the President counts "reductions in Overseas Contingency Operations" as an offset to additional infrastructure spending. However, those reductions -- $167 billion through 2019 -- have already been going on for some time now, as U.S. combat force involvement in areas like Iraq and Afghanistan gradually winds down.
Veterans' benefits programs are growing rapidly. The number of people receiving benefits under many entitlement programs, including veterans' health and pension programs, is expected to grow significantly over the next decade. In Table 26-4 of the budget's Analytical Perspectives section, we can see that beneficiaries for "veterans' compensation" programs are expected to increase by 1.7 million, or 45 percent, by 2023. That's the fastest rate of growth for any program except Medicare's prescription drug plans, and could spark debate on how to handle the additional financial obligations.7 Comments | Post a Comment | Sign up for NTU Action Alerts