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Defense

Taxpayer’s Tab Covers Veteran Benefits, Arson Database in New Issue
Posted By: Dan Barrett - 10/21/10

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Through this busy election season, NTU Foundation continues to score the bills Congress has introduced to keep taxpayers informed. The top potential spending, savings, and law changes are again highlighted in this week’s Taxpayer’s Tab. Issue 16 examines bills that would expand military veteran and personnel educational benefits, establish an arson database, and provide for improved prison conditions throughout the world.

The latest Taxpayer’s Tab covers the following bills:

  • S 3447/HR 5933, Post-9/11 Veterans Educational Assistance Improvements Act
  • S 1684/HR 1784, Managing Arson Though Criminal History (MATCH) Act of 2010
  • HR 6153/S 3798, Foreign Prison Conditions Improvement Act

Also, the Tab highlights the recent U.S. Senate Candidate Spending Analyses, which NTUF has release over the past two weeks. So far, five Pennsylvania and Florida candidates have been highlighted for their spending agendas. Some would increase while others would decrease federal spending. NTUF will be releasing more reports in the coming week. Be sure to stay up-to-date on all the latest research by checking out the NTUF homepage and following the official @NTUF Twitter feed.

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Public Presidential Campaign Financing Covered in NTUF Taxpayer’s Tab
Posted By: Dan Barrett - 10/14/10

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Springing forth from the successful BillTally Quarterly Report in Issue 14 of The Taxpayer’s Tab last week, NTU Foundation brings you brand new cost estimates in the traditional weekly format -- that's four bills introduced in the 111th Congress that would increase or decrease federal spending.

The most expensive bill of the week is a collaborative effort between pro-choice and pro-life caucuses in the House, to prevent unintended pregnancies and attempt to reduce the need for abortions. If enacted, the $3.9 billion first year cost would go towards state grants and programs supporting education and women’s health.

This week’s Taxpayer’s Tab details the following bills:

  • HR 3312, Preventing Unintended Pregnancies, Reducing the Need for Abortion, and Supporting Parents Act
  • S 3452, Valles Caldera National Preserve management Act
  • HR 775/S 535, Military Surviving Spouses Equity Act
  • HR 6061/S 3681, Presidential Funding Act

To supplement the large number of Military Surviving Spouses Equity Act cosponsors, the following is a breakdown by party and chamber.

  • House – 352 Congressmen in Support
    • 222 Democrats (87 percent of all Democrat Representatives)
    • 130 Republicans (73 percent of all Republican Representatives)
  • Senate – 60 Senators in Support
    • 40 Democrats (68 percent of all Senate Democrats)
    • 17 Republicans (41 percent of GOP Senators)
    • 2 Independents (100 percent of Independent Senators)*
    • 

* Senators Lieberman and Sanders caucus with the Senate Democrats.

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Corporate Welfare or Taxpayer Warfare?
Posted By:  - 09/24/10

That might be the question on the mind of Montgomery County (MD) Executive Ike Leggett. The reason why is because, earlier this summer, Leggett announced that he would ask the Montgomery County Council to pass a law that would exempt Lockheed Martin, the major defense contractor headquartered in the county seat of Bethesda, from paying the county’s hotel tax. At issue is a facility on the Lockheed corporate campus called the Center for Leadership Excellence, which houses visiting workers, contractors, and vendors. Between December and April last year, the Center housed 9,000 people. Also, the Center has created 175 jobs, according to the county’s budget director.

The State of Maryland has already enacted legislation that would exempt Lockheed’s facility from the state’s hotel tax. As it is designed, Leggett’s bill would exempt only Lockheed’s facility. The exemption would cost the county $450,000 in tax revenues a year, according to opponents. They argue that Lockheed Martin, being a major corporation, can afford to pay the tax. Further, they argue that the county cannot afford to give away tax breaks “when our citizens are suffering from furloughs, layoffs, hiring freezes and drastic cuts in services.”

What strikes me about these arguments is the strange logic behind them. Here we have a situation where a business, which is not in the hotel business at all, is unfairly subject to a tax. Legislators at the state level have recognized this is a problem and have acted to exempt the business and similar facilities from the tax. But none of that matters to opponents of corrective measure because they are so starved for money, especially other people’s money redistributed through the government, that they would unfairly tax an entity – including one that is providing $7.1 billion to the local economy and employing thousands of area residents – to get at that money. I can’t think of a better case for budget and tax reform.

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Only 8 Weeks Until MidTerms, Are You Informed?
Posted By: Dan Barrett - 09/21/10

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The NTU Foundation wants you to be the most informed voter, armed with the best, up-to-date information, as America heads into the mid-term election season. The Taxpayer’s Tab is one of the tools NTUF provides to keep track of Congress' potential spending agenda. This will be our 12th issue in which we highlight the highest and lowest cost bills, as well as the most cosponsored bills working their way through Congress and into law. In those 12 issues, we have articled over 40 bills and shown you the ways our BillTally data can help you in deciding if the priorities your legislator supports match your own.

As our country heads into one of the most contentious election cycles in recent memory, be sure to keep the Taxpayer’s Tab at the top of you inboxes and forefront of your minds. NTUF’s research is independent and nonpartisan. We do the grunt work so you can cut through the campaign rhetoric about Congress's spending habits.

The new issue of the Taxpayer’s Tab tackles yet another bill eliminating waiting periods for Medicare and Social Security Disability Insurance. Then we navigate through some of the Department of Defense’s weapons programs in a bill calling for their cancellation. A bill requiring earmark transparency is also showcased in our “Most Friended” section. Last, but not least, our Wildcard section centers on a bill which would continue and expand price reporting for businesses in the dairy and meat industries.

The specific bills of The Taxpayer’s Tab #12 include:

  • HR 2881, Kenny Callahan Act
  • HR 5784, Reduce and End our Deficits Using Commonsense Eliminations (REDUCE) in the Defense Programs Act
  • S 3335/HR5258, Earmark Transparency Act
  • S 3656/HR 5852, Mandatory Price Reporting Act

To help everyone get the most out of this upcoming election and The Taxpayer’s Tab, encourage your friends and family to join NTUF, follow NTUF on Twitter, subscribe to the Tab, and forward this important newsletter to others. Remember, transparency is everyone’s business and an issue in and of itself this election.

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Government Transparency: 8 Calls and No Answers
Posted By: Dan Barrett - 08/26/10

After calling two staffers on Capitol Hill and numerous bureaucrats at the United Nations’ headquarters, you would figure I would have a better idea of United Nations’ conference budgets. My first three calls and emails went to Legislative Assistants and Foreign Relations Committee staffers, ranging over almost six months. I was researching the amount the US could potentially save by prohibiting funding of the Durban II Conference in South Africa. The Conference got a lot of attention because it was a follow-up to the 2001 United Nations World Conference Against Racism, Racial Discrimination, Xenophobia and Related Intolerance.

After 6 months of silence from Foreign Relations Committee staff and more Googling than I hope ever to do, I changed gears and called the United Nations directly. This also proved to be a grinding affair wrought with more transferred phone calls than the comparatively efficient silence from the Hill. In the last month, I have spoken to UN workers in 7 different divisions, ranging from their General Information Division, who had no information to give, to the United Nations Advisory Committee on Administrative and Budgetary Questions and the Department of Conference Management’s Conference Services. All-in-all, the UN is impressive with its lack of cohesion and transparency.

On my final call, made this afternoon with a member of the conference management staff, I learned about half of what I set out to learn, eight months ago: The Durban II Conference was a hosted conference, all of which are principally paid by the host country with incidental costs paid out of the UN General Fund. So the majority of the Durban II costs would be paid out of South Africa’s pocket. If the conference was more general, the United Nations would pick up the tab, paid for by the UN General Fund. Member nations contribute to the fund based on economic indicators with the US paying $598 million in 2009.

No actual numbers were available as either the staffer was under no obligation to make them public (which he mentioned) and/or unified budgets of UN conferences do not exist (quite possible). When I asked why the staffer would not release the numbers, he asked if I was trying to find out how much the US paid. “Oh, you’re one of those,” was his response. The conversation ended quickly thereafter.

My search ended there because NTU Foundation’s BillTally Project does not pertain to already appropriated spending.

The United Nations was created to help prevent conflict and to serve as a development force for the “Third World.” These goals are accomplished largely through conferences where diplomats and leaders can come together. Yet an organization that can’t keep an eye on its check book, let alone a taxpayer-funded group that feels something as basic as conference budgets are not fit for public consumption, is bound to fail. According to the UN’s website, “It’s your world.” I would add, it’s also your money.

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F35 Engine Fight Reignites
Posted By: Dan Barrett - 05/11/10

As the Joint Strike Fighter (JSF) continues through its extended developmental phase, the F-35 Alternate Engine Project once again is in the spotlight. The competition was initiated to produce the best power plant for the new plane. General Electric is still creating its version and sees a future where the F-35 has two engines to choose from. Some Congressional Members, more concerned with pork than defense, agree. The original engine company (Pratt & Whitney) and the Department of Defense are defending a single engine system – not just because it was a parameter of the competition but a practical military logistical detail.

Costs have become a chief concern even in the deficit-prone defense-sector. GE has offered a fixed-price deal to the Pentagon, citing the competition could lower costs by $20 billion over the jet's lifespan. Pratt & Whitney has already offered a fixed-price contract, which would leave excess cost with the manufacturer rather than the American taxpayer. The catch in this competition comes with differing timelines. GE requires $485 million to maintain its development program while P&W has completed its engine. GE claims the competition brings about lower long-term prices and higher quality. However, justifications go only as far as the bank. Further upfront GE costs will equal $2.9 billion and will save $1 billion over the next five years. There is little to no difference in performance in either engine.

Although competition is key to innovation, there comes a time to decide on one engine for America's next-generation air superiority craft. P&W have already developed and integrated their engine into the F-35 framework. They have also offered guarantees against cost overruns in a fully binding agreement. GE must accept its loss and cease spending millions ($25.5 million so far) on lobbying Congress for a piece of equipment the military does not need. Secretary of Defense recently said, "Study on top of study has shown that an extra [F-35] fighter engine achieves marginal potential savings but heavy upfront costs – nearly $3 billion worth." Hopefully members of Congress will resolve this issue for our service members in time to honor their sacrifice on Armed Forces Day this Saturday.

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Nuclear Transparency
Posted By: Dan Barrett - 05/07/10

With the Obama Administration committing itself to greater international nuclear non-proliferation, Secretary of State Clinton spoke before the United Nations General Assembly releasing the exact number of US nuclear warheads - 5,113 - both in active service and storage. Citing a "goal of a safer world," Clinton wished to show other nations participating in the nuclear nonproliferation regime that the US is willing to prevent dangerous material getting into the wrong hands and to promote greater transparency of stockpiles for better understanding.

However, publishing the total number of warheads does not spell transparency for the American taxpayer. Much of the nuclear weapons budget lives in the dark. A Carnegie Endowment for International Peace study postulates that the US spends at least $52.8 billion per year. Around 55% ($29.1 billion) is dedicated to operation, upgrades, and sustaining the platform and approximately 15.8% ($8.3 billion) is spent on environmental and health costs. However, this is just an estimate as the total budget remains classified.

A total inventory of 5,113 nukes reflects a 17,104 reduction since 1991 – a 90% drop. According to a Brookings Institution fact sheet, the US spent an average of $70,000 in 1998 (around $97,000 in 2010 dollars) on dismantling one nuclear warhead. Taking the 17,000 warheads decommissioned in today's dollars, the US has spent at least $1.66 billion since the end of the Cold War. Unless more budgetary disclosures occur, both deficit hawks and disarmament proponents suffer from a lack of accurate information from an administration claiming its transparency.

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Special Hearing on the F-35
Posted By: Dan Barrett - 03/11/10

The Senate Armed Services Committee (SASC) convened a hearing to specifically address development issues regarding the F-35’s costs and timeline to military service. Being the largest military acquisition program in history, currently projected to cost at least $300 billion (although a more exact cost estimate was not produced during the hearings), the Joint Strike Fighter (JSF) project has been suffering development problems for at least the last two years. Ranking member McCain and Chairman Levin decided to bring in DoD procurement and cost officials to explore the delays and pending cost increases for America’s newest air superiority aircraft.

Under Secretary for Acquisition, Technology, and Logistics Aston Carter broke the JSF’s service life into 3 stages: Development, Ramp up to Production, and Full Production.

Development

The debate centered on the development phase, which was initially changed to be 30 months longer than originally planned but later, with a new production plan in place, has shrunk to 13 months. The time gap was filled with more test aircraft produced and by adding a more dedicated software integration program. The overall number of planes ordered has remained the same at 2,852 (all three variants included) but delivery will be delayed on the initial service craft, 122 planes between FY 2011 and 2015.

300 JSF’s are to be produced for testing purposes with $50 billion set aside for System Development and Demonstration (SDD). DoD Cost Assessment and Program Evaluation Director Christine Fox cited a $2.8 billion in increased development funds. Hopefully, this will improve the lagging test sorties, of which only 10% have been completed thus far.

Ramp up to Production

Many of the issues facing Congressional leaders, concerned with cost overruns, and military planners, worried about a Fighter Shortfall, point to military contractors as a source of the F-35’s woes. The bidding system in place was not law by the time the JSF program was running. Many of the cost estimates and accountability measures are either based off the old system or being caught up at a delayed pace. Senator McCaskill went so far to ask for specific individuals to blame for the delays. The only individual mentioned was the fired Major who ran the program until earlier this year.

Even with the delays and finger pointing, Carter gave a basic time-line for the JSF. 2011 would see both Marine vertical take-off and hardened Navy version testing and the first training squadron’s creation. In 2012, the Marines plan to have enough F-35’s to reach Initial Operational Capacity (IOC) and the Navy and Air Force will reach their IOC’s in 2016.

The dates for deployment remain unchanged as testing continues. Carter explained the lower number of planes produced initially will save taxpayers money because if flaws are found in the first line, the costly errors will be fixed on fewer planes instead of on entire squadrons.

Full Production

Aircraft production prices usually have a steep initial cost but as more planes stream through the production line, the costs begin to decrease. Spending will then change emphasis from production to maintaining the fleet once enough fighters are in service. Michael Sullivan of the Government Accountability Office cited maintenance hours ranging around 2.5 million hours to create and produce a modern attack aircraft – more than doubling a 2001 number of 1 million hours to achieve the same feat.

Taxpayer Costs

According to Fox, the F-35 was estimated to cost at $50.2 million in 2001, $69.2 million in 2007, and currently $80-95 million (all in 2002 dollars) per aircraft. In other words, if the F-35’s were rolling off the assembly line today, they’d have a price tag of $112 million each (assuming everything goes according to plan). Taxpayers would be paying about $319 billion for all 2,852 F-35’s in today’s dollars. 

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Airborne Laser works after billions spent
Posted By: Dan Barrett - 02/12/10

A low-power laser mounted on a modified Boeing 747 has accomplished its goal of destroying a launched missile in its boost phase. While impressive, perhaps amazing, we need to ask those questions big spenders hate to hear: How much has it cost? How will this help? What's its future worth?

The Airborne Laser Program (ABL) has long been a platform in the cross-hairs of budgetary hawks and practical politicians looking for an end product rather than an eternal R&D project. A 2004 GAO report states "costs for developing ABL have nearly doubled from the Air Force’s original estimate and additional cost growth is occurring", doubling in cost in the first 7 years of development. This is not to downplay the technological achievement but questions the efforts and funds going into the program. The 2009 enacted budget was $401 million, while a total cost totals at least $8.2 billion from 1996 to 2008. The FY2010 expenditure is expected to be $187 million.

In light of President Obama closing the door on more ABL expansion, the program is limited to one prototype, meaning there will be no combat flights for this aircraft. The research will be of great value but a practical application of the data and tests seem to be destined for the scientific shelf rather than to production lines and US bases. In cases of scientific breakthroughs but little military value, the Pentagon has made an effort to transfer the technology to places such as NASA and academia so that the innovation won't go to waste. ABL should be one of those cases because the missile threat to US assets is small.

Rogue States such as Iran and North Korea are already ringed with ground-based interceptors, ready at a moment's notice. The ICBM Great Powers (Russia, China, France, and the UK) all understand the concept of Mutually Assured Destruction (MAD) and will not sacrifice themselves for a strike against the US. Those nations in nuclear-limbo (India, Pakistan, and Israel) either lack the will or capability to launch a missile attack. And let's not kid ourselves, terrorists don't have the infrastructure or operating space to steal, develop, or launch a missile which would be within the purview of the ABL system.

More importantly, special interests benefit from the continuation of ABL. “Boeing produces the airframe, a modified 747 jumbo jet, while Northrop Grumman supplies the higher-energy laser and Lockheed Martin is developing the beam and fire control systems.” Science benefits but ABL continuation seems to be less national defense and more boondoggle pork. 

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Spending Smarter on Missile Defense
Posted By: Pete Sepp -

Admiral Mike Mullen, who recently completed a stint as Chairman of the Joint Chiefs of Staff, was a thoughtful proponent of the connection between America’s economic security and its national security, often mentioning the national debt as the biggest threat to both and stressing the need to “steward every dollar that we have.” Mullen has retired, but the national debt sure hasn’t been, which means that “stewardship” is more important than ever. Earlier this week NTU weighed in with a letter to lawmakers on one such development our budget team came across – the Senate Appropriations Committee’s decision to shift tax dollars away from a missile defense project with uncertain prospects and toward ventures with greater near-term promise.

Much bigger brains than my own can delve into the technical details of the SM-3 missile, which is part of the anti-missile phase of the Navy’s Aegis air defense system. However, NTU’s four-decade institutional knowledge of federal contracting and project oversight tells us that the Senate Committee made the smart move.

SM-3 Blocks II-A and I-B, which the Committee chose to fund, have good potential for a solid capability to defeat several ballistic missile threats our nation may be encountering before Block II-B (the version the Committee directed funding away from) could be reliably tested and fielded. Plus, on a dollar-for-dollar basis, funding II-B might not pay off with a vastly better weapon in a relatively predictable period of time -- potentially risking an all-too-familiar ascent into an alarming cost spiral. As the Committee noted, “the requirements for the SM-3 Block II-B remain in flux, as does its acquisition strategy and the associated costs for integration into the Fleet.”

NTU has communicated its views to Congress on a variety of  defense projects this year, including the F-35 alternate engine  and the Evolved Expendable Launch Vehicle. In many cases, we’ve had to offer words of caution about Congress’s decisions.

But on SM-3, the Senate Committee is making the right call. As our letter to Appropriators in both chambers states, “the Senate Committee’s funding choice on SM-3 represents the best possible prioritization of resources based on prudent risk assessments, and [NTU] would urge that any conference agreement reflect this stance.”

We’ll be keeping a watchful eye and urging a steady hand as the appropriations process moves forward, to make sure the Senate’s position on SM-3 becomes law.

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