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In the time it takes you to read this blog post, the federal government will have racked up an additional $10 million in debt that will be passed along in higher burdens on our children and grandchildren. Learn about what conservatives in Congress are doing it to stop it by joining us for a tele-townhall event with Representative Paul Ryan (R-WI), Chairman of the House Budget Committee and the innovative fiscal conservative behind the “Roadmap for America’s Future.” NTU President Duane Parde will be hosting the 30 minute call with Dick Armey, Chairman of FreedomWorks, and you’re invited to hear the latest breaking news and ask questions! Join us and thousands of other activists on the call at 6pm Eastern time Wednesday, March 9th by dialing 1-888-886-6603, extension 16307#.
Our national debt has reached a staggering $14 trillion, and our deficit alone from this year is as big as the entire budget of 1998. Congress has been working on a spending bill for the rest of 2011, but even modest spending reductions amounting to less than four cents out of every dollar of overspending have been rejected by Washington liberals. In the coming weeks we’ll begin debate on the budget for 2012, so it has never been more important for you to make your voice heard on Capitol Hill.
Our tele-townhall will be a great chance for you to hear from a Representative Paul Ryan, who as the head of the House Budget Committee is right on the front lines of the battle to reduce spending and create a sustainable budget. Join us and learn about not only the dangers our debt poses, but also what conservatives in Congress plan on doing to stop it. At 6pm Eastern time Wednesday, March 9th, dial 1-888-886-6603, extension 16307# to join this important call.
We hope you’ll join us as we get the latest information on the upcoming showdown over spending.6 Comments | Post a Comment | Sign up for NTU Action Alerts
GAO Report Highlights "Mother Lode" of Government Waste
In his State of the Union address President Obama said that we must create a “government that’s more competent and more efficient.” He highlighted the duplicative nature of Washington, joking that fresh water salmon and saltwater salmon are regulated by two different agencies, but “it gets even more complicated once they’re smoked.”
Something tells me President Obama is no longer laughing after the Government Accountability Office released a report today showing the depth of redundancy and waste Government Accountability Office (GAO). In the report, the government watchdog found that Congress’ penchant for creating programs, but never reviewing, or eliminating them, has created a labyrinth of duplicative programs that grows by the year.
If Obama thought two agencies to regulate salmon were bad, the GAO found that the U.S. government has more than 82 programs for monitoring teacher quality, 80 programs focusing on economic development, 47 for job training and 15 agencies that deal with food safety. Moreover, few of these programs are receiving the necessary oversight to ensure that taxpayer money isn’t being wasted. A consistent refrain found throughout the GAO report was that “little is known about the effectiveness” of a given program because it “has not been well studied.”
Comptroller General Gene Dodaro wrote that, “Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of tax dollars annually and help agencies provide more efficient and effective services.”
Given the apparent redundancy and waste spread throughout the federal government the question becomes whether Democrats will continue to label $4 billion in proposed spending cuts “extreme,” and back off their claim that adopting spending cuts will “undermine and damage our capacity to create jobs and expand the economy.”
Eliminating bureaucratic waste while making government more efficient for taxpayers should be a no-brainer for Congress. But as Reagan said, “no government ever voluntarily reduces itself in size.” Fortunately, Rep. Jeff Duncan, has introduced a bill to resurrect the “Committee on Reduction of Nonessential Federal Programs” tasked with identifying and cutting redundant federal programs. The idea, a throwback to the “Byrd Committee,” which sought out government waste to ease the stress on the nation’s finances prior to World War II, is a welcome idea given Congress’ $1.65 trillion overspending problem. It’s also the perfect prescription given the GAO’s grim diagnosis.
President Obama was to correct to speak of the need for a more efficient government in his State of the Union, but it has become clear it is not a laughing matter. Hundreds of billions of dollars of taxpayer money is being needlessly wasted by Washington. If Congress is looking for ways to reduce its deficit, the GAO’s report and Rep. Duncan’s new “Byrd Committee” are good starting places.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Reflections on CPAC
Today is the third and final day of the 2011 Conservative Political Action Conference (CPAC), the largest annual gathering of conservatives and libertarians in the nation. After three days of staffing a well-visited booth, meeting with dedicated activists, and listening to dynamic speakers, I’m looking forward to some rest and relaxation, but also to what the future holds for the conservative movement.
This year’s CPAC had the highest number of attendees (11,000) in the history of the conference. CPAC speakers ranged from Rep. Paul Ryan of Wisconsin, the House Budget Committee Chair, to Governor Mitch Daniels of Indiana, a potential presidential candidate who gave, in my view, an outstanding keynote address, which you can read here. Also, CPAC 2011 featured a number of new participating organizations that focus on both activism and policy related to social, economic, and political issues at the federal, state, and local levels.
While attending CPAC, I had the opportunity to participate in a number of discussions about important tax and fiscal policy issues facing the United States. NTUF hosted a discussion about entitlement reform that featured experts such as Rep. Devin Nunes, Maya MacGuineas, Douglas Holtz-Eakin, Steven Moore, and Dan Mitchell. The bottom line of their presentation was that we need to start tackling the problem of runaway entitlement spending before it’s too late.
But budget reform should not be restricted to social programs. CPAC also featured a panel on how the nation can reduce defense spending to a more manageable level without jeopardizing readiness. As a former military aide to a fiscally conservative Member of Congress, I was pleased to hear all of the views presented and the many ideas for maintaining an affordable defense posture. The passion the attendees displayed at the panels, and in conversations with me at the NTU table, was striking. It bodes well for conservatives if these activists carry their views home and remain outspoken and active in the political process.
For the last several weeks, there has been a lot of talk in the media about differences in the conservative movement over certain policies and suggestions that these differences spell certain doom the conservative movement. After three days of observing conservatives of all stripes from across the country, I can unequivocally say that reports of destructive differences among conservatives are greatly exaggerated. In fact, I would argue that the conservative movement has never been stronger and ready to bring real solutions to the many serious problems facing the nation.3 Comments | Post a Comment | Sign up for NTU Action Alerts
Tune into NTU's State of the Union Coverage tonight
Tonight at 9 p.m. EST, the National Taxpayers Union's crack government affairs and policy analysis teams will provide special online coverage of the President’s State of the Union Address, and we want you to be there and be a part of the discussion. We will be breaking down the President's proposals and what they will mean for taxpayers. Details on how you can join the conversation are below.
We look forward to seeing you online tonight at 9 p.m. EST!
We look forward to seeing you online tonight at 9 p.m. EST!
On the GOP Response: Limited Government?
Paul Ryan, as the face of the Republican party, eloquently stated: "We believe, as our founders did, that 'the pursuit of happiness' depends upon individual liberty; and individual liberty requires limited government. Limited government also means effective government."
Man, these guys can really talk the talk. But I'm skeptical. For six years Republicans held the Presidency and both chambers of Congress. Six years of unified government! What ended up happening? Bush took office when government was consuming $1.86 trillion, 18.5 percent of GDP. When he left office the budget reached over $3.5 trillion, 24.9 percent of GDP! Mind you, all under Republican government -- the same folks who are promising to "limit" government and "cut" spending now. I would take their rhetoric with a grain of salt and hold their feet to the fiscal fire. Republicans won back the House and 20 state governments under the auspices of limited government.
Let's hope they put their money where their mouths are.2 Comments | Post a Comment | Sign up for NTU Action Alerts
A Borrowing Binge: $15 Billion More on Table in Illinois
A deficit almost half the amount of the $26 billion general fund budget; a billion dollar backlog in unpaid bills to vendors; and billions more in missed payments to a pension system already $85 billion in the hole.
This is the fiscal reality staring Illinois lawmakers in the face as they reconvene to address a $13 billion budget deficit. Years of incurring too much debt, over taxation, and too many government promises have brought Illinois to the brink. Yet even as the state continues to spend $3 for every $2 it takes in, Governor Pat Quinn has proposed spending and borrowing more - $15 billion more.
If not there already, Illinois is a “deadbeat” when it comes to paying its liabilities. The state shares with California the lowest U.S. state credit rating from Moody’s Investors Service as a result of the widening gap between the states expenses and revenue and their failure to address a long term, structural budget deficit.
No one wants to do business with a deadbeat. Indeed, as noted by the Illinois Policy Institute, late or unpaid bills have already caused Illinois vendors to end business with the state. For example, a company that produces ammunition stopped delivering bullets because the Department of Corrections owed them money. If not addressed, Illinois will not be able to provide its core services to residents. In this instance public safety is in jeopardy.
As if the state has not already borrowed itself into oblivion, Gov. Pat Quinn has proposed borrowing $15 billion more to resolve the issue. Supporters say the outside loan would provide instant cash to schools, doctors and social welfare agencies. Also, they claim it will save the state money as the interest payments on the new debt will be less than penalties incurred by not servicing vendors. The catch is that this is only a short term fix, “solving” the problem for only a year. It’s the classic Illinois example of kicking the can down the road, saddling Illinois taxpayers with yet another loan payment.
Quinn has also proposed a plethora of new taxes – everything from a 33% increase in the state income tax, a $1 hike in the cigarette excise tax, and taxing the sales of online purchases (click here and here to read more). All would further hamper the economic outlook of a state that already ranks nearly dead last according to the ALEC-Laffer State Economic Competitive Index.
Illinois needs to reverse its deadbeat status. That means it should not enter into unaffordable new obligations and adjust existing spending obligations downward so it can begin paying down debt it already owes. More borrowing will make the problem worse in the long term, further hurting the state’s ability to take out loans or repay vendors. Tax and expenditure limits are another way to ensure that government outlays do not grow faster than the public’s ability to pay. The Illinois Policy Institute has been tracking HJRCA 61and its amendments which seeks to tie spending to per capita personal income growth. More to come on this issue…1 Comments | Post a Comment | Sign up for NTU Action Alerts
Welcome to Washington
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New Jersey's leaders reach deal on arbitration reform
Late yesterday, New Jersey’s Governor Christie, Senate President Stephen Sweeney, and Assembly Speaker Sheila Oliver announced that they had reached agreement on a proposal to reform arbitration awards for police and fire contracts. The proposal would cap salary increases negotiated through arbitration at two percent in an effort to make the process fairer for taxpayers who have to ultimately foot the bill for salary increases by paying higher property taxes.
The two percent cap, which will cover all salary items (i.e. COLAs, step increases) but not pensions or health care, will take affect next year and expire in 2014. The proposal also calls for a task force to evaluate the cap’s effectiveness. Also, arbitrators will be prohibited from awarding economic items not contained in previous contracts. Further, the proposal restricts arbitrators’ fees to $1,000 per day and $7,500 per case. Arbitrators will also be selected at random.
Police officers claim that the arbitration is not in need of reform because relatively few contracts go to arbitration, but mayors have long complained that the current arbitration process is weighted so heavily in favor of the unions that it pushes towns and cities to settle by agreeing to higher salaries. For example, New Jersey’s police officers are some of the highest paid in the nation.
Legislators, including Senator Sweeney, call this a “truly historic reform for New Jersey” and rightly so; some observers thought these leaders would agree on a cap given the interests involved, namely the powerful police and firefighters unions. This reform will help start to rein in the high costs of government that are consuming budgets and forcing higher property taxes on the backs of New Jerseyans. Over the last decade, local government spending has increased from $26.5 billion in 2001 to an estimated $44.7 billion this year, an increase of 69 percent. Recently, an arbitrator awarded firefighters in the town of Kearny a 17 percent raise over the next five years. Now, Kearny may have to lay off 16 of its employees to meet these expected higher costs. No wonder New Jersey’s state and local tax burden as a percentage of income is the highest in the United States.
There is still much work needed to be done – and soon – on reforming New Jersey’s budget and tax policies. Not only should lawmakers approve this proposal right away, but they should also approve the entire "tool kit" for local government that Governor Christie proposed back in May. But this arbitration proposal negotiated by the Governor and the General Assembly’s leaders is a good step in the right direction.0 Comments | Post a Comment | Sign up for NTU Action Alerts
New Jersey needs the "toolkit" to keep good times rolling
New Jersey appears to be on a roll. This year, the Garden State improved its ranking - moving from dead last to 48th - on the Tax Foundation's Business Tax Climate Index, the Nets got a new owner with the desire - not to mention the financial resources - necessary to rebuild what is currently the NBA's worst franchise, and Mike "The Situation" Sorrentino lasted longer on "Dancing with the Stars" than David Hasselhoff, Michael Bolton, and Margaret Cho. So how does New Jersey keep the good times rolling?
While I don't think I have the expertise to assess the chances for success of the Nets or the "Dancing With the Stars" contestants, I can tell you that for New Jersey's tax climate to continue to improve, the state needs to enact the governor's proposed "tool kit" for local government. New Jersey has the highest property taxes in the nation. To combat this, in July the Democrat-controlled legislature passed and Governor Chris Christie signed into law an annual two percent cap on local property taxes increases. The cap is lower than any previous restriction (the previous cap had a four percent ceiling) and limits to four (previously there were 14) the number of exemptions to the cap local governments can claim. The idea behind the cap is to enforce fiscal discipline by government entities, of which New Jersey has about 1,600.
But even with the cap in place, the high and growing cost of government in New Jersey places tremendous pressure on local governments to increase taxes either through an exemption or by seeking approval of voters. Therefore, it is necessary to find ways to reduce the cost of government to relieve some of the pressure for higher taxes.
To reduce the pressure, Governor Christie has proposed a tool kit for local government, which is a package of 33 bills that would give local governments powers to lower the cost of government and remain within the cap. The tool kit contains reforms to employee benefits, pensions, collective bargaining, and civil service. Among the reforms are a requirement that public employees contribute more to their health costs, an increase in the retirement age, a cap on arbitrators' awards for union contracts, and a proposal to allow government to opt out of the civil service system to consolidate services. These reforms are important steps on the road to reforming New Jersey's tax climate.
Although all of these tool kit bills have been introduced in either the General Assembly or State Senate and some have been enacted into law, the majority of the tool kit and most of the essential reforms, have yet to be considered. But time is running out before costs of government increase again. It would be a shame if New Jersey's roll were to suddely stop. If you live in New Jersey, the only way to keep the good times rolling is to click here to find your legislators and call or write them, and urge them to pass the tool kit.
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On Tap in Pennsylvania: Liquor Privatization
Many of the nation’s new Republican governors have ruled out tax hikes to address billions in collective deficits. Proposals to cut spending are taking center stage as a way to avoid the harmful effects of tax hikes during a recession. Governor-elect Tom Corbett of Pennsylvania appears to have embraced this philosophy as he considers a budget gap that could run as high as $5 billion this year. Pledging not to raise taxes, Corbett and Republican leaders in the Legislature have booze on the brain, pondering a plan to privatize the state-run liquor industry.
Pennsylvania joins 18 other states that impose some form of control on liquor sales, ranging from controls on both wholesale and retail markets. H.B. 2350 seeks to change all that. Introduced by state representative Mike Turzai, the legislation would privatize liquor stores in Pennsylvania, beginning with the auctioning of 750 retail licenses and 100 wholesale licenses to the highest bidder.
Getting the state out of the booze business is one way to reduce the public payroll, save on operating expenses and improve customer service. Also, with the sale of licenses the state is slated to collect $2 billion in up-front revenue in 2011 and an additional $350 million annually in alcohol sales tax. All could be used to help close the state’s looming budget deficit.
However, pro-control advocates cite many disadvantages of privatization. Yes, they claim, the private sector shows it can provide higher quality products at a lower cost, but reducing alcohol consumption, underage drinking, and alcohol related traffic deaths are lofty goals the profit oriented, private market cannot achieve. On the contrary, a recent study from the Pennsylvania-based Commonwealth Foundation of 48 states shows that over time there is no link between market controls and these social goals. Based on consumption and traffic data over the last four decades they find no significant reduction in any of these three areas compared with non-controlled states. As a matter of fact, they show that states which recently privatized their liquor industries experienced a significant decline in per capital alcohol consumption.
Another fear of the pro-control folks and even The New York Times is large scale layoffs of government workers that result from privatization. This may be true, but privatization doesn’t mean liquor stores disappear. The stores will still exist and continue to require workers. Most of the state jobs will simply shift to the private sector. And as evidenced by the 31 successful cases of private liquor sales there is little justification for government liquor salesmen. Jacob Sullum of Reason sums it up well, “[H]ow seriously can we take the argument that unnecessary government jobs should not be eliminated because then there will be fewer unnecessary government jobs?”
When state governments are experiencing shaky budgets, policy makers need to be on the lookout for any and all ways to streamline. Pulling the cork on state-run liquor sales is surely a place to start.1 Comments | Post a Comment | Sign up for NTU Action Alerts