|America's independent, non-partisan advocate for overburdened taxpayers.||Home | Donate | RSS | Log in|
As Congress continues to play budgetary chicken, prolonging the government shutdown, another debate is brewing that might or might not be fixed with a budget deal: the debt ceiling. The last time we came close to the federal borrowing limit, Congress pushed through the Budget Control Act, which put in place budget caps in exchange for an increase in how much debt the government can issue. However, BCA lacked any real entitlement reform and taxpayers are again looking at a divided and dysfunctional Congress as the debt ceiling deadline ticks down to zero. If the ceiling is not raised, the U.S. could default on our debt, sending shockwaves through the global economy. However, it might be the jump start that the U.S. needs to bring about true reforms and fiscal sanity.
To supplement this week's Taxpayer's Tab, NTUF compiled some information so that folks can get a read on where the government is at on the debt and how we got in this position (hint: entitlements).
Do you think the U.S. should raise the debt ceiling? If not, how would you get the country's finances back in order (especially because a default would likely lower our credit rating)?0 Comments | Post a Comment | Sign up for NTU Action Alerts
Obama's Canceled Asia Trip Saves Taxpayers $8.4 Million
In the wake of the government's shutdown, the White House announced on Thursday that President Obama would no longer be traveling to Asia this week.
The trip, which was scheduled to begin today and last through October 12, would have taken the President to two regional conferences (the Asia-Pacific Economic Cooperation summit and the East Asia Summit) and four different countries, including Indonesia, Brunei, Malaysia, and the Phillippines. White House Press Secretary Jay Carney cited "the difficulty in moving forward with foreign travel in the face of a shutdown" as the primary reason for cancelling the trip.
The full extent of what that trip may have cost U.S. taxpayers remains unknown. However, NTUF was able to compile a partial estimate consisting of the cost to fly Air Force One from Washington, D.C. to the countries President Obama had planned to visit.
Flight times were estimated via travelmath.com. The $179,750 cost per flight hour reflects the latest figure given to the Congressional Research Service (CRS) by the U.S. Air Force.
It should be noted that these estimates do not take into account any refueling stops, additional aircraft support, cargo transport, hotel and lodging costs, or any of the other myriad security and logistical measures taken anytime a President travels abroad. Many of these costs are unknown but are estimated to amount to tens of millions of dollars, in some instances.
For more on what it takes to move the President overseas, as well as the general lack of transparency when it comes to those costs, check out NTUF's latest study on Presidential Travel, "Up In The Air".0 Comments | Post a Comment | Sign up for NTU Action Alerts
Today’s Taxpayer News!
Shutdown web pages: In what may have been the final pre-government shutdown act by the National Park Service and the Department of Agriculture, the departments used their time to come up with new web site splash pages saying their website was to be inaccessible during a “shutdown”. More details on the Daily Caller.
Dependant disaster: A Philadelphia County is reeling after the revelation that employees had been committing insurance fraud on a massive scale for over 20 years. The officials were packing their taxpayer funded insurance plans with ineligible dependants, and pocketing the money. The total loss was estimated at $200,000. More details at Phillyburbs.
Duplicate waste: North Carolina’s New Hannover County government is advocating a significant investment in recycling centers. The issue is private companies have already invested about $60 million into landfills and recycling in and around the community. Read more at the Star New Online.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Today’s Taxpayer News!
Low Voltage: General Motors reported that the brand’s much hyped and subsidized Chevy Volt continued its dismal sales pace in September. Volt sales saw a 38% decline from year to year. Taxpayer funded credits for September were over $13 million. The National Legal Policy Center has more details.
Corruption crackdown: After more than 30 lawmakers from New York State have been embroiled in ethics issues over the last seven years, a commission appointed by Gov. Andrew Cuomo has proposed new rules that would strip corrupt politicians of their taxpayer funded pension. Read more from today’s New York Times.
Taxpayer toilet: The Federal Bureau of Land Management used spent over $98,000 for a single outhouse on a park trail in Alaska. CNSNews has more.0 Comments | Post a Comment | Sign up for NTU Action Alerts
As the clock struck 12:01 this morning, the federal government found itself in a situation we haven't seen since 1996: a shutdown. Because Congress was unable to come to an agreement on how to fund certain federal agencies whose budgets depend on annual appropriations, they've been forced to "shut down", and in some cases completely halt all activity.
While the term does sound dramatic, this is actually the 18th time since 1976 that the government's been forced to temporarily shut down. The other 17 episodes have lasted anywhere from a single day to nearly three weeks, stemming from political squabbles over issues like abortion to budgetary debates that simply couldn't be settled in time.
So what will happen until Congress is able to pass a budget or agree to a short term fix? Under federal law, all government agencies are required to have official contngency plans that specify which employees and duties are "essential" and "non-essential" (or "excepted" and "non-excepted"). This ensures that the government will still act in limited ways to protect public health & safety, and it continues benefits like Social Security and certain types of assistance for veterans. The Congressional Research Service has an excellent overview of the legal issues the government must consider during a shutdown, as well as examples of how certain government services and functions were affected. Some 800,000 federal employees are likely to feel the effects of the latest shutdown either in the form of furloughs or unpaid leave. The Departments of Health and Human Services, Commerce, and Interior are expected to be among the hardest hit.
While the last shutdown in 1995-1996 may offer some precedent when it comes to how the current one might play out, there are contextual differences to consider.
The charts below (using Office of Management and Budget data) illustrate U.S. spending on mandatory & discretionary programs in 2012 compared to 1996:
A major point of contention in the most recent budget battle that caused today's shutdown was how (and whether) to fund the President's health care reform law. Mandatory spending -- which includes funding for entitlement programs like Social Security, Medicaid, and Medicare -- has increased dramatically in recent years, and will likely remain a primary focus of budget debates as long as it makes up the majority of federal spending.
There is also growing concern over the amount of funding required to keep up with interest payments on America's debts. As the government borrows more to finance its existing programs, interest payments have increased significantly. So far, the government has spent about $396 billion on these payments in Fiscal Year 2013 alone, not including the month of September. In 1996, that total was $344 billion.
While the debate over budget priorities and even the shutdown itself aren't new on Capitol Hill, this time around, the fiscal trends framing the discussions are.0 Comments | Post a Comment | Sign up for NTU Action Alerts
The federal government officially runs out of funding at midnight tonight. While a good amount of attention will be devoted to political blame, it’s helpful to understand what a shutdown really means and what will actually happen in its wake.
First, the name, “shutdown” is not entirely accurate. The situation can more cogently be described as a funding gap. Between which one stream of funding ends before another is approved. The drastic nature of these once normal bureaucratic snafus were exacerbated in 1980 when President Carter’s new Attorney General, Benjamin Civiletti issued a couple legal opinions interpreting the obscure 1884 Antideficiency Act: One saying the work of government cannot continue through a funding gap, and another modifier saying that only essential government services and personnel could legally remain working. To allow non-essential government employees to work without being paid meant they would be “illegal volunteers”.
After the consequences of funding gaps became clear, politics gradually asserted itself. Throughout the end of Carter’s term and on through the Reagan and Bush terms, temporary shutdowns of anywhere between one and five days were commonplace and were precipitated by an outside political issue. The gap and the subsequent standoff between President Clinton and House Speaker Newt Gingrich in 1995, which dragged on 21 days, holds the modern record. Due to the political backlash that engulfed Washington in the months following the ’95 shutdown, America has not seen such an event since.
Another note about the term “shutdown”: Civiletti’s second legal opinion allowing “essential” workers to remain on the job means many impactful government services will continue. Medicare and Medicaid reimbursements will not stop. Social Security checks will continue to be mailed. There is also a current statute stating that military personnel will continue to accrue pay which will be reimbursed after funding is restored. However, the term “essential” does not apply to national parks, zoos, and museums like the Smithsonian. They will close if there is a funding gap.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Even before she retired last week, scandalized IRS official Lois Lerner’s compensation was already attracting attention. While on administrative leave, federal rules allowed her to keep collecting a salary, one that reportedly totaled $177,000. So it was no surprise when speculation arose over how much Lerner could collect in federal pension benefits.
Unfortunately, that speculation, which initially projected a benefit of over $50,000, might be off by about half … and in the wrong direction. National Taxpayers Union calculations show that Lerner could qualify for a starting pension at the annual equivalent of as much as $102,600, and up to $3.96 million over her lifetime.
The individual retirement choices of federal employees are not a matter of public record. However, precisely because NTU has been denied this information in the past (specifically pertaining to Members of Congress), we’ve developed the most accurate method available to provide solid estimates of how much federal employees can collect.
And now, the caveats for Lerner. NTU assumed she:
1) Joined the Civil Service Retirement System (CSRS) from the very beginning of her federal employment, and left the IRS with 34 years of service in various posts;
2) Had a “high-three” average salary of $177,000;
3) Opted for a reduction in her current benefits so that her spouse could receive part of the pension after she died;
4) Receives annual Cost of Living Adjustments of 3 percent; this is the level that CSRS’s own actuaries have employed when projecting future liabilities for the system;
5) Lives to the age of 87 years, which is the average age of death for a female who is currently age 62 under standard mortality tables used by the life insurance industry.
Some may wish to quibble with these assumptions, but even under other scenarios, Lerner’s retirement benefit could be quite generous. Want to assume she joined CSRS after she left the judicial branch, and signed on with the Federal Election Commission in 1981? The annualized benefit would drop … to $96,200, and the lifetime total to $3.7 million. Want to be ghoulish, and project a lifespan of 80 years instead of 87? The lifetime amount would be less … but still a considerable $2.57 million. Or, suppose she decided to leave CSRS and transfer into the newer Federal Employees Retirement System (FERS) when offered the chance during one of the “open seasons.” The pension benefit would be significantly smaller, just under $60,000 annualized to start. However, with FERS, she would also participate in and be eligible for Social Security benefits, and could take advantage of a government salary match of up to 5 percent through the Federal Thrift Savings Plan, which works like a 401(K) defined contribution arrangement. In the end, her FERS package could still be quite lucrative.
But didn’t Lerner pay into to her pension plan out of her own salary? Yes, though the contribution rate during Lerner’s career was generally 7 percent. As we have noted with lawmakers’ pensions, taxpayers pick up the lion’s share of a typical lifetime CSRS retirement payout.
According to media reports, prior to her decision in favor of voluntarily retiring Lerner was in danger of being removed from her job due to findings from an IRS inquiry board citing “neglect of duties” and mismanagement. But to taxpayers, this latest sordid episode in the history of the tax agency has but one lesson: any way it’s sliced, they’re the ones left to bleed.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Tweet tutoring: The Food and Drug Administration is paying over $182,000 of taxpayer money to an outside group for the expressed purpose of “better understanding” their social media. The agency is currently far behind other agencies in the number of Facebook “likes” and Twitter “mentions”. Read more at the Washington Free Beacon.
Paycheck hypocrisy: An Illinois judge ruled that members of the general assembly will indeed get their taxpayer funded paychecks after Illinois Gov. Pat Quinn forced members of the state legislature to forfeit their salaries until they solved the state’s unfunded pension liability crisis. On top of that, the back pay will have to come with interest. The Herald Review has more details.
Paper waste: The staff of Florida Rep. Alan Grayson used a bit of their time on the job to pull a prank on a fellow employee. A member of Rep. Grayson’s district office staff posted a picture of a chair wrapped I toilet paper and a note admitting the deed on an office phone on Facebook. Presumably, all of this occurred during business hours. Bizpac Review has more.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Today’s Taxpayer News!
Astro-ads: The state of Tennessee allowed Volkswagen to use $266,000 of taxpayer money to paint a giant advertisement on the roof of their Chattanooga plant. A VW spokesman defended the ad saying, “The sign ‘makes it clear that VW is at home in America.’” The Tennessee Watchdog has more details.
Robo-dog: This November, the Defense Advanced Research Projects Agency is prepared to hand over a giant robotic dog to Marines for field tests. Nicknamed the “Big Dog”, its stated purpose is to carry heavy gear in war zones. The total cost and the feasibility of the prototype are both unknown. Read more at DefenseTech.
Money Stix: The city of Nashville has approved a project that would construct a number of tall, colorful sticks in front of their Music City Center. Tentatively named “Stix”, the art is said to be “inspired by Native American themes and colors” and will cost taxpayers $750,000. Read more at The Tennessean.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Today’s Taxpayer News!
Radio Silence: The inspector general for the Department of Homeland Security reported that DHS has allowed over 8,000 pieces of radio equipment to sit idle in warehouses for over a year. The original cost of the equipment was $28 million. Read more at the Washington Times.
Failure to launch: NASA’s inspector general has detailed the agency’s spending of $43 million on 33 facilities that went underutilized in 2011. More information on this story can be viewed at the Las Vegas Guardian Express.
Hip-Hop Care: The state of Oregon’s insurance exchange has budgeted $20 million for outreach plans. The result of this spending has been a series of music videos and quirky ads. All of this, despite Cover Oregon’s $16 million budget shortfall. Read more at the Weekly Standard.0 Comments | Post a Comment | Sign up for NTU Action Alerts