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TONIGHT: "Price the Proposals" of the State of the Union Address
Posted By: Dan Barrett - 01/28/14

Expecting More or Less Government from Tonight’s Speech? Guess Right and Win!

Play our 2014 "Price the Proposals" game to test your budget brain power and win prizes!

Click Here to Play the Price the Proposals Game!

There are now just a few hours left for you to guess how much new savings or spending President Obama will call for in his State of the Union Address (SOTU) in our “Price the Proposals" game!

Time is running out, submit your entry now!

If you make the closest guess to what National Taxpayers Union Foundation’s analysis finds, without going over, you win! Runners-up receive prizes too, but you can’t win unless you enter!

Simply go to www.ntu.org/sotu2014.

What you’re playing for:

  • $50 Visa gift card
  • A one-year Reason magazine subscription
  • Special "Team Taxpayer" gear

Watch the speech to find out what the President proposes, and join with the 362,000 members of National Taxpayers Union and staff online for commentary, fact-checking, and taxpayer talk:

Deadline for entry: January 28th (TONIGHT) at 10 p.m. ET

Please don’t set this aside – enter now before you miss out on the fun!

Then, in the days ahead, stay tuned for a special post-SOTU analysis with NTU and NTUF staff, which will be on our blog soon after the President’s speech.

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Price the Proposals Cheat Sheet: How much NTU and Foundation Staff Think SOTU Will Cost
Posted By: Dan Barrett - 01/28/14

Set to start at 9 p.m. tonight, President Obama will deliver his State of the Union (SOTU) Address to a joint session of Congress. The White House has mentioned a few things that may come up in the President’s annual speech but taxpayers are left in the dark as to what exactly he plans for in 2014. Yesterday, NTUF Policy Analyst Michael Tasselmyer has compiled the rumors and reports in a post but questions remain. How much does the President aim to raise the minimum wage? Will his government-sponsored jobs programs be new or more of the same? More importantly, how much will this cost today’s (and tomorrow’s) taxpayers?

NTU wants to see what the grassroots think and are sponsoring a “Price the Proposals” contest (with prizes!!!) to add some fun in with the pomp and circumstance of our political leaders making grand plans for our challenging times. I’ve received quite a few questions about the contest, many of which ask for any insider information that I’ve come across. Sorry folks, this post is no great unveiling of hush hush Administration documents and plans. BUT I wanted to see what NTU and Foundation’s staff thought about the rumors making their way around the Beltway. More to the point, I had everyone place a guess in the “Price the Proposals” contest to see how they ultimately measure up to the line-by-line report, produced by NTU Foundation, and the 362,000 NTU members, all busily racing to place their guesses for a chance at the glory of victory. Remember that these guesses, as yours will be too, are only directed at new spending. Don’t think about tax changes just yet. Here’s where we stand:

  • Our Average Guess: $125 billion annual spending increase
  • Highest Guess: $1 trillion by Creative Content Manager Tim Howland
  • Lowest Guess: $120 million by Director of Development Rick Lipman
  • Our Average Number of Standing Ovations: 13
  • Highest Guess: “It’ll be one long continuous standing ovation” – Director of Research Demain Brady
  • Lowest Guess: “Just 3 standing ovations for the Pres” – State Government Affairs Manager Lee Schalk

So there you have it, some educated guesses from America’s oldest grassroots taxpayer organization. Think you’ll be more accurate with this new information? Head over to our “Price the Proposals” page and place your guess! Remember, you can’t win unless you play!

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Speaking of Taxpayers, Jan. 24: The "Obamacare" Insurance Bailout You Need To Know About
Posted By: Douglas Kellogg - 01/27/14

The whole gang is seemingly in the house this episode: Vice President Brandon Arnold explains why Congress needs to pass legislation to prevent an insurance company bailout through "Obamacare"; State Affairs Manager Lee Schalk updates on state issues to start the year; and NTUF's Dan Barrett talks about this year's Price the Proposals State of the Union game!

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Air Force One Price for Last Year's President's Day Golf Outing $722,000
Posted By: Douglas Kellogg - 01/27/14

Late last week the Washington Examiner’s Paul Bedard broke the story that the Secret Service costs of the President’s, Vice President’s, and First Lady’s separate 2013 President’s Day weekend jaunts totaled over $295,000 dollars.

The information was obtained by Judicial Watch through a Freedom of Information Act (FOIA) request.

As emphasized in the article, these exorbitant costs are just what the Secret Service paid out (at least what they’re willing to identify) for lodging, rental cars, etc.

Since National Taxpayers Union Foundation (NTUF) provides estimates on the cost of flying Air Force One, we thought an impromptu examination of the President’s Palm Beach gold weekend that accounts for his part of this triumvirate of travel would be in order.

In this case the President flew from an official event in Chicago to Palm Beach, and then to Washington – these two trips total at least $721,590 in operating costs for Air Force One. That is a conservative estimate based off the White House’s schedule, average flight times, and the cruise speed of his VC-25 jet. 

The actual, real world, cost could be noticeably more expensive.

$721,590 is still not a cheap airfare. Perhaps the trio will make up for it and stay in this President’s Day to watch House of Cards?

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Preview: The President's SOTU Proposals
Posted By: Michael Tasselmyer - 01/27/14

Leading up to tomorrow night's State of the Union address, the White House has made at least one thing abundantly clear: the President has both a pen and a phone at his disposal.

While those instruments will probably get plenty of use during the speechwriting process, the Administration has been using the line to emphasize that if Congress doesn't act on certain agenda items, the President will -- either through executive orders or other unilateral actions.

  • The focus of this year's SOTU speech, according to White House advisor Dan Pfeiffer, will supposedly be on creating middle-class job security, with proposals to strengthen retirement safety nets and offer more jobs and skills training programs.
  • Income inequality will likely be a major talking point for the President this year, especially in the wake of recent public debate over minimum wage hikes.
  • As far as "big-ticket" proposals are concerned, it's possible that the President will use the speech to reiterate his support for expanded early childhood education and comprehensive immigration reform, as the Washington Post reports.
  • Don't expect to hear much about the deficit or looming debt ceiling debate, a subject that's caused plenty of political controversy over the past few months.

The price tag accompanying the President's proposals will depend on how specific he'll be in describing his goals for this so-called "year of action." You can follow along with NTU and NTUF staff tomorrow night for real-time analysis during the speech, as well as in the days after as we break down the President's agenda and what it means for taxpayers.

Be sure to let us know ahead of time what you think the agenda will cost!

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Energy & The Economy: By The Numbers
Posted By: Douglas Kellogg - 01/27/14

The facts and figures behind America's recent energy resurgence might surprise you...

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Latest Taxpayer's Tab: Foreign Aid Transparency
Posted By: Michael Tasselmyer - 01/26/14

Tab Insert

The U.S. spends nearly $50 billion on foreign assistance, including economic and military aid. In the latest edition of The Taxpayer's Tab, NTUF features a bill introduced by Senator Marco Rubio (R-FL) and Congressman Ted Poe (R-TX) known as the Foreign Aid Transparency and Accountability Act that would require more open disclosures of where that money is being spent.

H.R. 2638/S. 1271 orders the development and implementation of measurable goals and performance standards for foreign aid programs. Data and reports on publicly-funded assistance initiatives would be made available on ForeignAssistance.gov in order to ensure an additional level of accountability. The Congressional Budget Office (CBO) estimates that the bill would cost $1.68 billion over five years, but sponsors informed NTUF that they intend to use existing resources to fund the legislation's provisions.

Also in the Tab:

  • Least Expensive: Congressman Lamar Smith (R-TX) introduced H.R. 1772, the Legal Workforce Act. The bill would discontinue the U.S. Citizenship and Immigration Service's paper-based I-9 forms and establish a mandatory version of the E-Verify system in order to authenticate workers' legal residency statuses. CBO estimates that doing so would require upfront costs, but save a net $3.3 billion over five years due to fewer refundable tax credit claims.
  • Most Friended: H.R. 3135, the Domestic Partnership Benefits and Obligations Act, would make all domestic partners of federal employees eligible for the same health and insurance benefits extended to married workers' spouses. Congressman Mark Pocan's (D-WI) bill would cost $55 million over five years and currently has 77 cosponsors in the House.
  • Wildcard: Congressman Randy Neugebauer (R-TX) introduced H.R. 3519, the Bureau of Consumer Financial Protection Accountability and Transparency Act, in order to remove the BCFP from the Federal Reserve System and in turn make its budget subject to normal appropriations processes. While CBO scored the legislation as a $2.9 billion savings, NTUF is recording the bill as a "No Cost" measure because spending would not change during the 2-year authorization period, and future outlays would depend on Congressional action.

The full Tab is available online.

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GAO on Flood Insurance: Let the Private Sector Help
Posted By: Michael Tasselmyer - 01/24/14

In last week's edition of The Taxpayer's Tab, we featured H.R. 3370 as the "Most-Friended" bill with 178 cosponsors in the House. The Homeowner Flood Insurance Affordability Act would delay a provision passed in 2012 that phases out the government's National Flood Insurance Program (NFIP) subsidies and charges higher premiums more in line with full-risk rates.

That law, the Biggert-Waters Flood Insurance Reform Act, also ordered the Government Accountability Office (GAO) to conduct a study on how to better incorporate private-sector solutions to the NFIP's financial woes. The GAO released their findings in a new report this week and suggested that reducing government involvement in the flood insurance market could benefit taxpayers in the long-run.

The NFIP's fiscal troubles have been well-documented over the years. The program has appeared on the GAO's "high-risk" list every year since 2006 and owes over $24 billion in debt; worse still, the program hasn't paid back any of the principal on the loans it's received since 2010. Unfortunately, taxpayers are ultimately responsible for digging the NFIP out of its mounting debt, and delaying premium increases would tack on an additional $900 million to that burden (as we noted in the Tab).

But as GAO points out, the damage could at least be contained going forward: "...[S]ome have suggested shifting exposure to the private sector and eliminating subsidized premium rates, so individual property owners -- not taxpayers -- would pay for their risk of flood loss."

In its report, GAO summarized a series of discussions it had with stakeholders that work within the industry to better understand how to transition towards a flood insurance market with greater private participation. That starts with making the marketplace more enticing for private firms to enter. Two key recommendations to make that a reality:

  • Allow private insurers to assess flood risk themselves. Currently, FEMA publishes "risk maps" based on the likelihood of an insured home to experience flood damage; the maps help determine the premium rates that FEMA charges. However, various private risk assesment professionals questioned the reliability of those maps, and suggested that private flood insurers would want greater flexibility to assess flooding risk through their own methodologies.
  • Allow private insurers to charge premiums that accurately reflect that risk. According to GAO, "Stakeholders said it was challenging for private insurers to gain enough confidence to enter the flood insurance market because they feared not being able to charge actuarially sound rates or obtain a reasonable rate of return." Although charging higher rates would probably be unpopular politically, it would more accurately reflect the price of coverage, encourage more firms to enter the flood insurance marketplace, and -- perhaps most importantly -- be financially sustainable.

GAO suggests that there would still be a role for government involvement in the flood insurance market, but in line with previous recommendations, suggested that Congress should consider eliminating subsidized premiums and charge full-risk rates to all policyholders.

Stakeholders also voiced concern over a complicated regulatory environment that would need to be addressed before private firms decide entry into the market could be viable. Additionally, GAO supported means-testing as a possible solution to affordability issues: "Currently, subsidies are available regardless of a property owner's ability to afford a full-risk premium. Means testing the subsidies would ensure that only those who could not afford full-risk rates would receive assistance and should increase the amount in premiums NFIP collects to cover losses."

The full report is available online.

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Governor Walker Aims for Half a Billion in Tax Cuts
Posted By: Lee Schalk - 01/24/14

During his Wednesday evening State of the State address, Governor Scott Walker acknowledged that taxpayers throughout the Badger State are in need of relief.

"When I travel the state, people don't tell me that they want to keep sending more money to Madison," Governor Walker said. "They don't tell me that taxes are too low or even that taxes are just right. Overwhelmingly, people across the state tell me that one of the best ways to fuel the economic recovery is to reduce their tax burden."

Walker went on to outline his plan to chip away at Wisconsinites’ tax burdens by more than half a billion dollars by tapping into the state’s projected surplus of nearly $1 billion. The details, as we know them thus far, are as follows:

  • Cut property and income taxes by $504 million over the next 18 months.
    • $98.6 million income tax cuts for the lowest income tax bracket (individuals earning up to $10,910 would see their income tax rate fall from 4.4 to 4 percent). This would equate to a $44 to $58 cut per tax filer.
    • $406 million property tax cut ($101 for a median-valued home worth $151,000).

In addition to $504 million in property and income tax cuts, Walker’s plan would tweak income tax withholding rates to return an additional $322 million to hard-working families. According to the Governor, a working class family of four would keep an extra $58 per month as a result. That equates to hundreds of extra dollars each year for Wisconsinites who, along with most Americans, are struggling in the current economic climate thanks to rising health care costs and high federal taxes.

The Governor’s proposal should be applauded for its aim to give the state’s working class a boost, but the plan could be improved to spur additional economic growth. Currently, Wisconsin ranks 43rd in the Tax Foundation’s State Business Tax Climate Index, as corporations face a 7.9 percent income tax rate and individuals are stuck with five different personal income tax brackets, starting at 4.4 percent and topping out at 7.75 percent. Leaders in Wisconsin should take a look at what North Carolina accomplished last year when lawmakers passed legislation that reduced the corporate income tax rate and collapsed the Tar Heel State’s three personal income tax brackets into a one lower, flat rate, ensuring lower tax rates for all. By focusing on reducing personal and corporate income taxes, North Carolina’s tax cuts were better positioned to foster economic growth than Governor Walker’s plan.

While his proposal is expected to face some opposition in the State Legislature, Governor Walker should be commended for continuing to fight for taxpayers. The Wisconsin grassroots undoubtedly appreciate having a taxpayer advocate in the Governor’s Mansion and if, as some have suggested, he eyes a job opening in DC for 2016, weary taxpayers across the country would certainly applaud a push for lower taxes and smaller government at the federal level.

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New Report Raises Doubts about F-35 Jobs Claims
Posted By: Nan Swift - 01/22/14

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:

  • Lockheed Martin’s claim of 125,000 F-35-related jobs is roughly double the likely number of jobs sustained by the program. The real figure, based on standard estimating procedures used in other studies in the field, should be on the order of 50,000 to 60,000 jobs.
  • Similarly, the company’s claim that there is significant work being done on the F-35 in 46 states does not hold up to scrutiny. Even by Lockheed Martin’s own estimates, just two states – Texas and California – account for over half of the jobs generated by the F-35. The top five states, which include Florida, Connecticut and New Hampshire – account for 70% of the jobs.
  • Eleven states have fewer than a dozen F-35-related jobs, a figure so low that it is a serious stretch to count them among the 46 states doing significant work on the program. These states are Iowa, South Dakota, Montana, West Virginia, Delaware, Nebraska, North Dakota, Alaska, Hawaii, Louisiana and Wyoming.

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.”

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