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Government Spending

The Late Edition: February 27, 2013
Posted By:  - 02/27/13

Today’s Taxpayer News!

NTU joined twenty-one organizations in a bipartisan coalition to urge Congress to honor the scheduled Defense Department cuts as part of the sequester.  Read the Washington Post story.

There is a risk of tax hikes in the upcoming sequester dealings, as NBC national affairs writer Tom Curry asserts.

The Heritage Foundation has compiled a short video summarizing the many tax hikes that took affect under Obama for 2013.

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As Sequester Nears, Cutting F-35 Is a Great Place to Start
Posted By: Nan Swift - 02/26/13

Just in time for Friday’s sequester deadline, the F-35 fighter jet is back in the news to remind us that yes, Virginia, there is room to pare back the Pentagon budget. Last week’s grounding of the entire fleet, due to a cracked engine blade, was the second time in two months that flight operations have been suspended and was well-timed with a major Time Magazine article lambasting “the most expensive weapon ever built.”  While NTU has long voiced concerns over several aspects of the extremely costly and extremely troubled aircraft, it’s about time others start to take notice of how the Pentagon is wasting taxpayer funds on this  boondoggle.

Born out of the Joint Strike Fighter program in the late nineties, Time explains that over the past decade the F-35’s price tag has doubled to $396 billion, the program has been beset with one delay after another, and still:

Its pilots' helmets are plagued with problems, it hasn't yet dropped or fired weapons, and the software it requires to go to war remains on the drawing board.

The article goes on to describe how taxpayer funds have been abused and wasted at almost every step of the way:

It opted to build three versions of a single plane averaging $160 million each (challenge No. 1), agreed that the planes should be able to perform multiple missions (challenge No. 2), then started rolling them off the assembly line while the blueprints were still in flux--more than a decade before critical developmental testing was finished (challenge No. 3). The military has already spent $373 million to fix planes already bought; the ultimate repair bill for imperfect planes has been estimated at close to $8 billion.

Back in 2002, Edward Aldridge, then the Pentagon's top weapons buyer, said the F-35 was ‘setting new standards for technological advances’ and ‘rewriting the books on acquisition and business practices.’ His successor voiced a different opinion last year. ‘This will make a headline if I say it, but I'm going to say it anyway,’ Frank Kendall said. ‘Putting the F-35 into production years before the first test flight was acquisition malpractice. It should not have been done.’

The Pentagon and its allies say the need for the F-35 was so dire that the plane had to be built as it was being designed. (More than a decade into its development, blueprints are changing about 10 times a day, seven days a week.)

It would be easy to think that after so many years and so much money taxpayers will have a truly cutting-edge weapon at the end of the day. Unfortunately, that couldn’t be further from the truth:

Aviation Week & Space Technology magazine, the bible of the aerospace industry and a traditional supporter, published an editorial last fall that declared the program ‘already a failure’ on cost and schedule and said ‘the jury is still out’ on its capabilities.

J. Michael Gilmore, Christie's successor as the Pentagon's top weapons tester, reported in January that all three versions will be slower and less maneuverable than projected. Weight-saving efforts have made the plane 25% more vulnerable to fire. Only one of three F-35s flown by the U.S. military, he added, was ready to fly between March and October.

Read the whole thing here.

The increasing costs of the F-35 are even starting to give our allies second thoughts regarding their planned purchases of the jet. Recently, Canada announced it was reviewing plans to buy 65 F-35s – both due to the cost and potential refueling problems with the aircraft itself. Australia and Great Britain are also reconsidering their orders, while Italy has gone ahead with cuts.

So how did taxpayers get stuck with this high-tech albatross that is seven years behind schedule and 70 percent over initial cost estimates?  Bloomberg.com sums this up:

It is also the defense project too big to kill. The F-35 funnels business to a global network of contractors that includes Northrop Grumman Corp. (NOC) and Kongsberg Gruppen ASA of Norway. It counts 1,300 suppliers in 45 states supporting 133,000 jobs -- and more in nine other countries, according to Lockheed. The F-35 is an example of how large weapons programs can plow ahead amid questions about their strategic necessity and their failure to arrive on time and on budget.

Only a few years ago, taxpayers were asked to bail out private institutions because they were “too big to fail.” Now, even as we face record debt and politicians crisscross the nation wringing their hands over a mere 2.4 percent pullback in total expenditures that they are certain will doom us all, taxpayers are being  forced to continue footing the bill for “too big to kill.”

Buying into the sunken-cost fallacy – throwing good money after bad – is not a path to sound policy, or  a strong defense for that matter. Billions of dollars have been wasted that could have been allocated to other successful military programs, to modernization, or even to finally auditing the Pentagon (a small investment of taxpayer money that could yield big returns).

Sadly, it looks like the F-35 will continue to be with us for now:

But thanks to $4.8 billion in Pentagon contracts for 31 planes pushed out the door barely 100 hours before the original Jan. 2 sequestration deadline, much of the program will continue on autopilot.

But it does help make the point that as the “dreaded” sequester looms Pentagon spending should be on the table, because there’s plenty of room for savings.  The Cato Institute has an excellent graphic here that helps to put the sequester in perspective, explaining that the coming cuts will only take us back to 2006 defense spending levels, which is still more than $100 billion over what we were spending during the Cold War. And while the sequester does call for some immediate short-term cuts in spending, military expenditures are projected to continue rising, albeit not as quickly, as we go forward.

That fact, more than the small chunk of spending restraint taxpayers get from the sequester, should strike fear in your wallet. The sequester is an important first step, but without other tough decisions and serious reforms, we still have an out-of-control spending situation on our hands. At the end of the day, as NTU Taxpayers’ Friend Award winner Congressman Justin Amash (R-MI) stated, “We’re bankrupting our country, and it’s going to put us in danger.”

 

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AFP’s Christine Harbin on What’s Next for Energy - Speaking of Taxpayers, Feb. 22
Posted By:  - 02/24/13

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Americans for Prosperity Policy Analyst extraordinaire Christine Harbin joins the podcast to discuss what President Obama's recent comments on 'regulatory' cap-and-trade and in his State of the Union mean for energy policy & taxpayers. Plus the Outrage of the Week!
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NTU and Foundation Poll Youth Conference for Their Important Issues
Posted By: Dan Barrett - 02/21/13

Staff from the National Taxpayers Union and NTU's research and education arm, NTU Foundation, participated in the 2013 International Students for Liberty Conference (ISFLC) with one question for attendees: What policies will you fight for? Over the course of the weekend, students and young adults responded by voting for one of six issues that we thought Americans of all ages could at least agree needs addressing. Many attendees were interested in the mission of NTU and NTUF and asked us many, often challenging questions. I recall one conversation about the economic and realistic reasoning behind whether or not to establish a federal Balanced Budget Amendment. Some even took up the cause of lower taxes and less government by becoming members of NTU or saying that they would enjoy the opportunity to intern with us over the summer. If you’re interested, check out our Internship page. We accept interns year-round and there’s a lot of government to roll back. Still others were looking to show their support for NTU and Foundation in other ways:

Blogger and Vlogger Julie Borowski stopped by for a bumper sticker and a picture

We asked people to cast a vote for their number one issue that needs reform right now. Our six fishbowls highlighted some of the issues we thought the ISFLC participants would identify with the most. The issues were: a Balanced Budget Amendment, cutting the Pentagon budget, ending the Federal Reserve, less spending, real tax reform, and right to work. One lucky entry would be drawn to be interviewed on NTU's Speaking of Taxpayers podcast. The Results were interesting:

Issues Voted on by Participants at
the 2013 International Students for Liberty Conference
Issue
Percentage of Overall Votes
Balanced Budget Amendment
13%
Cut the Pentagon Budget
7%
End the Fed
33%
Less Overall Spending
19%
Real Tax Reform
8%
Right to Work
6%
Other
14%
Note: Not necessarily representative of all ISFLC participants

We also found that these six issues were just the tip of the iceberg. On a separate board, students pinned other ideas on where NTU and Foundation can help out taxpayers, including stopping sin taxes, ending corporate welfare, and fighting for bacon (yes, we had some serious bacon fans at ISFLC). All of this proved that young people are just as interested in the important fiscal issues as any other age group.

Thanks to everyone who came by our booth and let their voices be heard and congratulations to Annie Setten who will be interviewed next Friday!

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The Late Edition: February 21, 2013
Posted By:  - 02/21/13

Today’s Taxpayer News!

A recent spree of retiring members of Congress is reinvigorating the debate over taxpayer-funded pensions. Read an overview from Anchorage Daily News, including pension estimates from NTU.

Can Congress and the President find a way to simplify the complex tax code in the coming year? Forbes contributor Howard Gleckman discusses the importance of tax reform

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Outrage of the Week! (AUDIO): State Senator Puts Luxury Shopping Spree on Taxpayer’s Tab
Posted By:  - 02/20/13

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Serving the people of New York: priceless; for everything else there's taxpayers... A former New York State Senator, with a current Assemblywoman as partner in crime, used some dastardly accounting to get state funds into her wallet for an expensive shopping extravaganza. 
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The Late Edition: February 20, 2013
Posted By:  - 02/20/13

Today’s Taxpayer News!

Arm yourself with the facts on the impending sequestration from Before It’s News, citing NTU’s overview.

A politician returning money to the treasury instead of demanding more? Kentucky Senator Rand Paul announced today that he’ll be returning $600,000 in unused funds to the United States Treasury.

The link between a higher minimum wage and increased unemployment is undeniable. Check out this chart from Fox Business.

unemployment

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Speaking of Taxpayers, Feb. 15: The $83.4 Billion State of the Union
Posted By:  - 02/18/13

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NTUF's Director of Research and author of the line-by-line cost analysis of the President's State of the Union joins the podcast to run down what President Obama talked about Tuesday night.   
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The Late Edition: February 18, 2013
Posted By:  - 02/18/13

Today’s Taxpayer News!

NTU opposes the Marketplace Fairness Act, a scheme to tax online purchases. Read the full story from the Daily Comet.

The Aspen Daily News takes a detailed look at a number of the tax tinkering proposals President Obama and the Democrats in Congress are likely to attempt in order to avoid the $120 billion in automatic spending cuts due to set in March 1st.

In honor of President’s Day, take a look at the chart below courtesy of the American Enterprise Institute graphically illustrating the percent of spending increases under the past five presidents. Note: This data was compiled in May of 2012.

Pres Spending

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The Late Edition: February 14, 2013
Posted By:  - 02/14/13

Today’s Taxpayer News!

NTU joined several other fiscally conservative organizations in support of a bill by Rep. Ron DeSantis (R-FL) which would extend the temporary Congressional pay freeze. Read the full story from The Hill.

NTU’s Pete Sepp weighs in on the 40 proposals from President Obama’s State of the Union speech, and NTUF’s line-by-line analysis of the cost for those where a cost could be calculated. The full article is from CNBC.

Did you know that Valentine’s Day has strong economic themes?

Check out this illuminating video from Learn Liberty outlining the economics of Valentine’s.

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