Tag Archives: Government spending

Public sector employees doing well

Below, Steven M. Greenhut tells how — despite a poor economy — public sector employees are doing quite well. I don’t think the problem is quite as bad here as it is in Greenhut’s home state of California. But just this week the Wichita City Council voted, in spite of a tight budget that has produced layoffs and outsourcing of city employees, a one-time payment of two percent of their annual salary to Wichita municipal court judges. This was made in lieu of merit pay.

Greenhut’s recent book is Plunder!: How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation. I’m looking forward to reading it.

The economy is struggling, the unemployment rate is high, and many Americans are struggling to pay the bills. But one class of Americans is doing quite well: government workers. Their pay levels are soaring, they enjoy unmatched benefits, and they remain largely immune from layoffs, except for some overly publicized cutbacks around the margins.

As I document in my new book, Plunder!, government employees of all stripes have manipulated the system to spike their pensions. The old deal seemed fair: public employees would earn lower salaries than Americans working in the private sector, but would receive a somewhat better retirement and more days off. Now, public employees get higher average pay, far higher benefits, and many more days off and other fringe benefits. They have also obtained greatly reduced work schedules, thus limiting public services even as pay and benefits shoot ever higher. The new deal is starting to raise eyebrows, thanks to efforts by groups such as the California Foundation for Fiscal Responsibility, which publishes the $100,000 Club, a list of thousands of California government retirees with six-figure, taxpayer-guaranteed incomes.

The story doesn’t end with the imbalance in pay and benefits. Government workers also enjoy absurd protections. The Los Angeles Times published a recent series about the city’s public school district, which doesn’t even try to fire incompetent teachers and is seldom able to get rid of those credibly accused of misconduct or abuse.
The real scandal is a two-tier society where government workers enjoy benefits far in excess of those for whom they supposedly work. It’s past time to start cleaning up the mess by reforming retirement systems and limiting the public unions’ power.

Steven M. Greenhut is director of the Investigative Journalism Center and News Bureau at the Pacific Research Institute. He is also a Goldwater Institute Senior Fellow.

Obama faces earmark test

A test for President Barack Obama is coming up soon.

When campaigning for the presidency, Obama pledged to end earmark spending. As reported earlier this year in Time Magazine: “… both Obama and Republican nominee John McCain tried to outdo each other with their pledges to rid Washington of the notorious pet projects that legislators slip into spending bills. Obama, who authored 2007 legislation to overhaul congressional ethics rules governing lobbying and earmarks, runs a real credibility risk when he makes exceptions to his own rules.”

But did he make a pledge to end earmarks? MediaMatters says he didn’t make a specific pledge. But he certainly criticized the earmark process.

At any rate, a bill loaded with earmarks is heading to the president for his signature. As reported in the New York Times: “The bill includes 1,720 earmarks costing $4.2 billion for lawmakers’ pet projects, according to the watchdog group Taxpayers for Common Sense.”

Earlier this year, Obama signed a spending bill that contained earmarks. His defenders said that it was “last year’s business.”

Fair enough. Obama inherited certain conditions upon assuming office. But now — at least as far as this spending bill is concerned — it’s all his own doing.

We’ll know soon how Obama really feels about earmark spending.

Rep. Steve Brunk on Kansas taxes and spending

Speaking to the Wichita Pachyderm Club on Friday, Kansas Representative Steve Brunk (Republican from Bel Aire) addressed taxation and spending in Kansas government.

Brunk said “We need more taxpayers, not more and higher taxes.” In evaluating legislation, he said he asks these questions: Does this help the state of Kansas bring companies to the state, and does it offer encouragement to companies already here?

Kansas is usually just about in the middle of all states in ability to attract companies to the state. We should be able to better than that, and a way to do better is to reform our taxing environment.

Some of our taxes should go away. The franchise tax is in the process of being phased out. That money is now available to make capital investment and create more jobs.

The corporate income tax should be eliminated, he said. The death tax or inheritance tax is inherently unfair, as people should be able to pass their estates to heirs without being tax.

Also, the capital gains tax is punitive, he said. It should be reduced or eliminated.

“We need a low and predictable tax base, so that we can attract businesses to Kansas to provide jobs without having to offer special and unique incentives.”

When revenues have increased in Kansas, we spent it rather than setting some aside in a rainy day fund. When revenues have not increased as quickly, it causes problems with the budget. Today, we’re probably facing a period of slow growth.

Brunk showed a chart of Kansas spending as compared to the inflation rate. Spending increased much faster, almost four times faster, he said, adding that this is unsustainable.

So Brunk has proposed what he termed a “speed limit.”

The spending problem is due to Republicans and Democrats alike, although Brunk said Republicans are amateurs at spending compared to Democrats. Without Republican help, budgets could be passed. There is a core of about 55 or so conservatives in the Kansas House of Representatives. The rest of the House Republicans are willing to spend along with the Democrats.

To this end, Brunk has proposed a constitutional amendment that he calls the REAL Act: Revenue and Expenditure and Assessment Limitations.

One thing this act does, he says, is to limit the rate of growth of spending to the rate of inflation. This would force the state to prioritize what it spends on, and to take a look at finding excess spending. Existing programs would be reviewed.

The REAL act would also limit the ability to increase taxes or start new taxes by requiring a two-thirds majority in the legislature.

The REAL act also provides for a rainy day fund, sometimes called a budget stabilization fund. The money in this fund could be used only to stabilize the budget when revenue drops below the rate of inflation growth. After this fund is full, an emergency fund would be created and funded for dealing with disasters such as the Greensburg tornado or the southeast Kansas floods.

We also need to avoid download state spending to counties, he said. There could be no mandates with accompanying funding.

Turning to property taxes, Brunk mentioned Proposition K, an effort to stabilize property taxes. Introduced in this year’s legislative session, the measure was referred to a tax subcommittee that didn’t do much to advance the proposal. Based on feedback and concerns, he’s going to adjust Proposition K and introduce it again.

Responding to a question from the audience, Brunk said that he conceptually likes the idea of a Fair Tax, a tax based on consumption rather than income or property ownership. Later, someone else asked, in jest, if an exemption for cigars could be part of a consumption tax law.

Answering another question, Brunk said that a problem with Kansas budgeting is that we have “add-on” budgeting instead of zero-based budgeting. Each year agencies must justify not their entire budget, but only the additional amount that they’re asking for this year.

Analysis

The REAL Act, as described on The Kansas Real Act page, is much like the Taxpayer Bill of Rights proposals, in that it limits spending to inflation plus population growth. These measures are universally and vigorously attacked by government spending advocates such as teachers unions and public employee unions, as they, amongst others, live off of ever-increasing government spending.

In my opinion, the components of the REAL act — limits on tax increases, the requirement of a supermajority to increase taxes, and a rainy day fund — are eminently sensible. Whether these measures can be passed as a package as a constitutional amendment is difficult to answer. In Kansas, such amendments require passage by two-thirds of the Kansas House and Senate, and then by a majority vote of the people. Action by the governor is not required, not can the governor block an amendment, except through persuasion of the legislature or the people.

An amendment to the constitution is required for any laws of this type to be truly effective. Kansas law already requires that the state hold ending balances of 7.5% in its funds. But each year the legislature decides to waive or ignore this law. That can’t be done, to my knowledge, to measures that exist in the constitution. Similarly, the Kansas Supreme Court can’t overrule the constitution and order the legislature to take action, as it has done with K-12 school spending.

The difficulty in passing clear and coherent laws was illustrated by the question about the exemption for cigars. Although proposed in jest, there will be constituencies that will be quite serious about exemptions to nearly any law that is passed.

Myths of Roosevelt and the New Deal presented in Wichita

Yesterday Burton W. Folsom, professor of history at Hillsdale College spoke to a capacity crowd at a luncheon sponsored by Americans for Prosperity-Kansas and the Flint Hills Center for Public Policy.

His topic was three myths of the New Deal, based on his recent book
New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America.

The first myth is that the New Deal got us out of the Great Depression, or at least made good headway. Massive spending and a doubling of the public debt, however, didn’t do much to cure unemployment, as admitted by Roosevelt’s treasury secretary Henry Morgenthau, Jr.

Besides unemployment, other measures were bad. The arrest and murder rate was high throughout the 1930s. Life expectancy, which had increased rapidly in the decades before Roosevelt’s presidency, declined slightly during his first two terms.

Why didn’t spending solve the problem and lift us out of the Great Depression? The money to support government spending has to come from somewhere. Even if the money is well spent — and there’s ample evidence it isn’t — it would have been spent in the private sector when it was in the hands of taxpayers. Government spending only shifts jobs from the private sector to the public sector.

The second myth is that if the New Deal didn’t get us out of the Great Depression, it was at least a step in the right direction, a view commonly held today. A look at specific programs tells a different story.

The Agricultural Adjustment Act (AAA) paid farmers to leave some of their land vacant, thereby reducing their production. Prices for crops, then, should go up. Some farmers, however, took the money, and then planted on the land that was to remain vacant. So Roosevelt sent inspectors. Farmers bribed the inspectors, so Roosevelt had inspectors inspect the inspectors. Then aerial surveillance started.

Then, in 1935 there were shortages of farm products. We imported 11 million bushels of wheat, 34 million bushels of corn, and 36 million pounds of cotton — at the same time we were paying farmers to not produce these products.

The National Recovery Act (NRA), another of Roosevelt’s programs, lasted for 2.5 years before it was unanimously ruled unconstitutional by the Supreme Court.

Folsom told how Massachusetts — back then a conservative state with a free-market orientation — took care of their own hungry people. But after seeing what other states (Illinois in particular) did to get federal funds, Massachusetts decided to take federal money.

The third myth is that Roosevelt had good intentions. His actual goal was to put together a political coalition so he could remain in office. The WPA, in particular, served to reward loyal Democrats with jobs, and to do actual campaigning for Roosevelt. He was also the first to use the IRS as a weapon against his political opponents.

Concluding, Folsom gave his recommendation for today: “We need to remember that massive spending did not work well back then. It carries with it a host of unintended consequences. Cutting taxes can often liberate people, produce more freedom, and turning the American economy loose with lower tax rates and more individual liberty would provide more of an opportunity to get us out of the current recession.”

Wichita Tea Party on Tax Day Flyer

Wichita Tea Party Protest: Flush Twice

Susan Estes has created a printable flyer to promote the Wichita tea party protest on tax day, April 15. Click on Wichita Tea Party Planned for Tax Day, April 15 to learn more about the event.

Thanks to Susan Estes for creating the flyer, and for the great imagery. It hints of one of the themes of the protest, which is “Flush twice, it’s a long way to Washington!”

Click on Wichita Tea Party Tax Day Flyer to download the printable flyer. It’s a pdf file.

Kansas blogger prone to exaggeration

Jason Croucher, writing in the Kansas Jackass blog, says that we’re spending trillions on the Iraq war and little domestically. Is this really the case?

A running tally of the cost of the war from CostOfWar.com is at about $605 billion. That’s in line with other estimates. It’s true the war is going to continue to cost a lot for some time, and the cost may well exceed $1 trillion at some time in the future, but that’s a lot different from saying “all those trillions spent in Iraq.”

Then there’s this from Croucher: “Ah, but then, suddenly, the federal government did something they haven’t done in years — they actually spend [sic] some money domestically!”

I realize that Croucher is exaggerating a bit — okay, a lot — in order to be sensational and amuse his readers. But to say that federal domestic spending hasn’t been increasing is far from factual.

Croucher may have been relying on material such as that presented by the left-leaning Center on Budget and Policy Priorities. (This might be the case if he’s doing any actual research when forming his opinions instead of parroting leftist talking points.) Their analysis shows that federal domestic spending is growing less rapidly than defense and security spending for the period 2001 through 2008. Relative to this spending, domestic spending is shrinking, they say.

This analysis, however, ignores the fact that spending has been increasing, and rapidly, too. Numbers will illustrate this.

The Heritage Foundation has a series of charts prepared from the historical tables of the U.S. budget. One chart, titled Since 9/11, Federal Spending Has Increased Much Faster Than Inflation, contains this analysis: “Total nominal spending has increased 97.6 percent since 1992, while the Consumer Price Index has increased a relatively modest 47 percent, which means that government spending is growing much faster than inflation. Less than half of the increase in federal spending came from defense and homeland security spending.”

So federal spending is growing, and it’s not all on the war and homeland security.

While the Iraq was is expensive, it’s nowhere near the budget-buster that Croucher might have you believe. The chart titled Despite War Costs, Defense Spending Falls Below Historical Average tells the story that even though defense spending is rising, it is still below — way below — spending in recent periods (as a percent of GDP) .

The spending whose absence Croucher laments has, in fact, been increasing rapidly — even during the recent Bush presidency. The chart Mandatory Spending Has Increased Almost Five Times Faster Than Discretionary Spending illustrates. The mandatory spending shown in this charts is mostly social security, Medicare, and Medicaid spending. That’s all domestic.

Remember too that it was George W. Bush who started the prescription drug benefit program for seniors. That’s an expensive program.

Perhaps the greatest Wichita Eagle opinion line ever

“It is a popular delusion that the government wastes vast amounts of money through inefficiency and sloth. Enormous effort and elaborate planning are required to waste this much money.”

This appeared in the Wichita Eagle on March 13, 2009. Originally, it appeared in Parliament of Whores: A Lone Humorist Attempts to Explain the Entire U.S. Government, a book written by the very funny P.J. O’Rourke.

Kansas Fed-Up with High Taxes

Here’s a press release from the Kansas chapter of Americans For Prosperity reporting on the results of a poll about taxes and spending in Kansas.

Interestingly, the poll found that a majority of lower-income Kansans are opposed to higher taxes on high income earners. This goes against the theme of some authors, including Thomas Frank, the author of the book “What’s the Matter with Kansas,” who argue that working-class people should vote their pocketbooks. Meaning, of course, soak the rich.

Study Finds Kansas Fed-Up with High Taxes and Wasteful State Spending

Lower-Income Residents Oppose Tax Hikes, Even if They Don’t Pay

TOPEKA — A new survey by the free-market grassroots group Americans for Prosperity finds that 57 percent of Kansans believe the state’s taxes are too high, with 51 percent disapproving of the way the state legislature handles budget and tax issues. When asked to identify the most important issue in state budgeting, 43 percent identified wasteful spending on programs that do not work.

“Kansas taxpayers have simply had enough,” said Derrick Sontag, state director of the Kansas chapter of Americans for Prosperity. “Legislators must work to address wasteful government spending before they even consider raising taxes on Kansas families and businesses.”

The survey also finds that lower-income Kansans oppose higher taxes, even if they are not forced to pay them. A solid 60.3 percent of respondents earning under $30,000 rejected the idea of raising taxes on others.

Respondents also rejected the idea of taxes that are paid for by working poor and lower income groups, with a decisive 91 percent opposing the taxes.

The survey was conducted by Voter/Consumer Research, and is based on the responses of 613 registered voters across the state, conducted by telephone Jan. 28- Feb. 2 of this year. The margin of error is +/- 4 percent.

The complete national and state results can be viewed at www.americansforprosperity.org/tax-survey.

Wichita Tea Party News Coverage on KSN Television

The Wichita Tea Party protest as covered by KSN Television, February 27, 2009. A very good job by reporter Josh Witsman.

“Someone needs to go and cut up Congress and President Obama’s credit card, because it’s not their credit card — it’s our credit card.”

Wichita Tea Party Citizen Report

A citizen report submitted by John Todd. Photos are available by clicking here. More coverage and video can be viewed by clicking here.

An estimated 100-plus citizen activists assembled today near Second and Waco Streets to participate in a protest of the federal stimulus package and bailouts. The event was billed as The Wichita Tea Party. Two men drove 200 miles from Garden City to attend. Other Kansans were here from Abilene, Hutchinson, Andover, and Augusta.

A gentleman from the Kansas City area came dressed in a pink pig suit with a sign denouncing “pork spending.” He delighted the crowd.

In addition to children, one lady brought her dog with a protest sign around his neck, reading “I didn’t read it either.”

A couple of middle-aged women from Wichita arrived early at the event indicating that this was their first involvement in citizen activism, and that they were hot about the stimulus spending that was emanating from Washington.

Staffers from Congressman Todd Tiahrt’s office participated along with dozens of like-minded citizens and several activist coalitions complaining about the stimulus.

The crowd carried signs, waved at passing cars whose drivers honked and gave thumbs-up signs marking their approval of the tax protest movement.

The event was a tremendous success and shows just what grassroots citizen activists can do to express their feelings of frustration towards a government that appear to have lost sight of the people who actually pay the bills. A general feeling among the crowd was that many of our leaders in Washington are moving our country towards an involuntary redistribution of wealth known as socialism.

They also appreciate the members of the Kansas congressional delegation who voted against the stimulus package.

Wichita Tea Party Photos

Wichita Tea Party, February 27, 2009

In Wichita, it was a cold day with a freezing wind, but quite a few protesters –human, canine, and porcine — came out to show their displeasure with the direction of our country. Appreciation was also expressed for the members of the Kansas Congressional delegation who voted against stimulus pork and bailouts.

Wichita Tea Party, February 27, 2009

Click here for more photos from this event. Or, click here for an automatic slideshow.

See more coverage by clicking on Wichita Tea Party.

In Wichita, Angry Citizens Revive Boston Tea Party Protest

Wichita Tea Party organizer Nancy Armstrong talks about Friday’s Wichita Tea Protest on KAKE Television:

Coverage at KAKE Television is at Angry Citizens Revive Boston Tea Party Protest.

Other stories at Voice For Liberty in Wichita are at
Wichita Tea Party
Area Residents Plan Wichita Tea Party
Wichita Tea Party, from AFP

Wichita Tea Party, from AFP

Here’s a message from Americans For Prosperity’s Kansas state director Derrick Sontag about the Wichita Tea Party this Friday.

It started with people like you, logging on and signing our petition at NoStimulus.com, and now we have a full-blown grassroots movement on our hands.

One such activist, Nancy Armstrong, supported Hillary Clinton in the 2008 primary and even went on the road, campaigning for the former New York Senator. But while on the campaign trail, Nancy learned more than she anticipated about the Obama campaign. Now she’s joining the fight against the massive deficit spending bill by organizing the Wichita Tea Party, part of the nationwide grassroots movement that’s spreading like wildfire from coast to coast.

Join Nancy at a rally this Friday outside Senator Sam Brownback’s Wichita office:

Wichita Tea Party
11:30 a.m., Friday, Feb. 27
Senator Sam Brownback’s Office ( Farm Credit Bank Building, 245 N. Waco, Wichita)

Let’s help support this cause tomorrow — bring your homemade signs and show your appreciation to Sen. Brownback for opposing this federal bailout bill, and your frustration for this bloated spending bill.

This stimulus package is not only detrimental to our national economy, but it has immediate implications right here in Kansas. Our state faces a $1 billion budget shortfall, and we need budget reform — now. This federal bailout bill for the states will be too much of a temptation for our legislators, who may see this as a way to avoid making those tough budget decisions that come with real and meaningful budget reform.

Area Residents Plan Wichita Tea Party

Grassroots movement sweeps into Wichita with anti-stimulus rally

WICHITA — Grassroots activists in Wichita will rally outside Sen. Sam Brownback’s office on Friday, to show their appreciation to the senator for opposing the federal stimulus bill, and to demonstrate their frustration with big government spending.

Nancy Armstrong, Garden Plain, organized the rally at 11:30 a.m. Friday, Feb. 27 outside Sen. Sam Brownback’s office (245 N. Waco, Wichita).

Sen. Brownback voted against the federal bailout bill. Armstrong said Friday’s rally is intended to thank the Senator for standing in opposition to this bill, but also to let everyday Kansans vent their frustration with the current spending in Congress.

Armstrong previously worked for the 2008 presidential campaign for Hillary Clinton, but has since devoted her efforts to opposing the big-government, liberal schemes put forth by Congress and the Obama Administration.

“The powers in Washington are out of touch with the American people,” said Armstrong. “But Americans taxpayers are not going to take all of this spending lying down.

“We’ll keep reminding our elected officials that we’re not happy with this ‘porkulus’ bill, and we’ll certainly remember this in the 2010 elections.”

The Wichita Tea Party will be held simultaneously with local tea parties nationwide as part of a growing nationwide movement allowing everyday citizens to voice their opposition to the federal stimulus package.

For more information, contact Nancy Armstrong at 316-990-6009 or [email protected].

Is Boeing tanker “victory” good for America?

A Wall Street Journal editorial from March 18, 2008 (Patriot Tanker Games) argued that calls on Capitol Hill for “patriotism” in defense procurement are misguided. Leaders of this call include Kansas’s very own Todd Tiahrt and Pat Roberts.

These politicians say that allowing an important American defense system to be built in partnership with a European firm is dangerous for America. In testimony to the defense appropriations subcommittee Rep. Tiahrt stated “I am outraged by this decision to outsource our national security … We are stacking the deck against American manufacturers, at the expense of our national and economic security.”

But the Journal editorial sees clearly through the haze: “What’s really going on is a familiar scrum for federal cash, with politicians from Washington and Kansas using nationalism as cover for their pork-barreling … The modern aerospace biz is an increasingly global affair, and more than half of the Northrop/EADS tanker (by value) will be made in America. Much of Boeing’s tanker would also have been built outside the U.S.”

If the tankers are built by Boeing that means more jobs for Wichita, which Tiahrt represents. Bringing home jobs and pork, it seems, are one of a United States Congressman’s most important jobs. But as the Journal editorial points out, the Defense Department has broader responsibilities: to American taxpayers across the country, and to American soldiers. If the Pentagon believes the Northrop/EADS tanker proposal is best for American security and taxpayers, on what basis can Todd Tiahrt, Pat Roberts and the rest of the Kansas congressional delegation object?

Every congressman and senator wants to do for their district or state what Tiahrt and Roberts are doing for Wichita and Kansas. This desire leads to never-ending battles for a share of federal spending. Spending is often allocated based on political considerations instead of reason.

The Journal editorial is absolutely correct when it concludes that “Protectionists in Congress want to make America’s soldiers wait even longer for this new equipment, all to score political points at home. There’s a word for that, but it’s not patriotism.”

George W. Bush leads in discretionary spending

In an article published by The Cato Institute (Bush Beats Johnson: Comparing the Presidents), we can read this:

Revised data released during the summer by the Congressional Budget Office (CBO) provide analysts the ability to make side-by-side comparisons of the spending habits of each president during the last 40 years. All presidents presided over net increases in spending overall, though some were bigger spenders than others. As it turns out, George W. Bush is one of the biggest spenders of them all. In fact, he is an even bigger spender than Lyndon B. Johnson in terms of discretionary spending.

This is before the prescription drug plan spending has started, and before costs from the recent hurricanes were known.

It makes me long for the days of the Clinton presidency, when a Congress led by the opposing party seemed to hold spending in check. But now that Republicans hold both Congress and the White House, it seems that spending is spiraling out of control.