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Bankrupting America’s Spending Daily

Posted: March 28, 2013 at 3:15 pm   /   by

Spending Daily | March 28, 2013

“The (86,000) budget-cutting ideas that got away”
The Washington Post reports, “After President Obama set up a national online suggestion box asking federal workers for new ways to cut the budget, 86,000 ideas came in. Some, inevitably, were a little odd. … But many others were more serious, sent in by people who had seen real government waste close up: Stop the ‘use it or lose it’ budgeting policy, which leads agencies to blow taxpayer money at year’s end; stop giving paper calendars to workers who already have online calendars; stop letting every armed service design its own camouflage. In the end, none of those things happened. Instead, those suggestions became a little-known part of the maddening story of Washington’s budget wars. Both parties, it turns out, have made wide-ranging efforts to survey the public about smart ways to cut the budget. The public responded — and then the politicians let most of the good ideas get away. Obama, for instance, chose 67 suggestions out of those 86,000. While some produced results, many seemed unambitious. Often, the administration picked ideas that applauded what it was already doing, instead of forcing it to start new reforms.”

Thousands of Federal Employees ‘Paid To Do Nothing’
The Washington Guardian reports, “As hundreds of federal employees face unpaid leave, a prominent Republican senator is demanding the government’s human resources office consider taking action against employees who aren’t doing their work on the government’s dime. Thousands of essential federal employees performing critical missions from food safety to national security are being threatened with furloughs, while others who are literally paid to do nothing or do not even show up for work are being retained,’ Sen. Tom Coburn, R-Okla., wrote in a letter he sent to the chief of the Office of Personnel Management (OPM). Employees who are AWOL, a military term meaning ‘absent without official leave,’ are costing the government millions in wasted hours, Coburn said.  A report he published in 2008 found that the government lost the equivalent of 9,410 years of work between 2001 and 2007 due to employees not showing up.”

Baucus Demands Answers on IRS “Star Trek” Video
The Hill reports, “The Senate’s top tax-writer wants answers from the IRS about a ‘Star Trek’ spoof that the tax-collecting agency has now apologized for making. Finance Committee Chairman Max Baucus (D-Mont.) said Wednesday that the video production wasted taxpayer dollars at a time when the federal government was struggling to collect all the revenue it was owed. Baucus also questioned why the IRS had a video production unit at all — especially at its reported $4 million a year price tag. The ‘Star Trek’ parody and a separate takeoff on ‘Gilligan’s Island’ cost around $60,000 in tandem, the IRS has said. …The IRS has also said it had installed more oversight on their video section in the last three years, and has more broadly defended its use of its studio. Miller said the IRS’s videos have helped eat into travel costs related to training, and that an IRS-produced video on tax refunds has received some 950,000 clicks on YouTube this filing season. The ‘Gilligan’s Island’ spoof, for instance, has been deemed a legitimate training exercise. ‘The in-house studio is more than 15 years old and allows us to develop educational videos in a cost-efficient way to train employees around the country and to inform taxpayers and partner groups of key tax administration messages,’ Miller wrote to Boustany.”

NYT: Sequester Cuts Hit Senate Barber
The New York Times reports, “They have survived the Civil War, the Great Depression and even Newt Gingrich. They are the caretakers of a Congressional institution that has often operated more like a gentleman’s club than a house of government, complete with a gilded members-only dining room, chandeliered sitting parlors and Carrara marble bath tubs. But the barbers of the UnitedStates Senate — along with a shoeshine attendant, a manicurist and the stylists who clip, color, feather and fluff senatorial locks from a basement salon across the street from the Capitol — may finally be losing their coveted status. Because of the automatic budget cuts known as sequestration, which are forcing government agencies to trim their spending and suspend some programs, the Senate will soon start privatizing its money-losing Hair Care Services unit, a cherished amenity that dates back to the early 19th century, when many senators lived in rooming houses with no running water.”

Numbers of Americans on Food Stamps Rise
The Wall Street Journal reports, “The financial crisis is over and the recession ended in 2009. But one of the federal government’s biggest social welfare programs, which expanded when the economy convulsed, isn’t shrinking back alongside the recovery. Enrollment in the Supplemental Nutrition Assistance Program, as the modern-day food-stamp benefit is known, has soared 70% since 2008 to a record 47.8 million as of December2012. Congressional budget analysts think participation will rise again this year and dip only slightly in coming years. The biggest factor behind the upward march of food stamps is a sluggish job market and a rising poverty rate. At the same time, many states have pushed to get more people to apply for SNAP, a program where the federal government picks up the tab. But there is another driver, which has its origins in President Bill Clinton’s 1996 welfare overhaul. In recent years, the law has enabled states to ease asset and income tests for would-be participants, with the encouragement of the Obama administration, allowing into the program people with relatively higher incomes as well as savings.”

 Pentagon Cuts Furlough Days by Nearly Half
The Associated Press reports, “The Pentagon will sharply cut the number of unpaid furlough days civilians will be forced to take over the next several months from 22 to 14, defense officials said Wednesday, reducing the impact of automatic budget cuts on as many as 700,000 workers. According to defense officials, Defense Secretary Chuck Hagel made the decision Wednesday, as military service chiefs and defense leaders continued to work through the details, trying to prioritize how they will allocate the more than $10 billion that Congress, in an attempt to take some of the sting out of the across-the-board budget cuts, shifted to operations and maintenance accounts. The officials spoke on condition of anonymity because they were not authorized to discuss the matter ahead of the public announcement. …Initially, civilians would have been required to take one day a week off without pay for 22 weeks, through the end of the fiscal year on Sept. 30 – a 20 percent pay cut for more than five months. The congressional action has given officials the leeway to lessen the salary cuts and also spread money around to other key priorities, including training, maintenance and possible ship deployments.”

When Interest Rates Rise on Borrowed Money, So Too Will Deficit
The Wall Street Journal reports, “Big borrowers are very sensitive to interest rates. The federal government is a big borrower. Even at today’s super-low interest rates, Washington spends a lot of money on interest — more than 6% of all federal spending last year. And it will spend more on interest as rates move back toward normal, as they surely will someday. The Congressional Budget Office expects rates on three-month Treasury bills (now close to zero) to be at 4% in 2023 and rates on 10-year Treasury notes (now around 1.9%) to at 5.2% in 2023. If current budget policies persist, more than 14% of federal spending will go to pay the interest tab. …Or, in a slightly different scenario, if interest rates rise as the highest 10 predictions of the private-sector economists surveyed by the Blue Chip Economic Indicators — that is, 4.5% on the 3-month Treasury and 5.8% on the 10-year in 2023 — then the federal deficit will be $157 billion bigger in that year then it would otherwise be, and $1.14 trillion bigger over ten years.”

Could ACA Be Repealed?
The National Journal reports on Sen. Mitch McConnell’s reaction to the Affordable Care Act’s individual mandate being designated as a tax and how the ACA could possibly be repealed. “Sitting at his desk a stone’s throw from the Senate chamber, McConnell turned to the aide and, with characteristic directness, said: ‘This decision is too cute. But I think we got something with this tax issue.’ He was referring to the court’s ruling that the heart of the 2010 Affordable Care Act, the so-called individual mandate that requires everyone in the country to buy health insurance or pay a penalty, was a tax. And while McConnell thought calling the mandate a tax was ‘a rather creative way’ to uphold the law, it also opened a new front in his battle to repeal it. McConnell, a master of byzantine Senate procedure, immediately realized that, as a tax, the individual mandate would be subject to the budget reconciliation process, which exempted it from the filibuster. In other words, McConnell had just struck upon how to repeal Obamacare with a simple majority vote.”

“Promises, Promises: Obama on Health Care”
The Associated Press reports, “Health care was the defining political battle of President Barack Obama’s first term, and – after the economy- it remains his most complicated policy challenge at home, central to his place in history. Fixing the system is a tall order as ‘Obamacare’s’ major coverage expansion takes effect this year and next. The U.S. is projected to spend $2.9 trillion on health care in 2013, approaching one of every five dollars in the economy, much more than any other advanced country. But Americans are not appreciably healthier and more than 48 million are uninsured. The nation’s mix of private insurance and government programs supports many of the world’s best hospitals, but overall the quality of care is uneven and much is wasted by lack of coordination and overtreatment, putting patients at risk. Fraud bleeds the system of tens of billions of dollars a year. … But can the administration deliver his promise of affordable, quality coverage for millions more uninsured Americans without a cost spike that undermines benefits for others? Costs will go up, not down, contrary to what Obama promised in his first term. But how fast?“ is an educational project of Public Notice, an independent, nonpartisan, non-profit, 501(c)(4) organization dedicated to providing facts and insight on the effects public policy has on Americans’ financial well-being.

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Bankrupting America's Spending Daily