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Issa: Time for another government bailout
The declining demand for traditional mail delivery service presents a crisis for the U.S. Postal Service (USPS). A continued imbalance of costs and revenues means taxpayers could be asked to bail out the independent government agency, which is required by law to be self-funded.
As labor contract renegotiations between USPS and its employee unions commence this fall, Congress should reject requests to delay again billions of dollars in future retiree health insurance obligations that USPS is required to meet annually. The problems need to be addressed now. Postponing billions in unmet obligations won't help.
The predicament in which USPS finds itself is not uncommon. Because of the ever-increasing reach of the Internet and digital media, bookstores, record stores and DVD rental chains have all seen their customer base and profits decline dramatically. Unlike these other affected businesses, USPS cannot simply go out of business or declare bankruptcy. The need to downsize the labor force and reduce costs to reflect declining demand and new market conditions needs to be the first priority of both workers and management.
Labor costs account for 80 percent of USPS operating expenses. Yet because of union contracts that contain "no-layoff" clauses, thousands have less than a full day's work, and some are even paid to sit in empty rooms.
Last year, USPS revenues declined 9.1 percent, and without permission from Congress to delay requirements to pre-fund some worker benefit plans, the Postal Service would have lost $5.2 billion. A $7 billion loss is anticipated this year.
Chart: Post office by the numbersWhile postal employee unions have cooperated on efforts to reduce the work force through attrition and incentives for early retirement, those efforts simply have not resulted in the kind of change and transformation USPS needs to cover its costs. Unions have balked at the idea of changing contracts that refuse to allow necessary layoffs even if workers would be offered the opportunity to be retrained and fill other positions in the federal government.
The difficulty and uniqueness of the situation for USPS is that there is little incentive to cut costs. Under current labor agreements, if USPS and its employees have a dispute over compensation, the negotiations are sent to a binding arbitration board. Unlike almost any normal labor arbiter in a private business, this board does not have to consider the financial condition of USPS when deciding compensation questions.
Postal employees have incentives for holding tight to negotiating positions. They correctly recognize that USPS is too important to shutter. Moreover, they know that a deeply indebted Postal Service leaves the federal government with no real alternative to a taxpayer bailout as the situation approaches insolvency. Indeed, a sheep's-clothes argument already is being put forward by the postal lobby and some Democratic lawmakers for a $75 billion taxpayer bailout of USPS.
No union has or ever will lobby for a layoff, so it's up to USPS management and Congress to demand concessions. Congress must protect the clear interests of taxpayers and postal customers and demand an agreement between labor and management that lays the foundation for a viable business plan for a truly self-funding Postal Service. Allowing USPS to postpone billions in obligations just makes a bailout easier and takes away one of the few inducements for a compromise between USPS and postal worker unions.
If compromise fails, Congress has an obligation to fix the Postal Service's budget imbalance not through a bailout, but through new mandates to cut costs and revise labor agreements.
Rep. Darrell Issa of California is the ranking Republican member of the House Committee on Oversight and Government Reform. Issa: Bailouts Are Not Smart Reform
By Rep. Darrell Issa America needs smart financial reforms that protect investors from fraud, address government regulatory failures and keep the government in the role of an unbiased quality-control technician instead of a corporate owner or bailout backstop. But if the Democrats in Congress get their way, we can expect more bailouts, more centralized control of our economy and more waste, fraud and abuse. Indeed, when regulators are given unchecked power and limitless discretion, they become unmanageable. Too often, large federal agencies are swollen fat on the taxpayers’ financing, and with no profit-driven pressure to keep costs down, they end up wasting taxpayers’ money. Moreover, unchecked regulators are susceptible to abuses of power that deliberately favor some particular faction or constituency. And sometimes, unsupervised regulators and the largest business interests team up to scratch one another’s backs. We call that crony capitalism. Waste, abuse and crony capitalism — in that escalating order — are the inevitable problems of big, unchecked government. That’s why I’m skeptical of the Democrats’ plans to fix our financial system by setting up complex new agencies, staffing them with lawyers and bureaucrats, and giving the bureaucrats vague new powers and a blank check to execute those powers. Nobody would argue that the financial industry doesn’t need reform. I certainly don’t. But we need reforms that will not entrench the same problems that have compromised smart regulation in the past and allowed the worst offenders to go undetected until years after they have absconded with billions of investors’ assets. First, even well-meaning regulatory enterprises are prone to waste and mismanagement. Sometimes the waste results from outdated practices. Recently, Congressional investigators discovered that the Securities and Exchange Commission still reviews large companies’ lengthy financial statements manually — using printouts, pencils and calculators — decades after the entire private financial industry has adopted electronic tools that automatically analyze the numbers. Sometimes the waste results from unmanageable, unwieldy structures. Currently, the chairman of the SEC has as many as 18 different organizational units reporting directly to her — too many for even the most talented manager. It’s no surprise that concentrations of power, rivalries and information silos have developed at that agency. The Senate bill makes no attempt to address these inefficiencies at the SEC and other agencies. Instead, it sets up new regulators, while loading additional responsibilities and powers onto existing regulators, including the SEC. Second, bureaucrats with wide, vague statutory authority sometimes abuse it to assist a favored group or narrow agenda. House Oversight and Government Reform Committee investigators discovered, for instance, that New York Federal Reserve Bank officials asserted control over American International Group’s public statements and securities filings. They used this power to delete key details about AIG’s taxpayer-funded bailouts — details that would have revealed that AIG’s derivatives counterparties were receiving 100 percent of their original investments. The cover-up benefited AIG’s counterparties by allowing them to escape public outrage. The Senate bill gives Washington bureaucrats the power to break up companies that — in their judgment — have become a threat to the financial system. This power, especially if never used except as a threat, would give the bureaucrats tremendous, easily abused informal authority over the private sector. Third, full-blown crony capitalism exists when federal regulators effectively control a large company, protect it from competition and use it to pursue government goals. This is exactly what has happened to General Motors — at the expense of customers, taxpayers and the long-term health of the American economy. It’s also true of Fannie Mae and Freddie Mac — which have for decades enjoyed government charters, artificially cheap capital and very little market-driven pressure to avoid risky choices. Yet the current version of the Senate bill allows Fannie and Freddie to continue their quasi-governmental, quasi-private lives. Moreover, the Senate bill’s permanent bailout fund would perpetuate dangerous expectations that the creditors of large companies are immune from risk. Americans deserve smart financial regulatory reforms that simplify agencies like the SEC to reduce waste and restrain the Fed and others from arbitrary abuses of power. Smart reforms would end crony capitalism by cutting off taxpayer support of Fannie and Freddie and reinstitute capitalism’s existing mechanisms — namely, failure and bankruptcy — to punish bad behavior and encourage prudence. Impartial judges must handle corporate failures, not federal regulators. Indeed, regulators must be given less discretion, not more. We can achieve real, bipartisan, smart financial reform, but not as long as the Democrats insist on increasing the federal bureaucracy, controlling the economy from Washington and substituting bailouts for bankruptcy.
Rep. Darrell Issa (R-Calif.) is ranking member of the Oversight and Government Reform Committee. Kill the Death Tax
By: Rep. Darrell IssaA brief window of sensible tax policy has opened for 2010, though if Congress doesn’t take action to permanently eliminate the Death Tax—now at zero percent—the rate will return to a whopping fifty-five percent next year. Any proposal by Republicans or Democrats other than a zero percent taxation is unacceptable. Economically, the Death Tax is counterproductive. The Death Tax serves only one purpose: to supply the revenue that liberals desperately need to keep pace with their out-of-control spending habits. As a result of political greed, the Death Tax sucks job-creating capital from the private sector, forcing the children of many small business owners and farmers to pay a cumbersome tax bill in order to keep their businesses and farms in the family hands. So long as these small businesses—which are responsible for 64 percent of all new jobs over the last 15 years—have to pay a 55 percent tax just to keep the family business running, their ability to create jobs is drastically stifled. Moreover, the Death Tax effectively serves to punish those who save and invest and encourages a pattern of reckless spending, thus depleting the economy of private capital and requiring more borrowing from the Chinese. Politically, the Death Tax is opportunistic. As a political strategy, the Death Tax is a brilliant scheme because it imposes a penalty on the dead, who have no votes—except perhaps in Chicago. But in reality, the Death Tax doesn’t only affect the dead; it’s a tax on everybody. Eliminating the Death Tax altogether would free up more than $1.6 trillion for job creation in the private sector, an amount that former CBO Director Douglas Holtz-Eakin estimates would generate 1.5 million new jobs. These are jobs we desperately need for an economic recovery. Morally, the Death Tax is reprehensible. To tax any person for divesting an asset at one rate the day before they die (15 percent Capital Gains), and more than triple that rate the day after they die (55 percent Death Tax in 2011), is making the federal government into a grave-robber. There is no reason why the company that a hard-working American created from scratch should be struck with a tax equal to more than half the company’s value at the moment of the owner’s death. Socially, the Death Tax is disintegrative. Class warfare—fomenting the resentments of the poor against the rich, the employee against the manager, and the laborer against the shareholder—won’t get our economy back on track. The advocates of the Death Tax pit one group of Americans against the other in a strategy based on political division rather than principle. In the end, every American suffers. Is it better for the American economy for Congress to reinstate the Death Tax—thus generating a meager $500 million in revenue, an amount equal to .014 percent of the 2010 federal budget? Or is it better to kill the Death Tax, thus giving American small businesses the ability and incentive to create 1.5 million new jobs? Is it better for America to pit one group of Americans against another and punish people for no other reason than they started a successful business, created jobs, and prepared to leave that legacy to their family’s next generation? Is it better for America to keep recycling unsuccessful policies of wealth redistribution to feed the ever-more-ravenous federal bureaucracy at the expense of small businesses, farmers, and every American who stands to lose from liberal economic policy? Of course not. Most Americans will tell you they hope to provide a better life for their kids than they had for themselves. The Death Tax destroys this goal to feed Washington’s gluttonous bureaucracy and punish people who have worked hard to build assets, save and invest. To get our economy back on track, Washington needs to permanently end the Death Tax along with every other policy that punishes Americans for starting successful businesses that create jobs. Let the American people earn wealth, grow businesses, and pass along a legacy of success to the benefit of their children, their employees, and millions of people who enjoy the economic benefit of successful small businesses. Rep. Darrell Issa represents the people of California’s 49th Congressional District in the United States House of Representatives, a seat he has held since 2001. He is the Ranking Member on the House Committee on Oversight and Government Reform. ###
Counterpoint: Fake job numbers vital to stimulus propaganda
Since President Obama took office, the American people have been subjected to an aggressive propaganda campaign designed to convince them that the $787 billion stimulus bill is working. Month after month, as unemployment continues to rise, the administration has sent its spinmeisters out to trumpet an altogether dubious number of jobs "created or saved."
Vice President Biden -- the man appointed by the president to oversee the recovery effort -- has shamelessly continued to claim credit for as many as one million jobs that the administration argues the stimulus has "created or saved."
Meanwhile, unemployment hit the highest point in a quarter century, and 3.8 million more Americans are out of work since the White House promised to "get the economy moving again." There's good reason to doubt thepresident's policies are working.
"Here in Washington, we've all seen how quickly good intentions can turn into broken promises and wasteful spending," the president noted in his State of the Union address while responding to skepticism about the stimulus. "And with a plan of this scale comes enormous responsibility to get it right.
"That is why I've asked Vice President Biden to lead a tough, unprecedented oversight effort -- because nobody messes with Joe."
Apparently, somebody is messing with Joe. Or even worse, Joe seems to be messing with us.
On top of espousing fictitious jobs claims, the White House has now directed the stimulus auditor to report inaccurate information on the Recovery.gov Web site. This continues to occur even as media reports savage the ridiculously inaccurate data.
From $1.2 million in stimulus funds that saved 935 jobs at a Georgia community council with only 508 employees, to a $1,047 lawnmower in Arkansas purchased with stimulus funds that resulted in 50 jobs, to the $26,174 grant for roof repairs in Texas that created 450 jobs, the signature item in the president's economic policy has been fraught with Enron-style accounting tricks and fraudulent reporting.
And all from a president who promised an "unprecedented level of openness and transparency."
The manifest inaccuracies in the data the Obama administration uses to justify its economic policies constitutes the promulgation of inaccurate and misleading information by the federal government. The American people deserve a straightforward accounting of the way the president spends their tax dollars, and they have the right to expect a return on their "investment."
So far, all they are getting is deceitful propaganda and a backbreaking trillion-dollar tax bill from the officials they elected to bring about change.
Administration Asleep at the Wheel on FHA Oversight
Have you heard? Wall Street -- stoked by never-ending taxpayer largesse -- is again chugging down the rails. Destination: raising its own stock prices in the midst of a jobless recovery. But don't be fooled: the engineers of this paper recovery are still asleep at the wheel, allowing runaway mortgage giants Fannie Mae and Freddie Mac to burn through billions more tax dollars without an Inspector General or independent oversight.
Meanwhile, the capital reserves of the Federal Housing Administration (FHA) have dropped dangerously low, raising the specter of another taxpayer bailout of a federal housing agency. As these Casey Joneses watch the next economic train wreck pick up steam, Congress should slam on the brakes and take a long hard look at whether it makes sense to continue pouring public money into a broken federal housing bureaucracy without holding it accountable for every tax dollar it receives.
We recently learned that the Justice Department ruled in September that the Inspector General of the Federal Housing Finance Agency (FHFA) -- the regulator of Fannie Mae and Freddie Mac - could not continue as an independent overseer of the mortgage giants. Instead, IG Ed Kelley has been relegated to the position of "internal auditor," lacking independence and reporting to a political appointee.
Fannie and Freddie were at the heart of the financial crisis and were responsible for trillions of dollars of high-risk lending that inflated the housing bubble. They have already consumed billions, yet Congress and the Obama administration seem comfortable allowing these mortgage behemoths to operate without sufficient independent oversight -- absurd.
In spite of the bailout bonanza, the Federal Housing Administration's capital reserves have plummeted 30 percent as a percentage of its assets in just one year, even as the number of loans FHA supports has increased dramatically. FHA's reserve capital fund has fallen to 0.53 percent, well below the 2 percent required by law. If total reserves fall below zero, FHA will receive an automatic taxpayer bailout. FHA Commissioner David Stevens has promised to turn down the automatic taxpayer cash infusion. I'll believe that when I see it.
This all adds up to a Congress and an administration addicted to using taxpayer subsidies to prop up the flailing U.S. housing market. Yet it was precisely this negligent behavior -- lenders pushing taxpayer-subsidized, low-down payment lending to people who couldn't afford to pay their mortgage -- that got us into this mess. For as you read this, Fannie, Freddie, the FHA and the Veterans Administration stand directly behind more than 50 percent of all American mortgages. That is a shocking amount of money for which the public is already on the hook. Congress, however, continues to run up more mortgage debt on the taxpayers' tab, hoping the next bailout will get America out of this housing mess -- all without independent oversight, transparency and accountability.
Congress can begin fixing this today by putting the brakes on taxpayer money headed into a failed federal housing system until real oversight by an Inspector General is reinstated and an investigation into the congenital lack of transparency and accountability in the federal housing bureaucracy begins. Independent oversight should be the locomotive driving reforms of the federal housing bureaucracy. Instead, many in Congress and the White House have stuck transparency and accountability back in the caboose, an unconscionable mistake for which the American people should not have to pay...again.
TARP and the Demands of Democracy
The concern among the American people about the size and cost of government continues to grow, and the Obama administration is beginning to experience a crisis of confidence doubtlessly owed to its aggressive expansion of the federal bureaucracy and deepening of the national debt. Members of Congress -- who have the power of the purse in our constitutional democracy -- know that we answer, ultimately, to the voters for the way that taxpayer dollars are spent. That's why Congress created the Office of Special Inspector General for the Troubled Asset Relief Program (SIGTARP) to monitor the way Treasury spends the $700 billion bailout program.
Back in April, Congress learned that Treasury pursued a formal opinion from the Office of Legal Counsel of the Department of Justice in an effort to limit SIGTARP Neil Barofsky's independence and bring him under the direct supervision of Secretary Geithner. In July, the House Committee on Oversight and Government Reform heard testimony from SIGTARP Barofsky that highlighted the Treasury Department's failures to protect taxpayers from the kind of fraud that undermines the American people's faith in their government.
Americans instinctively love their country, but they don't really like their government. Indeed, James Madison's classic line from Federalist 51 -- "if men were angels, there would be no need for government" -- presupposes the impossibility of a perfect government and leaves the people with, at best, the hope of a good government.
By good government, Americans mean a government limited in size and honest in action. Without independent oversight of the administration, the taxpaying public would have no guarantee that their hard-earned money -- reluctantly forfeited in the form of taxes to support the work of government -- is well spent. Americans have no patience for wasteful government, and they are acutely aware that the less transparent the government, the worse it will be.
When President Obama came to office, he promised an administration with "the highest degree of accountability and transparency possible." As a presidential candidate, Mr. Obama railed against the Bush Administration's "failure to track how the money has been spent."
Yet Americans are learning from SIGTARP Barofsky that they will not be told what TARP recipients are doing with bailout money, how much their substantial investments are worth, or how their money is being invested. The shroud of secrecy that the Obama administration has attempted to place over its bailout efforts is a brazen act of executive usurpation and political doublespeak. It is also an affront to democracy itself.
For democracy is the expression of popular sovereignty, namely, that the only good governments are those that reflect the will of the people and the rule of law. Exit polls from last year's election demonstrated that the people elected Barack Obama, in part, because they wanted more accountability and transparency in Washington. They wanted a change from secret deals to spend billions of tax dollars without any thought of a crushing national debt. They wanted the windows of government thrown open so that liberty's fresh air could reinvigorate the nation, economically and politically.
On too many fronts the Obama administration has broken its promise of change. Attempts to limit the autonomy and authority of SIGTARP are but another instance of the brass-knuckled politics that the Senator from Chicago brought with him to 1600 Pennsylvania Avenue. Neil Barofsky has done a great service to his country by refusing to roll.
The high price tag of the Obama administration
House Committee on Oversight and Government Reform
Almost every problem that America faces can be traced to the size, unmanageability and bureaucratic inertia of big, wasteful government, the rise of the administrative state and central planning. From the failure of government sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, to the fiscal insolvency of the postal system and the impending bankruptcy of Medicare, Washington has proven time and again that the best solutions are seldom found inside the beltway. Yet the Obama administration continues to look for new sectors of American economic life over which to exert its control.
The pace at which President Obama has pursued his radical agenda and the intensity with which House Speaker Nancy Pelosi has bullied that agenda through Congress have only deepened our economic crisis. One thousand-page bills are rammed through committees and brought to a vote without sufficient time for members of Congress to read them. Indeed, the President who promised to restore American confidence in government with unprecedented transparency and accountability has actually proceeded in the first months of his administration to encourage more wasteful spending and more serious abuses of executive power.
Early in his administration, the President signed a $787 billion so-called “stimulus” into law with high hopes of jump-starting the economy. Once Americans got a glimpse of the stimulus in action, questions arose about whether the President had jobs creation or political spoils in mind. Rather than sending money into “shovel-ready” jobs like the administration promised, untold millions became immediately available for organizations like ACORN, a left-wing activist group whose reputation for voter registration fraud and corporate embezzlement is the subject of ongoing Congressional investigations.
As the nation now faces record unemployment levels, it is clear that the President’s economic policies are not only failing but that they could be doing greater damage. Unprecedented levels of government spending and a new wave of tax increases are creating a perfect economic storm to siphon off the remaining private sector capital that withstood the current recession. Earlier this summer, when reports emerged from the Bureau of Labor Statistics that revealed the administration’s failure to stabilize unemployment numbers, the President’s response was staggering: spend more money, and spend it faster.
Everywhere in America, people are waking up to the recklessness of President Obama’s handling of the recovery efforts. An August poll by Gallup and USA Today revealed that 57% of Americans say the stimulus is having no impact on the economy or is actually making things worse. Economists like Nouriel Roubini of NYU’s Stern School of Business have raised the possibility of a double-dip recession due to outsized budget deficits and soaring energy prices.
Yet when members of Congress have questioned the effectiveness of the President’s stimulus, the President’s Chief of Staff, former Democratic Congressman Rahm Emanuel, appeared to orchestrate a series of letters to state governors with threats to cut off federal funding if the criticisms continued. What sort of intimidation and Chicago-style tactics the administration plans for the majority of voters who also question the President’s policies has yet to be seen, though the White House has been setting up tipster email addresses where Americans can report on each other about opposition to the President’s proposals.
In the first year of the Obama administration, government spending will top $4 trillion against a $1.84 trillion deficit, and more than 46 cents of every dollar that Washington spends is now borrowed, primarily from China. In fact, the President has proposed the highest deficit budget in American history, one that promises to grow permanent “base” spending 43 percent faster than inflation, not counting the trillion dollar cost of the Obama health care plan.
In his efforts to grow the government, the President has fixed like a laser on creating government-run system for nationalized health care. If enacted by Congress, the Obama plan for health care alone would create 53 new federal bureaucracies and cost $1.28 trillion in deficit spending. When you add that cost to the cost of his energy policies, the President has increased the annual tax bill of every American by thousands of dollars.
Meanwhile, unemployment has spiked to the highest levels in more than a quarter century, with states like Michigan, South Carolina, Nevada and California meeting or surpassing their record unemployment highs. As the rest of the nation suffers the pains of economic recession, however, Washington D.C. has six job postings – most of which are government jobs – for every unemployed person. In Miami, for instance, there is one job for every ten unemployed Americans. A recent study by the Rockefeller Institute of Government demonstrated that while the private sector has shed 6.9 million jobs since the beginning of the recession, the number of government employees continues to rise.
Unless the people whose government the President has the four-year privilege of leading are able to find a strong voice to say “No You Won’t” to the “Yes We Can” administration, this generation of Americans will be the first to leave our country poorer and weaker to our children and grandchildren. Or perhaps by our vigilant oversight of this administration we can cut government waste and reduce government spending to get America back on track to economic prosperity.
Unlike President Obama, Americans know they cannot spend their way out of a recession. But they might be able to vote their way out of it.
More spending, less transparency means deep trouble for U.S. taxpayers
In those last moments before the R.M.S. Titanic gutted its hull on a jagged iceberg 400 miles south of the Grand Banks of Newfoundland, her captain ordered a full reverse of all engines and a hard starboard turn. It was - as history records - too little, too late.
Contrast that with President Obama's announcement today that his administration will ramp up federal spending in the next three months. As the government chugs into uncharted waters of record fiscal irresponsibility, it seems our captain is shouting from the bridge, "Damn the deficits, men. Full steam ahead."
Or in his own words, "We're going to keep moving forward. We will not grow complacent or rest. Surely and steadily, we will turn this economy around."
Cue the music, Mr. President. Women and children first.
Today's announcement was troubling, not only for the shell game the President is playing with jobs creation, but for his redundant and hollow promises about transparency.
The President claims that his $787 billion stimulus has already "created or saved" 150,000 jobs in the first 100 days of the administration, compared with the 345,000 jobs that were lost in May 2009 alone. Moreover, the Labor Department reported last week that unemployment has spiked to 9.4%, higher than any point since 1983.
Among the new jobs that Obama hopes to create are 125,000 youth summer jobs, 135,000 education jobs, and rehabilitation and improvement projects at 107 parks and 98 airports nationwide.
Vice President Biden, the man charged with monitoring the stimulus, promised to "get more dollars out the door, more shovels into the ground and more money into the pockets of workers and families who need it most." Of course, this also comes on a day that the reports have leaked that the administration is contemplating a new tax on healthcare benefits and international travel.
You might call it "spreading the wealth around." Just Democrat politics as usual - spending money the government doesn't have to create a job that doesn't last by incurring debt that doesn't end. And in the process, raise a tax here and there.
Overburdened taxpayers are getting tired of waiting for the promised accountability too. When the President took office, he guaranteed "unprecedented transparency," and his administration launched a website, Recovery.gov, in early March 2009 to make good on the pledge.
Now in its third month, the site is a major disappointment. Reports are lagging behind, and taxpayers cannot track recovery funds from beginning to end as the Obama administration promised.
So today the administration announced the creation of a new website, www.whitehouse.gov/recovery. How we're supposed to expect anything different from the new site when the old site never provided real transparency is uncertain.
The new site does feature a nice YouTube video of Vice President Biden and a new "Roadmap to Recovery." Any ordinary traveler would have plotted his course before it began. A man who makes a roadmap after 100 days of wandering is seldom called a leader. More commonly, we say the man is lost.
And lost is where the nation is -- so long as President Obama pushes deficit spending to incalculable heights, encumbers the federal budget with more entitlement spending and repeatedly fails to provide the genuine transparency that he promised.
Man the bilge, boys. It's going to be a long night.
Rep. Darrell Issa is a California Republican and the Ranking Minority Member of the House Committee on Oversight and Government. An Airport for Somebody
President Obama spent loads of political capital early in his administration to push a behemoth $787 billion "spendulous" bill through Congress. In this promised era of transparency and accountability, Americans were supposed to rest safely in the assurance that the President would hold the line against fraud, waste and political kickbacks.
Apparently, Congressman John Murtha (D-PA) didn't get the memo.
The John Murtha Johnstown-Cambria County Airport is tucked away on the outskirts of Johnstown, PA, a town with a population of approximately 21,000. On any given day the airport handles an average of 20 passengers on a total of three flights -- all to Washington Dulles International Airport. A recent exposé by ABC News found the airport "virtually deserted" and dubbed John Murtha's airport the "Airport for Nobody."
Over the past decade, Congressman Murtha has secured at least $150 million in federal funding for his airport, in addition to a $147 per passenger annual government subsidy. Included in Murtha's earmarks are an $8 million state-of-the-art radar system that has never been used and a $6.5 million three-story National Guard and Reserve training center that resembles a ski lodge. In 2006, Murtha siphoned off $17.8 million of defense spending to replace a 7,000 foot asphalt runway with a concrete reinforced bed. Add it all up, and so much pork has flooded into Johnstown, PA, that somebody ought to call FEMA.
Bottom line: Since 1999, American taxpayers have spent approximately $1200 per passenger to operate John Murtha's little airport. It would have been considerably less expensive if we had provided passengers a free shuttle to nearby Pittsburgh, purchased them a full fare ticket on a regional flight and picked up their meal expense along the way.
But things weren't looking so good earlier for John Murtha's namesake airport when the economy took a downturn and declining passenger traffic resulted in a smaller slice of the taxpayers' pie. Along the way, Mr. Murtha tried unsuccessfully to squeeze a few more federal dollars for his pet project, though it wasn't until the stimulus money started trickling down the federal pipeline that he got the cash.
Once the stimulus funds were available, however, the administration designated an additional $800,000 of taxpayers' money to pave a second runway at John Murtha's airport. Apparently, one runway isn't enough for three daily flights and 20 passengers.
In the best case scenario, this decision appears to contradict the president's commitment not to allow stimulus funds "to be distributed…in response to improper influence or pressure." In the worst, it looks like the President is now a willing party to the very system of political paybacks he so vehemently opposed.
Yet President Obama has repeatedly stressed the need "to make sure that every single dollar" of the stimulus money is "well spent." A single dollar of waste, the President admonished, will be exposed and stopped. Stimulus funds in an Obama administration were supposed to target only those projects that demonstrate the ability to "deliver programmatic results" and "achieve long-term public benefits."
Congressman Murtha's airport does neither.
As the ranking member on the oversight committee, I've formally requested that the acting administrator at the Federal Aviation Administration provide a full account of this egregious waste of taxpayer money. How repaving John Murtha's second runway in Johnstown, PA, stimulates anything but the congressman's name recognition is a mystery to me, and I'm confident that it's infuriating to taxpayers.
This is precisely the kind of waste that Washington has to stop, and time will tell if the President has the political muscle to match his rhetorical strengths. Until then, feel free to book your ticket on PorkAir to Northwestern Pennsylvania, compliments of Congressman John Murtha and U.S. taxpayers.
Stimulus is Good Money for Lobbyists and Special Interests, Bad for Taxpayers
An Associated Press story that appeared on Sunday began, “President Barack Obama's ban on earmarks in the $825 billion economic stimulus bill doesn't mean interest groups, lobbyists and lawmakers won't be able to funnel money to pet projects… the result…is a shadowy lobbying effort that may make it difficult to discern how hundreds of billions in federal money will be parceled out.”
The more we learn about the proposed Pelosi-Obey $825 billion economic stimulus proposal, the more it is looking like an $825 billion earmark. Excluded from the package are good government provisions that would prohibit use of economic stimulus funds for lobbying or political activities. At a time when Democratic leaders are repeatedly touting the importance of passing their bill, they are taking the path of least resistance to ensure that the funds actually go towards the stated goal of creating jobs and jumpstarting our economy. Given the overtones of his campaign, President Obama has an opportunity and obligation to step in and direct congressional leaders to close these loopholes.
As it stands, we’re getting an economic stimulus that is more of a bailout for lobbyists and a vehicle for political payback – something that contradicts the reasons President Obama has said why we need this stimulus. Fannie Mae and Freddie Mac spent more than $170 million on lobbying, while groups like ACORN use taxpayer funds to advance a partisan agenda. Already, this Congress is prepared to repeat the failed policies that created the financial crisis and the mismanaged Wall Street bailout. More and more, this ‘stimulus’ is looking like a mad rush to expand government and steer billions of dollars to political supporters.
A closer look at the so-called “American Recovery and Reinvestment Act” reveals the failure to include a prohibition on use of economic stimulus funds for lobbying or political activities (Sec. 1106, p.7). A Government Accountability Report (GAO) noted, “The most common form of appropriation act restriction prohibits the use of funds for ‘publicity or propaganda’ (Principles of Federal Appropriations, Jan. 2004, p. 4-197).” No such restriction exists in this Act.
It creates a multi-billion dollar housing slush fund that allows the Secretary of Housing and Urban Development to waive rules on spending of funds. These provisions waive critical rules designed to prevent waste, fraud and abuse of taxpayer funds by organizations such as ACORN (Title XII p. 224-236).
Speaking of ACORN, they will be the likely beneficiary of funds from the Neighborhood Stabilization Program and the Self-Help and Assisted Homeownership Opportunity Program (report language p. 73).
Even the World Wildlife Foundation, which received 13% of last year’s budget from government grants and contracts, could stand to benefit from money earmarked for “Science” from funds allocated to NASA (bill p. 60).
Even more egregious or blatant, is the fact that MoveOn.org’s civic action committee could receive stimulus funds such as money earmarked for energy “activities” (bill p. 69) – since MoveOn.org lists one of its goals as to “reduce America’s dependence on oil.”
According to the Congressional Budget, less than half of the Democrat stimulus will be spent in the next two years, yet Speaker Pelosi appears eager to use an economic crisis as a guise to fast-track funds for political allies such as ACORN and MoveOn.org. President Obama has yet to intercede to stop this from happening, but still has every opportunity to prove that his campaign for change was more than a good slogan.
This bill’s failure to prohibit the use of funds for lobbying or political purposes is outrageous and I intend to offer an amendment to prevent the use of any stimulus funds for any lobbying or political activities. At a time when we are mired in a deep recession, we have an obligation to ensure that every dollar spent advances the objective of stimulating our economy – not inflating coffers of special interest influence.
Stimulus Bill Sells Out Taxpayers
The so-called ‘American Recovery and Reinvestment Act’ amounts to nothing more than an $825 billion earmark designed to expand government on the backs of the American taxpayers using money we do not have. There is little guarantee of any short-term gain, but there is no question of the irreparable harm we can expect by saddling our children and grandchildren with trillions of dollars of additional debt.
According to a report recently released by the Congressional Budget Office, only seven percent of the $355 billion in discretionary spending included in the bill would be injected into the economy by the end of FY09. More than $200 billion of “stimulus” funds will be spent between FY-2010 and FY-2019 – long after the recession is projected to be over.
Time and again, we are hearing how urgently these “stimulus” funds are needed. The American people have been cautioned that without this proposal, the recession we are currently experiencing will only deepen. You would think that given the severity of this economic crisis, the Democrats in Congress who have crafted this plan would ensure that every dollar spent will help create jobs and jumpstart our economy. Yet a closer look at the bill reveals that 93 percent of the bill’s discretionary spending will be spent in years to come – or as the Washington Post put it “too late to lift the nation out of recession.”
Instead of injecting new life into the economy – we’re seeing a massive expansion of government. The Pelosi-Obey bill contains $137 billion for the creation of 32 new programs - that’s 38% of all spending in the current bill. Seventeen of these new programs have never been authorized by the Congress. This on top of the $76 billion being spent to expand 60 existing government programs - nineteen of which have been described as “ineffective” or “results not demonstrated” by the Office of Management and Budget. It’s just another example of good money after bad.
Furthermore, while billed as a transportation, infrastructure and energy investment, a closer look at the Pelosi-Obey stimulus bill shows that only three percent of the $825 billion will go toward road and highway construction. In fact, of the $30 billion set aside in highway spending, less than $4 billion would occur over the next two years. Of the $18.5 billion proposed for renewable energy, less than $3 billion would be spent by 2011 and of $14 billion for school construction, less than $7 billion would be spent in the first two years.
Democrats should be honest with the American people about how they intend to spend taxpayer dollars. By the end of 2010, only 12 percent of the funds set aside for highway construction will be spent. What kind of job creation can we expect where the majority of funds set aside for public infrastructure aren’t spent for another two years? The only road being paved in this bill is the road to financial ruin. In reality, the proposed Pelosi-Obey $825 billion economic “stimulus” is nothing more than an $825 billion earmark that will do little but expand the federal government at the expense of America’s long term economic health. In 1993, the unemployment rate in America was virtually the same as the rate today – around seven percent – yet the stimulus package proposed by President Clinton in 1993 included only $16 billion of new spending. The total cost of this piece of legislation is almost as much as the annual discretionary budget for the entire federal government or enough to give every man, woman, and child in America $2,700.
We’re supposed to be stewards of taxpayer dollars, yet all too often their money is spent without any transparency or accountability. Pelosi-Obey is the wrong kind of stimulus -- it will grow the government, stick the taxpayers with the bill, and leave the American people wandering what they got in return. |
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