Even as Washington grapples with snipping the federal budget, spending on government entitlement programs continues to spiral out of control. One of the worst offenders is food assistance, a program with an insatiable appetite for taxpayer funds.
Already, the program's growth has outstripped nearly every other government assistance scheme. More than 43 million Americans now receive food stamps, renamed Supplemental Nutritional Assistance Program (SNAP) in 2008 to shed its image as a plan riddled with waste and fraud. One out of every eight Americans or 15 percent of the population receives SNAP assistance, a staggering increase of 74 percent since 2007.
A major reason for the runaway growth is the change in emphasis. Approved by Congress in 1964, the food stamp program was designed to feed poor households by providing ducats to redeem for groceries. A key feature of the early program was to allow clients to purchase surplus food produced by American farmers at a steep discount.
Most of those receiving food assistance had no job and existed on welfare. But as recently as 1999, wage earners outnumbered welfare families getting food benefits. With regular adjustments in income eligibility requirements, most single parent wage earners now qualify for food assistance. The benefit has become a de facto subsidy for low-wage jobs.
As the program has lowered its requirements, the cost to taxpayers has soared. In 1964, the annual funding for the food stamp program was $75 million. In the 2012 federal fiscal year, which began in October, funding is scheduled to reach $85.2 billion. That's more than double the 2010 spending level. This is what happens when entitlement programs are left unchecked.
But the growth is unsustainable with federal budget deficits stretching as far as the eye can see. Yet there is little Congress can do from a budgeting standpoint. As an entitlement program, Congress does not decide each year to increase or decrease SNAP funding. Instead, the budget appropriation is determined by estimations of how many people will apply and be eligible for food assistance. The only way to influence the budget is a Congressional vote to alter eligibility for the food assistance program.
That is almost impossible to do. Food stamps have normally been insulated from politics because any attempt to decrease benefits raises the spectre of poor people eating cat food to survive. That image is prepetuated by Democrats and the media to scare away advocates of food assistance reform.
Meanwhile, food program waste and fraud continues unabated. In fiscal year 2009, so-called improper payments cost taxpayers nearly $2.2 billion, according to the U.S. Department of Agriculture. Since most fraud goes undetected, the financial impact is likely much higher than reported.
Republicans have poked around the issue this session. As recently as June, a House Agriculture Subcommittee began looking for ways to trim the SNAP budget while using funds more efficiently to tackle legitimate needs. But Democrats have so far sidetracked reform by characterizing the effort as a Republican scheme to deny food to hungry infants and old people.
In the past, these emotionally-charged arguments have trumped common sense in the debate over food assistance. However, Congress can no longer ignore the facts as it faces pressure to reduce the burgeoning federal deficit. An overhaul of SNAP is long overdue. But like most entitlement programs, the prospects for meaningful reform are as dim as the arguments from fear mongers.
Wednesday, October 5, 2011
Thursday, September 29, 2011
Raising Hackles Over Rising Taxes
Even for a president known for his dunderhead economic ideas, it was stunning to watch Barack Obama stump for raising taxes to the tune of $1.5 trillion to reduce the deficit. In a futile attempt to defend his soak the rich plan, the president dredged up feckless justifications.
Obama bellowed that it wasn't fair that secretaries coughed up more money for taxes than millionaires and billionaires, borrowing a line from gazillionaire Warren Buffett. There was only one problem with the Buffett-Obama assertion. It is factually incorrect.
Households earning more than $1 million pay an average of 29.1 percent of their income in federal taxes, while those with incomes of $50,000 pay an average of 12.5 percent. The numbers clearly underscore the fallacy of the president's argument about tax fairness.
According to the Congressional Budget Office, 10 percent of the households with the highest incomes pay more than 70 percent of federal income taxes. Meanwhile 51 percent of Americans pay no federal income tax. Where is the fairness in that?
Those aren't the only flaws with the president's wrong-headed plan. Obama claimed that his tax increases were aimed at millionaires and billionaires. However, his proposal actually would lift federal taxes for individuals with $200,000 and above in income.
There is ample evidence to suggest that raising taxes on any group while the economy sputters is a prescription for economic disaster. Instead of raising government revenue, a tax hike likely would have the opposite effect because it would cripple job creation thus worsening the economy and suppressing wage growth. Total tax revenue will decline under that scenario.
A robust economy is the most reliable way to fuel more jobs. However, the nation's economic growth in the most recent quarter was an anemic one percent. That followed growth of a puny 0.4 percent in the first quarter. Increasing taxes will strangle the tiny economic development the country has experienced.
Increasing taxes will stifle small business job growth. One-half of individual and household incomes above $250,000 annually are attributable to small businesses revenue. These firms create more than 60 percent of all new jobs in the economy. Raising taxes on these individuals will leave less money for them to invest in their firms.
Under the president's plan, higher taxes also would apply to investment partnerships. The tax will be acutely felt by real estate and oil and gas developers. That will quell capital deployment among small business partnerships in these industries, further suffocating job growth.
In addition, the president's plan targets tax-exempt income from municipal bonds issued by states and cities. By reducing the tax benefits for individuals, these bonds will become a less attractive investment. As a result, infrastructure projects, often cited by the president as job creators, will lack proper funding.
Despite the adverse economic impacts, the Obama-controlled media has swept these obvious deficiencies under the rug and donned a cheerleader outfit to extoll the benefits of forcing the wealthy to pay an even higher portion of their earnings to the government.
Unfortunately, there are too many Americans who think confiscating more money from the rich will solve the country's debt problems. Even if everyone earning $200,000 and above were taxed at 100 percent of their income, it would hardly make a dent in nation's $14 trillion debt.
America does not have an income problem. The country has a spending problem. Even the economically illiterate should be able to understand that. Too bad that logic still eludes the president.
Obama bellowed that it wasn't fair that secretaries coughed up more money for taxes than millionaires and billionaires, borrowing a line from gazillionaire Warren Buffett. There was only one problem with the Buffett-Obama assertion. It is factually incorrect.
Households earning more than $1 million pay an average of 29.1 percent of their income in federal taxes, while those with incomes of $50,000 pay an average of 12.5 percent. The numbers clearly underscore the fallacy of the president's argument about tax fairness.
According to the Congressional Budget Office, 10 percent of the households with the highest incomes pay more than 70 percent of federal income taxes. Meanwhile 51 percent of Americans pay no federal income tax. Where is the fairness in that?
Those aren't the only flaws with the president's wrong-headed plan. Obama claimed that his tax increases were aimed at millionaires and billionaires. However, his proposal actually would lift federal taxes for individuals with $200,000 and above in income.
There is ample evidence to suggest that raising taxes on any group while the economy sputters is a prescription for economic disaster. Instead of raising government revenue, a tax hike likely would have the opposite effect because it would cripple job creation thus worsening the economy and suppressing wage growth. Total tax revenue will decline under that scenario.
A robust economy is the most reliable way to fuel more jobs. However, the nation's economic growth in the most recent quarter was an anemic one percent. That followed growth of a puny 0.4 percent in the first quarter. Increasing taxes will strangle the tiny economic development the country has experienced.
Increasing taxes will stifle small business job growth. One-half of individual and household incomes above $250,000 annually are attributable to small businesses revenue. These firms create more than 60 percent of all new jobs in the economy. Raising taxes on these individuals will leave less money for them to invest in their firms.
Under the president's plan, higher taxes also would apply to investment partnerships. The tax will be acutely felt by real estate and oil and gas developers. That will quell capital deployment among small business partnerships in these industries, further suffocating job growth.
In addition, the president's plan targets tax-exempt income from municipal bonds issued by states and cities. By reducing the tax benefits for individuals, these bonds will become a less attractive investment. As a result, infrastructure projects, often cited by the president as job creators, will lack proper funding.
Despite the adverse economic impacts, the Obama-controlled media has swept these obvious deficiencies under the rug and donned a cheerleader outfit to extoll the benefits of forcing the wealthy to pay an even higher portion of their earnings to the government.
Unfortunately, there are too many Americans who think confiscating more money from the rich will solve the country's debt problems. Even if everyone earning $200,000 and above were taxed at 100 percent of their income, it would hardly make a dent in nation's $14 trillion debt.
America does not have an income problem. The country has a spending problem. Even the economically illiterate should be able to understand that. Too bad that logic still eludes the president.
Sunday, September 18, 2011
American Amnesia Over 9/11 Attacks
In recent weeks, the mainstream media hyperventilated over the tenth anniversary of September 11, 2001, regurgitating remembrances of the horrific attacks. A plethora of newscasts, newspaper reports and magazine perspectives focused on healing, forgiveness and profound personal stories about the deliberate assault on America.
However, the untold story of 9/11 in the intervening years is how many Americans have forgotten the lessons of that fateful day that changed the country forever. Too many citizens believe luck, religious outreach and coddling our enemies will keep us safe from another attack.
In fact, a recent Pew Research Center poll found that 43 percent of Americans think U.S. "wrongdoing" motivated the attacks. The research should come as no surprise because the media and many politicians have spent the last ten years blaming their country instead of the terrorists for the attacks.
Overall, most Americans believe that we are no safer today than we were a decade ago. Pew found that 62 percent of those polled think terrorists have either the same or a greater ability to launch another major attack.
It is understandable why people feel that way. The public is deeply divided over the anti-terrorism policies and tactics undertaken by its government. Many are convinced their leaders have gone too far in trying to stave off another attack.
Likewise, a majority of Americans believe the wars in Iraq and Afghanistan have either increased the risk of attacks or made no difference. This is a somber reminder to the U.S. military and their families of the fickle nation they serve. No soldier should ever be put in harm's way if its citizens do no support the mission.
The Pew research stands in stark contrast to a united nation that faced events on the day after September 11th. Americans demanded punishment for the perpetrators. They insisted the government beef up its intelligence apparatus. They wanted to travel without fear. They called for tighter borders.
Soon after the American military unleashed its might, politicians and the media began expressing a different sentiment. They wanted to engage our enemies in dialogue. They preached religious tolerance. They chafed at security measures. Amnesia set in as Americans bought into the idea that our safety could be purchased with rhetoric and an extended hand of friendship.
In Pew's poll, less than half of Americans say the main reason the country has remained safe is because their government is doing a good job of protecting its citizens. A full 35 percent think America has been just plain lucky.
Clear majorities of Americans now oppose data gathering to prevent a terrorist threat, according to Pew's research. Most reject the idea of government monitoring of telephone calls and emails of suspected terrorists, which majorities had previously supported.
Politics have clearly shaped American opinions. Pew reports that from 2001 through 2008, Democrats offered "decidedly more critical views of the government performance on terrorism." After Barrack Obama became president, Democrat voters' views have turned more positive, Pew reports.
Political pandering as well as the Pew research offer a sad commentary on American resolve to fight terrorism. While the nation contemplates the events of 9/11, many of its citizens and political leaders have forgotten the painful lessons the attacks taught us.
The country must be vigilant, prepared, united in purpose and militarily strong to protect itself from terrorism. Ten years ago Americans would not have needed to be reminded.
However, the untold story of 9/11 in the intervening years is how many Americans have forgotten the lessons of that fateful day that changed the country forever. Too many citizens believe luck, religious outreach and coddling our enemies will keep us safe from another attack.
In fact, a recent Pew Research Center poll found that 43 percent of Americans think U.S. "wrongdoing" motivated the attacks. The research should come as no surprise because the media and many politicians have spent the last ten years blaming their country instead of the terrorists for the attacks.
Overall, most Americans believe that we are no safer today than we were a decade ago. Pew found that 62 percent of those polled think terrorists have either the same or a greater ability to launch another major attack.
It is understandable why people feel that way. The public is deeply divided over the anti-terrorism policies and tactics undertaken by its government. Many are convinced their leaders have gone too far in trying to stave off another attack.
Likewise, a majority of Americans believe the wars in Iraq and Afghanistan have either increased the risk of attacks or made no difference. This is a somber reminder to the U.S. military and their families of the fickle nation they serve. No soldier should ever be put in harm's way if its citizens do no support the mission.
The Pew research stands in stark contrast to a united nation that faced events on the day after September 11th. Americans demanded punishment for the perpetrators. They insisted the government beef up its intelligence apparatus. They wanted to travel without fear. They called for tighter borders.
Soon after the American military unleashed its might, politicians and the media began expressing a different sentiment. They wanted to engage our enemies in dialogue. They preached religious tolerance. They chafed at security measures. Amnesia set in as Americans bought into the idea that our safety could be purchased with rhetoric and an extended hand of friendship.
In Pew's poll, less than half of Americans say the main reason the country has remained safe is because their government is doing a good job of protecting its citizens. A full 35 percent think America has been just plain lucky.
Clear majorities of Americans now oppose data gathering to prevent a terrorist threat, according to Pew's research. Most reject the idea of government monitoring of telephone calls and emails of suspected terrorists, which majorities had previously supported.
Politics have clearly shaped American opinions. Pew reports that from 2001 through 2008, Democrats offered "decidedly more critical views of the government performance on terrorism." After Barrack Obama became president, Democrat voters' views have turned more positive, Pew reports.
Political pandering as well as the Pew research offer a sad commentary on American resolve to fight terrorism. While the nation contemplates the events of 9/11, many of its citizens and political leaders have forgotten the painful lessons the attacks taught us.
The country must be vigilant, prepared, united in purpose and militarily strong to protect itself from terrorism. Ten years ago Americans would not have needed to be reminded.
Monday, September 12, 2011
Why Bozo The Clown Could Beat Obama
Hand wringing over the electability of the current crop of Republican presidential candidates has replaced baseball as the national pastime. To listen to the political pundits, there is not a single GOP standard bearer with the mettle or the gravitas to oust Barrack Obama from the White House.
If the assertion wasn't so patently prosperous, it would be laughable. But the mainstream media has fueled the notion that the Republican candidates are so flawed, so intellectual bereft, so inexperienced as to have no chance of unseating the incumbent president.
Even Republicans have fallen prey to the crescendo of media blathering that has no basis in fact. GOP bosses and so-called political experts have openly pined for a white knight to ride to the rescue, suggesting New Jersey Governor Chris Christie or Florida Senator Marco Rubio or Wisconsin Representative Paul Ryan enter the presidential fray.
Republicans need to quit looking at the 2012 presidential race through the media prism. To conclude that no Republican is electable, you have to suspend political reality. Polling data, history and an analysis of the last election suggest Barrack Obama is the most vulnerable president in modern history.
Just look at the president's poll numbers. They are as dismal as the economy. In the latest Rasmussen Poll, only 21 percent of likely voters strongly approve of Obama. Meanwhile, 43 percent strongly disapprove. By zeroing in on those with strongly held opinions, the data taps into the level of voter angst.
These results represent a stunning turnabout from January of 2008 when hope and change entered the American political lexicon. Back then, 44 percent of likely voters strongly approved of the newly elected president, while only 16 percent strongly disapproved.
According to Rasmussen, the negative ratings for Obama have plumbed nearly unprecedented depths. You have to go back to President Jimmy Carter to find this kind of dissatisfaction. No one should have to be reminded that Carter was trounced by Ronald Reagan, a candidate that the media deemed "unelectable" because he was too far right.
Rasmussen, a Democrat pollster who has been tracking presidential ratings for years, recently scored Obama's approval index at -23. That is unfamiliar territory but for a handful of presidents, all of whom were rejected by voters for a second term.
Many in the media like to point to President Reagan's low approval ratings in his first term to suggest Obama will recover. However, the media always conceals one important fact: Reagan's numbers improved only when the jobless rate began to decline.
That's why history cannot be ignored. No sitting president, except Franklin Roosevelt, has been given a second term when the unemployment rate was above 8 percent. In fact, in the last 12 president elections, no incumbent has escaped defeat when the jobless number was 7.5 percent or higher.
It is sheer folly for the media to gaze upon the August employment figures without concluding Obama's chances for reelection correlate with job growth: zero.
An even-handed analysis of the last presidential election scrubs the sheen from Obama's historic victory. While the president snared a lopsided win in the electoral college, he managed to collect only 52 percent of the popular vote.
In key swing states, Obama's margin of victory was paper thin. For example, in Ohio the president won by 217,000 votes out of more than 6 million cast. It was the same story in Florida, where Obama eked out a 144,000 vote margin in a state where 8.5 million people trooped to the polls. Virginia swung to Obama by 230,000 votes out of 3.7 million ballots.
As these numbers suggest, Obama' win hardly approached landslide proportions. Despite having every advantage, including the weakest Republican candidate in history and a looming recession, it was a surprisingly close election. In addition, he was aided by the highest voter turnout in 40 years.
The president will have none of these advantages in the 2012 election. His own base suffers from Obama fatigue. While McCain was reviled by conservatives, the current GOP front runners have no such albatross. The unemployment numbers are unlikely to improve substantially before next November. Voter anger at the administration has reached record levels, approaching those recorded by George W. Bush.
As one measure of voter discontent, consider these poll numbers: Just 34 percent of Americans think the country's best days are in the future. More than 60 percent are gloomy about the outlook. That level of pessimism usually energizes voters to toss out the incumbent.
Barrack Obama has only one thing going for him. The mainstream media is solidly in his camp. The same journalists who failed to vet Obama when he ran for president will spend all their energy investigating, debunking and demonizing Republican candidates.
But voters are savvy. They can sift through the media spin. In the last election, the Pew Research Center polled registered voters and found that 70 percent believed that journalists wanted Obama to win.
The media won't abandon Obama this election. However, no amount of media campaigning can conceal the fact that the country is worse off under President Obama. Voters have seen the real Barack Obama and they are clearly in no mood to make the same mistake twice.
For that reason, those who dwell on electability of Republicans are obviously delusional about the political reality facing Barrack Obama.
If the assertion wasn't so patently prosperous, it would be laughable. But the mainstream media has fueled the notion that the Republican candidates are so flawed, so intellectual bereft, so inexperienced as to have no chance of unseating the incumbent president.
Even Republicans have fallen prey to the crescendo of media blathering that has no basis in fact. GOP bosses and so-called political experts have openly pined for a white knight to ride to the rescue, suggesting New Jersey Governor Chris Christie or Florida Senator Marco Rubio or Wisconsin Representative Paul Ryan enter the presidential fray.
Republicans need to quit looking at the 2012 presidential race through the media prism. To conclude that no Republican is electable, you have to suspend political reality. Polling data, history and an analysis of the last election suggest Barrack Obama is the most vulnerable president in modern history.
Just look at the president's poll numbers. They are as dismal as the economy. In the latest Rasmussen Poll, only 21 percent of likely voters strongly approve of Obama. Meanwhile, 43 percent strongly disapprove. By zeroing in on those with strongly held opinions, the data taps into the level of voter angst.
These results represent a stunning turnabout from January of 2008 when hope and change entered the American political lexicon. Back then, 44 percent of likely voters strongly approved of the newly elected president, while only 16 percent strongly disapproved.
According to Rasmussen, the negative ratings for Obama have plumbed nearly unprecedented depths. You have to go back to President Jimmy Carter to find this kind of dissatisfaction. No one should have to be reminded that Carter was trounced by Ronald Reagan, a candidate that the media deemed "unelectable" because he was too far right.
Rasmussen, a Democrat pollster who has been tracking presidential ratings for years, recently scored Obama's approval index at -23. That is unfamiliar territory but for a handful of presidents, all of whom were rejected by voters for a second term.
Many in the media like to point to President Reagan's low approval ratings in his first term to suggest Obama will recover. However, the media always conceals one important fact: Reagan's numbers improved only when the jobless rate began to decline.
That's why history cannot be ignored. No sitting president, except Franklin Roosevelt, has been given a second term when the unemployment rate was above 8 percent. In fact, in the last 12 president elections, no incumbent has escaped defeat when the jobless number was 7.5 percent or higher.
It is sheer folly for the media to gaze upon the August employment figures without concluding Obama's chances for reelection correlate with job growth: zero.
An even-handed analysis of the last presidential election scrubs the sheen from Obama's historic victory. While the president snared a lopsided win in the electoral college, he managed to collect only 52 percent of the popular vote.
In key swing states, Obama's margin of victory was paper thin. For example, in Ohio the president won by 217,000 votes out of more than 6 million cast. It was the same story in Florida, where Obama eked out a 144,000 vote margin in a state where 8.5 million people trooped to the polls. Virginia swung to Obama by 230,000 votes out of 3.7 million ballots.
As these numbers suggest, Obama' win hardly approached landslide proportions. Despite having every advantage, including the weakest Republican candidate in history and a looming recession, it was a surprisingly close election. In addition, he was aided by the highest voter turnout in 40 years.
The president will have none of these advantages in the 2012 election. His own base suffers from Obama fatigue. While McCain was reviled by conservatives, the current GOP front runners have no such albatross. The unemployment numbers are unlikely to improve substantially before next November. Voter anger at the administration has reached record levels, approaching those recorded by George W. Bush.
As one measure of voter discontent, consider these poll numbers: Just 34 percent of Americans think the country's best days are in the future. More than 60 percent are gloomy about the outlook. That level of pessimism usually energizes voters to toss out the incumbent.
Barrack Obama has only one thing going for him. The mainstream media is solidly in his camp. The same journalists who failed to vet Obama when he ran for president will spend all their energy investigating, debunking and demonizing Republican candidates.
But voters are savvy. They can sift through the media spin. In the last election, the Pew Research Center polled registered voters and found that 70 percent believed that journalists wanted Obama to win.
The media won't abandon Obama this election. However, no amount of media campaigning can conceal the fact that the country is worse off under President Obama. Voters have seen the real Barack Obama and they are clearly in no mood to make the same mistake twice.
For that reason, those who dwell on electability of Republicans are obviously delusional about the political reality facing Barrack Obama.
Sunday, September 4, 2011
Obama's Regulatory Expansion Saps Business Growth
While the economy shrinks faster than the president's approval ratings, at least Barrack Obama can boast of growth in one area: regulatory agencies. Under his leadership, the federal regulatory regime has intruded into nearly every aspect of the lives of individuals and of American business.
Since 2008, the annual budgets of federal agencies have skyrocketed 15 percent, while the economy stumbles along with Gross Domestic Product (GDP) growth of less than two percent this year. The annual taxpayer bill for this regulatory excess tops $54 billion.
Payrolls at federal regulatory agencies have increased 13 percent since Obama moved into 1600 Pennsylvania Avenue. That's a net addition of 281,000 government jobs. Meanwhile, private-sector job growth has dwindled since 2008, even with microscopic gains this year.
The Progressive Policy Institute studied the issue and found that in a one-year period federal regulatory jobs rose faster than either private or government payrolls. This shameless expansion has gone unnoticed by most Americans because the mainstream media has covered up the issue to protect the president.
With so many new employees on the federal dole, they are discovering more ways to punish business. In one single month this year, regulators unfurled 379 new rules that will cost businesses more than $9.5 billion, according to the Heritage Foundation.
In the Obama Administration's first 26 months, the foundation counted 75 new major rules that saddled businesses with $40 billion in additional expenses. Of course, those costs are ultimately passed on to unwary consumers, who always blame businesses for price hikes instead of the real culprit, federal excess.
A study last year by the Small Business Administration estimated that the annual price tag of complying with federal rules and regulations was a staggering $1.75 trillion. Small firms have suffered most. Research revealed that these companies spend 38 percent more per employee than large firms on federal regulatory compliance.
Unfortunately, Washington agencies are just getting warmed up. The Federal Register estimates that there are more than 4,200 new regulations in the government pipeline. And there is no end in sight because legislation passed by the Democrat controlled Congress the last two years created more superfluous agencies.
For example, the new Consumer Financial Protection Bureau is hiring at a frenzied pace. The agency, spawned by the Dodd-Frank Act of 2010, plans to add 1,200 people based in Washington with satellite offices in New York, Chicago and San Francisco.
The bureau has opened its doors for business, despite not having a director. The president has nominated former Ohio Attorney General Richard Cordray to the post. However, his appointment must be confirmed by the Senate.
Republicans and businesses plan to oppose the nomination as a way of neutering the agency. In signalling its opposition, the U.S. Chamber of Commerce warned that the new agency is a "potent threat to the price and availability of credit" for businesses and consumers.
That warning will go unheeded by a White House unconcerned about the harm federal regulations are causing the economy. Obama and his team of Big Government advocates keep dreaming up new ways to burden businesses and cripple economic expansion.
This from a president who claims he is preoccupied with creating jobs. Based on the evidence, Barrack Obama's idea of job growth involves enlarging the federal bureaucracy at the expense of the private sector, while sticking taxpayers with the bill.
Since 2008, the annual budgets of federal agencies have skyrocketed 15 percent, while the economy stumbles along with Gross Domestic Product (GDP) growth of less than two percent this year. The annual taxpayer bill for this regulatory excess tops $54 billion.
Payrolls at federal regulatory agencies have increased 13 percent since Obama moved into 1600 Pennsylvania Avenue. That's a net addition of 281,000 government jobs. Meanwhile, private-sector job growth has dwindled since 2008, even with microscopic gains this year.
The Progressive Policy Institute studied the issue and found that in a one-year period federal regulatory jobs rose faster than either private or government payrolls. This shameless expansion has gone unnoticed by most Americans because the mainstream media has covered up the issue to protect the president.
With so many new employees on the federal dole, they are discovering more ways to punish business. In one single month this year, regulators unfurled 379 new rules that will cost businesses more than $9.5 billion, according to the Heritage Foundation.
In the Obama Administration's first 26 months, the foundation counted 75 new major rules that saddled businesses with $40 billion in additional expenses. Of course, those costs are ultimately passed on to unwary consumers, who always blame businesses for price hikes instead of the real culprit, federal excess.
A study last year by the Small Business Administration estimated that the annual price tag of complying with federal rules and regulations was a staggering $1.75 trillion. Small firms have suffered most. Research revealed that these companies spend 38 percent more per employee than large firms on federal regulatory compliance.
Unfortunately, Washington agencies are just getting warmed up. The Federal Register estimates that there are more than 4,200 new regulations in the government pipeline. And there is no end in sight because legislation passed by the Democrat controlled Congress the last two years created more superfluous agencies.
For example, the new Consumer Financial Protection Bureau is hiring at a frenzied pace. The agency, spawned by the Dodd-Frank Act of 2010, plans to add 1,200 people based in Washington with satellite offices in New York, Chicago and San Francisco.
The bureau has opened its doors for business, despite not having a director. The president has nominated former Ohio Attorney General Richard Cordray to the post. However, his appointment must be confirmed by the Senate.
Republicans and businesses plan to oppose the nomination as a way of neutering the agency. In signalling its opposition, the U.S. Chamber of Commerce warned that the new agency is a "potent threat to the price and availability of credit" for businesses and consumers.
That warning will go unheeded by a White House unconcerned about the harm federal regulations are causing the economy. Obama and his team of Big Government advocates keep dreaming up new ways to burden businesses and cripple economic expansion.
This from a president who claims he is preoccupied with creating jobs. Based on the evidence, Barrack Obama's idea of job growth involves enlarging the federal bureaucracy at the expense of the private sector, while sticking taxpayers with the bill.
Sunday, August 28, 2011
Check In The Mail To Bailout Post Office?
If there ever was a poster child for bureaucratic inefficiency and incompetence, it is the U.S. Postal System. The ungainly appratatus stands as an example of what happens when a pseudo-government agency attempts to operate as a public enterprise using unsound business practices while ignoring market trends.
By its own admission, the Post Office is awash in red ink. Postmaster General Patrick Donahoe estimates the service will lose a record $8 billion in the current fiscal year that ends in September. Over the next decade, the losses could approach a budget-crippling $238 billion.
The Postal Service generates income by selling stamps and services to cover its costs. The agency currently receives no federal subsidies. However, with fewer people using the mail, revenues are sinking. In most recent fiscal quarter, the agency posted a $3.1 billion loss.
That doesn't even begin to describe the system's financial headaches. Next month the Postal Service is expected to default on a $5.5 billion health benefit prepayment required by federal law. The agency is unable to meet the obligation by borrowing money because it has reached its $15 billion limit, making default likely unless Congress or the government rescues the service.
In its review of the system, the Government Accountability Office (GAO) revealed that the current business model used by the Post Office is "not viable". The audit, released in June, called for deeper cuts in jobs and wages in light of the 25 percent decline in first class mail over the past decade.
In summarizing its findings, the GAO cautioned that without drastic revisions, the Post Office's staggering losses will increase. The calls for reform have gone largely ignored, although Donahue deserves credit for at least trying to whittle away at the bloated payroll.
His efforts have been opposed at every turn by the powerful National Association of Letter Carriers (NALC). A union official recently wailed that his organization will "vehemently oppose any attempt to destroy the collective bargaining rights of postal workers."
The union wants to protect every one of the current 563,400 postal jobs. Donahoe has raised the union's ire by calling for a reduction of 220,000 union employees as part of his plan for shuttering 3,650 post offices, many in rural locations. The postal chief also wants to end Saturday mail delivery, which would save $3 billion annually.
Republicans in Congress are growing impatient with the impasse. Led by California Rep. Darrell Issa, the GOP is considering legislation to rein in health benefits, reduce payroll and force changes to the pension fund covering 480,000 retired postal employees. That has set off a firestorm of protests among union officials, who complained that "crushing postal workers and slashing service" will not solve the system's financial crisis.
Democrats have been quick to come to the aid of the beleaguered union. Democrat Tom Carper who chairs the Senate subcommittee overseeing the post office, has voiced concern over whether the proposals "would be fair to employees." Carper is only protecting his party's interests. Postal unions have overwhelmingly supported Democrat candidates, including Obama in the 2008 presidential election.
That fact undoubtedly explains why the president's proposed 2012 budget included a whopping $11 billion bailout gift-wrapped for the Postal Service. The union was appropriately moved. "We're pleased that the Obama Administration seems to recognize the seriousness of the Postal Service's financial condition..." a union official chirped. News coverage of the proposed financial relief has been nonexistent.
Taxpayer funds won't fix this financial mess. If the Postal System were a "real" business, it would have long ago filed for bankruptcy. Washington needs to compell the system to exit the postal business, leaving the market to private companies to serve.
By its own admission, the Post Office is awash in red ink. Postmaster General Patrick Donahoe estimates the service will lose a record $8 billion in the current fiscal year that ends in September. Over the next decade, the losses could approach a budget-crippling $238 billion.
The Postal Service generates income by selling stamps and services to cover its costs. The agency currently receives no federal subsidies. However, with fewer people using the mail, revenues are sinking. In most recent fiscal quarter, the agency posted a $3.1 billion loss.
That doesn't even begin to describe the system's financial headaches. Next month the Postal Service is expected to default on a $5.5 billion health benefit prepayment required by federal law. The agency is unable to meet the obligation by borrowing money because it has reached its $15 billion limit, making default likely unless Congress or the government rescues the service.
In its review of the system, the Government Accountability Office (GAO) revealed that the current business model used by the Post Office is "not viable". The audit, released in June, called for deeper cuts in jobs and wages in light of the 25 percent decline in first class mail over the past decade.
In summarizing its findings, the GAO cautioned that without drastic revisions, the Post Office's staggering losses will increase. The calls for reform have gone largely ignored, although Donahue deserves credit for at least trying to whittle away at the bloated payroll.
His efforts have been opposed at every turn by the powerful National Association of Letter Carriers (NALC). A union official recently wailed that his organization will "vehemently oppose any attempt to destroy the collective bargaining rights of postal workers."
The union wants to protect every one of the current 563,400 postal jobs. Donahoe has raised the union's ire by calling for a reduction of 220,000 union employees as part of his plan for shuttering 3,650 post offices, many in rural locations. The postal chief also wants to end Saturday mail delivery, which would save $3 billion annually.
Republicans in Congress are growing impatient with the impasse. Led by California Rep. Darrell Issa, the GOP is considering legislation to rein in health benefits, reduce payroll and force changes to the pension fund covering 480,000 retired postal employees. That has set off a firestorm of protests among union officials, who complained that "crushing postal workers and slashing service" will not solve the system's financial crisis.
Democrats have been quick to come to the aid of the beleaguered union. Democrat Tom Carper who chairs the Senate subcommittee overseeing the post office, has voiced concern over whether the proposals "would be fair to employees." Carper is only protecting his party's interests. Postal unions have overwhelmingly supported Democrat candidates, including Obama in the 2008 presidential election.
That fact undoubtedly explains why the president's proposed 2012 budget included a whopping $11 billion bailout gift-wrapped for the Postal Service. The union was appropriately moved. "We're pleased that the Obama Administration seems to recognize the seriousness of the Postal Service's financial condition..." a union official chirped. News coverage of the proposed financial relief has been nonexistent.
Taxpayer funds won't fix this financial mess. If the Postal System were a "real" business, it would have long ago filed for bankruptcy. Washington needs to compell the system to exit the postal business, leaving the market to private companies to serve.
Sunday, August 21, 2011
Warning: Obamacare Contains Unhealthy Surprises
After another stinging legal defeat, President Obama's massive health care law has been placed on life support. The latest blow came when the 11th Circuit Court of Appeals ruled that the provision mandating government insurance coverage is unconstitutional.
Despite this and two other legal setbacks, the Obama Administration continues to snub the courts, instead quietly amassing the bureaucracy needed to oversee the gargantuan government program. Payrolls are being fattened at both the Internal Revenue Service and the Health and Human Services Department in anticipation of implementation.
Because of the government's stealth approach, most Americans are unaware of the pervasive bureaucracy that will be required to administer federal health care. If the U.S. Post Office employs more than one-half million people, how many government workers will be needed to oversee a trillion dollar health care program?
No answer has been forthcoming from the Obama Administration. Whatever the number, the bureaucracy will require round-the-clock feeding from the government trough. Not to worry because the feds have grand plans to raid your wallet beginning less than two years from now in 2013.
The implementation date was selected by the Democrat controlled House and Senate in 2010 to save Obama from having to defend unpopular taxes during the presidential campaign next year. Shortly after the election, the government will usher in the New Year with a hodgepodge of new taxes aimed at raising more than $503 billion over six years.
An increase in payroll taxes for businesses and individuals will be one of the first to be unleashed beginning in 2013. The current payroll tax of 1.45 percent will almost double to 2.35 percent for individuals making more than $200,000 annually. This tax has been part of the Social Security and Medicare deductions on most individuals' checks.
While this tax targets upper income earners, it is likely to include more middle income families. If history is any indication, entitlement expenses always grow faster than Treasury's revenues, making it unlikely any taxpayers will be spared from paying for the imposing government scheme.
In addition, the health care revision mandates payroll tax rates will apply to investment income, including capital gains, stock dividends, rents and royalties in 2013. This marks the first time in U.S. history that investment income will be subject to a payroll taxes.
In 2016, individuals will be required to purchase government health care insurance. Employers with more than 50 workers will be forced to provide health insurance or incur stiff fines.
Things go from bad to worse in 2018. All individuals will be forced to pay a new 40 percent excise tax on private health insurance plans, including those offered by business employers, that are deemed too generous by the government.
By the end of 2019, The Heritage Foundation estimates that the total tax burden of Obamacare on the economy will skyrocket to $102 billion annually.
But that doesn't tell the whole story. Besides the taxes already mentioned, there are 14 other changes to tax law that eliminate deductions, hike taxes and increase fees. Although aimed mostly at companies, consumers always end up picking up the tab for increased business costs in the form of higher prices.
Taxes won't be the only burden for individuals. Americans are likely to find the cost of private insurance prohibitive. The Centers for Medicare and Medicaid Services estimate that private insurance costs are expected to rise a stunning 88 percent.
No wonder the price tag for Obamacare has been hard to pin down. The Congressional Budget Office (CBO) released an updated analysis in March, raising the cost into the $1.1 trillion stratosphere. But that forecast will likely prove too low because the medical coverage standards have not been spelled out by the Institute of Medicine, the independent agency charged with the task of defining benefits.
Meanwhile, the states are facing a January 1, 2013, deadline to submit detailed plans based on the new standards. Insurance companies find themselves in the same predicament, prompting a Blue Cross and Blue Shield official to recently complain about the difficulty in planning for the new law without standards.
Businesses are facing equal uncertainty, particularly those offering health care coverage to employees. Future benefit costs are clouded, which has caused businesses to delay hiring. As a result, some firms and unions have already obtained waivers from the Obama Administration. Recent estimates put the number at "almost a thousand" exemptions from Obamacare.
One of the first in line to be granted a waiver was the powerful Service Employees International Union (SEIU), which represents many state and local government workers. That is no coincidence because the 2.1 million-member union was one of the president's chief supporters, filling his campaign coffers with millions of dollars, while supporting his health care reform.
Once Obamacare coverage begins it will be too late to prevent the government from seizing control of health care, which accounts for 17 percent of the economy. Washington has never once in its history repealed an entitlement program. That's why Congress must unplug Obamacare immediately and terminate the life of this federal boondoggle.
Despite this and two other legal setbacks, the Obama Administration continues to snub the courts, instead quietly amassing the bureaucracy needed to oversee the gargantuan government program. Payrolls are being fattened at both the Internal Revenue Service and the Health and Human Services Department in anticipation of implementation.
Because of the government's stealth approach, most Americans are unaware of the pervasive bureaucracy that will be required to administer federal health care. If the U.S. Post Office employs more than one-half million people, how many government workers will be needed to oversee a trillion dollar health care program?
No answer has been forthcoming from the Obama Administration. Whatever the number, the bureaucracy will require round-the-clock feeding from the government trough. Not to worry because the feds have grand plans to raid your wallet beginning less than two years from now in 2013.
The implementation date was selected by the Democrat controlled House and Senate in 2010 to save Obama from having to defend unpopular taxes during the presidential campaign next year. Shortly after the election, the government will usher in the New Year with a hodgepodge of new taxes aimed at raising more than $503 billion over six years.
An increase in payroll taxes for businesses and individuals will be one of the first to be unleashed beginning in 2013. The current payroll tax of 1.45 percent will almost double to 2.35 percent for individuals making more than $200,000 annually. This tax has been part of the Social Security and Medicare deductions on most individuals' checks.
While this tax targets upper income earners, it is likely to include more middle income families. If history is any indication, entitlement expenses always grow faster than Treasury's revenues, making it unlikely any taxpayers will be spared from paying for the imposing government scheme.
In addition, the health care revision mandates payroll tax rates will apply to investment income, including capital gains, stock dividends, rents and royalties in 2013. This marks the first time in U.S. history that investment income will be subject to a payroll taxes.
In 2016, individuals will be required to purchase government health care insurance. Employers with more than 50 workers will be forced to provide health insurance or incur stiff fines.
Things go from bad to worse in 2018. All individuals will be forced to pay a new 40 percent excise tax on private health insurance plans, including those offered by business employers, that are deemed too generous by the government.
By the end of 2019, The Heritage Foundation estimates that the total tax burden of Obamacare on the economy will skyrocket to $102 billion annually.
But that doesn't tell the whole story. Besides the taxes already mentioned, there are 14 other changes to tax law that eliminate deductions, hike taxes and increase fees. Although aimed mostly at companies, consumers always end up picking up the tab for increased business costs in the form of higher prices.
Taxes won't be the only burden for individuals. Americans are likely to find the cost of private insurance prohibitive. The Centers for Medicare and Medicaid Services estimate that private insurance costs are expected to rise a stunning 88 percent.
No wonder the price tag for Obamacare has been hard to pin down. The Congressional Budget Office (CBO) released an updated analysis in March, raising the cost into the $1.1 trillion stratosphere. But that forecast will likely prove too low because the medical coverage standards have not been spelled out by the Institute of Medicine, the independent agency charged with the task of defining benefits.
Meanwhile, the states are facing a January 1, 2013, deadline to submit detailed plans based on the new standards. Insurance companies find themselves in the same predicament, prompting a Blue Cross and Blue Shield official to recently complain about the difficulty in planning for the new law without standards.
Businesses are facing equal uncertainty, particularly those offering health care coverage to employees. Future benefit costs are clouded, which has caused businesses to delay hiring. As a result, some firms and unions have already obtained waivers from the Obama Administration. Recent estimates put the number at "almost a thousand" exemptions from Obamacare.
One of the first in line to be granted a waiver was the powerful Service Employees International Union (SEIU), which represents many state and local government workers. That is no coincidence because the 2.1 million-member union was one of the president's chief supporters, filling his campaign coffers with millions of dollars, while supporting his health care reform.
Once Obamacare coverage begins it will be too late to prevent the government from seizing control of health care, which accounts for 17 percent of the economy. Washington has never once in its history repealed an entitlement program. That's why Congress must unplug Obamacare immediately and terminate the life of this federal boondoggle.
Subscribe to:
Posts (Atom)