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Government ‘Shutdown’: Day 9
‘Shutdown’ Theater: Fox News compiled a list of seven operations that were halted over the last nine days that saved practically no taxpayer funds. The list includes scenic spots on the sides of roads to jogging paths that happen to be on public land.
Obamacare phones: The state of Tennessee’s healthcare co-op is offering new enrollees in the healthcare exchanges free smart phones if they enroll. The plan originally received a federal grant of $73 million. Read more at the Daily Caller.
Failure to report: One in five companies that received taxpayer assistance from the state of Wisconsin have not filed a report detailing where the money went. The reporting system was created in response to the revelation of $12 million of overdue loans from previous years. Find out more details from the Milwaukee Journal Sentinel.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Subscribe to NTU's podcast "Speaking of Taxpayers" via iTunes!
NTUF's Demian Brady joins the podcast to talk Debt Ceiling and the federal budget, and the Outrage of the Week! hammers one government so-called "shutdown" casualty that should concern taxpayers.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Government Shutdown Day 7:
Tribal fraud: An internal audit of Native American tribal areas across America has revealed extensive waste and fraud totaling tens of millions of dollars. “Embezzlement, paychecks for do-nothing jobs and employees who over-billed hours and expenses,” were commonplace, yet the acts have gone unpunished for years. Read more at WSLS.
Parking lot shutdown: The National Park Service has closed the parking lot at the home of George Washington, Mt. Vernon due to the government shutdown. Although, the park is privately owned and remains open. Read more shutdown stories at the Daily Caller.
Furniture fiasco: An investigation of Chicago public school contracts showed major discrepancies. Certain furniture ordered by schools was not up to specifications when delivered and overcharging routinely occurred. As a result of a local news investigation, the schools have instituted major reforms and are investigating the issues. ABC7 has more details.0 Comments | Post a Comment | Sign up for NTU Action Alerts
As Congress continues to play budgetary chicken, prolonging the government shutdown, another debate is brewing that might or might not be fixed with a budget deal: the debt ceiling. The last time we came close to the federal borrowing limit, Congress pushed through the Budget Control Act, which put in place budget caps in exchange for an increase in how much debt the government can issue. However, BCA lacked any real entitlement reform and taxpayers are again looking at a divided and dysfunctional Congress as the debt ceiling deadline ticks down to zero. If the ceiling is not raised, the U.S. could default on our debt, sending shockwaves through the global economy. However, it might be the jump start that the U.S. needs to bring about true reforms and fiscal sanity.
To supplement this week's Taxpayer's Tab, NTUF compiled some information so that folks can get a read on where the government is at on the debt and how we got in this position (hint: entitlements).
Do you think the U.S. should raise the debt ceiling? If not, how would you get the country's finances back in order (especially because a default would likely lower our credit rating)?0 Comments | Post a Comment | Sign up for NTU Action Alerts
Today’s Taxpayer News!
Low Voltage: General Motors reported that the brand’s much hyped and subsidized Chevy Volt continued its dismal sales pace in September. Volt sales saw a 38% decline from year to year. Taxpayer funded credits for September were over $13 million. The National Legal Policy Center has more details.
Corruption crackdown: After more than 30 lawmakers from New York State have been embroiled in ethics issues over the last seven years, a commission appointed by Gov. Andrew Cuomo has proposed new rules that would strip corrupt politicians of their taxpayer funded pension. Read more from today’s New York Times.
Taxpayer toilet: The Federal Bureau of Land Management used spent over $98,000 for a single outhouse on a park trail in Alaska. CNSNews has more.0 Comments | Post a Comment | Sign up for NTU Action Alerts
As the clock struck 12:01 this morning, the federal government found itself in a situation we haven't seen since 1996: a shutdown. Because Congress was unable to come to an agreement on how to fund certain federal agencies whose budgets depend on annual appropriations, they've been forced to "shut down", and in some cases completely halt all activity.
While the term does sound dramatic, this is actually the 18th time since 1976 that the government's been forced to temporarily shut down. The other 17 episodes have lasted anywhere from a single day to nearly three weeks, stemming from political squabbles over issues like abortion to budgetary debates that simply couldn't be settled in time.
So what will happen until Congress is able to pass a budget or agree to a short term fix? Under federal law, all government agencies are required to have official contngency plans that specify which employees and duties are "essential" and "non-essential" (or "excepted" and "non-excepted"). This ensures that the government will still act in limited ways to protect public health & safety, and it continues benefits like Social Security and certain types of assistance for veterans. The Congressional Research Service has an excellent overview of the legal issues the government must consider during a shutdown, as well as examples of how certain government services and functions were affected. Some 800,000 federal employees are likely to feel the effects of the latest shutdown either in the form of furloughs or unpaid leave. The Departments of Health and Human Services, Commerce, and Interior are expected to be among the hardest hit.
While the last shutdown in 1995-1996 may offer some precedent when it comes to how the current one might play out, there are contextual differences to consider.
The charts below (using Office of Management and Budget data) illustrate U.S. spending on mandatory & discretionary programs in 2012 compared to 1996:
A major point of contention in the most recent budget battle that caused today's shutdown was how (and whether) to fund the President's health care reform law. Mandatory spending -- which includes funding for entitlement programs like Social Security, Medicaid, and Medicare -- has increased dramatically in recent years, and will likely remain a primary focus of budget debates as long as it makes up the majority of federal spending.
There is also growing concern over the amount of funding required to keep up with interest payments on America's debts. As the government borrows more to finance its existing programs, interest payments have increased significantly. So far, the government has spent about $396 billion on these payments in Fiscal Year 2013 alone, not including the month of September. In 1996, that total was $344 billion.
While the debate over budget priorities and even the shutdown itself aren't new on Capitol Hill, this time around, the fiscal trends framing the discussions are.0 Comments | Post a Comment | Sign up for NTU Action Alerts
The federal government officially runs out of funding at midnight tonight. While a good amount of attention will be devoted to political blame, it’s helpful to understand what a shutdown really means and what will actually happen in its wake.
First, the name, “shutdown” is not entirely accurate. The situation can more cogently be described as a funding gap. Between which one stream of funding ends before another is approved. The drastic nature of these once normal bureaucratic snafus were exacerbated in 1980 when President Carter’s new Attorney General, Benjamin Civiletti issued a couple legal opinions interpreting the obscure 1884 Antideficiency Act: One saying the work of government cannot continue through a funding gap, and another modifier saying that only essential government services and personnel could legally remain working. To allow non-essential government employees to work without being paid meant they would be “illegal volunteers”.
After the consequences of funding gaps became clear, politics gradually asserted itself. Throughout the end of Carter’s term and on through the Reagan and Bush terms, temporary shutdowns of anywhere between one and five days were commonplace and were precipitated by an outside political issue. The gap and the subsequent standoff between President Clinton and House Speaker Newt Gingrich in 1995, which dragged on 21 days, holds the modern record. Due to the political backlash that engulfed Washington in the months following the ’95 shutdown, America has not seen such an event since.
Another note about the term “shutdown”: Civiletti’s second legal opinion allowing “essential” workers to remain on the job means many impactful government services will continue. Medicare and Medicaid reimbursements will not stop. Social Security checks will continue to be mailed. There is also a current statute stating that military personnel will continue to accrue pay which will be reimbursed after funding is restored. However, the term “essential” does not apply to national parks, zoos, and museums like the Smithsonian. They will close if there is a funding gap.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Tweet tutoring: The Food and Drug Administration is paying over $182,000 of taxpayer money to an outside group for the expressed purpose of “better understanding” their social media. The agency is currently far behind other agencies in the number of Facebook “likes” and Twitter “mentions”. Read more at the Washington Free Beacon.
Paycheck hypocrisy: An Illinois judge ruled that members of the general assembly will indeed get their taxpayer funded paychecks after Illinois Gov. Pat Quinn forced members of the state legislature to forfeit their salaries until they solved the state’s unfunded pension liability crisis. On top of that, the back pay will have to come with interest. The Herald Review has more details.
Paper waste: The staff of Florida Rep. Alan Grayson used a bit of their time on the job to pull a prank on a fellow employee. A member of Rep. Grayson’s district office staff posted a picture of a chair wrapped I toilet paper and a note admitting the deed on an office phone on Facebook. Presumably, all of this occurred during business hours. Bizpac Review has more.0 Comments | Post a Comment | Sign up for NTU Action Alerts
States' Dependence on Federal Spending: Historically High
Whenever the national economy takes a turn for the worse, states' tax revenues tend to fall, and policymakers at the federal and state levels often try to fill the budgetary gaps with an influx of federal tax dollars. These sorts of "stimulus" measures are pitched as ways to keep important public services operating until the economy recovers. In 2009, the President's signature stimulus bill -- the American Recovery and Reinvestment Act (ARRA) -- pumped massive amounts of public dollars into states' coffers, which went towards infrastructure construction, teacher and emergency personnel payrolls, and other projects.
This budgetary trick isn't new. What is unique when it comes to states' budgets in recent years, however, is just how much they depend on federal funding. According to new research from the Pew Charitable Trusts' Fiscal Federalism Initiative, more than 1 out of every 3 dollars states spend comes from a federal fund or grant. Even in past recessions -- indicated by the grey shading in the chart below -- that ratio tended to hover closer to 1:4.
Source: Pew Charitable Trusts
In the wake of sequestration, these findings mean that some states will undoubtedly be sitting a little closer to the edges of their seats as Congress begins another round of contentious debate on the budget and how it might avoid a government shutdown. States in the national capital region such as Maryland and Virginia will obviously be affected by any reduction in federal spending: more than 20 percent of the area's GDP consists of federal spending.
However, there are also some states that are more geographically removed from Washington but still have plenty of skin in the game -- in Kentucky and New Mexico, 35 percent of GDP comes in the form of federal spending, and there are 6 states total that depend on D.C. for more than 30 percent of their economic productivity. The Washington Post has a helpful breakdown of some of these figures here.
There are some signs of improvement: as the economy (slowly) recovers, states' tax revenues have steadily begun to increase. However, economists seem to agree that those numbers are heavily influenced by higher tax rates overall, such as recent rate increases in California.
For more on Pew's study, including plenty of helpful charts and deeper statistics, take a look at their Fiscal Federalism Initiative here.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Today’s Taxpayer News!
Another “green” bust: An electric car charging company in Phoenix which was sponsored by the Department of Energy is considering bankruptcy after admitting the stations they installed are not making a profit and disclosing that DOE’s “EV Project” spent almost $100 million of taxpayer money to help prop up the fledgling company. Read more here.
Tattoo stamps? A Raleigh, NC tattoo parlor has been accepting SNAP cards (a.k.a. food stamps) totaling hundreds of dollars. Read more at Red Alert Politics.
HipsterCare: Watchdog News highlights a new, and quite psychedelic, ad from Oregon’s state agency administering the Affordable Care Act (Obamacare). The ad, part of a longer campaign to enroll Americans, costs taxpayers almost $10 million. The TV ads themselves total $3.2 million in taxpayer funds.0 Comments | Post a Comment | Sign up for NTU Action Alerts