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Government Spending

NJ Senate Race: Booker, Lonegan Separated by $101 Billion
Posted By: Michael Tasselmyer - 10/14/13

Tab Insert

On Wednesday, New Jerseyans will vote in a special election to decide who will replace outgoing U.S. Senator Jeffrey Chiesa, a Republican and former state attorney general who was appointed by Governor Chris Christie to fill the seat vacated after Frank Lautenberg's death in June. Ahead of the election, National Taxpayers Union Foundation has released its line-by-line analysis of the proposals made by the leading candidates: former Newark mayor Cory Booker, who won the Democratic nomination in August, and his Republican challenger Steve Lonegan, the former mayor of Bogota.

During any election cycle, candidates propose and debate a variety of policies, which can give voters some insight into how they would spend (or save) the tax dollars they send to Washington. Unfortunately for taxpayers, it can be difficult to translate these proposals into specific dollar figures. Using data and methodology from the BillTally project, NTUF has analyzed the campaign promises of would-be Senators and Representatives since 2000 in order to make the budgetary implications of their agendas clearer for interested voters.

For the New Jersey election, NTUF sifted through each candidate's official campaign materials, public statements, and media appearances in order to determine which of their proposals could affect federal spending.

  • Lonegan's agenda included two items that would decrease federal spending and ten that carried unknown costs. Mayor Booker has offered more in the way of both detail and volume of proposals: of the 58 that NTUF determined would have some budgetary effect, 20 would increase federal spending.
  • On net, Booker's proposals could increase federal spending by $33 billion per year, while Lonegan's could save almost $68.2 billion per year.
  • That difference amounts to nearly $101 billion per year, roughly 2.8% of the Congressional Budget Office's projected federal outlays for Fiscal Year 2014.

For links to analyses of each candidate's proposals, as well as a number of summary graphs and other information on the studies, check out today's special edition of the Taxpayer's Tab online here.

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Top 10 Reasons the Sequester is a Success
Posted By: Nan Swift - 10/14/13

The Budget Control Act of 2011 (BCA) was a law passed by Congress and President Obama during tense negotiations over the “debt ceiling.”  The intent of the law was to provide fiscal discipline and reduce the long-term debt.  One of the most important things the BCA did was to create discretionary spending caps to reduce the amount of money Congress can expend.  When Congress can’t meet these caps, a mechanism called the “sequester” automatically reduces discretionary spending in an across-the-board fashion. While far from perfect policy, the BCA and sequester are important tools to rein in Washington’s out-of-control spending.

Here are 10 reasons why:

1. Spending is falling: Spending is on track to fall below $3.45 trillion by the end of FY13. This is the first time, since the end of the Korean War, federal expenditures have fallen two years in a row. 
 
2. The deficit is shrinking: The deficit is expected to continue to drop through 2015 and is already down from a high of 10.2 percent of gross domestic product (GDP) in 2009 to 4 percent this year.
 
3. The sequester was NOT the crisis its critics predicted:  Transportation Secretary Ray LaHood feared chaos at airports due to Federal Aviation Administration cuts, but post-sequester, the agency’s budget is still larger than it was in 2008. Education Secretary Arne Duncan said that the sequester would result in mass layoffs of teachers, which has proven false.
 
4. The sequester does NOT put our national security at risk: The reduction in defense spending under the BCA is roughly 10 percent, which brings spending to about the same level it was under President George W. Bush in 2006.
 
5. Spending restraint can get our debt under control:  According to the Congressional Budget Office, if we could hold federal spending steady at $3.5 trillion we should be able to balance the budget by 2016.
 

6. The sequester helped to put the brakes on Washington’s out of control spending: In 2009, total federal spending reached over a quarter of GDP; in 2013 that fell to 21.5 percent. “Discretionary”(i.e., annually appropriated non-entitlement )spending, which sequestration primarily affects has shrunk by 10 percent since 2011 – and the sky hasn’t fallen.
 
7. The sequester is helping to eliminate wasteful spending: When forced to reexamine their budgets, many agencies found savings after all. The Department of Defense (DOD) found $1 billion in savings from reduced transportation costs and saved another $9.6 billion in reprogramming requests, delayed contracts, and reduced costs in another 200 programs. And there’s still overcapacity that costs taxpayers billions.
 
8. In the long run, the sequester can help the economy: The CBO states that “if the spending reductions under current law were reversed, that policy would lead to greater federal debt, which would eventually reduce the nation’s output and income below what would occur under current law.”
 
9. The sequester may be helping the stock market: Though many predicted stocks would tumble when the sequester took effect, the stock market has hit record highs this year. Though this is the result of a combination of factors, one major factor is that markets recognize that the U.S. is dealing with our outsized debt problem, making us an attractive investment.
 
10. The sequester does what Washington can’t:  The BCA’s sequester was intended to be a line in the sand that Congress would never dream of crossing. However, all other attempts to get spending under control failed. For decades, Washington has repeatedly given in to its worst instincts to increase spending and grown the size of government. Without the  sequester the overspending would never stop.

It’s important to remember though, that the sequester is only the first step toward getting our fiscal house in order. Larger bills loom on the horizon in the form of mandatory entitlement spending that threatens to bury our nation in debt. That’s why it’s so essential that we make the tough choices now, before the debt becomes unmanageable. There’s still a lot of work to do, but we must start by urging Washington to “Keep the Caps!”

To learn more about this important issue and take action, visit KeeptheCaps.com.

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The Late Edition: October 9, 2013
Posted By: Curtis Kalin - 10/09/13

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.

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(Audio) Speaking of Taxpayers: Is Debt Ceiling Debate Going to Crash the “Shutdown” Party? – Oct. 4, 2013
Posted By: Douglas Kellogg - 10/07/13

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. 

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The Late Edition: October 7, 2013
Posted By: Curtis Kalin - 10/07/13

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.

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Infographic: Where We're at with the Debt Ceiling
Posted By: Dan Barrett - 10/04/13

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)?

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The Late Edition: October 2, 2013
Posted By: Curtis Kalin - 10/02/13

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.

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Government Shutdowns Then And Now
Posted By: Michael Tasselmyer - 10/01/13

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.

  • For one, federal employment has increased substantially since then: in 1996, there were a little less than 1.9 million full-time civilian employees in the Executive branch. In 2012, that number was closer to 2.1 million, which means an additional 200,000 federal workers and their families could be affected this time around.
  • President Clinton's 1996 budget request, over which the disagreement began that ultimately lead to two government shutdowns in late 1995, included $1.6 trillion in outlays and a $196.7 billion deficit. President Obama's latest budget request, submitted in April, consisted of $3.03 trillion in outlays and a $744 billion deficit.

The charts below (using Office of Management and Budget data) illustrate U.S. spending on mandatory & discretionary programs in 2012 compared to 1996:

fy96spendingfy12spending

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.

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The Impact of Past Government "Shutdowns"
Posted By: Curtis Kalin - 09/30/13

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. 

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The Late Edition: September 30, 2013
Posted By: Curtis Kalin - 09/30/13

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.

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