Tag: big government

The $822,000-per-Year Bureaucrat and the Death of California

Over the years, I’ve shared some outrageous examples of overpaid bureaucrats.

Hopefully we’re all disgusted when insiders rig the system to rip off taxpayers. And I suspect you’re not surprised to see that the worst example on that list comes from California, which is in a race with Illinois to see which state can become the Greece of America.

Well, the Golden State has a new über-bureaucrat. Here are some of the jaw-dropping details from a Bloomberg report.

The numbers are even larger in California, where a state psychiatrist was paid $822,000, a highway patrol officer collected $484,000 in pay and pension benefits and 17 employees got checks of more than $200,000 for unused vacation and leave. The best-paid staff in other states earned far less for the same work, according to the data.

Wow, $822,000 for a state psychiatrist. Not bad for government work. So what is Governor Jerry Brown doing to fix the mess? As you might expect, he’s part of the problem.

…the state’s highest-paid employees make far more than comparable workers elsewhere in almost all job and wage categories, from public safety to health care, base pay to overtime. …California has set a pattern of lax management, inefficient operations and out-of-control costs. …In California, Governor Jerry Brown hasn’t curbed overtime expenses that lead the 12 largest states or limited payments for accumulated vacation time that allowed one employee to collect $609,000 at retirement in 2011. …Last year, Brown waived a cap on accrued leave for prison guards while granting them additional paid days off. California’s liability for the unused leave of its state workers has more than doubled in eight years, to $3.9 billion in 2011, from $1.4 billion in 2003, according to the state’s annual financial reports. …The per-worker costs of delivering services in California vastly exceed those even in New York, New Jersey, Illinois and Ohio.

Cartoon California Promised LandActually, it’s not just that he’s part of the problem. He’s making things worse, having seduced voters into approving a ballot measure to dramatically increase the tax burden on the upper-income taxpayers.

I suppose the silver lining to that dark cloud is that many bureaucrats now rank as part of the top 1 percent, so they’ll have to recycle some of their loot back to the political vultures in Sacramento.

But the biggest impact of the tax hike—as shown in the Ramirez cartoon—will be to accelerate the shift of entrepreneurs, investors, and small business owners to states that don’t steal as much. Indeed, a study from the Manhattan Institute looks at the exodus to lower-tax states.

The data also reveal the motives that drive individuals and businesses to leave California. One of these, of course, is work. …Taxation also appears to be a factor, especially as it contributes to the business climate and, in turn, jobs. Most of the destination states favored by Californians have lower taxes. States that have gained the most at California’s expense are rated as having better business climates. The data suggest that many cost drivers—taxes, regulations, the high price of housing and commercial real estate, costly electricity, union power, and high labor costs—are prompting businesses to locate outside California, thus helping to drive the exodus.

Yet another example of why tax competition is such an important force for economic liberalization. It punishes governments that are too greedy and gives taxpayers a chance to protect their property from the looter class.

NJ Gov. Vetoes ObamaCare Exchange; SD Gov. Rejects Medicaid Expansion

On the same day he met with President Barack Obama (D) at the White House, New Jersey Gov. Chris Christie (R) vetoed a bill that would have implemented a key part of ObamaCare:

New Jersey Gov. Chris Christie (R) became the latest state chief executive to rebuff President Barack Obama’s health care reform law Thursday by vetoing a bill that would have created an online marketplace for uninsured residents to shop for health insurance.

For the second time this year, Christie rejected legislation passed by New Jersey’s Democratic-controlled legislature that would have established a state-run health insurance exchange under Obamacare.

Meanwhile, South Dakota Gov. Dennis Daugaard (R) said his state will not implement ObamaCare’s Medicaid expansion:

There are far too many unanswered questions for me to recommend adding 48,000 adults to the 116,000 already on our rolls.

The Huffington Post reports that 19 states have refused to establish an Exchange, and 9 states have refused to expand Medicaid. I’ve heard higher counts, though.

Exposing Washington’s Dishonest Budget Math

I’ve repeatedly tried to expose pervasive fiscal dishonesty in Washington.

In these John Stossel and Judge Napolitano interviews, for instance, I explain that the crooks in DC have created a system that allows them to claim they’re cutting the budget when the burden of government spending actually is rising.

This sleazy system is designed in part to deceive the American people, and the current squabbling over the fiscal cliff is a good example. The President claims he has a “balanced approach” that involves budget cuts, but look at the second chart at this link and you will see that he’s really proposing bigger government.

This dishonest approach also was used by the President’s Fiscal Commission and last year’s crummy debt limit deal was based on this form of fiscal prevarication.

Here are some key excerpts from a Wall Street Journal editorial exposing this scam.

…President Obama and John Boehner are playing by the dysfunctional Beltway rules. The rules work if you like bigger government, but Republicans need a new strategy, which starts by exposing the rigged game of “baseline budgeting.” …numbers have no real meaning because they are conjured in the wilderness of mirrors that is the federal budget process. Since 1974, Capitol Hill’s “baseline” has automatically increased spending every year according to Congressional Budget Office projections, which means before anyone has submitted a budget or cast a single vote. Tax and spending changes are then measured off that inflated baseline, not in absolute terms. …Democrats designed this system to make it easier to defend annual spending increases and to portray any reduction in the baseline as a spending “cut.” Chris Wallace called Timothy Geithner on this “gimmick” on “Fox News Sunday” this week, only to have the Treasury Secretary insist it’s real. …in the current debate the GOP is putting itself at a major disadvantage by negotiating off the phony baseline. …If Republicans really want to slow the growth in spending, they need to stop playing by Beltway rules and start explaining to America why Mr. Obama keeps saying he’s cutting spending even as spending and deficits keep going up and up and up.

You probably won’t be surprised to learn that other nations rely on this crooked system, most notably the United Kingdom, which supposedly is imposing “savage” cuts even though government spending keeps rising (and they fooled Paul Krugman, though he seems to make a habit of misreading foreign fiscal and economic data).

But let’s return to the American fiscal situation. Republicans almost certainly will lose the battle over the fiscal cliff because they meekly are playing cards with a rigged deck controlled by the other side.

They should expose this scam by using nominal numbers and looking at year-over-year changes in both taxes and spending. I did that last year and showed how simple it is to balance the budget in a short period of time.

They key thing to understand is that (barring a recession) tax revenues rise every year. Indeed, the Congressional Budget Office projects that tax revenue will climb by an average of more than 6 percent annually over the next 10 years - even if the 2001 and 2003 tax cuts are made permanent.

So all that’s really needed to bring red ink under control is a modest bit of spending restraint. This video is from 2010, but the analysis is still completely relevant today.

It’s amazing how good things happen when you follow the Golden Rule of fiscal policy.

Laszewski on ObamaCare: ‘Get Ready for Some Startling Rate Increases’

The invaluable Robert Laszweski:

The Affordable Care Act: Ten Months to Launch “Obamacare”––Get Ready for Some Startling Rate Increases

[…]

I conducted an informal survey of a number of insurers…None of the people I talked to are academics or work for a think tank. None of them are in the spin business inside the Beltway. Every one of them has the responsibility for coming up with the correct rates their companies will have to charge…

On average, expect a 30% to 40% increase in the baseline cost of individual health insurance to account for the new premium taxes, reinsurance costs, benefit mandate increases, and underwriting reforms…

In states with the least mandates or for health insurance companies with the tightest underwriting now, the increase could be a lot more…

[E]xpect individual health insurance rates for people in their 20s and early 30s to about double…

Will the feds be ready to provide an insurance exchange in all of the states that don’t have one on October 1, 2013?

I have no idea. And neither does anyone else I talk to inside the Beltway. We only hear vague reports that parts of the new federal exchange information systems are in testing.

The former CIA director couldn’t get away with an affair in this town but the Obama administration has a complete lid on just where they are on health insurance exchanges and haven’t shown any willingness to want to talk about their progress toward launching on time––except to tell us all not to worry.

We are all worried. I would not want to be responsible for the work that remains and only have ten months to do it…

The Republicans said this would not work. If it does not launch on time, or does with serious problems, I would not want to be an incumbent Democrat.

I told them not to call this the “Affordable Care Act.”

Meet the Press, Check the Facts

This Sunday (2 December 2012), David Gregory hosted a lively session of NBC’s Meet the Press. The focus of Sunday’s program was the so-called Fiscal Cliff. Gregory rounded up many of the usual Washington suspects, including Treasury Secretary Timothy Geithner, and drilled them on their talking points.

Several times, in the course of Gregory’s questioning, he referred to President Bill Clinton’s tough 1993 budget deal. Throughout the broadcast, Gregory kept stressing the fact that the 1993 deal included defense cuts. For Gregory, those cuts were the flavor of the day.

This isn’t surprising. Indeed, most members of Washington’s chattering classes parrot the line that the economy boomed during the Clinton years because Clinton was the beneficiary of the so-called peace dividend, which allowed him to cut defense expenditures.

In fact, if we look carefully at the federal budget numbers, while Clinton did cut defense expenditures, as a percent of GDP, the majority of the Clinton squeeze came from non-defense expenditures. Indeed, as can be seen in the accompanying table, the non-defense squeeze accounted for 2.2 percentage points of President Clinton’s 3.9 total percentage point reduction in the relative size of the federal government.

Clinton squeezed the budget and squeezed hard, from all major angles. This was a case in which a president’s actions actually matched his rhetoric. Recall that, in his 1996 State of the Union address, he declared that “the era of big government is over.”

Clinton’s 1993 deal marked the beginning of the most dramatic decline in the federal government’s share of the U.S. economy since Harry Truman left office. The Clinton administration reduced government expenditures, as a percent of GDP, by 3.9 percentage points. Since 1952, no other president has even come close. At the end of his second term, President Clinton’s big squeeze left the size of government, as a percent of GDP, at 18.2 percent—the lowest level since 1966.

The table contains the facts. President Clinton knew how to squeeze both defense and non-defense federal expenditures. Indeed, he squeezed non-defense a bit harder than defense. Since 1952, the only other president who has been able to reduce the relative share of non-defense expenditures was Ronald Reagan. Forget the “peace dividend”—it’s all about the Clinton “squeeze dividend.”

Majority of Americans Now Oppose ‘Universal Coverage’

I launched the Anti-Universal Coverage Club on the Cato@Liberty blog in 2007. The Club is “a list of scholars and citizens who reject the idea that government should ensure that all individuals have health insurance.”

Well, that list just got longer. A whole lot longer. I’ll let the folks at Gallup take it from here:

In U.S., Majority Now Against Gov’t Healthcare Guarantee

For the first time in Gallup trends since 2000, a majority of Americans say it is not the federal government’s responsibility to make sure all Americans have healthcare coverage. Prior to 2009, a majority always felt the government should ensure healthcare coverage for all, though Americans’ views have become more divided in recent years…

The shift away from the view that the government should ensure healthcare coverage for all began shortly after President Barack Obama’s election and has continued the past several years during the discussions and ultimate passage of the Affordable Care Act in March 2010.

The split is 54-44 percent, well outside the poll’s margin of error. Below the jump are the results in chart form:

Now all we need is for 54 percent of the public to “like” the Anti-Universal Coverage Club’s Facebook page.

The shift was bipartisan:

Republicans, including Republican-leaning independents, are mostly responsible for the drop since 2007 in Americans’ support for government ensuring universal health coverage. In 2007, 38% of Republicans thought the government should do so; now, 12% do. Among Democrats and Democratic leaners there has been a much smaller drop, from 81% saying the government should make sure all Americans are covered in 2007 to 71% now.

Yet another indication that ObamaCare remains quite vulnerable.

‘By Far the Broadest and Potentially Most Damaging of the Legal Challenges’ to ObamaCare

That’s how Kaiser Health News describes the legal challenge that Jonathan Adler and I outline in this paper and that Oklahoma attorney general Scott Pruitt has filed in federal court:

Supporters of the law scoff at the arguments…

But, confident of their case, some health law opponents, including Jonathan Adler of Case Western Reserve Law School, Michael Cannon of the libertarian Cato Institute and National Affairs editor Yuval Levin, are urging Republican-led governments to refuse to set up the online insurance purchasing exchanges, which would, as the argument goes, make their residents ineligible for the tax credits and subsidies. They say that this step also would gut the so-called employer mandate, which the law says will take effect in states where residents are eligible for such assistance…

As even some health law supporters concede, the claim that Congress denied to the federal exchanges the power to distribute tax credits and subsidies seems correct as a literal reading of the most relevant provisions. Those are sections 1311, 1321, and 1401, which provide that people are eligible for tax credits and subsidies only if “enrolled … through an Exchange established by the state” [emphasis added].

It’s technically not correct to say that Oklahoma’s complaint is a challenge to ObamaCare, however. That complaint does not challenge a single jot or tittle of the statute. Oklahoma is asking a federal court to force the IRS to follow the statute, and to prevent the Obama administration from imposing taxes on Oklahoma residents whom Congress expressly exempted. Oklahoma’s complaint is indeed “the broadest and potentially most damaging of the legal challenges” related to ObamaCare. But think about it: if the only way to save ObamaCare from such a fate is to give the president extra-constitutional powers to tax and spend money without congressional authorization, just how unstable is this law? And is it really worth saving?

Also, the article is a few months behind on the debate over congressional intent, and our ongoing debate with Timothy Jost (who has reversed himself on quite a few issues).

But overall, a good article.