Tag: Government waste

Washington Prospers While America Suffers

Unemployment in the heartland may be high and incomes may be stagnating in most of the nation, but Washington, DC, continues to be an oasis of prosperity as more of the nation’s resources get consumed by government. The latest evidence comes from the Washington Post, which reports on the federal government’s insatiable demand for more real estate.

Evidence of the federal government’s growing influence on Washington area commercial real estate is illustrated in big deals it is working on both sides of the table: auctioning a 127,000-square-foot Bethesda building previously occupied by the National Institutes of Health and moving to snatch up vast spaces in buildings on the private market that have been vacant for months. The General Services Administration is seeking to unload the 10-story building that the NIH vacated in 2002 when it consolidated offices into other buildings in Bethesda. The recommended opening bid for the online auction, which runs from April 30 to July 2, is $14 million. At the same time, federal leasing activity is expanding, according to Jones Lang LaSalle, the real estate firm representing the government. The government signed deals for 750,000 square feet of space in the District in the first quarter of 2010, compared with 670,000 square feet in the city for all of 2009.

It’s hard to pick out the most depressing part of the article. Signing leases for more space in the first quarter of 2010 than in all of 2009 might be at the top of the list. That is presumably a good (and discouraging) measure of the growth of government. But for those who enjoy reading about incompetence and inefficiency, the government’s eight-year (and counting) project to sell one office building may be at the top of the pile.

The GSA decided to sell the 46-year-old former NIH building at 7550 Wisconsin Ave. in Bethesda eight years ago. “We have a process we have to go through before we sell a building. We have to offer it to homeless housing, to local government,” said Bob Peck, commissioner for the GSA’s Public Buildings Service.

More discouraging factoids include a six-figure increase in the number of bureaucrats (just in the DC area), and the fact that the government is going to squander huge amounts of money on green renovations, which will require taxpayers to cough up lots of money for the contractors doing the work and for five-year leases (which probably means ten, knowing the sloth-like pace of government work) so the bureaucrats can be housed elsewhere during the work.

Expansion of the government’s role in the nation’s financial markets, increased defense spending and the new health-care law are driving its demand for more space. The government is expected to increase its Washington area payroll by as many as 100,000, according to Partnership for Public Service, a nonprofit group that helps the federal government find workers. “The government spent 2009 planning for the growth. We’re going to see the growth materialize in 2010,” said Scott Homa, research manager for Jones Lang LaSalle. The government also is overhauling many of its buildings, making them energy efficient. As a result, several agencies will need to lease space in the commercial market for five years or so during renovations.

Great Moments in (Anti) Stimulus

There were many reasons to oppose last year’s so-called stimulus legislation. But perhaps one of the most compelling reasons is that politicians and bureaucrats inevitably do really stupid things because the federal budget is a racket designed to funnel the maximum amount of money to powerful interest groups. Here’s a great example from a story linked on Kausfiles.com. A city in New Hampshire wanted to stick its snout in the trough in order to subsidize a water treatment plant, but eventually decided to reject the money because the local government’s out-of-pocket costs would increase - primarily thanks to corrupt rules designed to line the pockets of union bosses, but also because of protectionist requirements and a mind-boggling $100,000 of paperwork expenses:

As stimulating as it might have sounded at the time, the city recently declined $2.5 million from the American Recovery and Reinvestment Act for its new water treatment plant because federal wage regulations would have forced the city to pay more for the project. …the low bidder — Penta Corporation — presented final cost of $21 million with the stimulus funds and $17.3 million without. So the city said thanks, but no thanks, to the stimulus funds. “It just didn’t make sense,” said Deputy Public Works Director David Allen. “It was going to cost us more money to take the money.” Stimulus funds mandate workers are paid using Davis-Bacon Wage Determination, which sets the pay scale for workers on federal projects and added $2.5 million to the bottom line. The “Buy American” provision would’ve added another $500,000 and Allen said there would have been significant administrative costs — upwards of $100,000 — for the city to track it the way the government requires over the course of the two-year project.

Pinocchio Rove Strikes Again

George Bush ranks as one of America’s most fiscally irresponsible presidents. He increased overall spending from $1.8 trillion to $3.5 trillion and most of that new spending was used to create or expand domestic programs (no-bureaucrat-left-behind education spending, pork-filled highway bills, sleazy Wall Street bailouts, corrupt farm spending, new Medicare entitlements, etc.) that are not legitimate functions of the federal government. So it is galling to see his former senior adviser writing columns complaining about Barack Obama being a big spender. Many of the criticisms about the Obama Administration in his latest WSJ column are correct, to be sure, but Karl Rove has zero moral authority to make those arguments. Moreover, Rove once again engages in sloppy or dishonest (you choose) analysis by blaming Obama for some of Bush’s mistakes. In the excerpt below, he blames Obama for any of the Fiscal Year 2009 debt that was incurred after January 20 of last year. But as I’ve already explained, 96 percent of the spending in FY2009 is the result of Bush’s policies:

Consider that from Jan. 20, 2001, to Jan. 20, 2009, the debt held by the public grew $3 trillion under Mr. Bush—to $6.3 trillion from $3.3 trillion at a time when the national economy grew as well. By comparison, from the day Mr. Obama took office last year to the end of the current fiscal year, according to the Office of Management and Budget, the debt held by the public will grow by $3.3 trillion. In 20 months, Mr. Obama will add as much debt as Mr. Bush ran up in eight years. …Mr. Bush’s deficits ran an average of 3.2% of GDP, slightly above the post World War II average of 2.7%. Mr. Obama’s plan calls for deficits that will average 4.2% over the next decade. Team Obama has been on history’s biggest spending spree, which has included a $787 billion stimulus, a $30 billion expansion of a child health-care program, and a $410 billion federal spending bill that increased nondefense discretionary spending 10% for the last half of fiscal year 2009. Mr. Obama also hiked nondefense discretionary spending another 12% for fiscal year 2010.

Correction: In an earlier post on one of Rove’s columns, I incorrectly claimed that Bush never vetoed a bill because it spent too much.That was wrong. He did veto a handful of bills once Democrats took control of Congress.

Great Moments in Government Waste, the European Version

While American politicians are experts when it comes to squandering money, they may not be the world’s most profligate group of lawmakers. To be sure, American politicians sometimes give big piles of other people’s money to bail out Fannie Mae and Freddie Mac, but the politicians at the European Commission in Brussels engage in similar forms of corporate welfare with their Emissions Trading Scheme.

The overall burden of government is heavier in Europe, so that certainly suggests that there are greater opportunities to waste money, but what makes the European Commission special is that it is insulated from democratic accountability and there is no system of checks and balances. So even though the actual amount of money spent by Brussels is small compared to what is wasted by national governments in Europe, the outcomes are especially obscene. Here’s a story from the UK-based Daily Mail, reporting on a program (no joke) to fund activities such as basket weaving and siestas:

British taxpayers are helping to fund basket-weaving and slapstick acting workshops for young people across Europe. The projects, which include meetings about folk dancing and even a scheme to promote afternoon siestas, are part of an £800million EU programme to help people aged 13-30 ‘feel European’. …Another venture in Finland received thousands to support a coffee house which offered ‘everyone the chance to have a sleep for free’. It aimed to encourage afternoon naps to reduce stress. ‘Youth exchange participants’ also flocked to Macedonia last year for a meeting entitled Stories And Legends, receiving £18,000 to explore storytelling. …An EC spokesman said the projects were about exposing young people to other cultures and increasing their participation in  society. He added: ‘I don’t see anything wrong with basket-weaving or music-making if it encourages young people to meet other Europeans and learn a new skill from another part of Europe.’

Readers may be thinking this is no big deal. After all, American politicians fund pork projects all the time. But here’s the clincher. The UK’s Daily Telegraph reports that the European Commission is subsidizing a ski trip for…drum roll, please… the children of European politicians, and that the subsidies even go to households with income equivalent to about $175,000:

Taxpayers will heavily subsidise a skiing holiday in the Italian Alps for the children of MEPs and European Parliament officials in February. …The eight-day skiing trip for 80 children aged between eight and 17 is timed to begin over the weekend of St Valentine’s Day, providing some romantic time off from parenting for officials.  Costs, the holiday is priced at 920 euros (£822), are generously subsidised by the parliament’s budget. Households receive different levels of subsidy depending on their monthly income but even those on a income of over £108,000 get a discount. There is reduction of up to 52 per cent for officials earning £69,620 a year and an MEP, earning £86,000, is eligible for a subsidy of 45 per cent. …The children will enjoy full board in a three-star hotel in the beautiful village of Spiazzi. The trip includes “workshops” in a “multilingual environment” on the themes of “the mountain, its snow, its nature”. …The parliament’s spokesman declined to comment on the holiday.

Perhaps I’m not paying close enough attention, but I can’t think of anything the crowd in Washington has done that rivals this odious example of self-serving by lawmakers. Can anybody come up with an example that tops this?