Tag: waste

Government Gold-Plating

Sen. Tom Coburn (R-OK) released his annual Wastebook this past week. It contains a laundry list of doozies. The U.S. government’s gold-plating operations included $190,000 to study compost digested by worms, $297 million for the purchase of an unused mega blimp, and $1 million on a Virginia bus stop where only 15 people can huddle under a half-baked roof. These questionable (read: absurd) expenditures only represent the tip of the iceberg.

In addition to supporting members of Congress and civil servants, U.S. taxpayers support welfare recipients. And they support them lavishly, too. Hawaii, Massachusetts, and D.C. residents receive sizeable welfare payments (read: salaries). Indeed, the magnitude of these payments exceeds the average salary of an American teacher, as well as a soldier deployed in Afghanistan, by at least $10,000 per year.

The public can forget all the clap-trap they are hearing about austerity. Indeed, a fairly dull knife could cut billions of dollars from the U.S. government’s largess. 

Senate Committee Hearing on Disability Fraud

On Sunday, CBS’s 60 Minutes profiled Sen. Tom Coburn’s (R-OK) on-going investigation of fraud and abuse in the federal government’s two main disability programs: Social Security Disability Insurance and Supplemental Security Income (see Chris Edwards’ discussion here). Yesterday, the Senate Committee on Homeland Security & Governmental Affairs (Coburn is the ranking member) held a hearing on a particularly egregious example centered on the Social Security Administration’s Huntington, WV office. 

The case is a perfect example of what is quickly becoming known as the “disability-industrial complex”: specialty law firms overwhelming the system with dubious disability claims, doctors vouching for applicants with dubious claims, and federal administrative law judges awarding disability benefits to individuals with dubious claims.

 

The committee produced a 160+ page report that is jaw-dropping from beginning to end. If you’re pressed for time, at least check out the “findings” on pages 4-7. In the Huntington case, it’s pretty clear that the three points of the triangle were all in cahoots. It’s also quite similar to a still unfolding disability scandal in Puerto Rico that I discussed in August. In both cases, the public is now aware of the scandals thanks to the Wall Street Journal’s Daniel Paletta’s excellent investigative reporting. That begs two questions, however: what other major disability scandals are sitting out there waiting for a curious reporter discover? And what other ticking time-bombs are Social Security Administration bureaucrats aware of but doing little to defuse? 

Maybe the Real Lesson Is That It’s Best to Shut Down the Federal Government Before a New Fiscal Year Begins

The politicians, bureaucrats, lobbyists and interest groups in Washington are hyperventilating that the federal gravy train may get sidetracked for a day or two by a shutdown fight between Republicans and Democrats.

I’m not sure why they’re so agitated. After all, the shutdown is really just a slowdown since only non-essential bureaucrats are sent home. And everyone winds up getting paid for those unplanned vacations, which is why the bureaucrats I know are crossing their fingers for a lengthy confrontation.

But that describes what may happen when the new fiscal year begins tomorrow. What’s been happening in recent days, culminating today, is a feeding frenzy of end-of-the-fiscal-year wasteful spending.

Here are some details from a Washington Post expose.

This past week, the Department of Veterans Affairs bought $562,000 worth of artwork. In a single day, the Agriculture Department spent $144,000 on toner cartridges. And, in a single purchase, the Coast Guard spent $178,000 on “Cubicle Furniture Rehab.” …All week, while Congress fought over next year’s budget, federal workers were immersed in a separate frantic drama. They were trying to spend the rest of this year’s budget before it is too late. …If they don’t, the money becomes worthless to them on Oct. 1. And — even worse — if they fail to spend the money now, Congress could dock their funding in future years. The incentive, as always, is to spend. So they spent.

If you’re a taxpayer, you’ll be especially delighted to know that the “use it or lose it” spending orgy is so intense that federal contractors have to cater lunches for their sales staff. Can’t have them away from their desks, after all!

It was the return of one of Washington’s oldest bad habits: a blitz of expensive decisions, made by agencies with little incentive to save. Private contractors — worried that sequestration would result in a smaller spending rush this year — brought in food to keep salespeople at their desks. Federal workers quizzed harried colleagues in the hallways, asking if they had spent it all yet. …“Use it or lose it” season is not marked on any official government calendars. But in Washington, it is as real as Christmas. And as lucrative. …In 2012, for instance, the government spent $45 billion on contracts in the last week of September, according to calculations by the fiscal-conservative group Public Notice. That was more than any other week — 9 percent of the year’s contract spending money, spent in 2 percent of the year.

The IRS may win the prize for the most egregious example of last-minute waste.

In 2010, for instance, the Internal Revenue Service had millions left over in an account to hire new personnel. The money would expire at year’s end. Its solution was not a smart one. The IRS spent the money on a lavish conference. Which included a “Star Trek” parody video starring IRS managers. Which was filmed on a “Star Trek” set that the IRS paid to build. (Sample dialogue: “We’ve received a distress call from the planet NoTax.”)

But it’s not just tax collectors who flush our money down the toilet in creative ways.

One recent study, for instance, found that information technology contracts signed at year’s end often produced noticeably worse results than those signed in calmer times. …they listed dumb things they had seen bought: three years’ worth of staples. Portable generators that never got used. One said the National Guard bought so much ammunition that firing it all became a chore. “When you get BORED from shooting MACHINE GUNS, there is a problem,” an anonymous employee wrote.

Impressive examples of waste, though I confess I’m curious about the part about ammo and the National Guard. Does this mean bullets are like milk and have to be fired before an expiration date?

Beats me, but at least someone in the government acknowledged that (at least up to a point) it’s cool to fire a machine gun. Maybe that person should hook up with the Texas cop who likes tanks.

Oh, and you’ll be happy to know that spendaholic bureaucrats and crafty interest groups keep track of time zones so they can squander money until the very last second.

On Monday, Richer’s people will sell until midnight. Then they will keep selling. “Money rolls across the continent,” the feds say. Cash not spent in Washington might be spent by federal offices in California in the three hours before it is midnight there. When it is midnight in California — 3 a.m. in Washington — they will keep on. There are federal offices in Hawaii, after all. And it will still be three hours until midnight there.

Makes me think that we may need a slogan for the bureaucracy. Perhaps this modification of the Postal Service’s unofficial motto: “Neither snow nor rain nor heat nor gloom of night - nor even different time zones - stays these bureaucrats from spending every possible penny of other people’s money.”

But let’s close on an upbeat note. Whether you give credit to the Tea Party, to Republicans, to gridlock, or to Obama, the good news is that the federal government in the past two years has been wasting money at a slower rate.

So taxpayers can smile…or at least not frown as much. The bureaucracy and contractors may be throwing a party today, but not with the same reckless abandon they displayed a between 2001 and 2010.

$10.3 Billion in Unemployment Insurance Improper Payments

The Washington Times noted this week that the 2012 improper payment rate for unemployment insurance benefits was 11.4 percent ($10.3 billion out of $90.2 billion), according to U.S. Department of Labor data. The good news is that the figure is down from 12 percent in 2011. The bad news is that it’s still a pathetic waste of money. 

The waste, fraud, and high administrative costs associated with the program are just some of the reasons why it should be scrapped. A Cato essay on the failures of the unemployment insurance system explains: 

When policymakers dream of ways to provide subsidies and safety nets to groups in society, they rarely take into account the large bureaucratic costs that are inevitably involved. The UI system is a complex and costly system for governments and businesses to administer. 

State governments must raise taxes from almost 8 million businesses, with tax bills specifically calculated for each firm’s experience rating. At the same time, the states dole out individually calculated benefits to millions of workers and monitor whether each person making a claim is currently eligible. Businesses and states need to adjudicate the many disputed claims for benefits, and states need to police UI tax evasion as businesses try to manipulate the system to get a lower tax rate. 

Federal and state UI administration cost taxpayers $5.9 billion in 2010. Despite this large cost, there is widespread concern among experts that the UI system is “in long-term decline” from an administrative perspective. UI computer systems are apparently far outdated in many states, and administrators say that they need more money to do their jobs competently. 

Homeland Security Grants: Subsidizing Dystopia with Your Tax Dollars

My Washington Examiner column this week focuses on an important new study from the office of Sen. Tom Coburn (R-OK): “Safety at Any Price: Assessing the Impact of Homeland Security Spending in U.S. Cities.”  If you’ve read any of the ample media coverage the report’s received, you may have heard that DHS grants have gone toward 13 sno-cone machines for terror-warriors in Michigan, a latrine on wheels for Fort Worth, Texas, a $100,000 underwater robot for Columbus, Ohio, and a Halloween “zombie apocalypse” demonstration at a swank resort outside San Diego.

But, as I argue in the Examiner,

the media focus on “waste, fraud, and abuse” misses a graver problem with DHS’s decade-long spending spree. Sno-cone machines and “zombie apocalypse” parties aren’t the worst things DHS is underwriting. We ought to worry more about the proliferation of surveillance cameras, mobile biometric scanners, armored personnel carriers and police drones.

The useless projects DHS funds are far less troubling than the ones that can be used to harm Americans’ privacy and liberty—and Coburn’s report is replete with examples of the latter.

Just today the Daily noted another troubling DHS project: “Government officials are quietly installing sophisticated audio surveillance systems on public buses across the country to eavesdrop on passengers…. Linked to video cameras already in wide use, the microphones will offer a formidable new tool for security and law enforcement. With the new systems, experts say, transit officials can effectively send an invisible police officer to transcribe the individual conversations of every passenger riding on a public bus.” The Daily notes, unsurprisingly, “In San Francisco, the Department of Homeland Security is funding the entire cost with a grant.”

It’s a mistake to look at DHS grants simply through the prism of government waste—as if what’s going on here is of a piece with $500 toilet seats and bridges to nowhere.  The costs of this unthinking slide toward a militarized, high-tech Idiocracy can’t be measured in budgetary terms alone.

More highlights from Coburn’s report after the jump:

Coburn also notes the use of DHS funds for police purchases of “Long Range Acoustic Device” crowd-control weapons:

originally developed for use by the military as a nonlethal way to repel adversaries, including Iraqi insurgents or pirates, by making a loud and intense sound that is capable of damaging hearing. Law enforcement agencies have purchased LRAD machines for purposes that include crowd control and issuing message and alerts across vast distances, though its use in terror-related preparedness is questionable.

In 2009, the Pittsburgh police department used its LRAD machine to disperse a crowd that was protesting the G-20 summit….
In 2009, the San Diego County Sheriff stationed its LRAD device at the town-hall meetings of Rep. Darryl Issa (R-CA), Rep. Susan Davis (D-CA), and Rep. Duncan Hunter (R-CA), which drew conservative and liberal protestors. The San Diego sheriff’s stated that the LRADs were in place so they “could use the LRAD in place of pepper spray” if there were problem at the event, which there was not.

… Mobile Fingerprinting Devices:

The Fairfax County Police Department in Virginia,
part of the National Capital Region around
Washington, D.C., spent nearly $12 million to upgrade
its automated fingerprinting system called NOVARIS
and purchased mobile devices for use by officers in the
field. Digital fingerprinting had been in place for
Fairfax police since the early 1980’s, but the county
applied for, and won, UASI funds to purchase a new
state-of-the-art system, that would also help it
coordinate with neighboring counties. “Since it was
due for an upgrade, we took the opportunity to use the
UASI grant funds to refresh the system,” explained Alan Hanson with the department.
Hanson explained that the equipment “is used most often in a voluntary capacity” in situations where people are stopped but do not have identification.

…Armored Personnel Carriers:

police departments are arming themselves with military assets often reserved for war zones. One California resident observed as much when officials in Carlsbad—a city with one of the state’s lowest crime rates—expressed interest in using DHS funds to buy a BearCat: “What we’re really talking about here is a tank, and if we’re at the point where every small community needs a tank for protection, we’re in a lot more trouble as a state than I thought.”….

Fargo, a town which “has averaged fewer than 2 homicides per year since 2005” bought a “new $256,643 armored truck, complete with a rotating [gun] turret” using homeland security funds. Fargo Police Lieutenant Ross Renner acknowledges that Fargo “[does not] have every-day threats here when it comes to terrorism.”

…and “Drones: Patrolling the Skies Like Never Before”:

In Texas, the Montgomery County Sheriff’s Department successfully acquired a $300,000 Vanguard’s ShadowHawk drone fully paid with UASI dollars. Vanguard, located near Montgomery County, approached the sheriff’s department about procuring one of its unmanned systems, according to Chief Deputy Randy McDaniel. In fact, Vanguard helped the Sheriff’s department write “a winning grant proposal that allowed the entire cost of acquisition, training, insurance, and maintenance for a period two years to be absorbed in an Urban Areas Security Initiative (UASI) grant.”

Do read the whole thing.

Coburn Report on Federal Job Training Programs

Oklahoma Republican Sen. Tom Coburn released a report today on federal job training programs in his state. Here’s what Coburn’s intrepid staff found: duplication, waste, ineffectiveness, and stupidity. In short, the report is another example of how Washington is better at creating problems than solving them.

The report’s most important takeaway is that providing job training assistance is not a proper function of the federal government:

The convoluted mess of job training programs exists, not because of any well-meaning Oklahoman, but because Congress created a system that is doomed to fail. Employers and communities know best what skills are needed for a successful workforce, not bureaucrats—despite good intent.

What part of this scenario makes sense: Congress taxes Oklahoma employers at record rates, to fund job training programs created by politicians in Washington, only to send taxpayer money back to Oklahoma with rules and regulations that tie the hands of state and local governmental and business and ignore the unique economic and demographic factors of their communities. This scenario is the reality of the employment programs operated by federal government.

The first step Congress took in the wrong direction was a step out of the Constitutional boundaries set forth by our founders. Providing employment and training services is not a role for federal government at all, according to the enumerated powers listed in the U.S. Constitution. [Emphasis in original.]

Of course the scenario doesn’t make any sense, but as a Cato essay on federal employment and training programs notes, federal policymakers are fixated on “doing something”:

More fundamentally, federal employment and training programs don’t fill any critical economic need that private markets don’t already fill. Instead, the federal programs provide an opportunity for policymakers to show that they are “doing something” to help the labor market. To policymakers, federal job training sounds like something that should boost the economy, but five decades of experience indicate otherwise.

Medicare Fraud Posse Cackles as If They Laid an Asteroid

What the media blare:

Levinson Snags $515 Million in Health Care Fraud

More than 100 Charged in Massive Medicare Fraud Busts in 7 Cities in Scams Totaling $452 Mil

What I hear:

Drip … … … . drip … … … … .

Why? As the latter article notes, “authorities have targeted fraud that’s believed to cost the government between $60 billion and $90 billion each year.” So add up those two figures, which include frauds that occurred in multiple years, and you get somewhere between 1.1 percent and 1.6 percent of the amount that Medicare and Medicaid enable criminals to steal from taxpayers in a single year.

Neither article makes it clear how paltry these anti-fraud efforts are. But at least the former article asks:

So what is it about the government’s health care programs that make them such inviting targets for white collar criminals?

I answer that question here, and in this video: