Topic: Government and Politics

Bon Voyage, Politicians

Senator McCain and Speaker Pelosi have been criticized for their visits to the Middle East, but at least they can claim that their trips were relevant to issues of national importance. Most members of Congress, by contrast, create excuses for junkets to Europe and the Caribbean. Taxpayers pick up the tab for these quasi-vacations - and the price tag is staggering since politicians travel on private jets operated by the military and generally stay in plush hotels. The Examiner explains:

Congress is keeping Andrews Air Force base plenty busy this year ferrying lawmakers all over the globe at taxpayers’ expense. Rep. Bennie Thompson of Mississippi took his wife, nine Democrats and two Republicans - Reps. Dan Lungren of California and Mike Rogers of Alabama - on a whirlwind tour of the Caribbean last week. After stops in Honduras and Mexico, they stopped in the U.S. Virgin Islands, where the delegation stayed at the five-star Caneel Bay resort. In a separate trip to the Caribbean last week, Rep. Eliot Engel of New York squired his wife and four Democratic members to Grenada and Trinidad. All told, the military flew at least 13 congressional delegations to various destinations during the Easter recess – at an estimated rate of $10,000 or more per flying hour. …At the Caneel Bay resort, where room rates reach $1,100 per night, the spokeswoman said Thompson and his wife paid the “government rate.” But, according to the reservations department, Caneel Bay doesn’t “offer any government rates.” …Rep. Jim Oberstar, D-Minn., also led a trip to Belgium over the two-week Easter recess. In February, Sen. Bob Bennett, R-Utah, took a delegation there. “We’re at war with Iraq and Afghanistan, but apparently our members see Belgium as our most urgent international destination,” scoffed one Republican member of Congress.

Too Many Americans Have Their Snouts in the Federal Trough

A disturbing new reports estimates that more than one-half of Americans are somehow dependent on government for their livelihood. This is part of a troubling trend, and has worsened in recent years thanks to the profligacy of the Bush Republicans. Investor’s Business Daily certainly understands the danger of having a nation where the people riding in the wagon out-number (and maybe out-vote) the people pulling the wagon:

Gary Shilling, an economist in Springfield, N.J., figures that 52.6% of Americans, which includes dependents of direct recipients, “now receive significant income from government programs” … the data from 1950, when a mere 28.3% of Americans relied on Washington, that really shows how needy we’ve become. … if the current pace is not abated in 10 years, the percentage could exceed the 55% mark of 1980, the year Reagan was elected on a platform of scaling back the federal behemoth. By 2040, it could be 60%, Shilling reckons. This bodes ill for any prospects of cutting government back to any reasonable size and reforming our messy and intrusive tax system. … when more than half of the country has a financial interest in seeing the government grow, that’s the part of America to which they will cater. That’s certainly not healthy and it is likely unsustainable. … How long before the richest and most productive Americans decide that they will no longer prop up the poorest and least productive? With their political influence waning as that of the untaxed and low-taxed Americans and those who live off the government grows, they can either seek a tax-haven nation where government isn’t a growth industry, or they can choose to be less productive. Neither choice is good for America’s future.

Ron Paul and the Establishment

You get a sense of Ron Paul’s challenge in the Republican presidential race when you look at this Washington Post graphic about early fundraising. Not only is Paul running way behind the frontrunners in the money race, but the Post tells us who some of the notable donors to each candidate are. Mitt Romney is supported, for instance, by Mormon motel mogul J. Willard Marriott. Giuliani has Yankees boss George Steinbrenner. McCain draws support from Henry Kissinger and a managing director of the Carlyle Group. (Can you guess which one is the candidate of the Republican Establishment?) And apparently, the most notable contributor to Ron Paul is … Rob Kampia, director of the Marijuana Policy Project. It’s going to be a long campaign.

For the Democrats, interestingly, the Post eschews listing corporate moguls; instead, it tells us that supporters of the various candidates include Laurence Tribe, Steven Spielberg, Zach Braff, and Paul Newman. Democrats are just so much cooler. And I guess Clinton, Obama, and Edwards just didn’t get any money from The Rich. Funny thing, though, Hillary’s top five zip codes are all in Manhattan, and Obama’s are all in Manhattan or Chicago. Who knew all the hip young TV stars lived in such places? Edwards, however, did pull in a bundle from Beverly Hills 90210.

Sounds Appealing

Jonathan Rauch’s piece on Dwight Eisenhower and the foreign policy vision he handed down to a generation of foreign policy practitioners, includes this little gem:

Eisenhower’s staff secretary and closest aide, Gen. Andrew Goodpaster, once said of his boss, “He was an expert in finding reasons for not doing things.”

Sounds like a good attribute in a president to me.

Volunteer Today!

This is National Volunteer Week – which is really appropriate, since it’s also the week our federal income taxes are due, and the income tax system is based on “voluntary compliance.” No, really, it says so right on the 1040 packet and throughout the IRS website. Indeed, the friendly folks at the IRS acknowledge (.pdf) that some people get the wrong idea because the IRS itself tells taxpayers in the Form 1040 instruction book that the tax system is voluntary.” But if you take their little online test of “Your Role as a Taxpayer,” they explain to you that it is True that “IRS publications state that the tax system is voluntary,” but it is also True that “The government has the right to force me to pay my taxes and charge me penalties for not paying taxes.” Go figure.

Anyway, if you have any time or money left after paying your taxes, consider doing some volunteer work.

Another Costly Government Failure

Even though they claim to be pro-family, some politicians want the government to act like Mommy and Daddy. President Bush’s abstinence program is a good example of this unfortunate willingness to adopt nanny-state policies. But like almost everything the government does, abstinence programs are an expensive failure. The UK-based Guardian reports on the latest research:

It’s been a central plank of George Bush’s social policy: to stop teenagers having sex. More than $1bn of federal money has been spent on promoting abstinence since 1998 - posters printed, television adverts broadcast and entire education programmes devised for hundreds of thousands of girls and boys. The trouble is, new research suggests that it hasn’t worked. At all. A survey of more than 2,000 teenagers carried out by a research company on behalf of Congress found that the half of the sample given abstinence-only education displayed exactly the same predilection for sex as those who had received conventional sex education in which contraception was discussed.

To Fix Student Lending, Government Must Go

There’s been a lot of unflattering news lately about the student loan industry: Revelations about schools and lenders in revenue-sharing deals; college financial aid officers holding stock in companies on their schools’ “preferred lender” lists; a U.S. Department of Education official owning shares in a lending company he was supposed to be overseeing; and just yesterday, revelations that some lending companies have had largely unfettered access to a federal database stocked with Social Security numbers, email addresses, loan balances, and other sensitive information belonging to tens-of-millions of student borrowers.

To many people, these revelations are just further evidence of the immoral, rapacious greed of for-profit lenders. As Generation Debt author Anya Kamenetz explained recently on the Huffington Post blog:

When I wrote my first piece about the student debt crisis in the Village Voice in June 2004, the future looked grim. Average student loan burdens doubled in the 1990s to nearly $20,000, and in February 2006, barely a year ago, Congress passed the largest cuts to student aid in history.

I never would have guessed that the tide would turn so quickly and that the loan industry, with its fat profits, billions in government subsidies, private jets and baseball teams, would be on the defensive. But here we are.

Kamenetz and others like her are right to be angry about the cushy arrangements lenders have secured through the Federal Family Education Loan Program (FFELP), which guarantees student loans with federal tax dollars. Her solution to the overall student loan mess, however, would do little to attack the root cause of the scandals and graft:

The Direct Loan Program. Switching [to it from FFELP], as described in the reintroduced STAR Act, would save billions we could then use for much needed grant aid. And a “single payer” Direct Loan program would save on marketing costs and limit the potential for scandals like the current one.

The federal Direct Loan Program – which currently furnishes about a quarter of all federal student loans – cuts out private lenders and sends loans directly from the U.S. Treasury to college kids. Now, that might be cheaper to run – though that is itself hotly debated – but the definition of insanity is doing the same thing over and over and expecting different results, which is just what we’d be doing if we decided to solve the current student loan disaster by giving the federal government even more student lending power. The government, you see, is the root cause of the current problems, not the solution:

  • The subsidies that have enriched lenders were created by federal policymakers, not loan companies.
  • Massive federal aid – which according to the latest inflation-adjusted data from the College Board exploded from $48.3 billion to $94.4 billion over just the last decade – has helped fuel skyrocketing tuition, creating ever-bigger federal and private loan markets.
  • Some of the biggest problems unearthed so far directly involve federal breakdowns, including a federal official owning over $100,000 worth of stock in a company he was supposed to be overseeing, and federal bureaucrats giving some lenders almost free rein to comb over highly sensitive student data. (Which, by the way, also ought to make even the most trusting person very dubious of federal promises to fully protect student privacy if allowed to maintain a proposed “unit record database” containing detailed information on every college student in America.)

Unfortunately, many of the student lending industry’s antagonists aren’t actually all that concerned with maximizing efficiency or saving taxpayers money. What they’re primarily interested in is getting as many cheap dollars to students as they can. In other words, its not outrageous subsidies they’re especially angry about, but that the wrong special interests are getting them.

Michael Dannenberg, Director of the New America Foundation’s Education Policy Program and editor of its Higher Ed Watch blog, recently made this abundantly clear:

The ultimate success of these student loan investigations will be measured by the degree to which they result in cheaper college loans for students and families. Right now, students are paying interest rates for college loans that are simply too high.

Apparently it doesn’t matter that total, inflation-adjusted federal aid doubled over the last decade; that inflation-adjusted aid per full-time-equivalent student rose from $6,700 to $10,113 in that same time, or that the interest rate on subsidized federal loans is fixed at 6.8 percent while the prime rate is currently 8.25 percent. For Dannenberg and others like him, when it comes to federal policy college students never get a fair deal.

In light of the reality that the special interests most heavily involved in the student aid debate want as much money for themselves as they can get, and that the government has almost always been happy to provide it, it’s clear that what would be best for taxpayers would neither be to maintain FFELP nor to switch completely to Direct Lending, but to eliminate federal aid altogether. Then, the people who would be enriched would be taxpayers – well, maybe “unharmed” would be a more accurate description – while both lenders and students would finally have to earn an honest buck.