March 2013

March 1, 2013 12:13PM

Let’s Shed a Tear for Under‐​Appreciated Bureaucrats

When I first read this story in the Washington Post about supposedly under-appreciated federal bureaucrats, I was tempted to focus on the sentence referring to “the sledgehammer of budget cuts scheduled to hit today.” Below is the Congressional Budget Office's depiction of this "sledgehammer." Does the Washington Post really think that a 1.2 percent reduction in overall spending for the current fiscal year (which means the federal budget would still be larger than it was last year) represents a “sledgehammer of budget cuts”?

But I just mocked the New York Times last week for its reporting about supposed “deep spending cuts” and I also nailed the Washington Post back in 2011 for using the term “slash” for a budget plan that would have shaved a miniscule $6 billion from a budget of $3,800 billion. So instead I want to focus on the part of the story featuring self-pitying remarks of federal bureaucrats.

Here’s a good sampling:

[F]ederal workers in [the government-employee-heavy Fairfax County neighborhood of] Mantua say … having “United States Treasury” atop their paycheck [now] means having to defend yourself against arguments, from strangers and even from your own relatives, that you’re an overpaid and underworked leech.

…[M]any federal workers are … bothered by the growing sense that the careers they chose may now seem unattractive, even unworthy. …[O]n a recent visit to Missouri, [one worker] got fed up with ritual denunciations of federal workers…

[Another worker named Raymond] Won, a federal worker for 31 years, resents the notion, now commonplace on talk radio and Web sites devoted to bashing the government, that federal workers carry a lighter load than their for-profit counterparts.

…[O]lder government workers … are concerned about their pensions but even more anxious about why politicians are so willing to make federal employees the target of popular rage.

Excuse me while I wipe away the tears and compose myself. There are so many stories of unbearable hardship:

  • It’s absolutely heartbreaking to read about those unfortunate, oppressed, and under-appreciated bureaucrats who live in “a leafy section of Fairfax County where houses sell in the $700,000 range.”
  • And you can understand my tears of sympathy for folks who, as one bureaucrat admitted, had jobs where the “pay was guaranteed and you couldn’t get laid off.”
  • Moreover, we all share the pain of bureaucrats who must deal with uncomfortable comparisons, such as the fact that “pensions, once considered routine, have become a wild luxury in the private sector, so when many Americans hear that public employees still get retirement pay, they can get frustrated.”
Read the rest of this post »
March 1, 2013 11:50AM

UN Forced to Acknowledge Help to Mugabe

Four years ago, I wrote in the Wall Street Journal about a courageous United Nations whistleblower named Georges Tadonki. In 2008, Tadonki correctly predicted an outbreak of cholera in Zimbabwe. The epidemic, which killed 4,000 people, and an annual hyperinflation of 90 sextillion percent, were the results of Robert Mugabe’s drive to nationalize Zimbabwe’s commercial farms. Unfortunately, the UN bureaucracy, which was much more interested in appeasing Mugabe than helping his long‐​suffering people, threatened to fire Tadonki because of the revelation.

Congratulations to Bob Amsterdam, a friend of Cato and a human rights lawyer who defended, among others, Mikhail Khodorkovsky in Russia, for his recent win of Tadonki’s case before a UN tribunal.

March 1, 2013 10:54AM

DOMA Unconstitutionally Denies Federal Benefits to Legally Married Same‐​Sex Couples

Enshrined in the U.S. Constitution and an integral element of democratic self-governance generally is the fundamental right of all people to be treated equally by their government---to receive “equality under the law” in both procedure and substance. Yet at least one important federal law, with cascading effects on many others, denies that equal protection on the basis of sexual orientation: The Defense of Marriage Act, signed into law by President Clinton in 1996, contains a provision, Section 3, that defines “marriage” in all federal statutes as a legal union between one man and one woman. 

This definitional detail affects more than 1000 federal provisions, from tax returns and veterans’ benefits, to Social Security and health care, to housing and immigration. That is, federal law views lawfully married same-sex couples (who were married in one of the states or countries that recognizes these unions) differently from lawfully married opposite-sex couples. 

Aside from treating individuals adversely on the basis of their sexual orientation, Section 3 also imposes discriminatory costs on all sorts of private employers and contractors, due to the complex operation of federal employee benefits law---to give just one example of DOMA's reach.

Another example comes in tax law: Edith Windsor, the plaintiff in a case against DOMA that will soon be heard by the U.S. Supreme Court, had been in a loving, committed relationship with Thea Spyer for 42 years when they legally married in Canada in 2007.  When Spyer passed away in 2009, Windsor not only had to deal with the grief of losing her partner, but was forced to pay federal estate taxes totaling $363,053 because Section 3 prevents the IRS from recognizing Windsor as a surviving spouse. When Windsor sued to get her money back, two lower federal courts found Section 3 unconstitutional and ordered the requested tax refund.

Read the rest of this post »
March 1, 2013 9:00AM

Yes, School Choice Does Help Poor Kids

Yesterday, WaPo’s Valerie Strauss accused scholarship tax credit (STC) programs of operating as Reverse Robin Hoods, robbing from the poor to give to the rich.

Call it welfare for the rich. Why? Wealthy businesses and individuals are the folks who get the tax credits for putting up the cash to pay the tuition. Furthermore, the amount of money for tuition made available for tuition by private scholarship organizations often does not actually cover the full cost of attending a private school. Poor families can’t make up the difference. Guess who can.

The reality is almost exactly the opposite. Donors are not benefitting financially at the expense of the poor or anyone. And while it is true that tax-credit scholarships do not always cover the full cost of tuition at private schools, thanks to low-cost options and needs-based tuition breaks, low-income families are the primary beneficiaries of STC programs.

STC Donors Do Not Benefit Financially

It is odd to claim that “wealthy businesses” are financially benefitting by receiving a tax credit for their donations. Even a 100% tax credit means that they are simply no worse off than before. A corporation with a $10,000 tax liability that made a $10,000 donation to a scholarship organization would then owe no state taxes but it would still have $10,000 less than it did before. Whether the $10,000 went to the government or a nonprofit is irrelevant to its bottom line.

Moreover, Strauss fails to mention that most state STC programs do not grant 100% credits. In fact, only four of the fourteen STC programs do. The other credits range from 50% to 90%. In these states, corporations would be better off financially if they merely paid their taxes.

STC Programs Benefit Low-Income Students

It is telling that Strauss provides only one example to support her claim that rich people benefit from the scholarships instead of the poor: “[Pennsylvania families] eligible to receive money to pay private tuition can earn more than $72,000…”

The key words in that sentence are “can earn." The relevant question is how much do the families of scholarship recipients actually earn.  The nonpartisan Pennsylvania Legislative Budget and Finance Committee reported in 2010 that the average scholarship recipient’s family earned only $29,000 annually, less than half of what the program allowed at the time.

Read the rest of this post »