I caught a lot of flack from my Republican friends for my post blaming the FY2009 deficit on Bush instead of Obama. Well, I must be a glutton for punishment because I can't resist jumping (albeit reluctantly) to Obama's defense again. I'm venting my spleen for two reason. First, FoxNews.com posted a story headlined "Obama Shatters Spending Record for First-Year Presidents" and noted that:
President Obama has shattered the budget record for first-year presidents -- spending nearly double what his predecessor did when he came into office and far exceeding the first-year tabs for any other U.S. president in history. In fiscal 2009 the federal government spent $3.52 trillion ...That fiscal year covered the last three-and-a-half months of George W. Bush's term and the first eight-and-a-half months of Obama's.
This story was featured on the Drudge Report, so it has received a lot of attention. Second, Bush's former Senior Adviser wrote a column for the Wall Street Journal eviscerating Obama for big budget deficits. Given Bush's track record, this took considerable chutzpah, but what really nauseated me was this passage:
When Mr. Obama was sworn into office the federal deficit for this year stood at $422 billion. At the end of October, it stood at $1.42 trillion.
I'm a big fan of criticizing Obama's profligacy, but it is inaccurate and/or dishonest to blame him for Bush's mistakes. At the risk of repeating my earlier post, the 2009 fiscal year began on October 1, 2008, and the vast majority of the spending for that year was the result of Bush Administration policies. Yes, Obama did add to the waste with the so-called stimulus, the omnibus appropriation, the CHIP bill, and the cash-for-clunkers nonsense, but as the chart illustrates, these boondoggles only amounted to just a tiny percentage of the FY2009 total -- about $140 billion out of a $3.5 trillion budget.
There are some subjective aspects to this estimate, to be sure. Supplemental defense spending could boost Obama's share by another $25 billion, but Bush surely would have asked for at least that much extra spending, so I didn't count that money but individual readers can adjust the number if they wish. Also, Obama used some bailout money for the car companies, but I did not count that as a net increase in spending since the bailout funds were approved under Bush and I strongly suspect the previous Administration also would have funneled money to GM and Chrysler. In any event, I did not give Obama credit for the substantial amount of TARP funds that were repaid after January 20, so the net effect of all the judgment calls certainly is not to Bush's disadvantage.
Let's use an analogy. Obama's FY2009 performance is like a relief pitcher who enters a game in the fourth inning trailing 19-0 and allows another run to score. The extra run is nothing to cheer about, of course, but fans should be far more angry with the starting pitcher. That having been said, Obama since that point has been serving up meatballs to the special interests in Washington, so his earned run average may actually wind up being worse than his predecessor's. He promised change, but it appears that Obama wants to be Bush on steroids.
A report released today by the federal government’s non-partisan General Accounting Office finds deficits in the Department of Education’s financial and program oversight. According to the GAO, “These shortcomings can lead to weaknesses in program implementation that ultimately result in failure to effectively serve the students, parents, teachers, and administrators those programs were designed to help.”
The GAO’s findings are consistent with the longstanding pattern: for forty years, Americans have steadily increased spending on public schools without any resulting improvement in student performance by the end of high school (see the figures here and here).
The Obama administration has touted its $100 billion in education stimulus spending as a key to long term economic growth. What the data show, however, is that higher spending on public schools over the past two generations has not improved academic outcomes. And economists such as Stanford’s Eric Hanushek have shown that it is improved academic achievement, not higher public school spending, that accelerates economic growth.
So if the administration is serious in wanting education to boost the American economy, it must support reforms that are proven to significantly raise achievement, such as those that bring to bear real market freedoms and incentives -- programs like the DC private school choice program that the administration has decided to kill despite its proven effectiveness.
The Obama administration and its allies in Congress want the federal government to expand its role in subsidizing health care. We are told that this expansion will restrain rising health care costs. But an OMB report yesterday that the government made $98 billion in improper payments last year -- $55 billion of which came from Medicare and Medicaid -- ought to raise suspicions about that claim.
According to Reuters, OMB Director Peter Orszag told reporters that the embarrassing figures from Medicare and Medicaid demonstrate the need for health care reform. I would concur if “reform” meant reducing the government’s role in health care. However, he means the opposite, which raises the question of how giving more money to an already waste-prone and bureaucratic federal health system can possibly make sense for the economy.
The administration has promised to cut down on improper payments with the aid of a new executive order. According to the Associated Press:
Under the executive order, every federal agency would have to maintain a Web site that tracks improper payments, error rates and outstanding payments. If an agency doesn't meet targets for reducing error rates for two years in a row, the agency director and responsible official will have to directly report to OMB to explain the delinquency and new actions they will take.
Somehow I doubt this will amount to much of a deterrent. The AP also said the administration plans to impose penalties on government contractors who receive improper payments. But last month it was reported that “the Department of Defense awarded nearly $30 million in stimulus contracts to six companies while they were under federal criminal investigation on suspicion of defrauding the government.”
Democrat Tom Carper, chairman of the Senate subcommittee on federal financial management, seemed to partly understand the broader meaning of the improper payment estimates:
It goes without saying that these results would be completely unacceptable in the private sector, as they should be in government, especially at a time of record deficits…Unfortunately, these numbers may still be just the tip of the iceberg since they don't even include estimates for several major programs, including the Medicare prescription drug plan.
Yes, Senator, which is precisely why bigger government – be it stimulus, bail outs, or health care reform – is an inferior option to letting the marketplace provide for our wants and needs.
Carper is also right about the $98 billion figure being the “tip of the iceberg.” As has been noted here before:
The Government Accountability Office estimates that the two major government health programs are currently losing a combined $50 billion annually to such payments. But that estimate probably low-balls the actual losses. Harvard’s Malcolm Sparrow, a top specialist in health care fraud, estimates that 20 percent of federal health program budgets are consumed by improper payments, which would be a staggering $150 billion a year for Medicare and Medicaid.
See this essay for more on fraud and abuse in government programs.
The HUD Inspector General’s Office released an audit earlier this week on the department’s progress in making sure local public housing agencies aren’t subsidizing the deceased. According to the report, local “agencies made an estimated $15.2 million in payments on behalf of deceased tenants that they should have identified and corrected.”
The audit found the following “significant weaknesses:”
- HUD and local agencies did not have effective policies related to deceased tenants.
- Local agencies did not provide accurate and reliable information to HUD.
- HUD and local agencies did not safeguard assets to ensure correct assistance payments.
This report is a small illustration of the fundamental problems with the federal government subsidizing local governments. The local public housing agencies are supposed to be monitoring how money is spent and reporting to HUD. HUD is supposed to be monitoring the local public housing agencies. But no one does a very good monitoring job, despite the piles of regulations and paperwork that every level of government has to deal with for such subsidies. The muddled web of responsibilities also makes it easy for fraud artists to take advantage.
Last week, HUD’s IG reported that the department is sending $220 million in stimulus funds to local agencies already known to misspend taxpayer dollars.
From USA Today:
The government is sending millions of dollars in stimulus aid to communities and housing agencies that federal watchdogs have concluded are unable to spend it appropriately, increasing the risk that the money will be wasted.
Since July, auditors working for the Department of Housing and Urban Development's inspector general have scrutinized at least 22 cities, counties and housing authorities in 15 states and Puerto Rico to measure whether they can handle stimulus funds effectively. Only six, they found, could do so.
The rest — in line to receive more than $220 million in stimulus aid — had shortcomings ranging from poor management to inadequate staffing that threatened their ability to spend the money quickly and appropriately, a series of audit reports show.
According to a HUD spokesperson, the department is “spending millions of dollars to help local officials spend stimulus money effectively.” Maybe that’s true, but all monitoring help is a pure loss to taxpayers and the private sector economy.
Even when the federal oversight does find problems, the money often keeps flowing anyway. As the article notes:
USA TODAY reported in April that HUD planned to send $300 million in stimulus money to public housing authorities that had been repeatedly faulted by outside auditors for mishandling other forms of federal aid. Congress gave the Obama administration permission to withhold stimulus money from some of those agencies, but HUD opted earlier this year not to do so.
Yahoo News is highlighting the story "10 Jobs With High Pay and Minimal Schooling." Topping the list: air traffic controllers, who work for the federal government.
These workers make sure airplanes land and take off safely, and they typically top lists of this nature. The median 50% earned between $86,860-142,210, with good benefits. Air traffic controllers are eligible to retire at age 50 with 20 years of service, or after 25 years at any age.
Huge salaries and retirement after 20 years -- sweet deal!
Air traffic controllers seem to provide a good illustration of my general claim that federal workers are overpaid.
I don't know what the proper pay level for controllers is, but I do know that we should privatize the system, as Canada has, and let the market figure it out.
Here's a striking graphic of the results of continuing New York Times/CBS News polling on the question, "Do you think the federal government should guarantee health insurance for all Americans, or isn't this the responsibility of the federal government?"
Support for a government guarantee of health insurance starts dropping sharply as the country starts debating the topic. It's not clear from this graphic, provided by Gallup, but support is at 64 percent in June, 55 in July, and 51 in late September, well after the Long Hot August and just after President Obama's health care blitz that included his primetime speech to Congress and highly publicized rallies in Minnesota and Maryland. Note also that the question doesn't mention any downsides of the government guarantee; respondents apparently had figured those out for themselves.
Oddly enough, if you search the New York Times site for this question, nothing comes up. And if you Google the question, the Times isn't in the search results. It's almost as if they didn't want to publicize their very interesting finding. You can find a reference to it here and documentation here.
Another interesting take on support for health care "reform" can be found here -- a graph of all the polls on health care plans offered by the president or in Congress, from January to present, showing opposition rising. Also from pollster.com: President Obama's slipping approval numbers on health care.
I appeared on the CNN program Lou Dobbs Tonight last Thursday (Oct. 22) to discuss the medical marijuana issue and the drug war in general. There were two other guests: Peter Moskos from John Jay College and the organization Law Enforcement Against Prohibition (LEAP) and Barry McCaffrey, retired General of the U.S. Army and former "Drug Czar" under President Bill Clinton.
I was really astonished by the doubletalk coming from McCaffrey. Watch the clip below and then I'll explain two of the worst examples so you can come to your own conclusions about this guy.
Doubletalk: Example One:
Tim Lynch: "Some states have changed their marijuana laws to allow patients who are suffering from cancer and AIDS--people who want to use marijuana for medical reasons–they’re exempt from the law. But there’s a clash between the laws of the state governments and the federal government. The federal government has come in and said, 'We’re going to threaten people with federal prosecution, bring them into federal court.' And what the [new memo from the Obama Justice Department] does this week is change federal policy. Basically, Attorney General Eric Holder is saying, 'Look, for people, genuine patients–people suffering from cancer, people suffering from AIDS–these people are now off limits to federal prosecutors.' It’s a very small step in the direction of reform."
Now comes Barry McCaffrey: "There is zero truth to the fact that the Drug Enforcement Administration or any other federal law enforcement ever threatened care-givers or individual patients. That’s fantasy!"
Zero truth? Fantasy? This report from USA Today tells the story of several patients who were harassed and threatened by federal agents. Excerpt: "In August 2002, federal agents seized six plants from [Diane] Monson's home and destroyed them."
This report from the San Francisco Chronicle tells the story of Bryan Epis and Ed Rosenthal. Both men, in separate incidents, were raided, arrested, and prosecuted by federal officials. The feds called them "drug dealers." When the cases came to trial, both men were eager to inform their juries about the actual circumstances surrounding their cases--but they were not allowed to convey those circumstances to jurors. Federal prosecutors insisted that information concerning the medical aspect of marijuana was "irrelevant." Both men were convicted and jailed.
This report from the New York Times tells readers about the death of Peter McWilliams. The feds said he was a "drug dealer." McWilliams also wanted to tell his story to a jury, but pled guilty when the judge told him he would not be allowed to inform the jury of his medical condition. Excerpt: "At his death, Mr. McWilliams was waiting to be sentenced in federal court after being convicted of having conspired to possess, manufacture and sell marijuana.... They pleaded guilty to the charge last year after United States District Judge George H. King ruled that they could not use California's medical marijuana initiative, Proposition 215, as a defense, or even tell the jury of the initiative's existence and their own medical conditions." The late William F. Buckley wrote about McWilliams' case here.
Imagine what Diane Monson, Bryan Epis, Ed Rosenthal, and Peter McWilliams (and others) would have thought had they seen a former top official claim that federal officials never threatened patients or caregivers?!
Doubletalk: Example Two:
Tim Lynch: "After California changed its laws to allow the medical use of marijuana, [General Barry McCaffrey] was the Drug Czar at the time and he came in taking a very hard line. The Clinton administration’s position was that they were going to threaten doctors simply for discussing the pros and cons of using marijuana with their patients. That policy was fought over in the courts and [the Clinton/McCaffrey] policy was later declared illegal and unconstitutional for violating the free speech of doctors and for interfering with the doctor-patient relationship. This was the ruling by the Ninth Circuit Court of Appeals in a case called Conant – "C-O-N-A-N-T."
Lou Dobbs: "The ruling stood in the Ninth Circuit?"
Tim Lynch: "Yes, it did."
Now comes Barry McCaffrey: "That’s all nonsense!"
Go here to read the New York Times story about McCaffrey's hard-line policy.
The Conant ruling can be found here. The name of the case was initially Conant v. McCaffrey, but as the months passed and the case worked its way up to the appeals court, the case was renamed Conant v. Walters because Bush entered the White House and he appointed his own drug czar, John Walters, who maintained the hard line policy initiated by Clinton and McCaffrey.
I should also mention that Conant was not an obscure case that McCaffrey could have somehow "missed." Here's a snippet from another New York Times report: "The Supreme Court, in a silent rebuff on Tuesday to federal policy on medical marijuana, let stand an appeals court ruling that doctors may not be investigated, threatened or punished by federal regulators for recommending marijuana as a medical treatment for their patients." The point here is that the case was covered by major media as it unfolded.
When our television segment concluded, Lou Dobbs asked me some follow-up questions and asked me to supply additional info to one of his producers, which I was happy to do.
Whatever one's view happens to be on drug policy, the historical record is there for any fair-minded person to see -- and yet McCaffrey looked right into the camera and denied past actions by himself and other federal agents. And he didn't say, "I think that's wrong" or "I don't remember it that way." He baldly asserted that my recounting of the facts was "nonsense." Now I suppose some will say that falsehoods are spoken on TV fairly often--maybe, I'm not sure--but it is distressing that this character held the posts that he did and that he continues to instruct cadets at West Point!
My fellow panelist, Peter Moskos, has a related blog post here and he had a good piece published in the Washington Post just yesterday. For more Cato scholarship on drug policy, go here.
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