Tag: taxpayers

Public Housing for the Dead

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.

For more on fraud and abuse in federal programs, including housing subsidies, see this essay.

Abortion Funding and Health Care

President Obama’s approach to health care reform – forcing taxpayers to subsidize health insurance for tens of millions of Americans – cannot not change the status quo on abortion.

Either those taxpayer dollars will fund abortions, or the restrictions necessary to prevent taxpayer funding will curtail access to private abortion coverage. There is no middle ground.

Thus both sides’ fears are justified. Both sides of the abortion debate are learning why government should not subsidize health care. Tip of the hat to President Obama for creating this teachable moment.

Meanwhile, Catholics should be outraged at the United States Conference of Catholic Bishops (to which my grandfather served as counsel). Yes, the USCCB helped prevent taxpayer funding of abortions in the House bill. But at the same time, those naughty bishops have abandoned the Church’s doctrine of subsidiarity by endorsing the rest of the Democrats’ plan to centralize power in Washington.

As it happens, Caesar is the main source of funding for Catholic hospitals. That may explain why the bishops are so eager to render unto, ahem, Him.

Cross-posted at Politico’s Health Care Arena.

The Pelosi Bill’s High Water Mark

Democrats are having difficulty corralling 218 votes for the Pelosi bill because Americans do not want government to be as big and as powerful as the House leadership does. Pro-life Democrats do not want a government so big that it can force taxpayers to fund abortions. Pro-choice Democrats do not want a government so big that it uses subsidies to restrict access to abortion coverage. Other Democrats don’t want a government so big that it turns the United States into a welfare magnet.

The American people don’t want the Democrats’ approach to health care generally. The more time the public has to digest ObamaCare, the more they dislike it:

And the Pelosi bill is the most expensive and extreme version of ObamaCare.  Opposition will climb higher when the public learns the bill costs some $1.5 trillion more than Democrats claim.

Even a majority vote would not necessarily indicate majority support for the Pelosi bill. Rep. Jim Cooper (TN) and other Democrats are voting aye only because they want to keep the process moving – i.e., because this isn’t the vote that counts.

Win or lose, tonight’s vote will be the high water mark for the Pelosi bill.

(Cross-posted at Politico’s Health Care Arena.)

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Putting Private Insurance Out of Business

Over at Think Progress, Matt Yglesias takes me to task for saying that the so-called public option in the House’s health care bill “would all but eliminate private insurance and force millions of Americans into a government-run system.”

Yglesias apparently still buys into the myth that the public option is, well, an option.

For people who receive health insurance through their employers, which is to say the vast majority of the Americans who currently have health insurance, the House bill would change very little. Or, rather, the biggest change would simply be the confidence that if, in the future, you cease to get health insurance from your employer (maybe you’ll lose your job or want to change jobs) that you’ll still be able to get health care. What’s more, of the minority of Americans who would be getting health care through the new “exchange,” the majority will probably sign up for private health insurance and everyone will have the option of doing so. If the government-run public plan is, for whatever reason, vastly more appealing than the private options then it will dominate. But if you believe the government can’t run health care well, there’s no reason to think that will happen. Whatever you think of that, though, the basic fact is that even if the public option does dominate the exchange most people will still have private employer-provided insurance.

That might be true if the new government-run program were going to compete on anything close to a level playing field.  But, because the public option is ultimately supported by the taxpayers, the playing field can never be level.   True, the bill does say that the new program is supposed to be self-sustaining, covering administrative and benefit costs entirely out of premium revenues.  But remember that Medicare Part B was originally supposed to support 50 percent of its costs through premiums.  That has shrunk to the point where premiums pay for less than 25 percent of the program’s cost.

And the government has a myriad of ways to prevent the true cost of the program from showing up in premium prices.  For example, the government-run plan will not have to pay state or federal taxes, and unlike private insurance plans, who can be sued in state courts, the government-run plan could only be sued in federal court.

At the very least, the program carries with it an implicit guarantee against future losses.  Suppose the public option prices its products too low and loses money.  Can you imagine that Congress is simply going to let it go bankrupt, go out of business?  Would a Congress that has bailed out banks and automobile companies because they are “too big to fail” resist subsidizing the government’s insurance plan if it began to lose money?   Even without the actual bailout, such an implicit guarantee has a value. For example, the implicit guarantees behind Fannie Mae and Freddie Mac were estimated to have saved those institutions $6 billion per year.

All of this means that the government-run plan would be significantly cheaper than private insurance, not because it would out-compete private insurance or because it was more efficient, but because it had unfair advantages.  The lower cost means that businesses, in particular, would have every incentive to dump workers from their current health insurance plan into the government plan.  And, if other provisions of the bill make insurance more expensive, as is likely, the incentive for employers to shift workers to the government plan would be even greater.   Estimates suggest that nearly 90 million workers could eventually be forced into the government plan.

As Robert Samuelson, dean of economic columnists, writes in the Washington Post, “a favored public plan would probably doom today’s private insurance.”

Samuelson is right.  There is nothing “optional” about a public option.  And that is just the way the Left wants it.

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It Is Good to Be the King: Taxpayers Pay $413,000 for French President’s Unused Luxury Shower

Bastien François, a professor of political science at the Sorbonne, writes that “The French political system is incomprehensible to the rest of the world… In France we call it a republican monarchy. That phrase says it all.”

Indeed, according to the press, a £250,000 ($413,000) shower with air conditioning and radio surround sound that was “built to the exact specifications of the French President Nicolas Sarkozy” was paid for by the EU taxpayer during the French Presidency of the European Union in July 2008.

 It was “disposed of soon afterwards, unused, together with most of the equipment bought for the £16million ($26 million) conference.” The press also reported “other expenses included £1million ($1.65 million) spent on the opening dinner alone - more than £23,000 ($38,000) for each of the 43 heads of state.”

Your Tax Dollars at Work

The National Park Service announced Friday that it has removed its superintendent at Gettysburg National Military Park and reassigned him to work in a cultural resources office as an assistant to the associate director. His job duties have not yet been determined.

John A. Latschar said Thursday that his demotion was in response to the public disclosure of Internet activity in which he viewed more than 3,400 “sexually-explicit” images over a two-year period on his government computer – a violation of department policy. The misconduct, which Latschar acknowledged in a sworn statement, was found during a year-long investigation by the Interior Department’s inspector general and was documented in an internal Aug. 7 report obtained by The Washington Post.

The reassignment came after a Post report Monday about the results of the investigator’s forensic analysis of Latschar’s computer hard drive, which showed “significant inappropriate user activity” and numbered the “most sexually-explicit” images at 3,456….

David Barna, spokesman for the National Park Service, said Latschar’s annual salary of $145,000 and his pension will not be affected. The cultural resources office is based in Washington, but Latschar will commute from his home in Gettysburg to a Park Service office about 30 miles away in Frederick, Barna said.

Hey, can I get that deal? If I download 3,500 pornographic images on my office computer, can I get reassigned to a telecommuting job with no defined duties at my current salary and pension? As superintendent of a very visible national park, Latschar had a job with a lot of pressure, lots of criticism, management challenges, etc. Now he’s going to be some sort of undefined “assistant to an associate director in a cultural resources office,” but he won’t have to actually go to the cultural resources office, and he’ll still get the same pay and benefits he was getting for doing a real, stressful job. Does anyone in the federal government ever get fired?

“Opt-Out” Smoke and Mirrors

At today’s Politico Arena the editors ask:

Reid’s Option: Does it help or hurt the chances for healthcare passage by Christmas?

My response:

Like every other part of ObamaCare, the “opt-out” proposal for the “public option” is a mystery – and almost certainly will continue to be even after the likely 1,500-page bill emerges, if ever it does. Will residents in states that opt-out be able to opt-out of the taxes needed to support the public option? (Please don’t say the public option will be self-supporting: we’re grown-ups.) Healthy taxpayers in North Dakota, after all, have no incentive to subsidize unhealthy New Yorkers. But if states can opt out of the tax part, then we’ll have “adverse selection” at the state level, the very thing the “individual mandate” is meant to stop at the individual level. Yet if states won’t be able to opt out of the tax component, then what’s the incentive for states to opt out of the public option? All pay, no benefit, is a sucker’s game.

This is all smoke and mirrors. And it’s laughable to think that the Congressional Budget Office can score any of this, when nobody knows what “this” is. For all the backroom dealings so far, enough has taken place in public to enable the public to see what’s going on, and it’s not pretty. It’s the usual something-for-nothing gimmickry, like last week’s “doc-fix” joke. The vote on that is the best predictor so far of where this whole thing is going. When labor tells us they might accept a tax on high-value insurance plans if it doesn’t hit the middle class, we know the money isn’t there. May ObamaCare rest in peace until more sober people are able to attend to what’s really required to straighten out the health care mess that Congress created in the first place.

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