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The Right Parallels

1. Control Government Spending

from LightBookproductions Blogs
Posted March 18, 2006

It is disappointing that the U.S. Senate would at this time refuse to let go of the Social Security Trust Fund and give that money back to the people by maintaining the fund with real money in real time.

LightBookproductions has some ideas regarding this issue.

The appointment of an SOB.

The SOB would be a new cabinet post.
The Secretary Of The Bank with legal authority to do something about the spending problem.

You read it here first.

If someone has a like minded idea or wants to take this one and run with it, then go ahead.

If eight Republicans cannot be convinced to vote against the Democrats, who obviously enjoy spending the hardworking taxpayers future resources, then at least some conservative Dems should consider a compromise and support the creation of a law that would require, or allow Congress to borrow only part of the Social Security Trust Fund, for instance, only one-third of it.

If you think this is an impractical idea, then think about how impractical it really is that Congress has loaned itself every bit of that money, and also refuses to apply controls to itself regarding the spending of that money.

Having access to only one-third of that money would perhaps force Congress to at least spend it wisely, and with the change in how it operates the fund, the high profile nature of the endeavor would allow the people to keep an eye on it, and see where that one-third is going each year.

As of last year, according to the Heritage Foundation, $1.7 trillion has been taken from the Social Security Trust Fund in the just 20 years.

With the Federal Government recently increasing its debt capacity, we believe it is imperative that the people be allowed to either stop the Social Security Trust Fund raid, or be allowed to know how much it is accumulating every year and specifically where its going, that is, who is spending it, and how are they spending it.
 

From an email to Republican Gubernatorial Candidate and Florida Chief Financial Officer Tom Gallagher during the 2006 Republican Gubernatorial primary race in Florida.

Mr. Gallagher

I like the idea regarding control of state spending at the city and county levels that I viewed the other day on the Gallagher for Governor website.

A few weeks ago I was talking about an idea I had with a very smart banker who was hired to help strategically manage the capital investments for a large insurance company.

I read the conservative website Human Events Online regularly, where the issue of out-of-control government spending is discussed often, and I was thinking about the extravagant spending that goes on in Washington.

My idea involved what I thought of as a Secretary of the Bank (an SOB).

Perhaps a more powerful Secretary of the Treasury.

Someone who would not just monitor federal revenue and report on precarious spending trends with various warnings, but someone who would be in control of a percentage of federal revenue, and that percentage would, by strict law, be controlled in the manner of a bank.

I called this hypothetical person the SOB.

I liked the SOB reference because everyone in government who likes to spend so much of the taxpayers money, would inevitably call this person, at least behind the scenes, an SOB.

In an interview on one of the Sunday morning talk shows, the Secretary would be asked:

 "How do you feel being called an SOB all the time?" 

And they would reply:

"I take that as a compliment because that's precisely what I am paid to be, to be an SOB with the money."

The majority of Americans who have a cynical view of Washington's spending habits, would consider the SOB a Godsend.

Your idea, that probably makes sense to everyone except the Democrats, regarding a way to implement limits or controls via state law on spending at the local level, reminded me of how the SOB would think.

It appears that the Presidential line-item veto and the earmark legislation are potentially the closest thing we have to an idea like that at this time.  As legislated, these are limited tools, but they are better than no tools.

The Line Item veto would not have a major impact on the federal budget, yet, at least the President's idea of requiring a vote on selected line items would identify the sources, and require the sources to justify the spending, and be on record with a vote.

The problem with the Social Security Trust Fund is a good and specific example.

The U.S. Senate recently held a vote to put a stop to federal spending, or borrowing from, the (now imaginary) Social Security Trust Fund. Regretfully, 8 Republicans voted No, yet that was only 4 votes shy of making it a reality.

Sincerely

Palmer Hasty

Note:  July 11. 2006
We at LightBookproductions obviously like the basics of the ideas in the right hand column.  As gubernatorial candidate and Florida's Chief Financial Officer Tom Gallagher said in reference to Governor Jeb Bush's approach to policy making: "Revolutionary ideas transformed into common sense policies."

After some of the political machinations that tainted the 9-11 commission hearings, we were skeptical when we heard the term "bi-partisan commission" regarding a massive budgetary reform process to control congressional spending because it seems nowadays that whenever Congress does not have the collective will to figure something out beyond its self-entanglement in politics, or when something negative happens and someone feels the need to at least appear to be doing something about whatever it is, and they stand up in front of the cameras and sanctimoniously "call" for a "bi-partisan commission."

from The Heritage Foundation

Taxes & Spending
Four Ways to Reduce Government Waste
by Brian Riedl and Michelle Muccio
from Human Events Online
Posted July 11, 2006

"Congress will soon consider legislation to establish a commission that could bring an end to wasteful and counter-productive government programs."

"Representatives Todd Tiahrt (R.-Kan.) and Kevin Brady (R.-Tex.) are the authors of two leading bills (H.R. 2470 and H.R. 3282) that have been introduced in the House. The Senate will consider a similar proposal by Sam Brownback (R.-Kan.) as part of a comprehensive package of budget process reforms
(S. 3521)."

"Reform is necessary because the current budget process provides Congress little incentive to eliminate programs that clearly do not work. A well-designed government waste commission could overcome the budget process’s pro-spending bias and encourage lawmakers to cut failing programs, providing enormous taxpayer savings."

The Government’s Wasteful Spending Habit

"President Ronald Reagan once observed that a government program is "the nearest thing to eternal life we will ever see on this earth." A large portion of the current federal bureaucracy was created during the 1900s, 1930s, and 1960s to solve problems that no longer exist today. Instead of replacing the outdated programs of the past, however, each period of government activism has layered new programs atop the old. Unfortunately, most of these new programs become similarly embedded in the budget even when they prove to be as counterproductive as the older ones."

"Ford Motor Co. would not waste money today by building outdated Model T’s alongside Mustangs and Explorers. However, in 2006, the federal government still refuses to close down old agencies such as the Rural Utilities Service, which was designed long ago to bring electricity and phone service to rural America. Private companies are also quick to recognize mistakes. Ford Motor Co. saw that the Edsel was a flop and ceased production. Politicians, by contrast, have no bottom-line incentive to behave responsibly. Washington continues to run 342 economic development programs, 130 programs serving the disabled, and 90 early childhood programs. None of these programs -- neither the new ones nor the old ones -- have solved any of the ostensible problems they were created to solve. Even the federal government’s own reviewers find that 38 percent of all programs have failed to show any positive impact on their target populations."

Congress’s Incentive to Spend

"Public choice economists, such as Nobel laureate James Buchanan, blame reelection politics for the persistence of outdated federal programs. Imagine that the federal government ran a $300 million program that pays 1,000 people large sums of money for no legitimate purpose. This program, despite its wastefulness will be defended to the death by its small cadre of recipients and supporters. The rest of the country may consider the program useless and yet not invest time and energy to fight the program because it costs just $1 per American. When the program’s funding comes up, only its supporters will lobby Congress. Even lawmakers who do not have any beneficiaries in their district may support this program in return for other lawmakers’ support of their own projects (in other words, "log-rolling"). Multiply this phenomenon by thousands of federal grants and programs, and it becomes clear why Congress fails to eliminate duplicative, wasteful, outdated, and failed programs -- and why Washington now spends $23,760 per household annually."

BRAC: A System that Works

"This public choice puzzle has come up in the past. During the 1980s, lawmakers agreed that excess military bases should be closed but could never muster a majority to close any single base. Each base was defended by its local supporters and legislators, and the taxpayer savings from a single base closure were not large enough to motivate taxpayers elsewhere to fight for closure."

"The solution to this impasse was the Base Realignment and Closing (BRAC) process, created in 1988. BRAC is a commission of nonpartisan experts that recommends a package of base closures across the country. Congress then must approve or disapprove the entire list -- without any amendments. This solved the public choice puzzle for two reasons. First, it diminished special-interest opposition because lawmakers no longer felt that a single program or expenditure was being unfairly singled out. And even if they did feel targeted, the amendment restriction meant that saving their military base required voting down the entire savings package. Second, the merging of so many base closings into one package resulted in large savings -- large enough to motivate taxpayers into matching the intensity of the military base supporters. Lawmakers could tell local residents that they opposed closing the local base but that the taxpayer savings from all the other closed military bases were large enough to make up for the loss."

"BRAC has completed five rounds of recommendations and has succeeded in closing and realigning a large number of bases. The previous four BRAC rounds have resulted in net savings to taxpayers of over $17 billion through 2001 and an estimated $7 billion annually since then."

Four Elements of a Successful Commission

"A government waste commission can be modeled after the successful BRAC model to achieve similar results. However, whereas the BRAC examines military bases, a government waste commission would examine all federal agencies and programs.
There are four key elements that Congress should include in any legislation to crate a government waste commission:"

"Element No. 1: A Bipartisan Commission: Bipartisan acceptance of a commission’s recommendations requires that the commission itself include Republicans, Democrats, and independents. Additionally, allowing for a non-member expert to preside as commission chairperson would bring further expertise and neutral, non-partisan leadership to a commission.

Element No. 2: Examine All Agencies and Programs: A commission must be allowed to examine all federal agencies and programs. Government auditors have identified wasteful spending across government, from defense to entitlements to domestic discretionary programs. No federal program should be exempt. The purpose is not punishment but rather to help government better serve program recipients and taxpayers.

Element No. 3: Clear and Concise Criteria: A short and targeted list of criteria should be used to evaluate programs in order to allow a commission to be quick yet scientific in their analysis. With a few carefully selected criteria, a commission can effectively target wasteful spending, while a long list of criteria would cause program analysis to be time-consuming and confusing. The commission should also use criteria that are easily quantifiable to target programs that are inefficient, duplicative, outdated, or failed.

Element No. 4: Expedited Legislative Action: A commission’s program termination and reduction proposals have the most likelihood of being implemented if Congress is required to vote up-or-down on the entire package of recommendations without any amendments. Allowing lawmakers to amend their pet programs off the chopping block would result in the special-interest logrolling that this process was designed to overcome. Without amendments, legislators’ voting to save their own pet program would mean also voting to keep their constituents paying high taxes to fund the billions of wasteful spending for other lawmakers’ pet programs -- essentially a vote against fiscal discipline."

Conclusion
"Taxpayers are in dire need of budget process reforms as Congress grows more adept at squandering their hard-earned tax dollars. A government waste commission can correct some of the failings of the current budget process by helping Congress achieve meaningful taxpayer savings by eliminating failing programs -- many that should have never existed in the first place. A commission’s terminations and reductions could amount to billions of dollars in taxpayer savings and a leaner, less wasteful government."

Mr. Riedl is the Grover M. Hermann fellow in federal budgetary affairs in the Roe Institute for Economic Policy Studies at The Heritage Foundation.

Ms. Muccio is a research assistant in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

In October, 2006, Senate Bill 2590 was signed into law.

"This legislation will give the American people a new tool to hold their government accountable for spending decisions.  When those decisions are made in broad daylight, they will be wiser and they will be more restrained."                                            President George W. Bush

Note: This law requires a Website to go online by January 1, 2008.  The site will list all government grants and contracts above $25,000, except for those classified for national security.

From The Heritage Foundation  WebMemo

Personal Retirement Accounts