To allow our our work to reach the widest audience, as of May 2018, new blog posts will appear on the Independent Institute’s main blog, The Beacon. Please visit The Beacon for the latest insights on government waste, tax policy, economics, and more.
One of the stranger side stories to come out of the FBI’s secret investigation of then-presidential candidate Donald Trump’s election campaign back in 2016 came out in the news last week, where the FBI apparently chose to redact (or black out) a portion of a text message sent between FBI agents Lisa Page and Peter Strzok.
Apparently, the text message indicated the price that the Bureau’s then-acting director, Andrew McCabe, really paid for a conference table in materials that had been sent by the Department of Justice to the Senate Judiciary Committee, which has oversight authority over both the DOJ and the FBI. Senator Charles Grassley got a hold of an unredacted version of the message and referenced it in a communication he sent to the U.S. Department of Justice to demand that the DOJ stop inappropriately censoring public information. Here’s the text, where the information that had been redacted is indicated in square brackets:
Page: No way to change the room. The table alone was [70k]. (You can’t repeat that!) No, instead it just means we now have to get a small conference table for his actual office, so that he can actually have a meeting that is intimate. DOJ-PROD-0000118.
What Lisa Page’s text indicates is that the FBI spent $70,000 for a conference table for then acting-director Andrew McCabe, who would go on to be fired by President Trump back in March 2018, where a report subsequently issued by the Department of Justice’s Inspector General found that McCabe had engaged in a “lack of candor” while under oath on several occasions. The Inspector General recommended that McCabe face criminal prosecution.
Since the U.S. Congress approves the FBI’s funding, the members of that body have every right to access the FBI’s information on how it spends U.S. taxpayer dollars, which is what made redacting the cost of the conference table such a boneheaded move on the part of the FBI and the DOJ.
There is only one reason why it would ever have been done, and it is because $70,000 is an exorbitant amount of money for any government agency to spend on a conference table.
Paul Downs, who has crafted custom conference tables for a number of corporations and also NASA, but not the FBI, indicates on his web site that the price of a standard conference table that he might build for a customer would cost about $400 per linear foot. At that price, $70,000 could buy a 175-foot long table.
The site also indicates that prices rise as the tables get fancier, where the most expensive tables he makes will cost $2,000 per linear foot or more, where $70,000 would buy a spectacularly fancy 35-foot long table.
The conference table pictured above is not “the $70,000 table”, but is instead the conference table located in the FBI’s Strategic Information & Operations Center’s Executive Operations Room, which arguably is the most important room requiring a fancy conference table at the FBI’s Headquarters building in Washington D.C. It is about 10 years old and doesn’t look like it cost anywhere near $70,000.
Perhaps McCabe’s conference table came with an EPA-style Cone of Silence!
There is one more scary thing to consider from Lisa Page’s text. The FBI was shopping for a smaller conference table for his “actual office”. Who knows how much that might have cost U.S. taxpayers?!
Back on March 19, this writer put in his typical Monday workday and never left his neighborhood in California’s capital city. That schedule is somewhat at odds with a notice I received from FasTrak, California’s freeway tolling agency.
“Immediate Attention Required—Official FasTrak Notice,” read the outside of the envelope, mailed on May 14. “Violation Notice,” explains a magenta page inside. “You are receiving this violation notice because you drove in the 1-680 Contra Costa Express Lanes without a valid Fastrak toll tag.”
Actually, as I pointed out in an email to FasTrak, I didn’t drive in those lanes that day and I have never driven my current car on any stretch of 1-680 at any time, The FasTrak “official notice” offered no evidence or proof, photographic or otherwise, that on Monday March 19, 2018, I had driven on I-680 express lanes between Walnut Creek and San Ramon. The charge is a complete fabrication.
This was a “second and final” notice of a “delinquent toll evasion violation,” but I never received a first notice. According to this second notice, I owned $25.50, which would surge to $70.50 after May 30. Delinquent violations “may be sent to the DMV to be collected with your DMV Registration Renewal.” In fact, according to this official notice, “unless you pay the penalties” or contest the fee “the renewal of your vehicle registration shall be contingent upon compliance with this Notice of Delinquent Toll Evasion.” But wait, the magenta page says, “Open a FasTrak account to pay your toll and order tags. We’ll waive the $25 penalty.”
In the Bay Area, this type of extortion scam is rather common. An Independent Institute colleague got dinged for failing to pay a bridge toll, and the evidence was a photo of him at the toll booth paying his toll. In my case, FasTrak provided no evidence of any violation, just a fake charge, backed by threats. By all indications, politicians and FasTrak bosses are okay with it. In California, government greed is truly fathomless.
As of the end of 2017, there were over 2 million bureaucrats who directly work for the U.S. government.
That amazing number doesn’t include the 503,103 people who work for the U.S. Postal Service or any of the 1.3 million active duty members of the U.S. military services or the nation’s 800,000 reservists. Nor does it include any of the 5.3 million people who effectively work for the U.S. government “off the books”. If we include all these individuals, the total number of people who are paid to do the U.S. government’s bidding rises to nearly 10 million!
The following chart provides a visual breakdown of the various major departments and agencies where the 2,108,160 bureaucrats who work directly for the U.S. government toil:
Here are the employment numbers that go with each major department or agency, ranked from the department with the most civilian employees to the least:
But wait, that’s not all! There are an additional 105 other U.S. government agencies that collectively have 94,596 people on their payrolls, which if they were all grouped into one bureaucratic entity, would make up the fifth largest U.S. government department.
The scandal-plagued U.S. Department of Veterans Affairs does not currently have a congressionally approved leader. At the same time, the VA’s bureaucrats also appear to have little interest
in providing timely health care to America’s veterans, nor do they appear to take the business of maintaining safe and clean medical facilities for their patients very seriously, as recent news stories from Los Angeles’ VA hospital confirm.
Too often, there has been one root cause behind the VA’s inability to get its house in order: the bureaucrats of the government department too often put their own interests ahead of those of the veterans they claim to serve, with the result being millions of wasted taxpayer dollars and hundreds of prematurely ended lives.
The problem of institutionalized corruption of the VA is proving to be far beyond the ability of simple changes in leadership to repair, which is why the U.S. Congress is taking steps to make it possible for more veterans to seek medical treatment outside of the VA’s failing system. Earlier this week, the U.S. House of Representatives took a baby step in that direction, as Hope Yen of the Associated Press reports:
The House voted Wednesday to give veterans more freedom to see doctors outside the Veterans Affairs health system, a major shift aimed at reducing wait times and improving medical care despite the concerns of some Democrats who cast it as a risky step toward dismantling the struggling agency.
The plan seeks to fulfill President Donald Trump’s promise to expand private care to veterans whenever they feel unhappy with VA health care.
The long-awaited bill would change how veterans receive their medical treatment by allowing them to go to a private physician when they felt government-run VA medical centers couldn’t provide the care they needed, with the approval of a VA health provider. Veterans could access private care when they endured lengthy wait times, or the treatment was not what they had expected.
What makes this a baby step is that the VA can still dictate whether a veteran seeking effective and timely medical treatment can obtain care outside its system.
The VA would decide in many cases when a veteran sees an outside doctor, based on conditions it sets that determine what is inadequate care.
That restriction could very well allow the VA to continue abusing its government-created monopoly in providing health care to America’s veterans by preventing them from obtaining timely medical care outside of VA facilities, which only serves to benefit the interests of the VA’s bureaucracy.
The reform is being included in a spending appropriations bill that also aims to provide more financing to support the Veterans Choice program, which has chronically run low on funding because lawmakers and VA administrators did not anticipate the high level of demand of veterans seeking access to medical services from the private sector.
Considering the larger picture, the problems at the VA will never be solved until veterans can freely choose where they can obtain their own medical treatment, whether it be at specialized VA health care facilities or anywhere else outside of the VA’s system. The U.S. Congress needs to do more to make that possible.
June 6 will mark 40 years since California voters passed the People’s Initiative to Limit Property Taxation, more commonly known as Proposition 13. As its primary backers recall, “property taxes were out of control. People were losing their homes because they could not pay their property taxes, yet government did nothing to help them.” Proposition 13 rolled back property values to the 1976 assessed level, limited increases to no more than 2 percent per year if the property was not sold, and reassessed sold property at one percent of the sale price. The measure, approved by 65 percent of voters, did not create any new state agencies, mandated no new state spending and required no new state hires. Governor Jerry Brown called it a fraud and a rip-off, but after it passed he proclaimed himself a “born-again tax cutter.” That was never true and on his second go-round he made California’s income and sales taxes the highest in the nation, as Proposition 13 came under relentless attack.
As we noted in 2016, big-government apologists claim Prop 13 is inherently unfair because owners of similar properties pay different amounts of property taxes. With property tax pegged to the purchase price of a home, that differential is inevitable. In Common Claims About Proposition 13, the state’s legislative analyst claimed that higher-income Californians “own more homes and own homes of higher value and, therefore, receive the majority of the total dollars of tax relief provided to homeowners by Proposition 13.” Actually, these homeowners do not “receive” anything. They pay less of their own money to the government because of a measure voters approved. Contrary to statist superstition, to allow anyone to keep more of what they earn is not to give them something.
As the anniversary approaches, Governor Brown is touting a budget surplus of some $6 billion and tax collections are up $3.8 billion from what the governor anticipated in January. So Proposition 13 has not prevented a budget surplus, yet big-government types are touting a “split-roll” that would tax industrial and commercial properties at market value. Instead of cutting useless state agencies, trimming wasteful spending, or lowering taxes, statist types would rather remove one of the few checks on government greed. Forty years after Proposition 13, that greed remains insatiable.
Two weeks ago, the White House was floating a trial balloon for using rescission to cut $25 billion worth of spending. Last week, the White House moved forward with what appears to be a down payment on that plan, where they are initially seeking to surgically claw back some $15 billion worth of spending that was originally appropriated years ago, but which hasn’t ever been spent. The rescission package does not include any of the spending that was approved in February 2018 as part of the Bipartisan Budget Act of 2018.
Damian Paletta and Erica Werner of the Washington Post describe where the Trump administration is looking to save money for U.S. taxpayers:
President Trump is sending a plan to Congress that calls for stripping more than $15 billion in previously approved spending, with the hope that it will temper conservative angst over ballooning budget deficits.
Almost half of the proposed cuts would come from two accounts within the Children’s Health Insurance Program (CHIP) that White House officials said expired last year or are not expected to be drawn upon. An additional $800 million in cuts would come from money created by the Affordable Care Act in 2010 to test innovative payment and service delivery models.
Those are just a handful of the more than 30 programs the White House is proposing to Congress for “rescission,” a process of culling back money that was previously authorized. Once the White House sends the request to Congress, lawmakers have 45 days to vote on the plan or a scaled-back version of it through a simple majority vote.
Cuts to programs like the Children’s Health Insurance Program sound like they would potentially hurt kids, but that doesn’t appear to be the case in this situation, where thanks to the ineffective bureaucracy that is the U.S. government, it appears that the money will never be able to be spent for the purpose for which it was specifically allocated. Paletta and Werner explain:
The proposed cuts to CHIP would come in part from cutting $5 billion from the Children’s Health Insurance Fund, to help reimburse states for certain expenses. But the White House said the ability to use this money expired in September, meaning it can’t be legally used, even as it remains on the government’s balance sheet.
Since the money in these particular government accounts can never be lawfully spent, it makes zero sense for the U.S. Congress to not rescind the money, which can now perhaps be used instead to pay off the portion of the national debt that was borrowed to fund it. It’s not like any of it will ever go to help any kids after all this time!
But perhaps a better question to ask is: why didn’t the government’s bureaucrats spend the money when they were authorized to do so? That they instead let that money sit idle for years without taking any action demands an explanation.
Without such an explanation, the U.S. Congress would have no excuse to not reduce the spending it appropriates. And who knows — perhaps if there is an explanation, it too could also justify reducing the spending it appropriates. Either way, rescission would be a win for U.S. taxpayers.
Former governor George Deukmejian recently passed away at 89. Many Californians have little memory of the Golden State’s 35th governor, who served from 1983 to 1992. Millennials and such may be unaware that Deukmejian was the last California governor to return surplus funds directly to taxpayers in the form of a check. In 1987, he signed the largest tax rebate in California history, a $1.1 billion refund in surplus state money that put checks of up to $236 in the mail to taxpayers. As the governor explained, “I think we can be very pleased that we were able to protect this money for the taxpayers and that we have honored the spending limit enacted by the voters through the initiative process.” That was a reference to 1978’s Proposition 13, the last measure truly to limit taxes and spending, but the significance was deeper.
The tax-and-spend lobby howled long and loud over the plan to return money to the people. Deukmejian knew who pays the bills, and that the state does not have a prior claim to what workers earn. So he protected the money for the taxpayers who provided it in the first place. That practice is long gone and California now imposes the highest income and sales taxes of all 50 states. And if you don’t like the new $5.2 billion gas tax, Governor Jerry Brown calls you a “freeloader.”
Politicians now protect government bureaucracies, however useless and wasteful, from any meaningful reductions much less the elimination they deserve. Instead of protecting money for the taxpayers, politicians protect government from any meaningful accountability. George Deukmejian is gone, but he won’t exactly be resting in peace.
April is the one month in which the U.S. government can be expected to run a budget surplus, thanks largely to the annual filing of personal income taxes that are due during the month. According to the U.S. Treasury Department, April 2018 saw the biggest budget surplus ever recorded in the nation’s history of $214 billion.
Harriet Torry and Richard Rubin of the Wall Street Journal note the record, but also find the cloud in the silver lining:
The U.S. government posted the highest surplus on record in April, although the federal deficit over the past several months widened as spending rose along with revenues.
Government revenue rose by 12%, or $55 billion, in April from the same period a year earlier, the Treasury Department said Thursday. That brought April’s surplus to $214.3 billion, the largest April surplus on record.
More broadly, the budget deficit widened in the first seven months of fiscal 2018. The deficit, or the difference between the amount of money the government spent and what it took in, stood at $385.4 billion in October through April, which was 12% larger than the deficit during the same period a year earlier.
MyGovCost has been tracking the federal government’s cumulative tax collections and spending for the fiscal year to date, which we’ve graphed in the following chart, where you can quickly compare the government’s performance in its 2018 fiscal year against its previous 2017 fiscal year.
On the whole, we see that while the government’s tax collections in FY 2018 are indeed higher than in FY 2017, the government’s spending is likewise up, having been juiced by higher spending increases in March 2018 with the passage of the Bipartisan Budget Act of 2018, which President Trump signed into law the month before.
Earlier in April, the Congressional Budget Office forecast that the U.S. government will run an 804 billion dollar budget deficit in its 2018 fiscal year, which ends on September 30, 2018. With that being the case, we can look for both cumulative spending and tax collections to continue running above their respective 2017 levels, with spending having a wider gap from its previous year’s cumulative total.
To answer the question of why the annual budget deficit of the U.S. government will rise this year despite the government collecting more in taxes than ever before: “It’s the spending, stupid!”
New York attorney general Eric Schneiderman is the latest target of the #Me Too movement, with four women charging that Schneiderman abused them, calling one his “brown slave” and making her say that she was “his property.” Schneiderman, a self-proclaimed advocate for woman, dismissed it as “role playing,” and says he never crossed the line into actual abuse. New York governor Andrew Cuomo wasn’t having it, tweeting, “no one is above the law, including New York’s top legal officer,” and calling for Schneiderman to resign, which he did. Women, parents, students and taxpayers might contrast a California abuse case.
In Roseville, near Sacramento, officials placed a teacher on leave for sexually harassing a 14-year-old student. Education bureaucrats did not reveal the abuser’s name but according to news reports it’s Doug Mason. He claims, “while I may have made some mistakes in judgment as I strived to support and be accessible to my students, I emphatically state that I have not engaged in sexual assault or harassment. I have never touched a student inappropriately.” Superintendent Ron Severson told reporters the teacher “has a history of inappropriate behavior, but he staggered the incidents so only the most recent case qualifies under that.” So they are pushing for a new law that would allow administrators to consider an employee’s disciplinary history beyond the four years currently allowed by law.
As it emerged, the teacher union will negotiate a severance, because according to Laura Preston, of the California School Administrators Association, “It costs about $250,000 minimally to get rid of a teacher,” and “even if an employee is in jail we have to allow them to go through the dismissal process.” So abusive teachers can easily exploit the system and get paid while the case is pending, without performing any work. Extending consideration of disciplinary hearings, is not going to fix this atrocity, which is inherent in the system.
The government K-12 system a collective farm of failure and facilitates sexual abuse of minor students. Parents need the power to select an independent school and take their money with them. No California or federal politician is currently pushing such a system as a matter of basic civil rights. So the sexual abuse of students will continue, at unacceptable cost to parents and taxpayers.
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