s/o Gov't budget stuff question

[butterflymommy]

I've wondered this too. It seems so logical to cut off aid to countries that despise us anyway. Or at least, cut it off until we are in a better position financially. It does seem the gov't does this as an excuse to raise taxes because "there's no money."

 

Even sadder is that so much of this aid to poor countries is swindled and squandered. Billions were sent to Haiti (close to a billion of that US aid) and NOTHING -- truly NOTHING -- has improved since the earthquake. People are living in the same tent cities that were set up after the earthquake. My husband often "jokes" about all the Paris apartments the aid to Haiti has bought.

[molon labe]

That is, the poor and middle class pay a much larger percentage of their income in taxes than the wealthy.

 

We hear alot about how the rich should be paying their fair share, whatever that means. But as many of the wealthy have assets rather than income, wouldn't a wealth tax be more beneficial than simply raising the income tax rates?

[NoPlaceLikeHome]

We hear alot about how the rich should be paying their fair share, whatever that means. But as many of the wealthy have assets rather than income, wouldn't a wealth tax be more beneficial than simply raising the income tax rates?

 

 

Returning the capital gains tax to what it was under President Clinton would make taxes more fair as well as adding one or two extra income tax brackets for multi millionaires and above.The reason Romney paid a much smaller percentage of his "income" of about 13% than most average Americans was that his income is from capital gains. The capital gains rate used to be 30% which is more fair.

[Frances]

We hear alot about how the rich should be paying their fair share, whatever that means. But as many of the wealthy have assets rather than income, wouldn't a wealth tax be more beneficial than simply raising the income tax rates?

 

There are a number of ways we could maintain or increase revenue while not making the system more regressive. A wealth tax is one possibility. I believe there was a good article on this recently in the NY Times. As someone else noted, taxing capital gains at the same rate as wages would be another way. Despise all the wishful thinking to the contrary, the historical and academic evidence does not support the idea that lower capital gain tax rates stimulate the economy and increase job growth.

[Mom0012]

.

[Mom0012]

 

 

We still have historically low income and capital gain taxes which are still lower than the rates under President Clinton and previous Presidents. As long as we have a deficit problem revenue must be part of the solution as well as cuts. However, cutting social security and medicare is not the answer when there are simple solutions such as raising the the cap on social security taxes and fixing medicare part D by allowing the government to have more bargaining power with prescription drug cost and to raise medicare taxes slightly to actually help fund part D which was unfunded.

 

I strongly disagree. More revenue will only mean more spending.

[Dandelion]

Getting back to the OP's original question of "why does the government go straight to making cuts that so deeply affect the American people?", there's really no good answer when you consider the fact that our government wastes billions of dollars every year. Between chronic mismanagement and lack of oversight, duplication of efforts between redundant programs and departments, and approving tax payer funding for programs that most reasonable people would consider absolutely ludicrous, there are plenty of ways that our government could be making cuts before resorting to the kind of cuts included in sequestration.

 

Here are just some examples:

• The nonpartisan Government Accountability Office (GAO), headed by the Comptroller General of the United States, compiles an annual report of government waste and fraud.
  
  • In 2011 and 2012 alone, the GAO identified over 100 areas to reduce waste by addressing overlapping and duplicative programs. While the GAO doesn't put a specific dollar amount on these findings, the 2012 report stated that "Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of tax dollars annually and help agencies provide more efficient and effective services". Others in congress have estimated that the GAO's findings identify over $364B in duplicative spending.
    
  • In a report released by the GAO in January of this year, titled "U.S. Government Fiscal Years 2012 and 2011 Consolidated Financial Statements", the GAO cites issues involving an estimated $107.7 billion in improper government benefit payments, government-wide information insecurity, tax collection activities, and loans receivable and loan guarantee liabilities. These are separate from the waste and redundancy identified above.
    

  [*]The GAO just looks at redundancy, mismanagement, and fraud - it does not make value judgments about whether programs are worth spending tax payer money on. If we expand our lens to look at programs of questionable value, there are hundreds of examples of programs funded with tax payer dollars that simply don't make sense. Even if the U.S. had unlimited funds, do we really need tax payer money spent on talking urinal cakes, or a study to help golfers putt better by envisioning a bigger hole? Yes, our government actually spends money on crap like this. Here's a summary of a report that Senator Coburn of Oklahoma put together that details $18 billion in wasteful or ridiculous spending for 2012 alone. While I don't necessarily agree with everything in Senator Coburn's report, there is plenty there that I do agree is wasteful. And I believe most Americans, regardless of their political leanings, would agree that there is much in this report that tax payers should not be footing the bill for.

   

 

 

The inaction on the part of our government is shameful. Their inaction led to the sequestration cuts kicking in. They have also failed to take action on the vast majority of the issues identified by the GAO over the last several years (they've only addressed about 5% of the issues identified). Instead of eliminating the clearly identified waste and redundancy, to the tune of hundreds of billions of dollars, they are instead arbitrarily furloughing and laying off personnel in essential (and possibly critical) positions.

 

 

 

 

It's disgusting.

 

 

[Mrs Mungo]

Anyone who watches Congress on CSPAN (which, I do) knows that a ton of wasteful programs happen. That is where a lot of the pork I was talking about elsewhere comes in. Splitting the Navy ship designs is a classic example of that.

 

For example? I once watched a session where they argued about financial support for "insurance awareness." I think the insurance companies can do their own advertising!

 

But, how do the NFL, NHL and so forth consider a themselves non-profits? What in the world?!

 

ETA: Looking through those, however, I actually know some of those have been de-bunked because I have helped eldest and some of the other debaters in her debate group sort through some of those. Some of them tried to use items from that list as examples of wasted money that could be redistributed, but were easily refuted because the listings were misleading.

[Dandelion]

But, how do the NFL, NHL and so forth consider a themselves non-profits? What in the world?!

 

Yep, that was a new one for me too when I first saw Coburn's report. Having a really hard time wrapping my brain around that. :confused1: :glare:

[Mrs Mungo]

Looking at some of these grants where the researchers hope to profit from the end product-would the government be better served by going into the micro-loan business? There is already a precedent for it with government-backed student loans. It seems like a federally-backed loan could help people *but* the government could make their money back. Some of those HUD grants and NSF grants are good examples.

 

But, then at see some of those included *are* SBA loans. Why would loans be included?

[Dandelion]

Looking at some of these grants where the researchers hope to profit from the end product-would the government be better served by going into the micro-loan business? There is already a precedent for it with government-backed student loans. It seems like a federally-backed loan could help people *but* the government could make their money back. Some of those HUD grants and NSF grants are good examples.

 

That's certainly worth considering. It would be an improvement over what the government is doing now.

 

But, then at see some of those included *are* SBA loans. Why would loans be included?

 

If you're referring to the loans made to RI businesses, my guess is that Coburn included those because the loans were issued from a federal grant that was given to the city of Providence, and the grant was apparently used for purposes for which it is not intended.

 

I only linked Coburn's summary in my post above. Here's the full report that provides the details behind each of the 100 line items, along with a lengthy list of references. Here's an excerpt from #71 - Loans to Rhode Island businesses - $3.4 million (pp. 101-102):

 

"The city of Providence has been using part of its federal Community Development Block Grant (CDBG) to issue millions of dollars in risky loans. Now 25 percent of the program’s loans, collectively worth $3.4 million, are delinquent and the city is actively trying to collect $1,365,660 from 11 businesses. The Providence Economic Development Partnership (PEDP) makes a point to fund businesses whose loan applications have been rejected repeatedly in the marketplace. It serves as a lender of last resort, which is certainly a questionable use of federal dollars that could be directly benefiting the poor. <snip> Not only has the program made several faulty loans, PEDP is under federal investigation for spending up to $1.5 million in federal funds on catering, limos, and marketing – expenses that are disallowed under federal rules – in the last few years. <snip> CDBG funds are generally to be used for programs to benefit low- to moderate-income people, such as low-income housing and anti-poverty measures."

[nmoira]

Looking at some of these grants where the researchers hope to profit from the end product-would the government be better served by going into the micro-loan business? There is already a precedent for it with government-backed student loans. It seems like a federally-backed loan could help people *but* the government could make their money back. Some of those HUD grants and NSF grants are good examples.

 

But, then at see some of those included *are* SBA loans. Why would loans be included?

I think a small percentage of royalties for patents and patented ideas partially financed by government money is a better idea. Not all science should be for profit.

[Mrs Mungo]

If you're referring to the loans made to RI businesses, my guess is that Coburn included those because the loans were issued from a federal grant that was given to the city of Providence, and the grant was apparently used for purposes for which it is not intended.

 

I am cutting the rest of your post off because I was talking about #97. Small or "boutique" businesses make up a significant portion of the US economy and of employers. The SBA is designed to help people start small businesses. Part of that help is through offering loans. It is doing exactly what is designed to do. Those loans are to be paid back. I don't think that is a good example of waste. Why does Coburn hate cupcakes? Would he approve if the businesses had been auto repair or something more male dominated? Picking on cupcake companies gives an *impression* (right or wrong) that he is picking on women.

 

I think a small percentage of royalties for patents and patented ideas partially financed by government money is a better idea. Not all science should be for profit.

 

I think a royalty would be a good idea too. A loan in exchange for a small royalty up to a certain percentage above the original loan seems fair. That is what most normal investors do, I think? I only know from watching Shark Tank. ;)

[Dandelion]

I am cutting the rest of your post off because I was talking about #97. Small or "boutique" businesses make up a significant portion of the US economy and of employers. The SBA is designed to help people start small businesses. Part of that help is through offering loans. It is doing exactly what is designed to do. Those loans are to be paid back. I don't think that is a good example of waste. Why does Coburn hate cupcakes? Would he approve if the businesses had been auto repair or something more male dominated? Picking on cupcake companies gives an *impression* (right or wrong) that he is picking on women.

 

 

Ah, yes. That was one of the line items I disagreed with when I initially read through this. I see absolutely no issue with those loans and have no idea why they were included in the report.

 

On a personal note, I fully support funding for cupcake-related businesses. :tongue_smilie:

[Mrs Mungo]

 

 

There are a number of ways we could maintain or increase revenue while not making the system more regressive. A wealth tax is one possibility. I believe there was a good article on this recently in the NY Times. As someone else noted, taxing capital gains at the same rate as wages would be another way. Despise all the wishful thinking to the contrary, the historical and academic evidence does not support the idea that lower capital gain tax rates stimulate the economy and increase job growth.

 

 

To add to this, a video concerned with wealth distribution instead of income:

http://mashable.com/2013/03/02/wealth-inequality/

[DragonFaerie]

Thanks for all the replies! I've learned a lot, and as a result, I'm furious. Grrr.... It is absolutely ridiculous, and I do not understand why nothing is being done about it. Why would the members of Congress not dig into this information and make themselves heroes by being the Congress that finally fixed the budget?

[TXMomof4]

Looking at some of these grants where the researchers hope to profit from the end product-would the government be better served by going into the micro-loan business? There is already a precedent for it with government-backed student loans. It seems like a federally-backed loan could help people *but* the government could make their money back. Some of those HUD grants and NSF grants are good examples.

 

But, then at see some of those included *are* SBA loans. Why would loans be included?

 

There was a story on NPR (sorry - can't remember which show- Science Friday maybe) discussing the program to create a system to restock the space station. It was set up as a competition with the winner getting the contract. Expenses for the r & d were on the private company, the benefit was to the gov and the private companies. Sounds like a good plan to me. I'll see if I can find the link, it was really fascinating.

[Mrs Mungo]

Thanks for all the replies! I've learned a lot, and as a result, I'm furious. Grrr.... It is absolutely ridiculous, and I do not understand why nothing is being done about it. Why would the members of Congress not dig into this information and make themselves heroes by being the Congress that finally fixed the budget?

 

The budget WAS (relatively) fixed. The reason the first round of Bush-era tax cuts were enacted was because of a predicted budget surplus. But, we kicked off a multiple front war *and* cut taxes some more.

[MBM]

Why would the members of Congress not dig into this information and make themselves heroes by being the Congress that finally fixed the budget?

 

 

Because they have hidden agendas.

[TXMomof4]

Thanks for all the replies! I've learned a lot, and as a result, I'm furious. Grrr.... It is absolutely ridiculous, and I do not understand why nothing is being done about it. Why would the members of Congress not dig into this information and make themselves heroes by being the Congress that finally fixed the budget?

Something else to consider - when you discontinue a contract, grant program, purchase agreement, etc. (from a military POV) there is definitely money to be saved. We have contract gate guards. That used to be the job of the MPs but was contracted out at some point. Now we have MPs coming in to cover some of the shifts, which saves money. That MP gets paid the same whether he's working Sunday, midnight - 6 shift, whatever. The guard would get overtime, extra pay for 2nd shift, etc. So money is being saved. But that guard is out money. Dh is in school right now and they had private contractors teaching the classes. All of them were retired military so this was a second income, on top of their retirement. With all the craziness in the budget mess, they've had warrant officers come in and take over teaching the class. Which begs the question, why did they have contractors in to teach when they have fully capable people able to teach the class at the military pay rate? Of course, now those teachers are out of a job or have taken a significant pay cut. Anytime there's a cut - someone will be affected. (paragraph break because of stupid Windows8) Funny story about waste though - neighbor works in a secure room. The gov required that a dutch-door arrangement be put in to help maintain security. So they hired it out and the contractors came in and put in a half door. The 'desk' area of the door came loose and friend went to get a hammer to nail it back in place. A nail - single, one nail was loose. He was informed he absolutely could not touch it, that's a contractor job. But it was Friday afternoon so there was no way they'd get there til Monday. That means the door had to be guarded 24 hrs a day because it was no longer secure. Rather than tasking a soldier (who would be required to do it ) they had to call the security company and have guards ordered for the room for the entire weekend - at overtime rates, working 6 hour shifts. Seriously? Another - dh was the S6 on his first deployment (in charge of communications/computers for the battalion). They were replacing outdated computer systems while he was there, so he had to figure out what was needed and work up a proposal within a certain budget. Dh is nothing if not frugal. And smart about computer systems - that was his civilian job (he was National Guard at the time), he knows how to get the most for his money. He got it all put together and it was sent back because he didn't spend enough. The second proposal was three times the cost because he used name brand parts rather than the best parts. That second one was approved. There are thousands of these stories - but behind each expensive bolt, computer part, whatever is a person who made it that will be penalized when that pork is cut. It's a terrible catch 22.

[Mrs Mungo]

Something else to consider - when you discontinue a contract, grant program, purchase agreement, etc. (from a military POV) there is definitely money to be saved. We have contract gate guards. That used to be the job of the MPs but was contracted out at some point. Now we have MPs coming in to cover some of the shifts, which saves money. That MP gets paid the same whether he's working Sunday, midnight - 6 shift, whatever. The guard would get overtime, extra pay for 2nd shift, etc. So money is being saved. But that guard is out money.

 

Dh is in school right now and they had private contractors teaching the classes. All of them were retired military so this was a second income, on top of their retirement. With all the craziness in the budget mess, they've had warrant officers come in and take over teaching the class. Which begs the question, why did they have contractors in to teach when they have fully capable people able to teach the class at the military pay rate? Of course, now those teachers are out of a job or have taken a significant pay cut.

 

Both of these situations were likely due to Op Tempo. It used to always be soldiers (not just MPs) on gate duty. But, as the Op Tempo picked up (and units deployed) there were not enough available soldiers to pull guard duty *and* make sure all the other jobs were covered. Now that we are mostly out of Iraq and drawing down elsewhere, they do have soldiers available for it again.

 

It is likely a similar scenario with the classes. More people deployed in critical spots means fewer people available for class-teaching gigs. Now that the army is cutting units, there are more WOs (and others) available for those jobs.

[FaithManor]

Funny story about waste though - neighbor works in a secure room. The gov required that a dutch-door arrangement be put in to help maintain security. So they hired it out and the contractors came in and put in a half door. The 'desk' area of the door came loose and friend went to get a hammer to nail it back in place. A nail - single, one nail was loose. He was informed he absolutely could not touch it, that's a contractor job. But it was Friday afternoon so there was no way they'd get there til Monday. That means the door had to be guarded 24 hrs a day because it was no longer secure. Rather than tasking a soldier (who would be required to do it ) they had to call the security company and have guards ordered for the room for the entire weekend - at overtime rates, working 6 hour shifts. Seriously? Another - dh was the S6 on his first deployment (in charge of communications/computers for the battalion). They were replacing outdated computer systems while he was there, so he had to figure out what was needed and work up a proposal within a certain budget. Dh is nothing if not frugal. And smart about computer systems - that was his civilian job (he was National Guard at the time), he knows how to get the most for his money. He got it all put together and it was sent back because he didn't spend enough. The second proposal was three times the cost because he used name brand parts rather than the best parts. That second one was approved. There are thousands of these stories - but behind each expensive bolt, computer part, whatever is a person who made it that will be penalized when that pork is cut. It's a terrible catch 22.

 

Policies that prohibit common sense solutions are VERY costly.

 

Dh just went to work for GM's new IT department. Back in the 80's, GM purchased EDS from Ross Perot in order to do all of their IT in house. They did a cost benefits' analysis and found that by owning the company, efficiency would go up due to having their IT professionals working on site and not paying Ross's profits, plus all of the NON-GM contracts that EDS had would be money makers for them. Ross was willing to sell and move on to something else. It was a good move and GM had top notch IT service while making money off EDS. Then some executive with a burr in his behind, decided that they could make a huge amount of money by selling off EDS and then contracting for IT services through bid wars from EDS's competitors. They ended up with multiple vendors all winning bits and pieces and parts of different contracts and then trying to get EDS, HP, IBM, plus local IT service providers all to work together despite their different management structures and policies. GM ended up paying an absolutely ridiculous amount of money for far less efficient IT services...the average software development project doubled or tripled in price and took six months longer to complete plus they no longer had EDS's other contracts such as Kodak and whatever to offset these costs. Huge blunder.

 

Well, now guess what....frustrated with how long it takes to get anything done, the contract price of paying the service providers profit margin, and the general inefficiency for software support when it's spread across multiple vendors, has caused them to decide to bring their IT back in house. DUH! Wow guys, if you had listened to the EDS'ers back in 94/95 when they told you that your plan was going to backfire in a pretty mighty way, you could have saved yourself a lot of pain. Of course, EDS lost a tremendous amount of business to HP and IBM, which caused it's stock price to tumble, which caused it to be purchased by HP, who then fired a huge number of EDS tech personnel, then rued that decision because while it might have temporarily increased profits, GM, Kodak, etc. all became mighty ticked when there weren't enough programmers and technical support personnel to adequately cover the contracts and offshore resources (heavily lobbied for by GM as a price saving move) were not adequately trained for the business needs of American companies. HP keeps claiming that the loss of the GM business now doesn't mean a hill of beans to them and of course, temporarily, stock prices are starting to come up because in the first quarter, those 3000 employees that went to GM are salary and benefits packages that come off the bottom line and the cost of fulfilling these former contracts can be discharged on the books right away. However, once they have to start being honest about the loss of revenue and the brain drain, the stock price will take a hit.

 

NO.COMMON.SENSE. NONE.

 

I think that in both the public and private sectors, when upper management (congress, ceo's, etc.) get to keep their jobs and cadillac benefit packages despite whatever insane outcomes there are to their ill-conceived plans, there is no incentive to actually think about the long term ramifications of any of their decisions. We need to start by firing the incumbents in the government and at some point, big business needs to get serious about encouraging long-range planning and paying for that, not big bonuses for one quarter's worth of stock hike that will eventually lead to a major stock drop. When Dick Brown headed up EDS, he looted and pillaged the company, stock totally tanked, and then when asked how he could justify his 28 million dollar bonus, commented to the media, "I have an expensive wife." Time to clean house.

 

Faith