Billions here, billions there: A look at where it’s going
November 24 2008
Wars. Bailouts. Unemployment aid. Automakers. Washington has opened the tap on big spending and money is gushing down the pipeline.
The national debt now stands at $10.6 trillion, compared with about $5.7 trillion in 2000 before George W. Bush took office. Buckle up, because that figure is going to climb.
Here’s where some of the big bucks are going:
Iraq war — Various estimates put the total cost of the military operation since 2003 at about $600 billion.
Bailout — The Troubled Assets Relief Program (TARP), signed on Oct. 3, provides $700 billion in financial relief. Of that amount, the Treasury Department has committed about $270 billion in cash injections for banks and another $40 billion for the insurer American International Group.
Economic stimulus — Earlier this year, Bush signed into law a $168 billion stimulus package that included rebates for households and tax breaks for businesses. President-elect Barack Obama is preparing another stimulus plan, and Democratic lawmakers say they expect the package could total between $500 billion and $700 billion.
Detroit — General Motors, Ford, Chrysler and their suppliers have been authorized $25 billion by Congress to retool their assembly lines for making more fuel-efficient cars. Now, the Big Three want an additional $25 billion to ensure they will have the funds to operate through spring. Congress could act on it in December.
Housing — In July, Bush signed a housing bill that included $300 billion in new loan authority for the government to guarantee cheaper mortgages for troubled homeowners. In September, the Treasury took over mortgage giants Fannie Mae and Freddie Mac, pledging up to $200 billion to back their assets.
Jobless aid — Congress last week approved an extension of up to three months for expiring unemployment benefits. The cost is nearly $6 billion.
Federal Reserve — In the past year the Fed has increased its lending and purchases of debt by $900 billion, to almost $2.2 trillion.
The federal deficit — It’s the difference between what the government received from taxes and other revenue and what it spent. In fiscal 2008, which ended Sept. 30, the budget deficit was $455 billion, quite a difference from 2007’s $161.5 billion. Just one month into fiscal 2009, the budget deficit had already reached $232 billion, including $115 billion going directly on the deficit ledger for bank stock purchases as part of the financial bailout. The deficit for fiscal 2009 could reach $1 trillion.
Millionaires reap farm payments; Nobody checking incomes
Investigators say the problem will get worse
WASHINGTON — A sports team owner, a financial firm executive and residents of Hong Kong and Saudi Arabia were among 2,702 millionaire recipients of farm payments from 2003 to 2006 — and it’s not even clear they were legitimate farmers, congressional investigators reported Monday.
They probably were ineligible, but the Agriculture Department can’t confirm that, since officials never checked their incomes, the Government Accountability Office said.
The Agriculture Department cried foul: It said the investigators had access to Internal Revenue Service information on individuals that the department is not permitted to see.
John Johnson, deputy administrator in the department’s Farm Service Agency, said officials there are in touch with the IRS to devise a system for including tax information in its sampling program to determine eligibility.
He added that 2,702 recipients cited by the GAO was a small percentage of the 1.8 million recipients of farm payments from 2003 through 2006.
The investigators said the problem will only get worse, because the payments they cited covered only the 2002 farm bill subsidies.
The 2008 farm legislation has provisions that could allow even more people to receive improper payments without effective checks, they said.
There are three main types of payments: direct subsidies based on a farmer’s production history; countercyclical payments that kick in when prices are low and disappear when they recover; and a loan program that allows repayment in money or crops.
The 2002 farm bill required an income test for the first time.
An individual or farm entity was ineligible if average adjusted gross income exceeded $2.5 million over three years — unless 75 percent or more of that income came from farming, ranching and forestry.
According to the report, the 2,702 recipients exceeded the $2.5 million and got less than 75 percent of their income from these activities.
The payments to them totaled more than $49 million.
“USDA has relied principally on individuals’ one-time self-certifications that they do not exceed income eligibility caps, and their commitment that they will notify USDA of any changes that cause them to exceed these caps,” the GAO said.
The report said Agriculture field offices have been able to request that recipients submit tax returns for review.
But the administrator in charge of the payment programs, Teresa Lasseter, told the GAO, “Requiring three years of tax returns initially from over 2 million program participants was not a viable option or cost-effective alternative.”
The GAO said 78 percent of the recipients resided in or near a metropolitan area, while the remaining 22 percent resided in large towns, small towns and rural areas.
Further, the investigators said the Agriculture Department should have known that 87 of the 2,702 recipients were ineligible because it had noted in its own databases that they exceeded the income caps.
The GAO said it was prevented by law from identifying individuals cited in its report, but the investigators offered these examples of likely improper payments:
A founder and former executive of an insurance company received more than $300,000 in farm program payments in 2003, 2004, 2005 and 2006 that should have been subject to the income limits.
An individual with ownership interest in a professional sports franchise received more than $200,000 for those same years that should have been barred by the income limits.
A person residing outside the United States received more than $80,000 for 2003, 2005 and 2006 on the basis of the individual’s ownership interest in two farming entities.
A top executive of a major financial services firm received more than $60,000 in farm program payments in 2003.
A former executive of a technology company received about $20,000 in years 2003, 2004, 2005 and 2006 that were covered by the income limits.
This individual also received more than $900,000 in farm program payments that were not subject to those limitations.
The investigators also found nine recipients resided outside the United States — in Hong Kong, Saudi Arabia and the United Kingdom, for example.
The remainder resided in 49 of the 50 states, the District of Columbia and the Virgin Islands.
Five states — Arizona, California, Florida, Illinois and Texas — accounted for 36 percent of the recipients and 43 percent of the $49.4 million in farm program payments.
We must also remember that $2.3 Trillion they admitted to losing on September 10, the day before 9/11 still hasn’t been found either.
One has to wonder how much money, has been lost in other areas as well?
“Accountability” is not something the Bush Administration took to seriously.
Bush accountability is gone: just a reminder
Somebody owes me a Diet Coke.
That’s what was at stake in a wager a gentleman and I made over dinner at a restaurant in Baton Rouge. He had asked if I didn’t agree that Attorney General Alberto Gonzales, then, as now, under fire in the scandal over the alleged politically motivated firing of nine U.S. attorneys, would soon be forced to step down. I said no. He said Gonzales would not last six weeks. We made a bet on it.
This was 11 weeks ago. Gonzales, of course, is still in office. In fact, President Bush last month reiterated his support for his embattled friend, who faces a possible Senate no-confidence vote later this month.
I wish I could say that in wagering on Gonzales’ political survival, I relied upon some insider knowledge, some astute reading of the tea leaves based on long years of watching the political scene. Truth is, what I relied on is a belief in the utter shamelessness of George W. Bush’s administration.
No, Team Bush does not own the patent on shamelessness. Some of us thought it bespoke an alarming imperviousness to embarrassment when Bill Clinton, caught lying about being serviced by a young intern in the Oval Office, chose to brazen his way through the resulting furor rather than resign.
But if the Bush people did not invent shamelessness, they have refined it to a level that once seemed impossible. So much so that this shamelessness, this indifference to perception, this abysmal lack of what Thomas Jefferson called “a decent respect to the opinions of mankind” may prove to be the administration’s defining characteristic, its calling card in matters both grand and small. Granted, shamelessness will have to battle hubris and incompetence to earn that distinction, but still …
No administration in living memory has shown Team Bush’s ability to reverse itself so blithely, to deny the obvious so serenely, to ignore precedent, propriety and responsibility with such placid unconcern for consequences or public perception.
Weapons of mass destruction not found where you once guaranteed they would be? Pretend you invaded Iraq for other reasons.
“Stay the course” proving an ever more threadbare strategy? Deny it was ever your strategy at all.
FEMA director presides over a botched disaster relief effort that costs hundreds of American lives? Praise him for doing “a heckuva job.”
CIA director presides over intelligence gathering failures that cost thousands of American lives? Give him a Medal of Freedom.
And so on.
If you’re looking for accountability, you’re looking in the wrong White House. Or as Bush once put it, “We had an accountability moment, and that’s called the 2004 elections.” In other words, if you win the election you can do whatever you want and it doesn’t matter what anyone else thinks.
So I am not surprised that, despite growing evidence he allowed the Justice Department to become a wholly owned subsidiary of the Republican Party, Alberto Gonzales still has a job with the federal government. To be honest, I am more surprised that Donald Rumsfeld, Paul Wolfowitz and former FEMA chief Michael Brown do not.
And ain’t that a kick in the head? We have reached a pass where one is almost shocked to see people held to answer for scandal and ineptitude. Where one is taken aback at the notion that failure carries a price. And where tough talk and a “What, me worry?” smugness now routinely pass for iron resolve and moral clarity.
If you had told me in 2001 that this would be the state of things six years later, I’d have laughed in your face.
I’d have lost a lot of Diet Cokes on that.
GAO: Labor Dept. Misled Congress
By Carol D. Leonnig
November 25, 2008
The Labor Department gave Congress inaccurate and unreliable numbers that understated the expense of contracting out its employees’ work to private firms, according to a Government Accountability Office report released yesterday.
The department’s decisions in allowing contractors to compete for bureaucrats’ work — known as “competitive sourcing” — also demoralized workers, according to most of the 60 agency employees interviewed by the GAO.
“DOL’s savings reports are not reliable: a sample of three reports contained inaccuracies, and others used projections when actual numbers were available, which sometimes resulted in overstated savings,” the GAO report said. “Because of these and other weaknesses, DOL is hindered in its ability to determine if services are being provided more efficiently as a result of competitive sourcing.”
Labor Secretary Elaine L. Chao began having some agency workers compete for their jobs in 2004, but since then few employees have actually lost their jobs and had their pay cut as a result of the privatizing effort, GAO found. Of the 314 federal workers who had a job change as a result of competitions with private firms, 263, or 84 percent, were either reassigned to positions with the same title and pay or were promoted. Of the 16 workers who were demoted, 14 kept their same professional grade or pay.
Twenty-two employees were demoted or laid off, and all were African American. An additional 29 employees left voluntarily.
Sen. Tom Harkin (D-Iowa) and Rep. David Obey (D-Wis.), chairmen of their chambers’ appropriations subcommittees with jurisdiction over the Labor Department, asked for the report and urged Congress not to fund the competition program until the GAO provided the answers. They issued a statement yesterday saying the review documented “the negative impact the Bush Administration’s failed policies have had” on the agency.
“Under the direction of this White House, the Department of Labor has increasingly attempted to move work performed by Federal employees to private contractors” and, in so doing, hurt workers’ morale and “grossly overstated savings,” they wrote. “We look forward to working with the Obama Administration to strengthen the Department of Labor as it undertakes the critical missions of making sure our workplaces are safe; protecting employee pensions, health benefits and rights; and providing workers with the skills they need to compete successfully in the 21st century economy.”
Patrick Pizzella, an assistant secretary who oversees competitive sourcing, told the GAO in a letter last month that the department agrees tracking costs and performance more systematically would give the agency a more accurate picture of the usefulness of competitive sourcing. “As the GAO report indicates, DOL has made progress developing a system to assess the performance of winning service providers in our competitive sourcing program, and DOL’s competitions rarely resulted in lost jobs or salary reductions for DOL employees,” he said yesterday.
Pizzella said the Office of Management and Budget does not require that fuller counting; the GAO urged the OMB to require agencies to do so.
Will the lies ever end?