Shakespeare Explains Democrats

[Guest Contributor - Donald G. Mutersbaugh Sr.]

 “Tomorrow, and tomorrow, and tomorrow
Creeps in this petty pace from day to day
To the last syllable of recorded time.
And all our yesterdays have lighted fools
The way to dusty death [substitute all recent Democrat initiatives]. Out, out, brief candle.
Life’s [substitute Presidential Debates and Primaries] but a walking shadow, a poor player [substitute Democrat presidential candidates]
That struts and frets his [her] hour upon the stage [substitute Election Day],
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.” [Shakespeare: McBeth, Act V, Scene 5]

Presented with apologies to William Shakespeare. These classic verses just echoed in my mind as I watched the Democrat debates. Then, I watched the Iowa Democrat primaries unfold. As all of the world – literally – watched the primary results on television, I’m sure most of us stared at them in disbelief that anything as important as this could go so wrong. And my fellow newscasters and bloggers are absolutely correct when they point out the people responsible for this debacle want to run the country – good luck!

Without belaboring the point, truly this was a proxy of things to come. How these candidates can be supported by people who hold themselves out to be journalists – can say with a straight face the Democrats could do better than President Trump is amazing. When you look at all of his accomplishments in the face of what he and his family has had to endure, it presents an insurmountable venture for the Democrat candidates to even describe, much less try to argue, that they will do better.

As a taxpayer I am beyond disgusted to think of the millions of dollars that the House of Representatives has spent trying to impeach President Trump and otherwise completely destroy our country. They have done nothing productive. It is too bad that our tax laws do not allow us to designate which representatives can be paid or not paid – although the Democrats are so ravenous in their attempts to destroy this President that I doubt it would make any difference whether they were paid or not!

And even more amazing is that the message they have presented is so far from the American dream as to make it even more confusing and idiotic why they are even running. You don’t have to be driven by the almighty dollar to sort through the rubble they wish to push on us. As the statistic shows over 90% of Americans are satisfied with their current personal life status https://news.gallup.com/poll/284285/new-high-americans-satisfied-personal-life.aspx .

Good grief! Besides the unbelievable economic statistics concerning rising wages, declining unemployment, booming retirement portfolios, etc. – what part of this calculus don’t these candidates understand? How can they continue to lie to the American people and expect us to take them seriously and vote for them in November? They get up on stage for the debates and look each other in the eye and tell lies in a manner such as to outdo their opponents – that is, they try to one best them. 

The words of William Shakespeare are so applicable when he says “…It is a tale Told by an idiot, full of sound and fury, Signifying nothing.” The only thing more discouraging than watching these candidates enjoying themselves bloviating on national television is the fact that I have to watch it for eight more months – oh dear. "Have more than thou showest, speak less than thou knowest, lend less than thou owest" [Shakespeare: King Lear, Act I, Scene 4]. Sorry William, but thou speaketh so eloquently!

Donald G. Mutersbaugh, Sr. earned his Bachelor of Science degree from the University of Maryland and his Master of Business Administration degree from Mary Washington College. He is the former Associate Administrator of Information Resources for the U.S House of Representatives under Speaker Newt Gingrich.

THE NUMBER GAMES

                       

 Published in http://hnn.us/article/154391

Quality guru Dr. W. Edwards Demming always asserted, “You can't manage what you can't measure.” America is suffering from this ailment as facts and numbers become increasingly politicized. Everyone cherry picks statistics to build their case. They ignore or assail numbers that challenge their case. We are at a point where rational political discourse has evaporated along with objective facts and figures. Few are willing to stipulate to anything. Our ability to achieve reasonable middle ground fades by the day.

There are three areas where this numbers’ crisis is harming our nation and the Republican Party in particular.

THE REAL ECONOMY

Every pundit pounces on economic indicators. America’s economy has something for everybody. The stock market is at a record high and the economic recovery continues, although at a tepid pace. However, outside of the “top 1%” of income earners things are far from rosy.

The most accurate figures are being generated by Gallup. They show the unemployment rate at 7.4%. However, under-employment – people who are taking lower paying jobs to make ends meet - remains stuck at around 17% for the last three years. Wage earners, as a percentage of the U.S. population, are stuck at around 43% during this same period. The “Labor Participation Rate”, those employable in core earning years (ages 25-64), continues to lag at record lows (82%).

Congress reconvenes to face the future of unemployment benefits. Many families are at risk because unemployment insurance benefits ended on December 28, 2013. What no one is discussing is the fact that there are many Americans who have not been able to qualify for unemployment benefits. Unemployment insurance is partially funded by deductions when a person is employed. When a person is laid-off they qualify for benefits if they paid into unemployment insurance at least two quarters during the previous eighteen months (known as the base period). This only occurs if the person was employed as a W2 worker. Consulting work (1099) does not count because these are fees not wages. Therefore, an unemployed person who has worked as an independent contractor is not eligible for benefits.

Currently, 34.4 million Americans work as contractors or part-time without benefits. When they get laid-off, and cannot find follow-on opportunities, they become a large element without unemployment benefits. Media stories, and Congressional angst, are rare regarding Americans barely hanging on – not poor enough for welfare, but not being able to make ends meet. This is the real hole in our safety net.


FISCAL FLIM FLAMS

Once again the clock is ticking toward raising the debt ceiling. Congress is also sparring over how to fund unemployment benefits through spending offsets. The liberal chorus for taxation to ease the pain of the Sequester can also be heard on a daily basis.

These false deadlines and balance sheet fictions are designed to avoid real facts and serious decisions. There is over $680 billion lying around unused and unobligated in countless accounts throughout the Federal Government. Obama is the only recent president who has not conducted a “budget sweep” to retrieve these funds. A memo from either the U.S. Treasury or OMB would sweep this money back into a general fund to stave-off the national debt ceiling for a full year. Alternatively, an across the board hiring freeze of federal employees would save $350 billion a year. This would solve the debt problem for nearly six months. Still another option is to save $650 billion by annually implementing the 9,000 Inspector General and Government Accountability Office (GAO) reports.

Congress and the White House won’t admit there are real opportunities to balance the Federal budget. They are adrift in a sea of sham.


PURITY PURGES

In a world where “Duck Dynasty’s” Phil Robertson has replaced “Firing Line’s” William F. Buckley as the intellectual symbol of conservatism, numbers still matter.

The Republican Party, like the Democratic Party, is an amalgam of interests gathered around a set of philosophical concepts. In order to win elections, and therefore to govern, political parties must expand beyond their comfort zone to attract candidates and voters who don’t always adhere to these core concepts. Expand too far and party labels are meaningless. Restrict too much and the party is sent into the political wilderness.

A key test for striking the right balance comes when a Party disciplines one of their elected officials for being too wayward. At some point being useful for “organizational purposes” is undermined by a pattern of votes that threaten Party integrity. In 1970, Republicans ended the political career of Senator Charles Goodell (R-NY) because he was voting less than 50% of the time with his Party and taking the lead in sponsoring ultra-liberal legislation. As Goodell had been appointed to fill the vacancy left by the death of Robert Kennedy in 1968, his bid for a full term was the ideal opportunity to make an example. James Buckley, brother of William F. Buckley, ran on the Conservative Party ticket against Goodell. Goodell was made a “poster child” for disloyalty. Buckley crushed Goodell by nearly 2-1.

It is one thing to purge disloyalty at the 50% or less threshold. It is quite another to launch primary challenges at the 100% or less threshold. That is what is happening across the Republican Party as it enters the 2014 election cycle. For example, the Texas Tea Party has declared Rep. Pete Sessions (TX-32) an “under performer” for his American Conservative Union rating of 97%, and is fielding candidates against him.

Incumbent re-election rates are always over 85% and are many times over 90%. Open seats are another matter as are divisive primaries. In these circumstances the incumbent party retention rate, depending on state, can plummet to 50%. Thanks to multiple cycles of gerrymandering, individual Congressional districts have skewed more partisan. However, Republicans make up a third or less of registered voters in most states. In order to win Senate seats, Governorships, and other statewide races, Republicans need to appeal to Independents and open-minded Democrats. As Ronald Reagan once said, “The person who agrees with you 80 percent of the time is a friend and an ally — not a 20 percent traitor.”

Tea Party purity purges play well on conservative talk radio, but the only way to govern is to control the government.

Raising Revenue Responsibly

This article was published on the History News Network

 http://hnn.us/articles/how-solve-fiscal-cliff-problem-responsibly

There are three legs to the stool of Federal Fiscal Solvency - Cut spending, entitlement reform, and revenue generation. Few of the Washington power players are realistically discussing any of these, but revenue has generated the most polarized rhetoric.

All our lives are impacted by the way our Federal Government raises the $2.9 trillion it needs to function. That is why it is important that any revenue element of a “Fiscal Cliff” deal is weighed not only for the amount, but for its “tax incidence”.

“Tax incidence” charts the various ways government amasses its revenue and how these ways impact individuals, industries, demographics, and “geographics”. Our current “progressive rate” income tax system and the strategic reform proposals of the flat tax, fair tax, and Value Added Tax (VAT) all generate significantly different impacts on our individual spending habits and our overall national economy.

Tax policy punishes or promotes economic activity either with intended or unintended consequences. Government tax policy has become social policy, resulting in an amazingly complex and voluminous tax code. The federal tax code is over 5.6 million words or 3,458 pages – seven times longer than the Bible, depending on the edition. Each page, sentence, phrase, and punctuation of this Tax Code, and its countless regulations, instructions, and manuals, determine winners and losers within the economy. These regulations are further subject to equally voluminous interpretation through administrative and judicial rulings.

There are nearly an infinite number of ways individuals, companies, and an array of other entities, can navigate this tax landscape. Lost in this morass is the original intent for many of these pathways and how they are supposed to positively guide economic behavior while raising desired revenue.

Democrats obsess over raising tax rates on the wealthy, and Republicans remain vague about “tax reform”. Thankfully, one person has conducted a detailed review of the Federal Tax Code and found $992 billion in possible tax saving/new revenue over the next ten years – without raising tax rates.

In July 2011, Senator Tom Coburn (R-OK) issued his “Back in Black” report. http://www.coburn.senate.gov/public/?p=deficit-reduction

“Back in Black” is a 624-page detailed, line by line, analysis of how the Federal Government can cut waste, achieve operational efficiency, and find the revenue needed to get out of debt.

Coburn’s final section (pages 558-624) addresses how decades of tax policy decisions have created a multitude of opportunities for special interests to avoid taxes, or obtain tax incentives and subsidies, while harming the general populace (pushing the tax burden onto others and driving up the debt).

Reviewing some of Senator Coburn’s examples of how our tax code runs amok is instructive and sobering. Coburn’s ideas represent the most economically neutral opportunities for new revenue and should be part of any strategic “Fiscal Cliff” agreement.

Subsidizing millionaires - Individuals with over a million dollars in income benefit from more than $7 billion in tax relief annually through the mortgage interest deduction. Under current law, homeowners can deduct the interest paid on home mortgages for primary residences and vacation homes loans of up to $1 million, resulting in lost federal revenue of nearly $88 billion. Even a yacht can be considered a second residence—as long as the luxury boat has a “sleeping, cooking, and toilet facility” and an individual lives in it for at least two weeks a year.

Subsidizing foreigner gamblers - Americans must pay taxes on their winnings at horse and dog tracks in the United States, but not foreigners. This deprives the Federal Government of $30 million over the next ten years.

Subsidizing Hollywood – In order to encourage Hollywood to produce feature films and television programs in the United States, entertainment companies may deduct up to $15 million in certain costs associated with the production of television episodes and movies where at least 75 percent of the compensation costs are for work performed on U.S. soil. Allowing Hollywood to benefit from this accelerated cost recovery results in federal revenue losses of at least $30 million a year.

Allowing fraud - Within the Additional Child Tax Credit (ACTC), individuals without a valid Social Security Number (SSN) claim $1.780 billion a year, or $17.8 billion over ten years. Congress has not provided the IRS with adequate authority to deny these fraudulent claimants.

No documented impact – The 1993 Government Performance and Results Act (GPRA) is supposed to hold every federal activity accountable for actually achieving intended results. GPRA is routinely ignored, not only for federal expenditures, but for tax expenditures. Two examples are Empowerment Zones (EZs) and Renewal Communities (RCs). EZs and RCs are federally designated poverty or distressed areas where businesses and local governments receive federal grants and tax incentives in exchange for locating and developing in these zones. Nearly $1.8 billion in grant incentives provided to EZs and RCs have been allocated since 1993. However, the Government Accountability Office (GAO) and the Inspector General at Department of Housing and Urban Development (HUD) have not found any tangible improvement in community outcomes.

Bailouts without end - The IRS has excluded major Troubled Asset Relief Program (TARP) recipients from certain tax obligations for potentially the next 20 years. These TARP recipients may avoid paying more than $90 billion combined in taxes because of this special tax treatment. This includes AIG, which has accumulated over $25.6 billion in carry-forwards and other tax-deferred assets; New GM, which will avoid as much as $45.4 billion in taxes because of the Treasury Department‘s exemptions; and Citi, which will use $23.2 billion in carry-forwards and other credit carryovers in just one year.

Malfeasance - The Internal Revenue Service found nearly 100,000 civilian federal employees were delinquent on their federal income taxes, owing over $1 billion in unpaid federal income taxes. The federal government has also failed to collect more than $62 billion in penalties owed by swindlers, criminals and others cited for violating federal laws and regulations and this amount has increased dramatically.

It is truly sad that none of these issues were discussed during the 2012 campaign. Republicans, in particular, could have avoided being branded as coddling millionaires. Each side is equally guilty of over politicizing these serious management and economic issues. The fact that Senator Coburn’s published report has remained in the policy wilderness for the last seventeen months is unconscionable.

Breaking Bad – Avoiding the Fiscal Cliff

A shorter verison of this column appeared in the Washington Examiner

http://washingtonexaminer.com/breaking-bad-avoiding-the-fiscal-cliff/article/2512227

The impending “fiscal cliff” is the most thoroughly predicted disaster since the end of the Mayan Calendar. The problem is no one is willing to design and implement a real solution that has any chance of bipartisan support.

The cycle of dysfunction has existed for decades. The Federal Budget Act of 1974 created what was supposed to be a rational process for planning, approving, and implementing government spending. It quickly became an empty paper exercise as appropriations ignored the Budget Resolutions. When the difference became embarrassingly stark, the Senate simply gave up on passing one at all. Additional budget reform legislation was passed and immediately ignored. Gramm-Rudman-Hollings, Budget Reconciliation, and the Government Performance and Results Act (GPRA), all gather dust. Annual budget deals, and continuing resolutions, put off the day of reckoning. Reagan’s 1982 budget deal resulted in more revenue and no spending cuts.

Administrations annually create a new budget. Hidden inside the hundreds of pages is the “Current Services Budget”, or “Baseline”. This outlines how much it costs to maintain existing services at current levels. It factors in various cost drivers - cost of living increases, escalation clauses in contracts, etc. Budget battles are fought over the increase above current service levels. When officials propose budget cuts they are talking about cutting the increase, not cutting current service funding levels. Therefore, there is a built in “ratchet effect” to expanding government spending.

The latest looming cliff is supposed to wrench the Washington policy players out of denial and avoidance, forcing them to actually do something real. This will not happen unless certain things change.

Start with the basics – Use the “Current Service Analysis” levels as the budget framework. Administration and opposing budgets can be aspirations compared against the true baseline. That will level the playing field and keep everyone honest about what is really an increase and what is really a reduction.

Rise above ideology - Both Democrats and Republicans contributed to the cliff. Both sides spend like there is no tomorrow. Both sides embrace “sacred cows”. Both sides live in a world where their people are angels and their opponents are demons. A good first step is to admit that each side has some good ideas and each side has looney ones.

Democrats need to understand that even their most cherished domestic assistance programs are riddled with waste and inefficiency. Republicans need to realize that the Departments of Defense and Homeland Security are just as bloated and dysfunctional as the liberal programs they assail.

Make Inspector Generals and the GAO “rock stars” – The Government Accountability Office (GAO) has 3,100 employees. There are also 73 Inspector General Offices embedded in Cabinet Departments and major agencies. All these offices are filled with highly trained, dedicated, objective civil servants who document waste, fraud, abuse, and inefficiency as well as recommend actions to eradicate and prevent future squandering of public resources. They document over $650 billion in waste annually. That is $6.5 trillion in cost avoidance and direct spending reductions over the ten years everyone uses to discuss the fiscal cliff. Except for a rare instance, these reports, and their detailed recommendations, are universally ignored.

The next Congress will be as grid locked as the last few. Partisan votes in the House will die in a Senate unable to muster sixty votes to move legislation. Then there are possible White House vetoes.

Therefore, why not check ideology at the door and embrace stewarding public funds? One hopes overwhelming numbers of Members from both parties, as well as the White House, would agree that waste is waste. Pass budget bills that specifically mandate GAO and IG recommendations are implemented and corresponding amounts of documented waste, fraud, and abuse are cut from programs and agencies. Resurrecting effective Congressional Oversight is long over due.

Having everyone discover that they can all agree on something will shift from the culture of confrontation to a culture of collaboration. Beginning swimmers start in the shallow end of a pool and then move into deeper waters as their skills and confidence improve. Congress and the White House could move into more complex and contentious waters as their ability to respectfully and constructively disagree improves.

Allow for public input - “Crowd sourcing” is being successfully used in several European countries to harness collective wisdom for public policy. Using either an ongoing “crowd sourcing” process, or an annual referendum tied to tax returns (like the Presidential Campaign fund check-off), citizens could either identify what to cut or what to fund. Their input would initially be advisory and mature into binding guidance as seriousness and sincerity are displayed by all involved.

If Congress, the White House, the agencies, and the media, do not explore these ideas, America faces a crisis that will dwarf the chaos in Greece.

[Scot Faulkner was Chief Administrative Officer for the U.S. House of Representatives. http://citizenoversight.blogspot.com/]



Housing Woes

House sales continue to slump. The latest figures show a 33.2% drop in new home sales from June 2007. Media and financial pundits have filled the airwaves with complex reasons for the worst housing market since the Great Depression. There is one additional reason they missed – corruption.

Last month Baltimore Mayor Sheila Dixon had to explain receiving thousands of dollars in gifts while providing tax breaks and zoning changes to developer Ronald Lipscomb. She denies any prid-pro-quo and defends the gifts as stemming from a “personal relationship”. A grand jury has been convened to review the matter.

One of the reasons America’s housing bubble has burst is that thousands of houses in hundreds of subdivisions have been built based upon corruption, not market forces. Local governments require economic analysis and market projections to prove the financial viability of a subdivision before it is approved. Yet numerous reports rejected by local zoning officials as being made of “whole cloth” are later overturned by other officials. Why would local officials approve developments that will not make money?

Every house in a subdivision requires at least $1.50 in services for every $1.00 raised in property taxes. This means that residential growth will either bankrupt a community or require major tax increases. In addition, new houses balloon student-teacher ratios, crowd highways, and lengthen emergency response times, creating unacceptable risk and harm. So why would local officials approve developments that will hurt their communities?

These disconnects with reality happen through callous disregard for the community. Unfortunately, this callousness is usually bought and paid for by local developers. Recently, a zoning official retired and went to work for developers. “They are now paying him over the table instead of under the table,” mused an activist.

Rapid sprawl can usually mask this disregard for market forces. Questionable projects make money because so many people are buying anyway. However, when market conditions weaken, these shaky developments crumble like poorly constructed buildings in an earthquake. Pundits looking for reasons for the historic scope and depth of America’s housing slump should explore how the market was first undermined by low ethical standards.