Clinton and the Great Recession

 IN AN INTERVIEW AIRED YESTERDAY ON CBS BY KATIE COURIC, PRESIDENT CLINTON BLAMED THE RECESSION ON BUSH AND THE REPUBLICANS;

WHY DID COURIC LET HIM GET AWAY WITH THAT????

The seeds of the Great Recession were planted by the Clinton Administration with bi-partisian support from the Congress

1. On November 12, 1999, President Clinton signed the repeal of the Glass-Steagall Act  [the Gramm-Leach-Bliley Act] permitting commercial banks to merge with investment banks and therefore to issue securities such as collateralized debt obligations. The Republicans were in control of the House and Senate but the Repeal passed with    

most members of both parties voting for it [Citigroup was the lead bank in lobbying for this legislation because it had just merged with an investment bank and an insurance company.]

Days after the Clinton Administration stated that they would support the repeal of Glass-Steagall, Clinton’s Secretary of the Treasury, Robert Rubin, announced he was leaving to take a top position at Citigroup as the second in command. ....was there a quid-pro-quo for making this deal?....we don’t know.

2. On December 21, 2000, President Clinton signed into law the Commodity Futures Modernization Act which made issuing over-the-counter derivatives legal without any accompanying regulations, not even the requirement to report derivatives that were sold.

He signed this law despite the fact that the head of the Commodity Futures Trading Commission, Brooksley Born, had warned that some day these instruments would bring down the banks and it would cost the American taxpayers a huge amount of money; famously, a hedge fund named Long-Term Capital Management already had nearly brought down the financial industry by betting on derivatives.

This was a bi-partisian bill, agreed to by Democrats as well as Republicans

3. Despite promising in his campaign for President not to enter into NAFTA [the North American Free Trade Agreement], President Clinton signed  NAFTA in 1994 after adding some labor and environment provisions that unfortunately had no strong provisions for enforcement.

During Clinton’s term in office, he entered into ~300 trade agreements [according to Wikipedia] which some claim were so one-sided in favor of the other country that more than 2 million jobs left the U.S. (an average of 45 thousand jobs a month from 1997 to 2001) during Clinton’s second term in office [see The Economist, The Clinton Shuffle: Free Trade; U.S. Jobs Shipped Abroad:  A New Measure by Erica L. Groshen, Bart Hobijn and Margaret M. McConnell]

SIGN OUR PETITION TO SAVE SOCIAL SECURITY

TAKE A STEP TOWARD SAVING SOCIAL SECURITY 

PLEASE SIGN OUR PETITION

(Click the link "A Petition to Save Social Security" under Find Us On Facebook)

IT IS ESSENTIAL FOR THE U.S. TO START PAYING DOWN ITS HUGE DEBT, BUT FOR THE MOST PART, SOCIAL SECURITY HAS NOTHING TO DO WITH TAKING MONEY FROM THE GENERAL TREASURY  

As we explained in a previous blog [July 28], Social Security’s revenue comes from a separate payroll tax.  What does impact our deficit is the money that the Federal Government “borrowed” from Social Security in order to fund earmarks and other wasteful government spending.  The current debt owed to Social Security is ~$2.5 Trillion.  

Our petition says the following:


1)  The $2.5 T debt does not have to be repaid  [so the deficit would be immediately decreased by that amount]


2)  The “cap” [as explained in our Blog] would be lifted so that high earners would be paying a bit more in payroll taxes


3)  The Federal Government would promise [by passing a law] that no money would be borrowed from Social Security in the future [Al Gore’s idea of locking up the funds]

This would eliminate the need to push back the retirement age past 67 which is already too late.

We have only 24 signatures, so we need YOU to step up to sign the petition and to circulate this message to your friends and family to ask for their signatures as well.  

 DON’T ACCEPT WHAT SOME POLITICIANS WANT YOU TO BELIEVE, THAT SOCIAL SECURITY WILL NOT BE THERE FOR YOU AND YOUR CHILDREN....ACT NOW TO PRESERVE THIS ESSENTIAL PROGRAM 

MEDICARE FRAUD: AT LEAST $60 BILLION ANNUALLY

The U.S. Justice Department stated that Medicare pays out $60 Billion in fraudulent charges each year.  (This is approximately 14% of Medicare’s annual claims).  

Some experts think the number is twice that amount, according to Cynthia McFadden and Almin Karamehmedovic who reported on a four month Nightline investigation into Medicare scams [March 17, 2010 on ABC News).  A similar investigation was conducted and reported on by 60 Minutes.

A Medicare fraud strike force was established in 2007, however, before an investigation even begins, the perpetrators usually have already collected Medicare’s payments and closed down their operations.

According to the 60 Minutes and Nightline reports, Medicare fraud has surpassed drug dealing because it is so easy, so lucrative and carries such little risk.  A criminal only needs a code book from Medicare showing the billing codes for services and products that Medicare will pay for, plus a list of “patients” showing their names, date of birth, Social Security number and address. They simply fill out their forms correctly and money from Medicare is wired directly into their bank accounts within 30 days.  The ABC News reporters interviewed DHHS Secretary Sebelius’ staff who stated that Medicare has the power to stop payments if they suspect fraud.  But this is rarely done even when there is clear evidence of fraud.

Most troubling were interviews of Medicare recipients who had actually called Medicare to report that items (products/services) paid for on their behalf were not items that they received (or even needed).  For example, a woman said that she first contacted Medicare in 2003 to alert them that she never ordered, received or had any need for an electric wheel chair and other items that Medicare had paid for on her behalf.  Over the past 6 years she has received several such reports of Medicare payments for fictitious medical supplies (sometimes duplicate equipment) and every time she called Medicare to let them know.  She even asked that they somehow flag her account so that no payments would be made on her behalf without checking with her first since she has not been sick for 30 years... but apparently Medicare has taken no action.

You would think that Medicare would dramatically tighten its enrollment standards for vendors and have each one investigated for a period of time before permitting them to receive Medicare payments.  At the very least, patients should be called before payments are made for very expensive items to check that a physician did indeed recommend these items for them.  With $60 Billion at stake, it is inexcusable that even such low-tech, low cost measures as these have not been taken. 

 60 MINUTES ASKED HOW WE CAN EXPECT OUR GOVERNMENT TO RUN A HUGE NEW HEALTH CARE INITIATIVE WHEN THEY CAN’T EVEN RUN MEDICARE  EFFICIENTLY.....WE ARE ASKING THE SAME QUESTION

THE U.S. CONTINUES TO WASTE BILLIONS OF DOLLARS IN IRAQ

The U.S. has built hundreds of abandoned or incomplete projects in Iraq, some of which will never be used [see Article by Associated Press Writer Kim Gamel, Sunday, August 29 on Yahoo News] 

Examples:  $165 Million Children’s Hospital in the South, unused

                   $100 Million Wastewater Treatment System in Fallujah, yet sewage still runs 

  in the streets  

        $40 Million prison sitting empty and probably will never see a prisoner

According to the Article, auditors have discovered that more than $5 Billion of the $50 Billion the U.S. has spent on reconstruction has been totally wasted. 

We also looked at an MSNBC video that showed the multi-Billion-dollar massive new U.S. Embassy compound in Iraq.  It has 21 buildings on 104 acres with many amenities.  The maintenance cost is estimated to be $1.8 Billion every year.  

 PERHAPS OUR POLITICIANS HAVE FORGOTTEN THAT

WE NEED TO BORROW MONEY FOR ALL OF THIS

Refugees and Asylum Seekers

• We want to restate what we have said before on this blog: we are in favor of legal immigration, and now we can add, we are in favor of granting refugee status to those who face persecution in their homelands; with a caveat: we are broke so we have to dramatically cut back and only accept those who REALLY face persecution as well as those who can afford to take care of themselves without welfare from the U.S. taxpayers

• Our Federal politicians have to face the fact that we can no longer afford to be the savior of every man, woman and child on earth, even though in our hearts we desperately want to be

• Correction: We can no longer be the savior of every man, woman and child on earth until we pay down our enormous debt

• To remind you of important U.S. financial numbers:
• Total U.S. national debt is

~$13 Trillion

• In Fiscal 2009 (the last full year for which we have numbers) the U.S. had a deficit of over $1.4 Trillion for just that year (and is expected to run a similar deficit for 2010)

• The deficit = Federal spending minus revenue received; this is money that we have to borrow and pay interest on until the money is finally repaid
  
• Federal spending in 2009 increased by 18% (including raises for Federal workers)

• It is interesting that the Obama administration estimated that the deficit would be “only” $482 Billion for the year; it appears we have a problem in managing if we forecast a deficit of $482 Billion and end up with three times that figure
  

• This Posting discusses something you might not be aware of: Every year we grant “refugee” status (which for purposes of this Blog will include those who are granted asylum, since it is basically the same thing except that we have no annual limit on the number of asylum seekers) to hundreds of thousands of people, many of whom are indigent and/or sick

***

DISCUSSION

U.S. Refugees

(1) A “Refugee” is defined in the U.S. Immigration and Nationality Act, as amended by the Refugee Act of 1980, as a person who is fleeing {their homeland} because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion, and who is of special humanitarian concern to the United States; someone who seeks asylum fits under the same definition except they enter the U.S. and then ask for asylum

(2) Over the years, Congress and the Administration have “stretched” that definition to include many others. For example, according to a 2007 CRS (Congressional Research Service) report, Congress decided to allow those fleeing China because of the one-baby mandate to become “Refugees” in this country which gives them all of the rights of a U.S. citizen including welfare

(3) There are no age, income or even health requirements that must be met to obtain Refugee status (in the past, those with HIV/AIDs could not be admitted, but that is no longer true, and waves of entrants from Africa are admitted who immediately obtain free medical and other benefits which they have for at least seven years and which most continue to have because by the 8th year they have become naturalized citizens)

(4) Basically, all benefits that are available to U.S. citizens are available to Refugees, which include:

1. TANF - Temporary assistance for needy families
2. Medicaid
3. food stamps
4. subsidized public housing
5. Low-Income home energy assistance program
6. SSI- Supplemental Security Income
7. Social Security disability benefits
8. if 65 or older, Social Security benefits

(5) The most recent report to Congress by the Office of Refugee Resettlement (see the US Department of Health and Human Services website at www.acf.hhs.gov ) is for 2007; that report gave these figures for Refugees settled in the U.S.:

25% live in public housing

39.1% receive Medicaid or Refugee Medical

Assistance

24.6% have no medical coverage (so they

presumably will be subsidized by the new health

care bill)

15.3% receive cash assistance from SSI

49.3% are on food stamps

(6) In 2007, “welfare” for Refugees cost taxpayers over $10 Billion; unfortunately, we could not find any reports after 2007, so we do not know recent cost figures for welfare benefits obtained by Refugees; our best guess is that we pay at least $20 Billion, but that is just a guess; we called many Senators and Representatives’ offices and got the same answer, “they don’t know” and they don’t know how to find out, which is strange because Congress is supposed to oversee these programs

Note: The U.S. still conducts a “diversity lottery” every year that brings in 50,000 more people who get the same benefits as Refugees; the only requirements for these entrants is that they have graduated from high school and have worked at least two years in their country

(7) Where do we find Refugees to Resettle? According to a CRS report, the U.S. takes at least

one-half of the refugees recommended by the United Nations High Commissioner on Refugees; According to someone we talked with at the UN [who asked to remain anonymous], we actually take much more than 50%

(8) A website called Refugee Resettlement Watch claims that 95% are chosen from the U.N. with some would-be refugees paying the U.N. to get on the U.S. resettlement list; we could not prove or disprove this allegation, but corruption at the U.N. would not be anything new

(9) Additional Costs to Taxpayers for Refugees:

Public Buildings: The U.S. has to pay for offices

throughout the nation that handle refugee

questions/issues

Law Courts: If a person is denied a claim for

asylum or refugee status, they get to appear before

a judge who hears their case where there is an

attorney for the claimant paid for by taxpayers (the

same is true when they apply for some benefits

such as Social Security disability; if benefits are

denied, they get a hearing to appeal

Lawsuits: In our research, we came across a lot of litigation brought by the states as a result of the disallowance of Federal payments for various refugee/asylum costs [the amount disallowed by the Federal government was hundreds of millions of dollars that that the states had to pick up because they had failed to apply for the correct program for the Refugee; Also, we found a class action settlement [called the Kaplan Settlement] forcing the USCIS [US Citizenship & Immigration Service] to expedite applications for naturalization so that people will not have their SSI benefits cut off after seven years even though they have not become U.S. citizens

(10) The Obama Administration wants to increase the number of Refugees: Every year the President, with the consent of Congress, announces how many refugees will be admitted from certain countries; you can go to the White House web page to see Presidential Determination No. 2009-32; for 2010,

Obama made the following quotas:

15,500 Refugees from Africa

17,000 Refugees from East Asia

2,500 Refugees from Europe and Central Asia

5,000 Refugees from Latin America/Caribbean

35,000 Refugees from Near East/South Asia

5,000 unallocated Reserve

80,000 Grand Total

In addition: the following may be considered Refugees

(if they qualify, meaning, that they don’t have a criminal history)

1. Persons in Cuba
2. Persons in the former Soviet Union
3. Persons in Iraq
4. In exceptional circumstances, persons identified by a United States Embassy in any location

Not referenced in the President’s directive are Asylum seekers who don’t have an annual quota and the 50,000 diversity lottery winners

So the President may bring in many more than 80,000 people, as you can see from the above, he may let in unlimited people from certain countries and also anyone recommended by a U.S. Embassy

***

• Reluctant as we are to cut back on aiding those who want to come to this country, these are extraordinary times and therefore we need to dramatically limit Refugee status to people who require welfare services unless there REALLY is a present danger that, if left in their home land, they will be killed

• We stress that there REALLY needs to be the prospect that people will be killed if they cannot leave their homeland; a good example is the “List Project” which is bringing to the U.S. as refugees people from Iraq who worked for the U.S. government as translators, doctors, engineers, etc.; as a result of their work, their lives are truly in danger

• People who are fleeing their country because they want to have more than one child should only be permitted Refugee status if they can afford to take care of themselves [frankly, they should be applying to enter as legal immigrants rather than as Refugees]; we are told by aid workers that there are many people in this category, i.e. entering as Refugees or seeking asylum because they cannot afford to take care of themselves or their families [a case in point is President Obama’s aunt who argued that she feared for her life in her country because she is related to the President, but there happen to be many other relatives of Mr. Obama’s living just fine in Africa, and it is doubtful that someone would try to attack a very old, very sick woman because she is related to the U.S. President

• Many aid workers that we talked with suggested that, even in good times, we should consider not giving refugee status to those who are old unless they already have family living in the U.S. [an aid worker told us about an old man who was flown here at cost to U.S. taxpayers of $1,900 but who had no family or friends in this country; he died in public housing several months after arriving; the aid worker thought it was a waste of money for the U.S. to bring him in the first place and incredibly sad for the man to have died all alone in a strange place]

• The thing that bothers us the most, was that our politicians have no idea how much it is costing taxpayers to bring Refugees into this country who have to go on welfare

• We want to stress again that probably most Refugees who come here WANT very badly to work; we are not saying that they are lazy; however, with double digit unemployment, and the U.S. with a $13 Trillion deficit, we cannot afford to bring in and take care of more people who have not “paid into the system”

Foreign Aid

• The U.S. gives billions of dollars to many countries around the world each year (~$138 B) which the U.S. has to borrow because it does not have sufficient revenue in the treasury

• The US also loans money and provides loan guarantees to many countries; the U.S. has to borrow the money to make these loans and must also borrow when it has to cover a default; we consider this to be “foreign aid” as well

• Recent magazine articles such as one in the Economist have suggested that cutting foreign aid should not be done because the U.S. gives so little, less than 1% of GDP (Gross Domestic Product); haven’t you heard something similar from Members of Congress talking about earmarks?.....however, 1% of GDP according to the U.S. Bureau of Economic Analysis (BEA), is $146 Billion

• So, let’s get familiar with the numbers: The U.S. GDP is estimated by the BEA to be $14.6 Trillion this year;
  
  U.S. national debt is ~$13 Trillion;
  
  For Fiscal 2009, Federal tax revenue was a bit over $2.1 Billion (~14.5% of GDP)

• It is difficult to know exactly how much in Fiscal 2009 was spent on Foreign Aid (we don’t have fiscal 2010 numbers yet) because aid comes from many budgets, for example: food aid comes from Agriculture appropriations (we could not find a bill for that yet) but aid for “democracy programs” and certain health care programs are part of the State-Foreign Operations appropriations bill; also it is not clear what is meant by “aid”; for example, does it include contributions to the United Nations, the World Bank, IMF and the Export-Import bank? Does “aid” include loans and loan guarantees? (as noted above, we think all of these activities are “aid”)

***

DISCUSSION

FOREIGN AID

1) Why Blog about U.S. Foreign Aid? The U.S. has continued to spend money as if it grows on trees (perhaps because we have a printing press that we have been too eager to use) while acknowledging that we have to cut our debt, so if you are Obama’s deficit reduction commission, you ask, why not start with cutting Social Security benefits since that seems to be the low hanging fruit? We have already discussed why Social Security should not be cut and have pointed out wasteful government spending that should be cut instead (see below for our prior postings on this Blog) While foreign aid is great to give when we are flush with cash, we need to be more selective in our aid spending until we get our fiscal house in order

2) Top 10 recipients of US aid are: Iraq, Afghanistan, Pakistan, Israel, Egypt, Jordan, Kenya, Nigeria, Mexico, South Africa & Ethiopia [source: Congressional Research Service (CRS) Report R41228 dated July 2, 2010] We think Haiti should be added to this list because over $2B was requested for Haiti for reconstruction after the earthquake in a supplemental funding bill and over $1B has already been provided to Haiti not to mention the military support and other services that were provided to the country right after the earthquake

3) War zone economic aid: In the CRS Report referred to above, which only discussed the State-Foreign Operations appropriations bill (so most military expenditures as well as aid from other government agencies as well as loans and loan guarantees are not included); the requested aid listed below for each of these countries includes both the 2011 request as well as a supplement payment for 2010:

Iraq: $2,816.7 Billion

Afghanistan: $5,927.7 Billion

Pakistan: $3,423.6 Billion

Total: 12,168.0 Billion

Note: Congress indicated they are holding off on aid to Afghanistan due to a Wall Street Journal article about US aid money that arrives at the airport and is immediately flown out of the country to places unknown

4) Aid to the Middle East: CRS Report RL32260 dated June 15, 2010, states that there is a consensus among most analysts “that U.S. economic and security aid has contributed significantly to Israel’s security, Egypt’s stability and Jordan’s friendship with the United States; the requests for fiscal year 2011 are:

Israel: $3 Billion in military aid which is spent on U.S. manufactured military equipment (although up to 26.3% can be spent on military equipment that is manufactured in Israel); the US also provided loans to Israel (although not since 2005) and loan guarantees so that Israel can borrow at a lower rate than it could without the U.S. guarantee

Egypt: A total of $1.558 Billion, with $250 Million of this total for economic aid and $1.3 Billion for military aid; Economic aid to Egypt has decreased from previous levels and will be further reduced over time (the inference from the CRS report is that Egypt does not want to accept “conditions” from the U.S. Congress on human rights issues so it wants bi-lateral economic aid to gradually end and in its place it requested “endowments” because those don’t come with “conditions”); A law was adopted providing for an endowment for Egypt of up to $200 Million to “further the shared interests of the U.S. and Egypt, but so far that has not been established because the terms are still being discussed; apparently there are no “conditions” on military aid, so Egypt wants that increased due to the escalating cost of maintenance on U.S. equipment that it has purchased in the past

Note: Egypt also receives Excess Defense Articles (EDA) from the Pentagon worth hundreds of millions of dollars according to CRS [note: this program enables the U.S. military to reduce its inventory of outdated equipment by providing friendly countries with necessary supplies at either reduced rates or at no charge], and Egyptian officers also participate in the IMET program ($1.4 million requested in the 2011 budget) which fosters cooperation between the U.S. and Egyptian military (the CRS report has a footnote about debt owed to the US by Egypt of ~$4.2 Billion with repayment installments at $370 million per year)

Jordan: A total of $842 Million for fiscal 2011 (which includes a supplemental funding request for fiscal 2010 for “logistical expenses in support of military operations in Iraq and Afghanistan”) Part of the money to Jordan goes to pay installments on its debt of $6.7 Billion which we believe is owed to the U.S. (that is the inference in the report, but is not stated explicitly) with most of the other economic aid going to managing scarce water resources in Jordan, education and to “democracy assistance”, with military assistance being used to upgrade Jordan’s air force equipment

Jordan also receives funding from the Millennium Challenge Corporation (MCC); the request for 2011 is $40 Million and from a Wikipedia article on the MCC it looks like Jordan previously received $25 Million from this program [note: the MCC is a development fund started by the George W. Bush administration in 2004 when he pledged to increase assistance to both rich and poor countries by 50%]

Palestinians--West Bank/Gaza: While not in the top 10 of US recipients, by signing the Oslo Accord in 1993, the U.S. committed $3.8 Billion in economic assistance to the Palestinians, of which $2.3 Billion has been paid (average annual aid is $388 Million)

Further assistance from the U.S. comes to the Palestinians from the United Nations Relief and Works Agency (UNRWA) for Palestine Refugees; the U.S. voluntarily contributes money to UNRWA despite admission by that agency that they hire employees who are members of Hamas. The U.S. contribution in 2009 was $267.9 Million and was $155 Million in 2010 despite viewing a documentary filmed by a Palestinian showing UNRWA students being taught that all of Israel is occupied Palestinian land and that only through violence can the liberation of Palestine be achieved (while the teacher looked on, nodding her head in agreement [source: The Washington Times, June 10, 2010, U.S. Taxpayer Money Funding Terror Education in West Bank/Gaza by Anath Hartmann] The Palestinians also get additional economic assistance from the United Nations which indirectly comes from money provided by the U.S.

5) Aid to African Countries: The U.S. provides aid to most African countries which is mostly for health needs, with Ethiopia, Kenya, Nigeria & South Africa getting more U.S. aid than their neighbors; the amount of the aid listed below is for the so-called International Affairs Budget for the State-Foreign Operations appropriations bill; however, Africa gets over $7 Billion annually in aid for HIV/AIDS:

Ethiopia: $583.5 Million requested for fiscal 2011

($533.2 Million received in 2010); a very recent (August 11, 2011) interesting Yahoo News article (Ethiopia Eyes End of Food Aid Within Five Years) by Barry Malone quotes Ethiopia’s Prime Minister as saying that, due to their ambitious development plan that has been giving them average economic growth of 14.9%, Ethiopia may not need any more food aid in five years; The article states that over the past five years, Ethiopia had an average annual growth rate of 11% [note: the U.S. State Department website estimates economic growth for Ethiopia for 2009-2010 at 9%]; according to the Yahoo News article, Ethiopia hopes that its economy will grow due to business ties with China, India and Turkey. China has this year invested in road building, hydropower and wind farm projects, probably because they want to tap into Ethiopia’s oil and gas reserves; a good way to avoid having the country’s money get into the pockets of corrupt politicians is to put it directly into projects that improve the lives of the indigenous people

Kenya: A $714 Million requested for fiscal 2011

($687.7 Million received in 2010)

Nigeria: $647.7 Million requested for fiscal 2011

($614.7 Million received in 2010)

South Africa: $586.1 Million requested for fiscal

2011 ($577.7 Million received in 2010)

6) Aid to Our Southern Neighbors: Mexico and Haiti are the final countries that we will address here

Mexico: There was no requested aid for fiscal 2011

($582.7 Million received in 2010) however the requests in the CRS Report are only preliminary requests from the State Departments and, as noted, do not include supplemental requests for 2011 nor do they include aid from other agencies. There is no doubt that Mexico will be receiving U.S. aid in 2011 if for no other reason than the drug war they are fighting. A good question for Americans to debate is whether we want to continue to put money into fighting drug cartels rather than legalizing drugs and treating people for their “disease”

Haiti: There is no 2011 fiscal request for Haiti; however, we believe that there will be a supplemental request as there was for 2010. The U.S. went all out to help Haiti right after the earthquake, but the results (we think) have not been great because the government appears to be weak and is rumored to be corrupt, which makes us wonder where the bulk of our money has gone. President Clinton has said in public many times that he likes to give cash to countries to empower them (we are not sure that is the exact language he used, but something like that). We think that is NOT the correct approach when dealing with a corrupt government, especially when the U.S. is having financial problems and has to borrow to get the funds for aid to Haiti. Bottom line, any additional aid to Haiti should be “in kind” rather than in cash

***

• Reluctant as we are to cut back on aid to help poor people around the globe, the U.S. needs to face the reality that we must dramatically reduce our debt in the short run because having so much debt reduces the security of the American people; but we have to reduce our debt without doing so on the backs of our seniors [note: did you notice that the requests for 2011 aid by the State Department actually raised the amount of aid from last year?]

• The U.S. should form “partnerships’ with major U.S. donors like the Gates Foundation and the Clinton Global Initiative. Why shouldn’t the U.S. get “credit” for their donations when it is the U.S. who gave those organizations deductions for their charitable giving. For example, why should the U.S. give$7 Billion a year for HIV/AIDs when the Gates Foundation and/or some of the Billionaires who have now agreed with the Gates/Buffet team to give a least one-half of their wealth to charity, can do this?

• The U.S. must stop IMMEDIATELY providing loans and loan guarantees to countries; similarly, our Federal Reserve needs to stop using its balance sheet to bail out sovereign nations like it did for some European countries; if history repeats itself, those countries will not feel gratitude for this after they have recovered, and they can and should borrow on their own “dime”

• Are you as bothered as we are about the U.S. spending money on “democracy programs”? Why should we interfere with a government’s internal form of government if it is not torturing its citizens or depriving them of freedom of speech? We were unhappy when our State Department tried to require Honduras to reinstate their President when the Honduran people revolted against their President who was trying to take away their freedoms; Please let us know how you feel about this

Federal Politicians are Out of Touch with THE PEOPLE OF THE U.S.

• Billions of dollars are spent wastefully

• Corruption is rampant but not recognized as corruption

• Immigration laws are ignored when this could mean more votes in an election

• Benefits have increased for public workers over the years but decreased for most Americans who are the ones who pay for the public workers

***

DISCUSSION

WASTEFUL SPENDING

1) Congressional Earmarks

~$16 Billion were spent on earmarks in fiscal 2010; this should have been zero given the $13 Trillion national debt

2) Stimulus Funds Used on items that will not provide real growth to the economy

See the Coburn-McCain report that found 300 “questionable projects” costing taxpayers over $15 Billion including $62 Million for a tunnel to nowhere in Pittsburgh, PA that even the PA Governor called “a tragic mistake”; some would say that $15B out of an $862 Billion stimulus is not bad, however, it is horrific because we had to borrow that money, so the price is really $15 Billion PLUS the interest payments on that debt that will have to be made for years to come

3) Other funds spent wastefully

Example: Congress contributed $5 Billion last year from the general treasury to the Highway Fund because some of the gas tax money, which was supposed to be spent on our dangerously decaying bridges and roads, was spent instead on museums, scenic designing and bike and pedestrian paths; according to a GAO report, during the years 2005 through 2009, Congress misspent $78 Billion of gas tax money on other than highways, roads and bridges causing Congress to have to “bail out” the Highway Fund a number of times; (also see last week’s Blog on wasteful spending found by the Heritage Foundation)

4) Trips for big groups of people including friends and relatives paid for in whole or part by public funds

Example: the 200 people from the State Department that recently went to China, and a large group (including spouses and other family members) led by Speaker Nancy Pelosi who went to the Copenhagen Climate Conference (see our Blog dated July 7, 2010); also Michelle Obama’s recent trip to Spain which was only partially paid by public funds ($146K according to the media for Air Force Two, plus expenses for government people who accompanied her); We point to the First Lady’s trip because we can only imagine what a great boost it would have been for the economy of the Gulf Coast if she had taken her vacation there, or even some place else in the US, with her friends. We understand that her friend asked her to go to Spain with her, but Mrs. Obama should have declined or convinced her friend to go somewhere in the US instead. A PR person in Spain figures that Granada, a town in Spain they visited, got at least $1B worth of free publicity from the trip and that the result will be a significant number of tourists coming to Granada. Given the worst economic crisis since the Great Depression and the fact that we still have double digit unemployment, providing a boost to the economy of Granada, Spain rather than towns in the U.S., especially when taxpayer dollars were used for part of the trip, is unfortunate. If that isn’t being out of touch, we don’t know what is!

5) Bailing out Banks and other companies with little or no adverse consequences to its investors and employees

It was bad enough having to bail out the banks that partially caused the Great Recession, but it made people angry when there was no quid pro quo demanded by the government other than interest on the amount of the government money provided (in other words, people who were running the companies should have stepped down and they personally should have lost money for their irresponsible actions)

CORRUPTION

1) Fund raisers for Members of Congress by companies that could be affected by pending legislation

See the NY Times article dated July 14, 2010 entitled Fund-Raising Before House Vote Draws Scrutiny, about a series of fund-raisers last December that took place right before (indeed, some on the same day) as a vote on the financial reform bill; an example they cite is Representative Crowley from New York who is on the House Ways and Means Committee; According to this article, he attended a fund-raising event where he collected thousands of dollars and then returned to the floor of the House in time to vote against some amendments that would have imposed stiff restrictions against the very financial institutions that had just contributed to his campaign fund

2) Accepting contributions from those who are under the “jurisdiction” of a committee that the Politician sits on

How many times did we hear Senator Dodd say that the banks giving him campaign money had nothing to do with the decisions he made as Chairman of the Senate Banking Committee (if you believe that we have a bridge to sell you!)

3) Allowing “endowments” at universities in the name of a Member of Congress which are funded by those who have some connection to the politician either by receiving earmarks or other “favors”

See the August 5, 2010 New York Times article by Eric Lipton which describes some of these endowments: one example is an endowment set up in the name off Mitch McConnell at the University of Louisville; this University received “hundreds of thousands of dollars from a military contractor to fund this endowment and this contractor later got a $12 million earmark that was sponsored by Senator McConnell”; another example is an endowment in the name of Senator Daniel Inouye at the University of Hawaii; according to the article, as funding for Senator Inouye’s endowment, the University of Hawaii “received $100,000 from a cruise ship line that Senator Inouye later helped with legislation allowing it to expand its American ports of call”

4) Making a rule and then allowing the rule to be broken

Example: this year the House ruled not to give earmarks to for-profit companies --- but then Members began giving earmarks to non-profit subsidiaries of for-profit companies that were set up in order to get earmarks in contravention of the House rule. Representatives acknowledge that this is happening but say that this is just fine!

5) Paying bribes in exchange for votes

When this was done to get votes for the new Health Care bill from “hold-out” senators, Senator Reid said that this was normal practice for how Congress gets laws passed (we heard him say this on TV)

FAILURE TO ENFORCE U.S. LAWS

1) Failing to secure our borders

2) Failing to require people to speak/write English before becoming citizens so that they can vote in English in the voting booth

We believe it is harmful for people to vote when their only source of information on candidates and issues may be misleading translations

3) Failing to arrest students who came to the Capitol and announced that they entered this country illegally

See the Wall Street Journal Article dated July 31, 2010 entitled Young Illegals Out Themselves, Daring to be Deported)

4) Failing to uphold laws that forbid the hiring of workers who are not in the country legally

The new policy of the Administration apparently is to go after and deport only those illegals who are “criminals” (see Wall Street Journal Article dated August 3, 2010 entitled Deportation Data Reflect Shift)

WE ARE IN FAVOR OF LEGAL IMMIGRATION........however, illegal immigration is hurting this country; unfortunately, politicians think only about getting more votes rather than what is good for the United States

PUBLIC vs. TAXPAYER BENEFITS

1) Most US workers in the private sector no longer participate in pension plans; some have 401(k) plans at work which do not have defined benefits, but whose value fluctuates with the markets. (Also, many employers stopped giving matching funds during the Great Recession)

2) For those lucky enough to have a private sector pension plan, it is supposed to be guaranteed by a Federal corporation called the Pension Benefit Guaranty Corporation (PBGC) from funds received as insurance premiums from the companies providing the pension plans; however, the PBGC has assumed responsibility for a number of severely underfunded plans and what once were surpluses on its balance sheet have become deficits (according to CBS news on May 3, 2010, the PBGC has a deficit of $129 Billion). Apparently because many underfunded plans have union participation, bills have been introduced in the House and Senate (Senator Casey, Democrat from PA in the Senate and Representative Pomeroy, Democrat from ND in the House) to have the taxpayers bail out union underfunded plans which Moody’s estimates are underfunded by $165 Billion

3) The really lucky workers are in the Federal public sector; Their pension payments come from the general treasury and are therefore guaranteed by American taxpayers; their payout is based on the number of years of service and the average amount of salary of their three highest paying salary years. They can receive as much as 80% of their salary. Recently, Congress gave Federal workers the right to add their accumulated sick leave to their retirement (most businesses don’t even let employees accumulate sick or vacation leave from one year to the next let alone add it to their retirement benefits)

4) Federal workers also get two other retirement benefits: a Federal Thrift Savings Plan and participation in Social Security; The Federal Thrift Savings Plan is similar to a 401(k). Whether or not a Federal worker contributes any money to the plan, Uncle Sam contributes 1% of the worker’s salary every year into the Thrift Savings Plan, and matches what the worker contributes to the plan up to 5% of that worker’s salary. Social Security benefits essentially work the same as it does for the private sector: they pay FICA (payroll) tax of 6.2% up to the “cap” which this year is $106,800 (see our Blog regarding Social Security dated July 28, 2010).

5) Of course, all of these wonderful benefits Congress gave to other Federal workers they also gave to themselves. They get their full pensions at age 50 if they have worked 20 years in Congress, or are eligible at any age after 25 years of service or age 62 without regard to the number of years in Congress except that in order to get a pension they have to have worked at least 5 years for the Federal Government

6) We decided to include a paragraph on the salaries of Federal workers after reading an Article in USA Today entitled Federal workers Earning Double their Private Counterparts (dated August 10, 2010). For the last nine years, while private wages and benefits have been decreasing, those of the public workers have been increasing, so much so that public workers now earn, on average, twice as much as private workers ($123,049 versus $61,051). For 2011, President Obama asked for a 1.4% across-the-board pay hike in 2011 for Federal workers. Although this is the lowest raise requested in a decade (last year’s raise was 2%) it is still a salary increase while the private sector is still suffering through wage decreases. According to the USA today article, this 1.4% adds up to $2.2 Billion; however, this figure does not take into consideration the increased amounts these workers will get in their Savings Thrift Accounts discussed above nor the increases they will get in their pensions from these annual raises. We have to say it again, this Administration and Congress are OUT OF TOUCH with the temper of the times

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• Our politicians say that Social Security costs too much money (although Social Security payments for the most part do not come from the general treasury as do Federal pensions and funds for thrift savings accounts) and they want to take further cuts from Social Security by, among other things, pushing back the retirement age to 70 when members of Congress can retire at age 50 --- shouldn’t their retirement age be pushed back too? [Please comment below]

• We need to insist that Federal workers get what most people get in the private sector....401(k) plans with little or no matching funds; if they had what most Americans have, they would feel differently about Social Security benefits; without reducing their benefits, Members of Congress will remain out of touch