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Posts Tagged ‘pork-barrel spending’

It’s not too surprising to learn that spending money on “high-speed” rail is foolish. And it’s hardly a revelation to learn that politicians over-promise and under-deliver when they push through these boondoggles.

My Cato colleague, Randall O’Toole, has written extensively about these money-losing white-elephant projects. But it’s not exactly shocking news that libertarians would resist wasteful government spending.

But it is stunning when establishment leftists admit that such programs are a mistake.

Here are excerpts from a column by Charles Lane, an editorial writer for the Washington Post. Yes, your eyes are not deceiving you. Even folks at the Washington Post are recognizing (or at least beginning to recognize) that government is a giant sink-hole that squanders tax dollars and undermines prosperity.

Today, Liu Zhijun is ruined, and his high-speed rail project is in trouble. On Feb. 25, he was fired for “severe violations of discipline” — code for embezzling tens of millions of dollars. Seems his ministry has run up $271 billion in debt — roughly five times the level that bankrupted General Motors. But ticket sales can’t cover debt service that will total $27.7 billion in 2011 alone. Safety concerns also are cropping up.

…On April 13, the government cut bullet-train speeds 30 mph to improve safety, energy efficiency and affordability. The Railway Ministry’s tangled finances are being audited. Construction plans, too, are being reviewed.

Liu’s legacy, in short, is a system that could drain China’s economic resources for years. So much for the grand project that Thomas Friedman of the New York Times likened to a “moon shot” and that President Obama held up as a model for the United States.

…China’s train wreck was eminently foreseeable. High-speed rail is a capital-intensive undertaking that requires huge borrowing upfront to finance tracks, locomotives and cars, followed by years in which ticket revenue covers debt service — if all goes well. “Any . . . shortfall in ridership or yield, can quickly create financial stress,” warns a 2010 World Bank staff report.

Such “shortfalls” are all too common. Japan’s bullet trains needed a bailout in 1987. Taiwan’s line opened in 2007 and needed a government rescue in 2009. …[T]he Beijing-Tianjin line, built at a cost of $46 million per mile, is losing more than $100 million per year. …On the whole, I’d say China should envy us.

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There are very serious ways to save huge amounts of money from the defense budget, largely by making smarter choices about defining America’s national security.

This obviously involves high-profile decisions about whether it is smart to engage in nation-building in Iraq and Afghanistan. But it also involves what seem to be “gimme” choices about whether we should be spending tens of billions of dollars to maintain troops in places such as Germany, the United Kingdom, South Korea, and Japan.

And, sometimes, it’s just the simple fact that bureaucracies like to squander money. Here’s a $600,000 boondoggle that barely rises to the level of a rounding error in the Defense Department’s budget, but it is a nauseating example of how government wastes our money in genuinely spectacular ways. Every time some politician says we need to raise taxes, you should think of this piece of you-know-what and  say #*&@;^ No!

Here are the key passages from a U.S. News and World Report story.

A $600,000 frog sculpture that lights up, gurgles “sounds of nature” and carries a 10-foot fairy girl on its back could soon be greeting Defense Department employees who plan to start working at the $700 million Mark Center in Alexandria, Va. this fall. That is unless a new controversy over the price tag of the public art doesn’t torpedo the idea.

Decried as wasteful spending that will be seen by just a couple thousand of daily workers who arrive on bus shuttles, foes have tried to delay the decision, expected tomorrow, April 1. But in an E-mail, an Army Corps of Engineers official said that the decision can’t be held up because it would impact completion of the huge project.

…The Mark Center is one of the facilities that thousands of defense workers will be reporting to as part of the Base Realignment and Closure plan, or BRAC, that is shifting workers around Virginia and Maryland. The BRAC plan itself has been criticized as wasteful.

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Since I’ve spent the past 25 years analyzing government, I’m used to spectacular levels of waste and incompetence. Examples of pork such as “$27 light bulbs” and the “turtle tunnel” barely cause me to raise an eyebrow.

It takes something really amazing to grab my attention, so I’m almost grateful to Ike Leggett, the head bureaucrat of Maryland’s Montgomery County. He has restored my faith in the extreme foolishness of the political class with a proposal that would require bums to get a panhandling license from the government.

Montgomery County Executive Ike Leggett is pushing for a state law that would allow the suburb to ban all roadside solicitation without a permit.

Just think of the new bureaucracy that could be created! Imagine all the new patronage jobs, the new forms that would be required, and the new leases to be signed!

Best of all, think of how much fun it will be to fleece taxpayers to pay for this nonsense. Other bureaucrats and politicians will be jealous of Ike for this new racket.

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Since I’m involuntarily forced to finance National Public Radio, I guess I should be happy that free-market views occasionally are allowed on air. Click here to listen to a segment where I talk about earmarks, “phonemarks,” and special interest corruption in Washington.

The risky part of a pre-recorded interview is that you never know what the journalist will use. If the person interviewing you is biased, they can use a quote out of context to make you appear stupid, or use an incomplete quote to distort the meaning of your words. That did not happen in this case. The NPR interviewer, at least to my ear, was quite fair.

I wish the segment had been longer, however, so I could have explained why even “honest” earmarks are wrong. Let’s say that Congressman Smith or Senator Jones inserts an earmark, or makes a phonemark, to get funding for a sewer system. It’s quite possible that such a request is completely untainted by corruption (other than the run-of-the-mill practice of trying to buy votes with other people’s money).

But that doesn’t make it right. One of the reasons why federalism is such a good idea is that money is much more likely to be spent wisely is if it is raised at the state and local level and people at those levels decide how it should be allocated.

This doesn’t mean there is no corruption, insider deal-making, or special-interest shenanigans. That’s an inevitable part of government. But federalism at least makes it easier for people to monitor how their money is being spent – and to escape if they think their state or local government is going overboard with bad behavior.

In other words, centralization of government is a bad idea. This is why big government in Washington is worse than big government at the state and local level. And it’s why big government from the European Union in Brussels is worse than big government in Rome, Berlin, or Stockholm.

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There’s a lot of attention being paid to yesterday’s landslide vote in the House to prevent a big tax increase next year. If you’re a glass-half-full optimist, you will be celebrating the good news for taxpayers. If you’re a glass-half empty pessimist, you will be angry because the bill also contains provisions to increase the burden of government spending as well as some utterly corrupt tax loopholes added to the legislation so politicians could get campaign cash from special interest groups.

If you want some unambiguously good news, however, ignore the tax deal and celebrate the fact that Senator Harry Reid had to give up his attempt to enact a pork-filled, $1 trillion-plus spending bill. This “omnibus appropriation” not only had an enormous price tag, it also contained about 6,500 earmarks. As I explained in the New York Post yesterday, earmarks are “…special provisions inserted on behalf of lobbyists to benefit special interests. The lobbyists get big fees, the interest groups get handouts and the politicians get rewarded with contributions from both. It’s a win-win-win for everyone — except the taxpayers who finance this carousel of corruption.”

This sleazy process traditionally has enjoyed bipartisan support, and many Republican Senators initially were planning to support the legislation notwithstanding the voter revolt last month. But the insiders in Washington underestimated voter anger at bloated and wasteful government. Thanks to talk radio, the Internet (including sites like this one), and a handful of honest lawmakers, Reid’s corrupt legislation suddenly became toxic.

The resulting protests convinced GOPers, even the big spenders from the Appropriations Committee, that they could no longer play the old game of swapping earmarks for campaign cash. This is a remarkable development and a huge victory for the Tea Party movement. Here’s part of the Washington Post report on this cheerful development.

Senate Democrats on Thursday abandoned their efforts to approve a comprehensive funding bill for the federal government after Republicans rebelled against its $1.2 trillion cost and the inclusion of nearly 7,000 line-item projects for individual lawmakers. …Instead, a slimmed-down resolution that would fund the government mostly at current levels will come before the Senate, and Reid and Minority Leader Mitch McConnell (R-Ky.) said it will pass by Saturday. …The majority leader’s surrender on the spending bill marked a final rebuke for this Congress to the old-school system of funding the government, in which the barons of the Appropriations Committee decided which states would receive tens of millions of dollars each year. …Almost every Senate Republican had some favor in the bill, but as voter angst about runaway deficits grew before the midterm elections, Republicans turned against the earmark practice.

This is a very positive development heading into next year, but it is not a permanent victory. Some Republicans are true believers in the cause of limited government, but there are still plenty of corrupt big spenders as well as some Bush-style “compassionate conservatives” who think buying votes with other people’s money somehow makes one a caring person.

In other words, fiscal conservatives, libertarians, and Tea Partiers have won an important battle, but this is just one skirmish in a long war. If we want to save America from becoming another Greece, we better make sure that we redouble our efforts next year. Eternal vigilance is the price of liberty.

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I haven’t commented much on earmarks, but an oped in today’s Washington Post was has goaded me into action. A former Reagan Administration appointee (the Gipper must be spinning in his grave), who now makes a living by selling our money to the highest bidder, made several ridiculous assertions, including:

…earmarks are largely irrelevant to balancing the budget. The $16.5 billion Congress spent on earmarks in fiscal year 2009 sounds like a lot, but leaves a minuscule footprint – about 1 percent of 2009′s $1.4 trillion deficit. Those seriously concerned about deficits should look elsewhere for meaningful spending reductions. …On Capitol Hill, party leaders must appeal to lawmakers’ interests as well as their principles to get the votes they need. The leaders must be able to offer incentives – such as earmarks – to win votes on difficult issues. Earmarks are not the only possible incentives, nor do they need to be the most compelling ones. But they are a tool for taking care of members who might otherwise stray.

The author is right that earmarks technically are not a big share of the budget. But he conveniently forgets to address the real issue, which is the degree to which earmarks are the proverbial apple in the congressional Garden of Eden. Members who otherwise might want to defend taxpayers are lured into becoming part of the problem. This is how I described the process in a recent PolitiFact article.

Daniel Mitchell, a senior fellow with the libertarian Cato Institute, …adds that the existence of earmarks increases the upward pressure on federal spending indirectly, since lawmakers “know they need to support the relevant powers on the spending committees in order to have their earmarks approved.” Mitchell calls earmarks a “gateway drug” that “seduces members into treating the federal budget as a good thing that can be milked for home-state/district projects.”

Since the author of the Washington Post column is trying, at least in part, to appeal to advocates of smaller government, I’m also puzzled that he says earmarks are good because they help grease the wheels so that more legislation can be passed. Does he really think reminding us about the “Cornhusker Kickback” and “Louisiana Purchase” will make us more sympathetic to his argument? Yes, it’s theoretically possible that congressional leaders will use earmarks to help pass legislation shrinking the burden of government. It’s also possible that I’ll play centerfield next year for the Yankees. But I’m not holding my breath for either of these things to happen.

Last but not least, earmarks are utterly corrupt. The fact that they are legal does not change the fact that they finance a racket featuring big payoffs to special interests, who give big fees to lobbyists (often former staffers and Members), who give big contributions to  politicians. Everyone wins…except taxpayers.

This is one of the many reasons why I did this video a couple of years ago with the simple message that big government means big corruption.

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My former Heritage Foundation colleague has returned to youtube.com with a video asking taxpayers whether examples of government waste are true or false.

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