The Public Policy

Wastrel Government

Six choice examples of government at its typically awful.

By 5.6.13

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We often hear about waste, fraud, and abuse in government. And repeatedly we hear politicians solicit suggestions on how to stop wasteful government spending. Each time the results are depressing. Politicians don’t have the political courage to stop foolish spending.

The proof is in the pudding.

President Obama received 86,000 ideas from the public on how to cut waste. The administration selected 67 ideas from this list, none of which represented any new or innovative ways of thinking. Instead, they simply reinforced their own thinking by picking items already on the chopping block. The same applies for Republicans. House Republicans solicited ideas through their YouCut initiative, and of the thousands of public comments submitted, 36 were selected as winning ideas -- but only two passed political muster.

The out-of-control, irresponsible spending must end. Political leaders should pick up the ball and act on government waste. Here are a few recent examples of idiotic government spending:

1. According to an Office of Personnel Management (OPM) report, taxpayers shelled out over $155 million in 2011 to pay union employees to advance their own interests. Based on a practice called “official time,” public sector union officials can work full time in government offices and be paid by taxpayers to help unions “satisfy their duty of fair representation” -- which begs the question, is that the taxpayers’ responsibility? Some lawmakers, including Reps. Phil Gingrey (R-Ga.) and Dennis Ross (R-Fla.), are looking into the issue, but OPM seems reluctant to discuss it.

Americans for Limited Government obtained information on certain federal agencies’ use of official time through Freedom of Information Act requests. Among their findings, 35 union employees worked full time at the Department of Transportation in 2012, and 17 were at the Environmental Protection Agency. All made at least $72,000 per year, paid for by you and me.

2. California voters approved $10 billion in spending to finance a super high-speed rail system between San Francisco and Los Angeles in 2008. A group of farmers sought to block the project, but agreed to settle. Critics, including the California legislator who started it and got California citizens to approve the project, now complain. The projected costs have increased from $45 billion to $70 billion. More, to keep costs down the train would share track with commuter rail in the Bay area. This means fewer trains and slower speeds, and would require two transfers for passengers to complete the L.A.-San Francisco trip.

Others say the project’s costs have been seriously underestimated. An April 2013 Heartland Institute report finds cost projections doubtful, and warns the project could cost California taxpayers billions more, due to poor planning and refusal to heed recommendations by respected researchers.

3. The New York Times recently ran a story on Rhode Island’s loss of close to $100 million last year, when a startup, 38 studios, went bankrupt. The state poured money into the gaming venture, founded by former Boston Red Sox pitcher Curt Schilling. Schilling promised that his interactive video game company would employ thousands of the state’s citizens once it was up and running. Every potential investor had rejected the idea, but Rhode Island wanted jobs and took a gamble. The athlete had no experience running a business, much less a complex interactive video game studio, and the company went bankrupt in two years. Now there is a web of litigation over who will pay the bondholders -- if anyone.

4. The Office of Management and Budget has been trying to crack down on federal agencies that pay hefty service fees to keep empty bank accounts open. According to the Washington Post, 13,712 accounts are open by federal agencies that have a zero balance. Paying service charges on these unnecessary accounts will cost taxpayers at least $890,000 this year, while providing absolutely no benefit. Quite simply, the government agencies haven’t gotten around to filling out the paperwork to close the accounts, which each cost $65 per year.


5. In 2009, the Department of Energy awarded a $529 million loan to Fisker, a company that produces luxury electric cars costing over $100,000 apiece. On April 24, the House Oversight Committee began to investigate an estimated $32 million the car company received in payments in 2011, after it had failed to live up to the conditions of the loan agreement. Also last month, the government seized $21 million from the auto company after it failed to make a scheduled payment. The troubled carmaker is expected to file for bankruptcy, which will add it to the long list of government-sponsored failures in recent years.

6. A report released last month by the inspector general found that 21 percent of tax refunds issued by the IRS through the Earned Income Tax Credit in 2012 were distributed in error -- totaling more than $11 billion.

As our nation continues to recover from a devastating economic recession, people are tightening their belts and exercising restraint. We recognize that self-control and even some sacrifices are the way to get through the tough times and create a prosperous future. Unfortunately, our elected leaders refuse to make responsible spending decisions, and the list of wasteful and abusive spending debacles gets longer and more ridiculous with each passing year. Enough is enough.

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About the Author

Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA), the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times best-selling books, Ninja Innovation: The Ten Killer Strategies of the World's Most Successful Businesses and The Comeback: How Innovation Will Restore the American Dream. His views are his own.