Posts Tagged ‘Taxpayers’

Where to Cut: Public Union Benefits or Defense?

Wednesday, March 16th, 2011

Wisconsin Governor Scott Walker’s war on public-sector unions is being brought to the national stage by Senator Tom Coburn (R-OK). Coburn challenged members of Congress following the release of an exhaustive study by the Government Accountability Office that found many overlapping and duplicate programs from education to defense that cost taxpayers billions of dollars each year.  The study found 82 federal programs to improve teacher quality, 47 for job training and employment, as well as hundreds of military clinics that could gain from consolidating administrative, management and clinical functions.

According to Coburn, a physician who some call “Dr. No” in the Senate because he places holds on legislation that he considers to be unconstitutional, “Government employees, although they’re fabulous and they overall do a great job, they produce no net economic benefit in our country.  Matter of fact, they produce a net negative economic benefit.  So if you take the drag off the economy by nonproductive implementation of capital what you’re going to see is that capital is then going to be put to use in something that is productive.  We’re not talking about letting go hundreds and thousands of employees — we’re talking about streamlining things.  Even if it were hundreds of thousands of employees, if we’re not borrowing another $300 billion additional next year because we streamlined some programs, that has some tremendous benefit to the economy as well.”

In particular, Coburn challenges federal job-training programs. “Job training is wasteful.  We put ‘help wanted’ on our government website and we’re getting people who have been through these programs who say they are a total joke and a total waste of time.  I want a job-training program that actually trains somebody to do something that they get a job for.  Why should we have 47 different separate job training programs?  Nobody understands them all.  If it’s a federal role — which I question – -then any job-training program ought to be designed so that you can measure its effectiveness.  None of the 47 has any metrics on it to measure effectiveness.”

Senator Coburn’s position could have an impact on his popularity, much as Wisconsin’s Scott Walker’s controversial stance on public-employee unions has lowered his ratings. A Rasmussen poll reveals that almost 60 percent of likely Wisconsin voters now disapprove of their governor’s performance, with 48 percent strongly disapproving.  The poll also finds that the state’s public school teachers are very popular with their fellow Badgers.  With 77 percent of those polled holding a high opinion of their educators, it is not particularly surprising that only 32 percent among households with children in the public school system approve of the governor’s performance.

TARP’s Ultimate Tally Could Be Just $25 Billion

Thursday, December 16th, 2010

TARP’s Ultimate Tally Could Be Just $25 BillionThe estimated cost of the Troubled Asset Relief Program (TARP) keeps falling, according to the nonpartisan Congressional Budget Office (CBO).   The latest estimate is that TARP will cost the taxpayers just $25 billion – significantly less than the $700 billion allocated for the financial bailout in the fall of 2008.  The CBO’s last estimate – made in August – was that TARP would add up to a $66 billion loss, so the newest numbers represent a significant improvement.

This optimistic prediction is thanks to funds returned to the Treasury Department as banks repaid their loans and bought back stock warrants.  Another factor in the revised numbers is that less money than anticipated went to bailing out AIG and General Motors, the latter of which recently had an extremely successful initial public offering.  “Clearly, it was not apparent when the TARP was created two years ago that the cost would turn out to be this low,” according to the CBO.  “At the time, the U.S. financial system was in a precarious position, and the transactions envisioned and ultimately undertaken through the TARP engendered substantial financial risk for the federal government.”

TARP was originally created so the government could buy toxic mortgage-backed securities from big banks.  Former Treasury Secretary Henry M. Paulson ultimately altered the program to infuse cash into banks and other companies that were likely to fail.  The majority of banks have repaid their loans; in fact, the federal government has made approximately $12 billion from those transactions.  Because the financial system was stabilized more quickly than originally anticipated, only $433 billion of the TARP fund was spent, which reduced the potential for losses, according to the CBO.  President Barack Obama and Treasury Secretary Timothy Geithner have hailed the revised projection as a sign that the extremely unpopular program was effective and not the corporate giveaway as some opponents have accused.