Tuesday, April 26, 2011
Abortions and Fiscal Irresponsibility
If men could get pregnant, abortion would be a sacrament.
— Gloria Steinem, The Verbal Karate of Florynce R. Kennedy, Esq.
At first blush one might assume that the raft of anti-abortion activity from the national to the state level has to do solely with moral opposition to the procedure and the willingness of many to permit their wish to exercise control over a woman’s body to supersede their dislike of government involvement in the private sector. Recent events show that in some quarters, at least, fiscal concerns are of equal, if not greater, importance.
South Dakota offers an example of the public sector intruding into the private sector of women’s bodies for moral reasons. On March 22, 2011, South Dakota Governor Dennis Daugaard signed a law that establishes the longest waiting period in the country for women seeking to have abortions. It requires them to wait for three days after meeting with a doctor before permitting the abortion to take place. According to the governor, the three days will give women, for whom he apparently believes the decision to have an abortion was made on the sperm of the moment, the opportunity to consider the decision for an additional period before proceeding. (Harsh though this legislation is, it didn’t hold a candle to South Dakota House Bill 1171 that emerged (and was promptly shelved) from what is euphemistically described as the South Dakota House Judiciary Committee on a 9 to 3 vote. It attempted to redefine justifiable homicide to include the killing of someone performing abortions, such as a doctor. Inartfully drafted, (or perhaps changed on the floor) it would not have had that effect but, nonetheless, that is how it was perceived by critics and supporters alike. South Dakota was not alone in introducing government into the lives of women in 2011.
In Virginia a new law was passed that requires that doctors’ offices that perform abortions be regulated the same as hospitals rather than as doctors’ officers, thus introducing a level of regulation to abortion clinics that may make many no longer financially viable. As part of the budget deal arrived at in mid-April, the District of Columbia is prohibited from using its own funds to pay for abortions, another example of a Republican majority that dislikes the excessive control over people’s lives it believes is exercised by the federal government, doing just that. For some opponents of abortion, abortion is a fiscal as well as a moral issue. That was apparent in Texas as well as in comments made by former U.S. Senator Rick Santorum.
When a state budget was being discussed (appropriately on Aprils Fools day) in the Texas legislature (that for Texas residents, thankfully, meets only ever two years) State Representative Randy Weber, a supporter of reducing the amount of money available for providing contraception for low income families, justified his position saying the use of contraception led to higher abortion rates. He said a study for the period 2000-2001 “shows that the highest abortion rate is among women actively using contraception and . . . among the poor.” When challenged by one of his colleagues who asked him if he thought contraception didn’t work he quite properly responded, not being the fool some took him for, that it didn’t work for “those that get pregnant.”
In an earlier discussion in committee, a representative from the Legislative Budget Board explained to legislators that contraception could save Texas $80 million during the next two years because “fewer babies would be born under the state’s Medicaid program.” In response Rep. Jody Laubenberg said, “We’re going to save on the non-babies that are being born? We’re going to prevent baby births? This has got to be government math. . . . Basing it on the speculation that you are going to save money by non-babies, by non-Medicaid baby births.” Of course Texas is not alone in basing its attack on family planning on budgetary issues. It is joined by former Senator Rick Santorum of Pennsylvania.
Mr. Santorum, now a U.S. President wannabe, was entertaining, and entertaining questions on a radio talk show in New Hampshire. When the subject of abortion came up he expounded on his economic theories saying cash shortfalls for social security are attributable to the country’s “abortion culture.” In responding to a caller he said” Well, a third of all the young people in America are not in America today because of abortion.” Mr. Santorum laments their absence since were they here they would be working, earning money and paying taxes and thus the social security trust fund would have more money than it now has. Perhaps Mr. Santorum has, being apparently witless, unwittingly come up with a solution to the problem of underfunded social security. If he and the Texans are correct, states like South Dakota should require that each woman who wants to have an abortion be given, in addition to counseling, a fiscal impact statement describing the effect on the economy if her unborn child is not permitted to be born and become a productive taxpaying member of society. Such a statement, if not the counseling, would certainly reduce the number of abortions taking place in the United States.
Wednesday, April 13, 2011
The Tax Collector and the Republican
Taxes are what we pay for civilized society.
— Oliver Wendell Holmes, Compania de Tabacos v. Collector
Congressional Republicans constantly remind us that principle is more important than principal. They are willing to shrink government at all costs. The latest example comes from the new budget agreement that has an impact on the IRS and tax collections.
Tax collection is one of the IRS’s principle functions as we are all reminded this time of year. There are some who not only refuse to cheerfully pay what they owe but actively take steps to avoid paying taxes they owe. As a result, some IRS employees have as their main job, identifying those people and taking steps to encourage them to pay what they owe.
In 2006, Republicans in Congress came up with a whole new approach that provided employment to the non-governmental sector, a group that is always favored by Republicans. (That is because Republicans know that those who work for the government tend to be lazy and inefficient whereas those in the private sector are hard working and productive. That is, of course, something of a generalization, since occasionally someone in the private sector will disappoint and prove to be lazy and/or unproductive.)
Because of the Republican belief in the virtues of the private sector (which is almost as fervent as its belief that in taking funds from programs for children and the poor it is doing God’s work), in August of 2006 it was announced that within a couple of weeks the IRS would turn over to private collection agencies 12,500 delinquent tax accounts of $25,000 or less. According to the New York Times, this new way of collecting taxes was thought up and put in place by the Bush administration. The plan had, like many plans do, an upside and a downside.
The upside was that the debt collectors were part of the private sector. Under the private debt collection system the collectors would collect $1.4 billion each year of which they could keep $330 million, thus lining the private sectors’ pockets by that amount instead of having it go into a government pocket where it would, in all likelihood, get lost. Although that seems like a win-win, in 2002 Charles Rossotti, the Commissioner of Internal Revenue, had told Congress that if it hired additional IRS employees to handle collections, it could collect more than $9 billion each year at a cost of only $296 million, considerably less than the cost if the same work was done by private collection agencies. That came out to a cost of $.03 per dollar collected. According to the NYT, his testimony was correct but Congress didn’t want to swell the size of government by authorizing the hiring of additional personnel for the IRS. Charles Everson, IRS Commissioner in 2006, when the private debt collection program was implemented, agreed with Mr. Rossotti and said it was more efficient to hire more IRS personnel but Congress would not appropriate the funds it needed to do that. Congress’s reluctance is a perfectly sensible approach since if you want to shrink government you have to make sacrifices and in this case, the sacrifice is increased revenue.
In 2008 Democrats took control of both houses of Congress and in March of 2009 it was announced that the IRS had determined that IRS employees could do collection work more efficiently than the private debt collectors, just as Rossotti and Everson had said some years earlier, and there was no reason to continue the program. Senator Grassley, who was the top Republican on the Senate Finance Committee, was outraged. Ignoring the fact that the government would have more money if the IRS were responsible for collections, he said the IRS was caving in to “union-driven political pressure.” He would have rather seen the federal government lose money than take away business from the private sector. The last chapter in this saga, however, has not been written.
Now that the budget compromise had been reached here is one of the things that has happened. The White House had requested an increase in the IRS budget of approximately 9% which would have enabled the agency to hire an additional 5000 personnel. Many of those could have been used to collect taxes which would have helped reduce the deficit. Echoing what Messrs. Rossotti and Everson had said years earlier, Treasury Secretary, Tim Geithner, who testified before Congress in March, said: “Every dollar invested in IRS yields nearly five dollars in increased revenue from non-compliant taxpayers.”
Republicans have refused to authorize the hiring of additional personnel at the IRS in order to collect taxes. A release from John Boehner’s office said increased funding for the IRS had been denied as part of the budget agreement. This shows that the Republican majority has the courage of its convictions. The rest of the country can enjoy the benefits of living off the fruits of its follies.
Thursday, April 7, 2011
The Budgets and the Unemployed
When a great many people are unable to find work, unemployment results.
— Attributed to Calvin Coolidge
The unemployed in many states have been given what they, at least, hope is a once in a lifetime opportunity to help the states and federal government solve their budgetary problems, an opportunity that hunger and homelessness may keep them from fully appreciating.
Michigan led the way when on March 29th Governor Rick Snyder signed a bill that says beginning January 2012 the number of weeks the unemployed will receive benefits will drop from 26 weeks to 20 weeks. It is estimated this will save the state $300 million each year. Since Michigan has one of the highest unemployment rates in the country at more than 10%, a significant number of its citizens will be given the opportunity beginning next year to participate in bringing government spending under control. They will also be benefitting those who might employ them, according to supporters of the legislation, since reducing the unemployment benefits will reduce the unemployment taxes paid by employers. It is a win-win situation although the employers will appreciate it somewhat more than the unemployed. Michigan is not the only state addressing the issue.
Florida boasts an unemployment rate of 11.5% and its House of Representative proposes to not only reduce the number of weeks for which unemployment benefits will be paid from 26 to 20 weeks but to provide that if the unemployment rate falls the number of weeks that benefits are paid also falls. If the rate drops to below 5% members of the below 5% group will only be able to collect unemployment benefits for 12 weeks. It is not clear why those who remain unemployed when the rate drops should pay a price for the good fortune of the 6.5% who are no longer a member of their club. Supporters of the House version say by reducing the number of people receiving unemployment benefits, businesses will do more hiring. The unemployed will eagerly await that outcome. (This proposal is not yet law. The Florida Senate has passed a less restrictive version of reform that neither shortens the number of weeks of payments nor penalizes recipients of unemployment as the rate of unemployment falls. Negotiations between the two chambers will determine how it will end up.) Meanwhile in the mid-West there’s the “Show Me” state-Missouri.
Missouri is a conscience driven state. Missouri has an unemployment rate of more than 9 percent. Legislators in that state are more concerned about the national debt than about their unemployed. Missouri legislators have blocked a vote that would have permitted the state to accept federal funds to extend unemployment benefits from 79 weeks to 99 weeks. Jim Lembke is one of the state senators filibustering the legislation. Speaking on behalf of the opponents of taking the money as well as the unemployed who are in the district he represents he said: “This is about sending a message to the federal government from the state of Missouri that enough is enough. The federal government is sending us money they don’t have.” If it is money the federal government does not have then presumably it is money the unemployed could not have used anyway. (Mr. Lembke also plans to take steps to try to keep the state from accepting $190 million in federal education money, efforts that will earn him the thanks of school children throughout Missouri.) If Mr. Lembke is successful, 10,202 people will immediately lose their benefits and, by the end of this year, another 24,000 people will have lost their benefits. Mr. Lembke, on the other hand, will have helped the federal government save $105 million for which it, if not his unemployed constituents, will be grateful.
Wisconsin has not reduced benefits but has taken steps to reign in costs. . The Wisconsin Legislative Audit Bureau discovered that in the 2009 fiscal year there were more than $9 million in overpayments of unemployment benefit payments of which $222,000 went to 37 prison inmates who though unemployed, are not the sort of unemployed that unemployment payments are designed to help. (The same study showed that there were 33 inmates who received food stamp benefits, a surprising result since one of the benefits of being in prison is that room and board are furnished by the state and food stamps would seem to be unnecessary.) The state agencies that are responsible for having made the payments say that they are taking steps to recover the money and may even pursue criminal charges. One can only wish them success in their efforts. Helping the unemployment fund stay solvent by recovering money from those who collected it fraudulently is far preferable to keeping it solvent by reducing benefits. Just ask the unemployed in Florida, Michigan and Missouri.