Tag Archives: Afghanistan

The Veterans and their Administration

Veterans PopulationThe Numbers Game: Issues pertaining to the management of Veterans Administration services have special meaning to 225,933 people in Nevada, 169,255 of whom served this country during war time, and 56,678 who served during peace time.  [VA actuary]  69,190 Nevadans served during the Gulf War era, 79,281 served in Vietnam, 20,462 served in Korea, and we have about 9,444 remaining veterans from World War II. [VA actuary]  Meanwhile, 13 years of operations in Afghanistan and in Iraq are adding to these numbers.

The United States deployed 2,333,972 people to Iraq and Afghanistan between 2001 and 2011, of whom 1,353,627 have since left the forces, and 711,896 used VA health care services between FY 2002 and FY 2011. [ABC] Veterans during the period 2008 to 2011 saw deployment time increased by 28%. [Rand pdf] The Iraq operations, we were told, could last “six days, six weeks, I doubt six years.”

“We don’t talk about deployments in the specific, but we have brought a good many Guard and Reserve on active duty. Fortunately, a great many of them were volunteers. We have been able to have relatively few stop losses. There are some currently, particularly in the Army, but relatively few in the Navy and the Air Force. And it is not knowable if force will be used, but if it is to be used, it is not knowable how long that conflict would last. It could last, you know, six days, six weeks. I doubt six months.” [Rumsfeld, Aviano Air Base February 7. 2003] 

We may not want to talk of deployments, but warfare creates veterans and the longer the warfare lasts the more veterans there will be.

Estimates during the debate over initiating operations in Iraq which projected totals over $3 trillion (Stiglitz) were dismissed out of hand. Instead Lawrence Lindsay, Chair of President Bush’s Council of Economic Advisers estimated the war might cost $200 billion at the most, but during the 2002 campaign season this projection was determined to be “shockingly high,” Lindsay was fired and replaced by Mitch Daniels who argued the Iraq war would cost no more than $50 to $60 billion.  [EconMonitor]

The $60 billion figure is dwarfed by the estimated $135 billion estimated as minimally necessary to provide services to veterans.

Making the situation even more tenuous for veterans, the Sequester budget deal cut  services from other agencies (HUD, Defense, Labor) for veterans while ostensibly leaving the VA untouched — except that “administrative costs” might be cut by 2%, and what constituted an “administrative cost” remained ambiguous. [WaPo]

The Management Game:  The VA Inspector General’s office has expanded its investigation to 26 VA facilities regarding allegations of falsified records and delayed care.  One former administrator in Phoenix, AZ offered his opinion that 40 veteran may have died while waiting for care.  To date no link has been established between the delays and those deaths. [ABC]  The lack of direct linkage notwithstanding, it is certainly possible that care delayed can all to easily become care denied.  Instead of listening to carping, finger pointing, and generally distasteful politicizing of the situation at the Veterans’ Administration, here’s what I’d rather hear from our pontificating pundits and politicians:

Reducing delays and other problems within the VA system, which have long be evident, may well require a significant shift in the way in which services are perceived and administered.

#1. Future Congressional calls for war or large military operations should be accompanied by calculations projecting a reasonable TOTAL cost of the actionsincluding services and benefits for veterans. As there should be an accounting for individuals who falsified records to artificially reduce wait times, there should be an accounting for those whose minimalist estimations for the cost of operations in Iraq and Afghanistan made those actions appear “affordable.”

The failure of the VA to provide timely services is a function of staffing and facilities, infrastructure which should be considered before we launch wars in which we have an option to defer, delay, or avoid action altogether.

#2. Administration of VA services should be predicated on veterans’ needs and not dubious or inappropriate management theories.  The VA is not a commercial or manufacturing entity. Its sole function is to provide customer/client services.  In this wise, the VA perspective ought to be one in which client service is acknowledged to be labor intensive, and hiring should be adjusted accordingly.

For example, while demand for VA care services has increased by 38%, the VA has hired only 9% more medical professionals.  Public-private partnerships with local medical service providers has been applied, and more such partnerships may be one part of a larger strategy to appropriately staff the facilities.   Actions by Senate Republicans who blocked a $24 billion veterans’ health bill in February  2014 which included funding for 27 new medical facilities are unhelpful. [Reuters] [Roll Call 46 – all 41 votes blocking  S. 1982 were cast by Republican Senators]

The treatment of and for veterans should reverse the perspective that all claims are “costs” and “cost containment” is an ultimately desirable institutional goal.  If one is manufacturing widgets for WalMart this might be an acceptable perspective, but we are not talking about a price driven retail commodity — we’re speaking of veterans who have been promised a level of support services (educational, medical, and employment) which have not been delivered on a timely basis.

The much maligned Internal Revenue Service is a far more trusting agency than the VA appears to be.  When I file my return electronically the IRS assumes I am being honest. I may be audited at some point in the future, but for the latest fiscal year the assumption is that I meant what I affirmed at the end of the document — that the return is the most honest and accurate it is within my power to provide.   The VA claims process might be improved by adopting the same attitude.

Unfortunately, the VA is giving the appearance of an institution for which a claim is as much an opportunity for fraud or misuse as it might be a legitimate request for service.  This attitude could quickly spawn a multi-layered bureaucracy  devoted to weeding out any untoward claims. It’s essentially the pre-ACA attitude of health insurance corporations which sought to deny as many claims as possible in order to manipulate its medical loss ratio.  This situation might have been predicted since politicians of every imaginable stripe have loudly proclaimed their affinity for rooting out “Waste, Fraud, and Abuse.”  In the instance of the VA all this cat-calling from the bleacher seats simply serves to reinforce the “cost containment” proclivities and diminish the “service to the client” perspective.

#3 The core of the manipulation problems in the Phoenix office is said to emanate from a bonus system for “meeting the numbers.”  I’ll have to admit to a jaundiced view of bonuses.  Bonuses are what you pay employees when you don’t want to pay them up front what they are really worth. It’s close to an analogy in which the cafe owner justifies sub-minimal wages because the wait staff receives tips.

No one should be particularly surprised when people emphasize on the job what the institution/company/corporation rewards.  If the company rewards speed in delivery, speed we will get — even if a NOAA drone is delivered by FedEx to the wrong address.  If the company/agency rewards fast service, then the service will be fast, and if that can’t be done in the real world then the numbers are fudged to gain the reward and make the boss happy in the bargain.  If the disturbing consequences of the testing furor in education has taught us nothing else, it should have told us that we will get what we measure, not necessarily what we want.

How much less traumatic might the problems with the VA be if we could admit to ourselves that there are immeasurable things which are nonetheless important to the delivery of competent and complete care for veterans and their families?

#4. Technology moves faster than our fingers.  Granted that the inability of computer data systems to share information quickly and accurately is a problem, especially it seems between Department of Defense and VA systems.  At some point we need to acknowledge the hard horrible fact that older stand-alone data systems were never designed to function in a file-sharing world.  No amount of patching or plugging is going to make them compatible.

Until we accept that if we want compatible systems we have to buy them.  They are expensive, they are complicated, and they are unintelligible to most voters — however, the old retail saw holds true — we will get what we are willing to pay for.

Meanwhile there are 225,933 veterans in Nevada who deserve to receive the educational, employment, and medical services they were promised when they signed on to serve us, and who deserve more than a political outrage du jour, and a brief turn in the media limelight.

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Are We Serious About Discussing The National Debt?

OK, let’s talk about the debt and the deficit — but let’s have a serious, adult, conversation.  Here are some suggested rules for this road:

We need to talk about our national debt as a fiscal policy matter, not as a political propaganda talking point.

#1. One of the crucial points we need to acknowledge is that we were involved in two very expensive wars between 2000 and 2013.  We racked up some significant debt during military operations in Afghanistan and Iraq.   The military endeavors in Afghanistan have been, and continue to be, exceedingly expensive:

“The fact remains, however, that if the CRS and OMB figures for FY2001-FY2013 that follow are totaled for all direct spending on the war, they reach $641.7 billion, of which $198.2 billion – or over 30% – will be spent in FY2012 and FY2013. This is an incredible amount of money to have spent with so few controls, so few plans, so little auditing, and almost no credible measures of effectiveness.” [CSIS]

The removal of American forces from Afghanistan will curtail future expenditures, but the debt remains.  Whether we like it or not, we have to pay for both the direct expenditures for military operations, and we have to allocate funds for indirect costs which we may reasonably expect to incur.  There will be Veteran’s benefits to distribute, survivors’ benefits, and other VA services.

Although we are no longer a significant military presence in Iraq, the debt for our military actions and “reconstruction” is still on the books.  As of March 2013, the Iraq war cost $1.7 trillion which should be added to another $490 billion in benefits owed to Iraq War Veterans. [Reuters]

However convenient it may be to run on about “out of control” and “rampant” spending — it is absolutely necessary to be honest about the major elements included in the total indebtedness — and we cannot honestly discuss our national debt without acknowledging its major components, such as the wars in Afghanistan and Iraq.

At some point the national discussion must answer the question: How do we pay down what we owe for these wars without jeopardizing the promises we made to the men and women we sent to fight in them?

Secondly, we need to address the issue raised in the CSIS report, i.e. how we account for and administer our military expenditures?  There have been several attempts to improve Pentagon auditing, but the situation remains alarming.  The Defense Contract Auditing Agency, which is supposed to prevent over-payments, fraud, and abuse is in disarray.

The DCAA has a budget of $573 million, and a backlog of 24,000 audits.  This means that at the rate it is operating it cannot clear its backlog until 2016.  [BusinessIns] Note, it isn’t that the Pentagon doesn’t want to audit its contracts, it is that with current personnel and resources — it can’t.   Audits in 2011 (the last year for which figures are available) the DCAA recouped about 9% of the $128 billion in costs  it audited.   If we apply the 9% rate to the current backlog of $574 billion we could expect to recoup some $54 billion. [BusinessIns]

Therefore, another question we need to raise when discussing “waste, fraud, and abuse” in a significant portion of our national expenditures is:  Have we allocated the resources necessary to perform the audits imperative to the reduction of wastefulness?  It makes precious little sense to argue for either a reduction or increase in allocations to the Department of Defense unless we are willing to provide the necessary fiscal oversight of those allocations.

#2.  There needs to be an agreement as to what does and does not contribute to national indebtedness, especially in terms of earned benefit programs.

First, while we may argue about the philosophy underpinning the Social Security program, there is no argument about how it is funded.   The Social Security Administration explains why some have been confused about the “debts owed to the SSA”:

Most likely this question comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the “unified budget.” This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are “on-budget.” This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken “off-budget.” This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are “on-budget” or “off-budget” is primarily a question of accounting practices–it has no effect on the actual operations of the Trust Fund itself.  [SSA] (emphasis added)

From 1984 onward the Social Security Administration was empowered to hold special issue securities which are non-public securities, not available on the commercial market, that can be redeemed as the SSA determines it needs in order to make its revenues meet the amount of benefits to be paid.  In short, it was the Reagan Administration’s intent that there be a “savings account for the trust funds” to address the retirement of the Baby-Boomers, and the increased number of beneficiaries who would be eligible for benefits.

While it might be advisable to decrease the need for the Social Security Administration to dip into its Special Issue reserves, it cannot be rationally argued that the SSA contributes in any significant way to the national debt.

There are alternatives to decreasing benefits, the most common being an increase in the earnings cap.  The current contribution and benefit base is set at $113,700 meaning that all income above that level is not subject to taxation.  [SSA]

“Currently, earned income in excess of $113,700 is entirely exempt from the 6.2 percent payroll tax that funds Social Security benefits (employers pay a matching 6.2 percent). 5.2 percent of working Americans make more than $113,700 a year.” [NYT] (emphasis added)

When the Congressional Budget Office released its report on Social Security in July 2010 (pdf) altogether too many focused on the problems sections and insufficient attention was paid to the options the report presented.  There was, for example, Option 6, removing the cap:

Under this option, Social Security’s total revenues would increase by about 0.9 percentage points of GDP in 2040, or by about 18 percent relative to current law. This option would improve the 75 year actuarial balance by 0.9 percentage points of GDP and would extend the trust fund exhaustion date beyond the 75 year projection period. As a result, payable benefits would be higher from 2039 onward, especially for people born later. This option would primarily affect taxes paid by high earners. (emphasis added)

When we discuss options regarding the “reform” of earned benefits (“entitlements” if you will) ALL the options should be on the table — including the removal of the regressive cap on income subject to the Social Security taxes.   [See also NYT]

There’s nothing intrinsically wrong with discussing “entitlement reform” as part of future budget and funding planning.  However, there is something very wrong about assuming that all such ‘reform’ be borne by the 95% of the U.S. population who are to accept reduced benefits,  for the benefit of the top 5% of income earners.  A person earning an adjusted income of $1,000,000 annually isn’t paying any Social Security tax on $886,300 of his or her income; the equivalent of 16 people who earn the U.S. median wage of $54,000.

Those wishing a fuller account of the elite assault on earned benefits should read, or review, Thomas B. Edsall’s excellent commentary in “The War on Entitlements,” NYT, March 6, 2013.

#3. We need to factor in the impact of the recession.   There’s really no way around this:

“Including all the stimulus spending, tax cuts, bank bailouts and automatic stabilizers, the Great Recession will add about $4.2 trillion to the federal deficit by the time the economy has fully recovered in 2016, based on back-of-the envelope calculations using figures from the Congressional Budget Office and the congressional Joint Tax Committee.”  [MarketWatch]

Or we could review the report from the Dallas Federal Reserve, and the Recession looks even worse if we look at total costs to the overall economy : “Last month, the Federal Reserve Bank of Dallas published a staff paper estimating the costs of the 2007-2009 financial crisis. The conservative estimate came out at 40 to 90 per cent of 2007 output, roughly US$6 to US$14 trillion.” [INET]

Recessions reduce income, reduced income reduces tax collections, reduced tax collections reduce government revenue, reduced government revenue increases debt.

If “tax reform” is advocated as a way to recoup the losses from the Great Recession, then we need to move beyond the Supply Side Hoax.   The notion that lower taxation would lead to more government revenue, was then — and is now — a theory in search of reality.    From the “been there, done that” corner:

“Supply-side economics starts from the generally accepted economic insight that tax policy can influence private-sector decisions by changing the incentives to work and invest. But supply-side acolytes take this relatively mundane observation to an extreme conclusion. They argue that lowering taxes for people, especially for those who have a lot of money to invest, will always lead to better economic results, and furthermore, that lower taxes is the single most critical intervention the government can undertake to stimulate growth.

This assertion—that lower taxes for the rich will lead to improved economic results—is testable. Of course, pure natural experiments in economics are few and far between, but over the last 30 years the United States alternated between economic policies that were heavily influenced by supply-side ideas, then were not, then were again. This variation allows us to compare economic performance in the various eras. If proponents of supply-side theory are correct, then the supply-side eras should outperform the non-supply side era. But that’s not what happened.” [CAP]

Reduced to a single chart we can see the results of the Supply Side Hoax applied to the U.S. public debt.

Supply Side TrendsWhen we apply Supply Side policies the blue line (national debt) increases, when we don’t the national debt is reduced.

It would follow from this that the “No New Taxes” (aka Supply Side Mantra) line makes a lovely and enticing slogan, but the application of the policy hasn’t resulted in better levels of investment growth, significant gains in productivity, better overall economic growth, better employment numbers, more income for the middle class, or better wages for working Americans.  These are all associated with increased federal revenue levels, we would obviously benefit from adopting a more realistic pro-growth tax policy than simply adhering to the narrow “no taxes = pro-growth” incantations from the Supply Siders.

When the push runs into the shove, a discussion of tax policy in regard to the reduction of the national debt should realistically incorporate the means why which federal revenues can be increased, without exacerbating the already serious level of income inequality, stagnating wages and salaries, and burdens on the American middle class.

If we’re truly serious about discussing the means by which we are to address the level of the national debt, then pontificating and nibbling around the edges of the 15% of the Federal Budget which concerns non-defense discretionary spending doesn’t suffice.   Are the advocates of cutting the food assistance programs really trying to convince us that they are taking important steps to curtail federal spending when those programs comprise some 0.24% of the federal budget? [InteractiveCP]

There are, indeed, some very serious questions to be answered when the question of the National Debt is raised: Not is sound bites and slogans, but in sound economic thinking and earnest efforts on behalf of working Americans.

 

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