Tag Archives: veterans’ benefits

Take That Yellow Ribbon Magnet Off Your Bumper

Yellow Ribbon Senator Harry Reid (R-NV) nailed the ginned up controversy about the capture of a Libyan terrorist in this commentary:

“It doesn’t matter what your ideology is, you should feel good about this. There’s no conspiracy here, this is actual news. But the reaction of some of the Republicans, I’ve been told, is to downplay and insult the brave men and women of our special forces and the FBI. They’re trying to say, oh, it’s no big deal. I wonder if the men and women who captured the terrorist agree. But the Republicans said it’s no big deal. Even in these days of polarization, created by the obstruction, the delay, and diversion of the Republicans, even in these days of polarization, their reaction is shocking and disgusting. They’re so obsessed with criticism, criticizing anything President Obama does. They’ll go so far as to sit here and insult the men and women in uniform and in law enforcement. They should stop and think, just for a little bit, about what it’s like to put your life on the line and to do something for our country — that’s what they did. They’re insulting these good men and women who did some courageous things, heroic things, in order to criticize President Obama. I think they’ve lost touch with reality; it’s really pathetic, there’s no other word for it.” [TPM]

The Senate Majority Leader’s remarks contain the essence of the Republican response — belittle, allege conspiracy, insulting, and carping — because some credit might accrue to the Administration for coordinating the capture of the terrorist who launched the attack on our diplomatic outpost in Benghazi.

Indeed the capture of Khattala did garner much chattering in the wasteland that comprises Fox News. [TPM]  “It” was a conspiracy — a capture designed to help Sec. Hillary Clinton with her book tour? “It” was ill timed — gee, Khattala’s been walking free for two years, what was the Administration doing all that time?  The Administration could have issued the “go order” at any time!  Pathetic really is a well chosen word for this palaver.

Consider the result for a moment, and think of the intricacy of entire operation.  A terrorist 6,259 miles from the United States, in a country of 6.2 million people, is captured without being injured, and in an operation which did NOT result in any civilian casualties.  Further, the terrorist is not only captured, but arrested, to be charged with capital crimes against American citizens.  The case against him has to be built, carefully and with all the precision required by our system of justice.

Obviously, our Special Forces held up their end — the intelligence gathering, analysis, interpretation, and evaluation in addition to the assignment and training of personnel; and then the rehearsal, the plan modifications, the logistical coordination of men, transportation, supplies, and equipment — everything and everyone to be in the right place at the right time doing the right thing.

What thanks do they get from the carping right wing noise machine? They could have captured Khattala at any time?  Criticism of this ilk really has lost touch with reality — as if the critic is sitting in the living room with the game controller playing through a Shoot’em Up Script.  Criticism of this nature is an insult to those who plan, coordinate, assess, revise, and implement complicated military operations.

Those who “support the troops” should be appreciative of their efforts.

So, my right wing acquaintances — you can keep that yellow Support the Troops magnet on your bumper when:

1. You can give credit where credit is due. When you can applaud the killing of Osama Bin Ladin without sniffling. When you can applaud the take down of the Somali pirates without carping. When you can take pleasure in the surgical extraction of a known terrorist over 6,000 miles away and return the felon to face the charges he richly deserves.

2. You can call as loudly for the funding of veterans services and benefits as you do for launching military operations which create more veterans.  If I never hear another Republican like Senator Jeff Sessions (R-AL) say that veterans’ benefits are an entitlement we can’t afford [Electablog] it will be too soon.

3. You can understand that while we want our troops to have the best and most effective weapon systems we also need to pay the personnel who are to use them.  It doesn’t do to bellow about cuts to military BAH (Basic Allowance Housing) or subsidies for military families, while at the same time calling for balancing the budget and paying for weapons systems the Pentagon doesn’t even want.  The term we’re looking for here is “fiscal responsibility.” Fiscal responsibility in the very real world.

4. You call for using diplomacy before you shout for more young men and women to take on dangerous tasks in dangerous places. Professional members of our arms forces know that war is the failure of diplomacy — perhaps at some point you’ll understand this as well.

When you can comprehend these four things then I’ll no longer be justified in seeing your bumper magnet as merely a proclamation of your militarism and your disdain for the Commander in Chief.

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Filed under Politics, Republicans

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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Where the Heck on H.R. 975?

VeteransOn March 5, 2013 Representative Timothy Walz (D-MN) introduced H.R. 975 in the 113th Congress of the United States.  The full ‘title’ of the bill is as follows:

“To amend title 10, United States Code, to extend the duration of the Physical Disability Board of Review and to the expand the authority of such Board to review of the separation of members of the Armed Forces on the basis of a mental condition not amounting to disability, including separation on the basis of a personality or adjustment disorder.”

The Fleet Reserve Association explains why this act would be beneficial for our veterans:

“FRA recommends support the for “Servicemembers Mental Health Review Act” (S. 628), sponsored by Sen. Jon Tester (Mont.) and its House companion bill (H.R. 975) sponsored by Rep. Tim Walz (Minn.) The bills would authorize the Physical Disability Board of Review (PDBR) to review and, when necessary, correct service records for veterans diagnosed by DoD with a Personality Disorder (PD) or Adjustment Disorder (AD) and discharged after active duty deployment. Many of these brave veterans have seen combat and may actually be suffering from Post-Traumatic Stress (PTS). Because PD and AD are considered pre-existing conditions, the DoD is not obligated to award the benefits they earned that may help them properly reintegrate into their communities.”  (emphasis added)

Now why would the Fleet Reserve Association, and others, be calling for a bill to review the application of Personality Disorders and Adjustment Disorders diagnoses?  Part of the answer is revealed in a Viet Nam Veterans study (pdf) from the Yale Law School legal services department published in February 2014.

According to the study of Coast Guard applications of PD and AD labels the study found, “The vast majority of AD and PD discharges failed to comply with Coast Guard regulations 255 of a random sample of 265 discharges analyzed violated regulations in some way. ”  More disturbingly, the study found that 100% of the combined AD and PD discharges between FY 2001 and FY 2005 (and FY 2008, FY 2012) were not in compliance with Coast Guard regulations.  And the problem continues — since 2009 the number of AD and PD discharges has risen.

It’s not just the Coast Guard, and it’s not just a few veterans, and it’s not that the problem has not been noticed before.    The problem has been, more or less, in the public domain since 2007.   Dr. Debra Draper, GAO testified to the House Committee on Veteran Affairs, “DoD data show that from November 1, 2001, through June 30, 2007, about 26,000 enlisted servicemembers were separated from the military because of a personality disorder. Of these 26,000 servicemembers, about 2,800 had deployed at least once in support of OEF/OIF.”   As of 2009 there were questions about the response to GAO recommendations from the Pentagon.   The GAO observed that the services had saved some $12.5 billion in health care and compensation via the AD/PD discharge route. [DP]

So, there has been a problem, there is a problem, and so far 49 members of the House have signed on as co-sponsors of this legislation.  None from Nevada, a state with approximately 246,000 veterans. [VA pdf] There are five sponsors for Senator Jon Tester’s version (S. 628), none from Nevada.

H.R. 975 was assigned to the House Armed Services Committee’s Subcommittee on Military Personnel on March 26, 2013, one of the members of this subcommittee is Representative Joe Heck (R-NV).

There were some tangential references  to the discharge label issues in the last Defense Appropriations Bill “(Sec. 593) Establishes the Commission on Military Behavioral Health and Disciplinary Issues to study the adequacy of DOD mechanisms for disciplinary military personnel action in addressing the behavioral impact of service-connected mental disorders and traumatic brain injury.”   However,  in today’s  insurance parlance  AD and PD are “pre-existing conditions,” which may not fall under the “service connected” classifications.  In short, not enough has been done, and it appears that not enough is being done.   It’s a topic Representative Heck might want to bring up at the next meeting of his Subcommittee on Military Personnel.

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Filed under Economy, Politics, Veterans

Thank You For Your Service, Not Really.

Senate Against Vets

41 Republican members of the U.S. Senate voted to sustain their filibuster of S. 1982 — the Comprehensive Veterans Health and Benefits and Military Retirement Pay Restoration Act of 2014.  [rc 46] They voted against S. 1982 which would have included:

Restoring the full cost-of-living adjustment for all military retirees; Reforming the system for processing veteran’s disability claims to reduce the existing backlog; Providing in-State tuition assistance for post 9/11 veterans pursuing a college degree; Expanding programs designed to help veterans find a job; Requiring new services for survivors of sexual assault: and Improving health care services related to mental health, traumatic brain injury and other conditions. [CR1209]

Got that? Restore those COLA adjustments. Work on that unconscionable backlog of disability claims. Provide in-state tuition assistance for veterans. Help veterans find jobs. Provide services for survivors of sexual assaults and improve veteran’s services for mental health, TBI, and other conditions.  The objections from the GOP side of the aisle? Those were addressed by Senator Barbara Mikulski (D-MD):

Now, other Republicans have come to the floor and they have objected to this bill because they argue that by expanding VA health care to veterans currently not eligible for it–veterans who in some cases are trying to get by on $28,000, $30,000 a year in this tough economy; and it is true, we do expand VA health care to those veterans who do not have a whole lot of money–the Republicans who object say, well, that would open the floodgates for millions or tens of millions–I think somebody said 22 million veterans–every veteran in America would be eligible for VA health care, that the health care system would be swamped and health care, especially for those most in need, would deteriorate because so many people came into the system.

“As I mentioned yesterday, this is absolutely untrue. No new veteran would be added into VA health care until the VA had the infrastructure to accommodate those new veterans. So we are not opening the door for millions of new veterans–not true–and, as currently is the case, those with service-connected disabilities would continue to get the highest priority service, as they currently do and which, in my view, should always be the case. Those who were injured in war are the top priority, and those folks must always be the top priority, and that is certainly the case in this legislation.”

What were the Republicans afraid of?  That the bill would cost money, that more veterans might be served by the government that assigned them combat and support roles where they were expected to literally give their all in our service.   So, it’s perfectly acceptable to send approximately 1,431,403 [DoD] into Iraq, Afghanistan… Libya? Syria? Crimea? Korea?  BUT when they come home we can’t “afford” to have “millions of veterans” soaking up those VA benefits?

Syria: “For America to sit on the sidelines and do nothing is a huge mistake,” Georgia Republican Sen. Saxby Chambliss told CBS’ “Face the Nation.” (April 28, 2013 Fox News)

Libya: “We cannot just stand by with Libya, America. We cannot just say to the Brits, the French, or even the U.N., ‘You go; we’ll watch from the shore.’ Imposing a no fly zone isn’t enough because it doesn’t protect the people on the ground from being killed at ground level; just from the air.”  [USNWR]

Crimea: “Ukraine may not be the trigger event, but it sure as heck provides an insight into the mindset of the leaders vying for power. We can be fairly certain that Vladimir Putin is willing to go all the way to protect Mother Russia’s interests. How far is our Nobel Peace Prize winning President willing to go to do the same for the Homeland?” [OathKeepers]

The Republicans can’t have it both ways.  Advocating the of the use of military options for each and every foreign crisis — and then refuse to pay for benefits when the troops come home.

Update: See this post from the Nevada Rural Democratic Caucus!

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Filed under Health Care, Politics, Veterans

No Thanks For Your Lip Service

Veterans DayAnother Veterans Day, another lesson in the difference between “Thank You for your service,” and “Thank You” for your service.  Bunting and bands are lovely.  Donated meals are a nice gesture, as are donations to the various organizations which assist veterans and their families.   However, as far as I’m concerned those who proudly plaster their windows and bumpers with “Support The Troops” displays while voting for members of the U.S. Congress who do not support appropriate improvements in services for veterans are merely giving lip service to those who’ve done us a real service.

As of the Census Bureau’s Statistical Abstract 2010 (pdf) there were 2,076,987 veterans in the United States, of whom 189,662 were disabled.  There are 27,386 veterans in Nevada, of whom 1,882 are disabled.   As we might obviously expect, most of our veterans were enlisted personnel.  {see table 510 CBSA pdf}

Putting Some Legislation Where Our Mouths Are?

So, who is supporting those veterans with legislation to improve the quality of their lives?  Let’s look at the dismal history of H.R. 466, initially introduced in the 111th Congress.   Rep. Lloyd Doggett (D-TX35) put the Wounded Veteran Job Security Act in the hopper on January 13, 2009.  It passed the House on June 8, 2009.  The bill was sent to the Senate, where it went to the Senate Veterans Affairs Committee.   Nothing further was seen of the bill.

The bill, the Congressional summary of which is:

“Wounded Veteran Job Security Act – Expands the definition of “service in the uniformed services” for the purposes of uniformed servicemembers’ employment and reemployment rights to include a period for which a person is absent from a position of employment to obtain medical treatment for an injury or illness recognized as service connected by the Secretary of Veterans Affairs (VA), or for which a line-of-duty document has been granted by the Secretary of Defense (DOD). Directs such a person intending to return to a position of employment to notify the employer within a specified time period. Requires a person submitting an application for reemployment due to such an absence for medical treatment to provide the employer, upon request, with documentation to establish eligibility for reemployment, including a link between the injury or illness and the medical treatment obtained.”

seemed like a common sense piece of legislation. So, Rep. Doggett re-introduced it as H.R. 2875 in the 112th Congress.  This time it was referred to the House Veterans’ Affairs Committee, chaired by Rep. Jefferson Miller (R-FL) from which it never emerged.   Rep. Doggett kept trying.

In the 113th Congress the Wounded Veteran Job Security Act was numbered H.R. 1774, and was introduced in September 2013.  It was promptly sent to the Economic Opportunity subcommittee of the House Veterans’ Affairs Committee, chaired by Texas Republican Bill Flores (R-TX17).  No further action has been taken on H.R. 1774.

In short, a bill which would protect the job security of a veteran seeking  treatment for a service connected medical issue, can’t seem to get through the Republican controlled House of Representatives in the past two sessions.  Even GOP sponsored bills can’t seem to make it through the Congress — witness the sad tale of H.R. 1293 the Disabled Veterans Home Improvement and Structural Alteration Grant Increase Act of 2009.  The bill would increase the home modification funds for disabled veterans from $4,100 to $6,800.  [GovTrack] The bill passed the House 426-0 on July 28, 2009 — a person might have thought it had a chance in the divided, filibuster riddled,  Senate?  No, nothing happened.  See: [Veterans Guidebook to Opportunities and Benefits: How to Navigate the Funding Process and Services U.S. Senator Kirsten E. Gillibrand New York 2013, download]

Unfortunately, these aren’t the only examples of our flag pin bedecked Congress members speaking one way and acting another.  On September 19, 2012 the IAVA was moved to outrage over the failure of a Jobs for Veterans bill blocked by a Republican filibuster in the Senate:

“Today, Iraq and Afghanistan Veterans of America (IAVA), the nation’s first and largest nonprofit, nonpartisan organization for veterans of the wars in Iraq and Afghanistan, expressed outrage at the Senate’s failure to pass the Veterans Job Corps Act (VJC) – which would help put thousands of young veterans back to work. With Congress shutting down to campaign, no employment legislation will pass until after the election. And with the unemployment rate officially at 10.9%, veterans across the country are left treading water while Congress blocks legislation with procedural tricks.”

Words which might apply just as well in November 2013 as in 2012.  Words are fine…some action would be preferable.

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Filed under Defense spending, Politics, Veterans

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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