from The Washington Post  11/13/09

Top 10 most destructive government actions

Martin L. Gross has a beef with the way Washington works, or rather, the way Washington has of mucking things up. In "National Suicide: How Washington Is Destroying the American Dream from A to Z," Gross lays out how tax dollars are wasted, government programs fail and scams are perpetrated. Gross has also written "The Government Racket: Washington Waste from A to Z." We asked him for a Top Ten list of most destructive government actions.

GUEST BLOGGER: Martin L. Gross

1. FALSE DEFICIT FIGURES. Washington habitually understates the federal deficit. President Obama, following the tradition of Presidents Clinton and Bush, said it was $1.417 trillion in 2009. But figures at the Bureau of the Public Debt shows it to be $l.885 trillion, the balance being money taken from the various trust funds and spent -- gone forever as part of the national debt.

2. LOOTED SOCIAL SECURITY. In the 1980s, Alan Greenspan raised the Social Security taxes 25 percent to meet future obligations of baby boomers. Instead, that surplus was taken from the trust fund each year --$2.2 trillion to date. The money was spent elsewhere and the "fund" given worthless IOUs that can never be redeemed. Result? Federal Insurance Contributions Act (FICA) taxes will eventually have to be raised some 50 percent to pay for the boomers' retirement.

3. HIDDEN WELFARE COSTS. Welfare is not a category in the federal budget but the Congressional Research Service last catalogued it in 2003 as a $522 billion federally mandated state cost. Welfare is hidden in 86 different programs in six different cabinet agencies. Today, after inflation, it costs $700 billion a year, larger than Social Security or Medicare. It represents $65,000 for every poor family of four -- yet poverty increases each year, says the Census Bureau.

4. DUPLICATION OF FEDERAL PROGRAMS. There are 1,399 federal programs just for rural areas. Thousand of programs passed by Congress -- and immediately forgotten -- do the same or similar jobs in many federal agencies. For instance, there are 50 programs for the homeless; 27 for teenage pregnancy; 163 job training programs; 90 for early childhood development; 72 for statistics; 341 economic development, etc, wasting untold billions each year.

5. FINANCIAL MISMANAGEMENT. Medicaid paid $27 million to individuals who were dead, according to a September 2006 survey of only 10 states by the Inspector General of the Department of Health and Human Services. Of IRS in-house thefts, 12 employee thieves were hired though they had criminal records. The Government Accountability Office said they could not honestly verify the nation's books. Medicare paid 203,377 ambulance claims twice. Federal employees used government credit cards for such personal business as $3,000 for a breast enlargement, and $74,000 for exotic strip clubs.

6. MISINTERPRETING THE CONSTITUTION. Washington now grants immediate citizenship to the newborn of illegal immigrants, a so-called "birthright." But the 14th amendment, passed to grant citizenship to freed slaves, states the opposite for foreigners. We grant that right, which no other country does, despite the Constitutional requirement that the parents be "subject to the jurisdiction" of the United States, which excludes all illegal immigrants.

7. FALSE TAX POLICIES. The personal tax exemption was $600 under Harry Truman. Today, after true inflation figures, it should be $8,400. But it is only $3,650. Thus a family of four loses some $20,000 in exemptions, and must pay an extra $5,000 taxes each year. Also the 1986 tax "reform" cut the tax rate from 35 percent to 28 percent but took away deductions for interest and sales tax. The maximum tax rate has been raised back to 35 percent but the deductions were never reinstated.

8. UNFUNDED MANDATES. Despite the Tenth Amendment, which delineates powers of the federal government and the states, Washington requires states to carry out national programs without fully paying for them. This costs states an estimated $200 billion a year, including 43 percent of the Medicaid bill. Other mandates include, new motor vehicle regulations, No Child Left Behind, federal requirements for the disabled, clean air, safe drinking water, hospital treatment of indigents, bilingual education, updated voting equipment, etc.

9. ALTERNATIVE MINIMUM TAX . When it was revealed that 155 millionaires did not pay any federal tax, Congress started a new policy, one which eventually taxed millions of innocent Americans who took legal deductions in high taxed areas. The cost to taxpayers will be a trillion dollars over a decade. The so-called mistake was not indexing the exemption for inflation, but the government knew the truth. When Congress finally voted to eliminate the unfair tax, President Clinton vetoed it. Meanwhile untaxed millionaires now run in the thousands.

10. WASTE, WASTE, WASTE. Government waste amounts to at least $600 billion. Consolidating the 86 welfare programs would save some $300 billion a year. Closing 25 of 50 useless major agencies, including the Maritime Commission, the Appalachian Regional Commission, the Rural Utilities Service, and others would save billions, as will cutting the number of cabinet agencies from 15 to 12. Eliminating earmarks - such as $107,000 to study the sex life of the Japanese Quail - would, since 1991, have saved $27l billion in useless pork.