Like other government hand-out programs, the unemployment insurance system suffers from a substantial fraud problem. The Washington Post reports that 90 D.C. city employees and 40 former employees are being investigated for grabbing UI benefits to which they were not entitled. The cost of this fraud has been about $800,000 since 2009.
Economic variables are key drivers of the numbers in CBO’s budget projections. I noted last week that CBO’s new outlook assumes substantially lower interest rates, which appears to produce more than a trillion dollars of savings over the next decade.
It’s been a year since Republicans assumed control in the House in the wake of the 2010 elections, which were powered by Tea Party concerns about massive federal spending and deficits. With the more conservative House, has Congress made any progress on spending cuts yet?
Cato has published a new section on www.downsizinggovernment.org that examines the Department of the Interior.
CBO has released a study comparing the wages and benefits of private sector and federal non-military workers. The study uses statistical techniques to make comparisons with adjustments for education level, experience, and other factors.
The Washington Post is reporting that the Obama administration will propose a 0.5 percent cost-of-living pay increase for federal workers in its upcoming budget. The paper says that the modest cost of living increase in federal compensation would be the first pay jump for federal workers since before President Obama ordered a two-year freeze in late 2010.
Even with a “freeze” in effect, federal pay rose faster than private-sector pay in fiscal 2011, according to the USA Today’s Dennis Cauchon. Crunching Bureau of Labor Statistic’s data, Cauchon found that average federal worker wages rose 1.3 percent in 2011, or slightly more than the 1.2 percent increase in average private wages. The federal increase—while modest—occurred despite the freeze Congress and the president put into effect because increases from “longevity, merit, and promotions” were not covered, according to Cauchon.
Extending the extra unemployment insurance benefits would be bad for the federal budget and bad for the economy, and there is a better long-term solution for unemployment than the current UI system.
In the Wall Street Journal yesterday, Alan Reynolds pointed out some of the flaws in the data being used in the income inequality debate. Far too many policymakers, analysts, and reporters assume that the data showing rising inequality is carved in stone, but it isn’t. Some portion of the supposed change in income inequality in recent decades is a statistical artifact due to changes in marginal tax rates and other factors.
Lawmakers are considering extending temporary payroll tax cuts. But the policy is based on faulty Keynesian theories and misplaced confidence in the government's ability to micromanage short-run growth.