Republicans are all over the ACORN scandal and calling for an end to federal subsidies for the group. That would be a good step, but it’s not exactly going out on a limb and pushing for major budget reforms.
It looks like farm subsidy reform is unlikely for another few years. Senator Blanche Lincoln has been selected the new head of the Senate Agriculture Committee. Dow Jones notes: “Lincoln is a two-term moderate Democrat who described herself Wednesday as a ‘farmer’s daughter.’”
The Bureau of Economic Analysis has released its annual data on compensation levels by industry. The data show that the pay advantage enjoyed by federal civilian workers over private-sector workers continues to expand.
Summarizing a new Government Accountability Office study, the Washington Post reports that “the cost of building and operating the controversial U.S. ballistic missile sites in Europe could substantially exceed the original estimate of more than $4 billion.”
Federal unions, government officials, and the Washington Post’s “Federal Diary” column frequently suggest that federal civilian workers are underpaid. They suffer from a large “pay gap” compared to private sector workers, or so the story goes.
But in the Post’s “Jobs” section yesterday, human resources specialist Lily Garcia argues that “Uncle Sam Is a Boss You Can Rely On.” For job seekers, Garcia points to the many advantages of federal work:
Ohio lawmakers are hot under the collar about federal stimulus dollars possibly helping Georgia bid away one of its big employers. Here’s the Dayton Daily News:
NCR’s news release touting its decision to move jobs from Dayton to the Atlanta, Ga. suburbs includes one factoid that has Ohio lawmakers in a fury: The City of Columbus, Ga. plans to use federal stimulus dollars to buy a building and construct another to accommodate the 870 manufacturing jobs expected to come to the that Atlanta suburb. ‘The fact that economic stimulus dollars were used to move an Ohio company to Georgia at taxpayer expense is an outrage,’ said state Sen. Jon Husted.
Added U.S. Rep. Pat Tiberi, R-Columbus: “Federal stimulus money is being used to create winners and losers among workers in different states and that’s just not right; it’s dirty.”
All I can say to both parties is that’s what you get for building an imperial city on the Potomac and spending the last few decades destroying the constitutional principle of federalism. As I’ve described in this study, regional warfare over federal subsidies has escalated in recent years. It’s horribly wasteful, and it’s getting worse.
The head of the Office of Personnel Management claims that federal workers are underpaid compared to private sector workers by 20 percent, on average. Federal unions and other cheerleaders for the bureaucracy have been making similar claims for years.
Federal workers are not underpaid.
Now a Human Resources expert writing in The Washington Post backs up my claims. Lily Garcia writes:
The primary advantages of working for the federal government are generous benefits, solid pay, and relative job security, a combination that is challenging to find in the private sector, even in the best of times … In addition to these benefits, federal employees, contrary to popular belief, are paid relatively well.
One policy implication is that federal worker compensation would be a good place to look for budget savings to reduce the federal deficit. We could start with a two-year freeze on federal salaries to save about $20 billion. During a recession, private wages are not increasing, so why should federal wages?
The Federal Diary column in the Washington Post is a curious piece of newspaper real estate. Most newspaper columns are aimed at the broad general public, but this column is aimed directly at the few hundred thousand government workers in the DC region. The result is that it takes a very government- and union-centric view of the world. The fact that the federal civilian workforce costs taxpayers an enormous $300 billion or so every year is beside the point for the column.
In a briefing with reporters yesterday, the head of the Office of Personnel Management complained about a Lou Dobbs television bit that featured this data that I assembled from the Bureau of Economic Analysis. The Federal Diary columnist called me yesterday about the data, and I explained to him the shortcomings of the OPM claims that federal workers are underpaid.
Unfortunately, the Federal Diary today simply parrots the OPM’s claims, calling the Dobbs/Edwards/BEA data “misleading.” Yet this data clearly shows that federal compensation has taken off like a rocket this decade.
I watched the congressional conference committee on the budget yesterday on CSPAN, and it seemed like the final fall and sacking of Rome. Two of the remaining generals defending fiscal sanity, Reps. Paul Ryan and Jeb Hensarling, pled with the invading barbarians to limit their fiscal pillaging and warned that the Treasury was empty. But the barbarians, in the form of Rep. Rosa DeLauro and others, had visions of spreading the empire’s gold widely, and were not deterred by talk of damage to future generations.
The barbarians are inside the fiscal gate. The gate is the 60-vote margin usually required for big, new spending programs to pass in the Senate. Ryan and Hensarling were right that the Democrat budget plan could be a major turning point in the nation’s fiscal history. The “reconcilation” process approved by the Democrats lowers the bill passage margin in the Senate to a simple majority. The procedure was put in place in the 1970s to control spending and reduce budget deficits. But the Democrats may try to use that budget-restraint mechanism for the opposite — to pass a massive new health care subsidy program.
Ryan and Hensarling have proposed an alternate fiscal vision, but their troops have left the field, and they will need to rebuild their armies before they can put that vision in place.
President Obama focused on budget and economic issues in his press conference last night. One concern raised by reporters was that federal deficits were exploding and that Obama’s big spending plans would seem to make the problem worse.
Obama’s response was essentially that higher spending reduces the debt problem, which would strike most people as paradoxical to say the least:
Here’s what I do know: If we don’t tackle energy, if we don’t improve our education system, if we don’t drive down the costs of health care, if we’re not making serious investments in science and technology and our infrastructure, then we won’t grow [the economy by] 2.6 percent, we won’t grow 2.2 percent. We won’t grow. And so what we’ve said is, let’s make the investments that ensure that we meet our growth targets that put us on a pathway to growth as opposed to a situation in which we’re not making those investments and we still have trillion-dollar deficits.
First note that Obama’s budget would drive government health care costs up, not down. But aside from that technicality, the economics of Obama’s theory don’t make any sense.