Chris Edwards

Breasts vs. Government Subsidies

I was catching up on my reading in the International Breastfeeding Journal, and came across a great article by George Kent, a professor at the University of Hawaii.

As a scholarly article, it had no photos. Instead, what made it interesting were the contradictions it revealed in the federal women, infants, children (WIC) subsidy program. This is a $5 billion per year program that subsidizes families with babies, mainly by providing free infant formula.

Kent found that:

K for Korruption

The Washington Post has been running a series on its website (Citizen K Street) on the life of Gerald Cassidy, the preeminent entrepreneur of federal budget earmarking since the 1970s. Here are a few thoughts:

- Cassidy is a liberal Democrat, but a much more important aspect of his character seems to be his insatiable quest for money, money, money.

Government Hall of Shame

The Washington Post reported the other day that there are more delays and cost overruns at the new Capitol Hill Visitor Center.

Edwards’s 2-to-1 Budget Law

How should government officials decide on whether to fund big projects such as fighter aircraft, highways, bridges, and other types of infrastructure?

First, they should check the Constitution to see whether they are legally allowed to spend on the object in consideration.

Second, they should assume that the item will cost at least twice as much as initial estimates indicate. There should be a 2-to-1 hurdle when the price tag of a project is being considered.

Soaring Cost Overruns

Last week, we found out that new combat ships for the Navy will cost taxpayers at least 59% more than promised.

Today, the Washingon Post reports that upgraded Air Force cargo planes will cost taxpayers at least 35% more than originally promised.

Cost Overruns, Again

The Washington Post reported yesterday that the cost of new combat ships from Lockheed Martin and General Dynamics will likely be at least $350 million each, instead of the originally budgeted $220 million.

That 59 percent cost increase is routine for big federal procurements. The table below summarizes official government estimates of costs for various defense, energy, and transportation projects.

Unsurprising News from the Pentagon

The Washington Post reports yesterday on cost overruns for weapons procurement. "It is not unusual for weapons programs to go 20 to 50 percent over budget, the Government Accountability Office found."

That’s for sure. As I’ve documented, it’s not unusual for weapons to more than double in cost. I’m talking about the F/A-22 Raptor, the V-22 Osprey, the CH-47F helicopter, the Patriot missile, and on and on. See here, and see the discussion in Downsizing the Federal Government.

The same pattern occurs in federal highway projects, energy projects, and many other government endeavors.

Part of the reason this occurs is that contractors and government officials have a quiet understanding that the initial cost numbers that are used to get projects launched should be low-balled. Both sides know that later on, after projects are underway, excuses can be found to raise the price tag. "The scope of work has expanded." "We couldn’t have foreseen those additional problems." "The mission requirements have changed." "There are new regulatory requirements."

Catching Terrorists with 1920s Technology

On August 18, the Washington Post ran a story on the post-9/11 technology investments at the FBI. The story concludes, “five years after the Sept. 11, 2001 terrorist attacks and more than $600 million later, agents still rely largely on the paper reports and file cabinets used since federal agents began chasing gangsters in the 1920s.”

The Big Dig

With Boston’s Big Dig highway project in the news, a brief review of the project’s finances is in order.

 

As the project was getting started in 1985, government officials claimed that it would cost $2.6 billion and be completed by 1998. The cost ultimately ballooned to $14.6 billion and new problems continue to arise as the project finally nears completion. (The federal share of the project’s cost was $8.5 billion). In 2004, hundreds of leaks were found in the project, which added millions of dollars in taxpayer costs. And in recent weeks, parts of new road tunnel ceilings have collapsed. 

 

Raphael Lewis and Sean Murphy wrote an excellent Boston Globe series a couple of years ago revealing how the Big Dig had been grossly mismanaged. A key problem was that Massachusetts repeatedly bailed out bungling Big Dig contractors instead of demanding accountability. Contractors were essentially rewarded for delays and overruns with added cash and guaranteed profits.

 

When federal money is involved, state and local profligacy and corruption are usually the result. For background on the general problem of cost overruns on federally funded projects, see my compilation of evidence here.

Government Catch-22

The Washington Post reports today on the series of corruption scandals to hit Connecticut in recent years.

One scandal involved former Governor John Rowland, who was sentenced to jail for illegally accepting gifts. The Post quotes Rowland’s defense attorney lamenting that a new state legislature effort to crack down on corruption by imposing tighter rules will mean that “government will operate less efficiently.”

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