Downsizing Blog

The Wall Street Journal reports that the IRS is investigating 100,000 “suspicious” tax returns over possibly fraudulent claims of home buyer tax credits. Included in the economic stimulus package in February, the $8,000 tax credits were set to expire at the end of November, but the housing lobby is pressing Congress for an extension. 

The Washington Post reports on the curious case of David W. Wilmot, a D.C. lobbyist who also earns $300,000 a year as the head of a troubled nonprofit group that’s funded by Medicaid. D.C. officials have asked a judge to put two of the nonprofit’s group homes in receivership and halt all referrals to its eleven facilities because of “systemic” problems.

The Washington Post has delivered an exposé on the rampant corruption and waste occurring in the District of Columbia’s HIV/AIDs Administration. According to the Post, “the agency receives about $100 million a year, largely from the federal government, for prevention, medical care, housing, case management and support services.”

The Department of Defense’s Defense Contract Audit Agency is responsible for performing all contract audits at the department. Unfortunately, the agency seems to have developed an excessively cozy relationship with the contractors that it is supposed to be overseeing. That is bad news for taxpayers because of the massive size of DoD’s contracting activities.

Biofuels lobbyists have been successful in securing federal funding and regulatory support. As an industry that thrives on federal subsidies, any threat to its privileged status is a cause for alarm. This week Energy Secretary Stephen Chu set off such alarm when he told a group of alternative energy developers that “if it were up to me, I would put every cent into electric cars.”

When the economy was growing, state and local governments spent money as if the good times would never end. But in the face of stagnant revenues, state and local governments are now spending record amounts of taxpayer money lobbying the federal government for a larger piece of Uncle Sam’s deficit-fueled budget.

The Federal Aviation Administration is trying to implement a $35 billion overhaul of the nation’s air traffic control system that would replace old-fashioned radar technology with modern satellite-based GPS navigation. But according to the Associated Press:

With the government running huge deficits and average family incomes stagnating in the recession, it is unseemly that federal worker pay continues to soar. I’ve called for an immediate freeze to federal worker pay, at least until the economy recovers and private worker pay starts catching up.

Regulation and taxes are like two blades on a pair of scissors cutting holes in the family budget. With dairy products, a federal regulatory cartel acts to keep the prices of milk, cheese, and related products artificially high.

U.S. Department of Commerce Secretary Gary Locke stopped by the economically beleaguered state of Michigan to announce the opening of a new “Commerce Connect” office in the city of Plymouth. According to the Detroit Free Press, the office “will act as a one-stop shop for businesses to access all the federal government has to offer, from research and development tools, to grants, to licensing assistance.”