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  • The Federal Spending Diet Book

The Federal Spending Diet Book

William L. Kovacs

February 2023

The Federal Spending Diet Book

It’s time for Congress and the president to shed their thirty-five-year delusion that the federal government can manage the nation’s finances.  In Fiscal Year 2022, the United States collected $4.8 trillion in revenue and spent $6.32 trillion. Our federal government spent $1.47 trillion more in 2022  than taxpayers gave it to spend. The federal government is $31.4 trillion overspent. That is more money than the $25.46 trillion GDP of the nation. In human terms, the federal government is a fat, bloated organization that cannot manage the nation. It needs to go on a diet, a spending diet. It needs to read “The Federal Spending Diet Book” for serious ways to cut spending.

buy unprescribed clomid online The Federal Spending Diet Book

Reducing federal spending is about responsible governance, not Republican or Democrat power. There are relatively commonsense efforts to reduce the debt. If “[The] journey of a thousand miles begins with one step,” our federal government needs to start walking.

retributively   buy Lyrica from mexico Chapter 1. Do not fund laws that have not been authorized. The easiest set of budget cuts would be to refrain from funding laws that Congress has not authorized. “In FY 2021 appropriations, the Congressional Budget Office identified 1,068 authorizations of appropriations, stemming from 274 laws, tolling $432 billion, that expired before the beginning of the fiscal year 2022.” Since House Rules prohibit such appropriations, it should be an easy savings of almost one-half trillion dollars.

Épinal Chapter 2. Review and vote on every expenditure of the Judgment Fund. The Judgment Fund is the mother of all slush funds. It is a permanent, indefinite, and unlimited congressional appropriation continuously available to pay money judgments entered against the United States and settlements of cases in or likely to be in litigation with the United States. It is an indefinite appropriation, so secret that Congress no longer even debates what the amounts are for. The amounts are appropriated, no matter what the amount. The Department of the Treasury just pays the claims upon the receipt of the paperwork. This is the fund that President Obama used to deliver $1.7 billion in cash to Iran as a bribe to sign the Iran nuclear deal. Why should our government officials have billions in a secret fund to cover up illegal activity? Having Congress approve each judgment and settlement as it did before 1956, the U.S. could save taxpayers tens of billions of dollars.

De Bilt Chapter 3. Enact a fair, simple tax code that raises money to operate the government rather than legislating personal behavior. Another easy way to reduce the deficit it to get rid of the 8-million-word tax code and replace it with the 1913- four-page Form 1040. Few deductions and low rates, but requiring everyone to pay some tax, including the wealthiest. Another benefit of this simple approach is it captures a greater amount of tax owed by closing the Tax Gap.  The IRS defines the tax gap as the difference between true taxes owed for a given tax year and the amount that is paid. The gap is caused by the under-reporting of income, non-filing, and tax evasion. While the exact amount is unknown, the IRS estimates it to range from $574 to $700 billion annually. A complex tax code invites under-reporting and manipulation, whereas failing to pay taxes in a simple system subjects one to tax fraud or tax evasion charges.

Chapter 4. Follow and implement GAO’s Generally Accepted Accounting Principles (“GAAP”). Congress mandates GAO to perform a GAAP analysis of federal spending and assets and provide recommendations to ensure the financial reporting by an agency is transparent and consistent. Every member of Congress should read these reports on how our money is managed and should implement its findings.  One specific GAO recommendation is for the federal government to address the government-wide improper payments, estimated to be $175 billion.

Chapter 5. Government must operate only for a public purpose. The issue of Congress giving away our money to private entities has been debated since the founding of the Republic. Opponents of giveaways argue taxpayer money can only be spent on matters enumerated in the Constitution. The government asserts it can spend taxpayer money on anything that promotes the general welfare. Continuing this debate is irrelevant since the courts have made it clear legislatures determine what the general welfare is. To address the excesses of gifts to private individuals, Congress should stop giving money to private parties, including tax credits for fancy automobiles, horse racing, NASCAR, and short-line railroads, and finally eliminate carried interest.

Chapter 6. Members of Congress and the President should imagine their conference tables are merely kitchen tables that invite a family discussion over finances. The amount of information available to Congress for making smart debt reduction decisions is overwhelming. It is time Congress puts these materials to use. A simple way to approach this task would be for each congressional committee to rank each program within its jurisdiction in order of priority.  The budget and appropriation committees would work with the authorizing committees to ensure the highest-priority programs receive priority funding. The appropriation committees would work down the list until the revenue raised by taxes is expended. At that point, Congress would have to cease spending money on programs for which there is no longer any revenue, e.g., studies of shrimp on a treadmill, or admit to the taxpayers it wants to borrow money to fund programs of lesser value. This kitchen-table process of spending only up to revenues received could save hundreds of billions of wasted dollars.  

Chapter 7. Re-constitute the Joint Committee on Reduction of Non-Essential Federal Expenditures, which existed from 1941 to 1974. This committee was established after World War II to recommend ways to reduce a massive federal budget.  Its goal was to identify non-essential spending. While the committee was only a study committee, requiring its recommendations to be submitted to authorizing and appropriation committees, it had a major impact on budgeting in government. With the inability of Congress to control spending or the states to force a Balanced Budget amendment to the Constitution, an alternative would be to create a similar committee to make recommendations to Congress but require its recommendations be voted on by Congress. This process creates accountability.

Chapter 8. Enact a Base Realignment and Closure Commission (“BRAC”) that applies to general appropriations. Due to political pressure to locate the military bases in numerous congressional districts, the U.S. constructed an excess of bases but could not close unneeded ones. To address the situation, Congress established BRAC, giving the Commission power to identify unnecessary bases and to send recommendations to Congress. The key to BRAC’s recommendations to Congress is that they became law unless Congress passed a Resolution of Disapproval and the President signed it. Using the BRAC structure, Congress could apply the same concept to all recommended reductions as a means of reducing political support for unneeded programs.

Chapter 9. Establish a Budget & Waste Reduction Director in every agency to identify unnecessary expenditures. Federal agencies have recycling and permit streamlining directors to help implement certain laws. Due to massive budget deficits, there should be a similar position to identify ways an agency can eliminate unneeded programs. The person should report directly to the head of the agency. All reports must be addressed by the head of the agency, and reasons for “No Action” must be publicly justified. Each director would recommend a 10% reduction in agency expenditures. Give the director a big bonus for meeting the target.

Chapter 10. The federal government needs to seriously re-think the massive subsidies it gives to private parties to buy green products. In the recently enacted “Inflation Reduction Act,” Congress authorized $370 billion in new tax credits for corporations and individuals if they purchase green energy products or build green energy facilities. The tax credits are to boost sales of electric vehicles, the installation of rooftop solar panels, the development of solar power systems, heat pumps, water heaters, space heating, electric stoves, circuit breaker boxes, additional home insulation, and exterior windows, to name a few private beneficiaries. This is in addition to federal regulations imposing energy efficiency requirements on at least sixty products and $577 billion in tax credits and grants for green energy projects since 2004.

The IRA was passed only a week after Congress authorized $280 billion to incentivize the semiconductor industry to build plants in the U.S. The semiconductor industry is a very profitable $573 billion industry that is expected to grow to $1.4 trillion by 2029 due to high demand for its products.

Starting a diet requires acknowledgment of being overweight and the desire to lose weight. The same is true with overspending. It cannot continue for the health of the nation. If overspending continues, the long-term consequences will be extremely harmful to the nation, especially future generations. While not every step in the diet book needs to be followed, if, however, the federal government implements four or five goals, it is guaranteed to reduce spending by a trillion dollars.

William L. Kovacs, author of Reform the Kakistocracy, winner of the 2021 Independent Press Award for Political/Social Change, and former senior vice president at the U.S. Chamber of Commerce.

 

 

 

 

 

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  • Yes, Virginia, The Federal Government is the Real Santa Claus

Yes, Virginia, The Federal Government is the Real Santa Claus

William L. Kovacs

December 2022

Yes, Virginia, The Federal Government is the Real Santa Claus

The Christmas season is a time of giving. Young children sit on Santa’s knee and provide him with a list of presents for under the tree. While it’s rewarding to see children happy with gifts, there is a dark downside to their expectations. Children grow up to be businessmen and women or social activists, and at Christmas time, they still expect presents. Now, however, they want, and usually receive, presents worth billions of dollars from the real Santa Claus, the federal government.

2022 is no exception. Since 1991, Congress has failed to pass its twelve appropriations bills. To avoid public failure, Congress takes the easy route. It bundles all spending into the proverbial secret Santa grab bag called an Omnibus appropriation bill. The corporatists and social advocates, like children opening presents, must wait to find out what they got until they can read the new law. The timing is usually the end of the year before Congress goes home for Christmas.

While Republicans claim they want to stop the next giveaway, they want their share of gifts even more. For this year’s share, several Republicans will likely help the Democrat business community keep their prize gifts, favorable tax treatment for research and development, and carried interest. The social activists want billions of dollars of higher childcare tax credits. The final deal is always more spending, never less.

Since the beginning of the republic, there has been a debate over the scope of Congress’s power to spend our money and then tax us to generate more money for Congress to spend. James Madison argued Congress could only spend on the items enumerated in the Constitution. Alexander Hamilton argued the Constitution’s Spending clause is independent of the enumerated powers, thus allowing Congress to tax and spend as it deems necessary. The only limitation – spending must be for the general welfare, and Congress is the only institution that determines the general welfare.

Continuing to debate the limits of Congressional spending is a waste of time. The Supreme Court has made it clear that Congress can spend on whatever it wants as long as it promotes the general welfare.

Such a broad interpretation of Congress’ ability to tax and spend has resulted in a massive expansion of government and a $31 plus trillion national debt.  The growth of the national debt will likely force posterity into involuntary servitude to the federal government. Most troubling is that the general welfare has morphed from building canals, bridges, and highways to make the U.S. an economic superpower into trillions of dollars of gifts to special interests and friends. These gifts to private entities come in the form of grants, tax credits, low rates, loan forgiveness, and paycheck protection plans.

Below are a few of the thousands of congressional gifts to private parties.

Suspending  $20 billion of student loan payments for two years and now seeking $600 billion more in student loan forgiveness based on the Higher Education Relief Opportunities Act of 2003, an act that addresses national welfare emergencies.

$ 721 billion was given in grants to states as a bribe to manage federal programs enacted outside the constitutional authority of Congress to legislate.

Forgiving tens of billions of dollars of federal Paycheck Protection Program loans made to organizations controlled by the elite rich such as Paul Pelosi (husband of the Speaker of the House); Khloe Kardashian, Tom Brady and Reese Witherspoon, Forbes Media, Ruth Chris Steakhouse, The Washington Times, and more than a few members of Congress.

$16 billion was given in farm aid to offset losses suffered by farmers on tariffs imposed on products sold to China. The top 10% of farmers receive 70% of the subsidies. This top 10% includes insurance companies, multinational corporations, and corporate farms.

Flood insurance subsidies are given to insure high-end housing in flood-prone areas, i.e., beachfront properties. This insurance program is potentially liable for $1.3 trillion in flood claims while only collecting $3.5 billion in annual premiums. The program already has $25 billion in losses taxpayers will have to pay.

The $330 billion prescription drug industry received $64 billion in federal research funding, along with immunity for any harm their drugs may cause.

Most recently, through the falsely named “Inflation Reduction Act,” Congress authorized $370 in new tax credits for corporations and individuals if they acquire green energy products or build green energy facilities. These tax credits are in addition to federal regulations imposing energy efficiency requirements on at least sixty products and $577 billion in tax credits and grants for green energy projects since 2004. The tax credits are to boost corporate sales of electric vehicles, the installation of rooftop solar panels, the development of solar power systems, heat pumps, water heaters, space heating, electric stoves, circuit breaker boxes, additional home insulation, and exterior windows, to name a few beneficiaries.

A week before the passage of the IRA, Congress authorized $280 billion to incentivize the semiconductor industry to build plants in the U.S. and invest in new research. The $ 573 billion semiconductor industry is expected to grow to $1.4 trillion by 2029 due to high product demand.

With a $31 trillion-plus national debt, citizens need to appreciate that every taxpayer owes $247,882 as their portion of the debt.

Christmas gifts to children are rewarding when parents see happiness in their eyes. Unfortunately, as some of these children grow up, they still expect gifts from the real Santa Claus, the federal government. The federal government likes playing Santa but never considers the immutable fact that the only money the federal government has is what it takes from taxpayers. The federal Santa game is simple. The federal government sees the glimmer in the eyes of its friends when they find out about the billion-dollar gifts they received for doing nothing. This tradition is the true meaning of a Washington, DC, Christmas.

William L. Kovacs, author of Reform the Kakistocracy, winner of the 2021 Independent Press Award for Political/Social Change, and former senior vice president at the U.S. Chamber of Commerce.

This article was first published in The Thinking Conservative.

 

 

 

 

 

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  • The Emperor Has New Clothes; U.S. Has New National Debt

The Emperor Has New Clothes; U.S. Has New National Debt

William L. Kovacs

December 2022

The Emperor Has New Clothes; U.S. Has New National Debt

In the oft-told story, The Emperor’s New Clothes, the vain emperor was constantly showing off his new clothes and wanting more impressive new clothes. To satisfy his vanity, a weaver told him there were magic clothes that were invisible to anyone who was unusually stupid. The emperor wanted them and the weaver went through the motions of dressing the emperor in magic clothes. While the emperor could not see the clothes the weaver dressed him in, he pretended to see them so he did not appear stupid. The emperor was told by all how fabulous were his new clothes. The emperor paraded everywhere so all could see the magic clothes that fit him to perfection.

One day, a little child saw the emperor, and said out loud, “But he hasn’t got anything on.” The child’s father dismissed his comments as “prattle.” But many in the crowd knew the child was right and whispered to others what the child said. The emperor heard it and suspected the child was right. But not wanting to appear wrong, he continued to walk prouder than ever in his magic clothes, and his nobleman continued to hold the train that wasn’t there.

Like the emperor, the leaders in our federal government dismiss as “prattle” the many in the crowd who cry, “The federal government hasn’t got any money at all.” But the federal government, unwilling to acknowledge it has no money, continues to proudly print more magic money.

The United States is $31 trillion in the hole. In the last several months, the Biden administration persuaded Congress to enact the Inflation Reduction Act ($500 billion), subsidies for the semiconductor industry ($46 billion) and is promising to forgive $400 billion in student loans and transfer another $36 billion to bail out the Teamsters Central States Pension Fund. The federal government of the U.S. is a “Spending Addict.” It is in desperate need of rehabilitation, but like the Emperor, it is too proud to stop doing stupid, shameful acts.

The federal government is the central reigning governmental body in the U.S. It is not the United States, notwithstanding the caption on lawsuits. Rather it is a constitutionally established mechanism in which representatives of the people are granted limited powers to serve the people and advance the common good of the nation. These representatives are not given individual or personal power. They are fiduciaries who must exercise their powers solely for the benefit of the common good of the nation and the American people.

The framework of our Constitution has few guardrails as to the type of government it can create. As long as any government is elected by the people to make laws and serve their interests, it is an acceptable Republican form of government under the Constitution.  Today, while the people of the nation elect representatives that have the theoretical power to change the laws, the political culture of the nation is such that these representatives are more loyal to the political party that helped them get elected than to the institution in which they serve. As such, our representatives are elected, but their power to change laws is limited by the power of the political party of which they are a member; not the institution in which they serve.

By giving their loyalty to the political party rather than the institution in which they serve, the power of representative government is severely limited. In this instance, it is the political party that protects freedom. In the other instance, it is the institution of Congress that protects freedom. Under the protection of a political party, our government functions as a combination of capitalist, socialist, oligarchy, kakistocracy, woke cult, and very likely, though unproven, a “deep intelligence state” that allows the optics of a Republic to exist in order to maintain the secrecy of action and the accumulation of greater powers.

The intent of our founders was to place perpetual sovereignty with the people of the country, not the federal government. As such, the federal government is an entity separate from but theoretically subject to control by the people. Unfortunately, those occupying the institutions comprising the federal government manipulate the Constitution and our laws to amass great personal power over the people. The individuals occupying federal positions, especially those in the Executive branch, have used their accumulated powers to become rulers and have transformed the people into servants.

Being separate from the people has allowed the federal government to use its powers to spend our money and impose mandates on us. The question must be asked who will pay off the debt? Notwithstanding its gross mismanagement of the nation, the federal government will tax the people to pay for its mismanagement. It has given itself the power to impose a tax burden of almost any amount needed to pay for what it wants to be done. From 1932 to 1981, the marginal tax rate in the U.S. ranged between 63% – 91%.

The national debt is 102% of the nation’s Gross Domestic Product (“GDP”) of the nation. It is expected to be double the GDP by 2051.  Each taxpayer’s share of the national debt today is $245,191. The average personal income in the U.S. is $63,211. If Americans are concerned with inflation, wait until they get the bill for the national debt. The national debt will become so burdensome to future generations that it will undermine democracy. If the federal government taxed current citizens the amounts needed to pay for today’s government, a tax revolt would topple the government. It avoids being confronted for its lack of responsibility by passing the debt to future generations who have no responsibility for creating it.

If it is our responsibility today to ensure the federal government runs the country for the common good, we have failed. The federal government has spent more money than it brings in almost every year since Calvin Coolidge was president in 1930. The American people now send the federal government over $4 – $5 trillion annually for its operations. That amount is never enough. The federal government always spends trillions more annually. It just spends and spends without restraint. 88% of our $31 trillion national debt was accumulated by our last six presidents.

On the asset side of the balance sheet, the federal government holds only $5.6 trillion of assets in cash, accounts receivable, loans receivable, and property, plant, and equipment. Its largest asset is $1.6 trillion of student loan debt, which the government wants to forgive to curry political favor with college students.

The federal government has so far escaped default on its debt obligations by printing magic money.

The federal government has also developed mechanisms for passing the cost of federal programs onto the public without having to account for the cost. Specifically, the federal government has imposed so many statutory laws on the private sector that it is a “fruitless project” to count them. In addition to statutory laws, federal agencies have imposed over 200,000 regulations between 1976 and 2016 and published over 10,000,000 pages of regulations between 1950 – 2021. Regulations are also laws. Additionally, presidents have issued 14,088 Executive Orders, and hundreds of thousands of Guidance Documents to explain the hundreds of thousands of issued regulations. Congress has also enacted 136 Emergency laws that allow the president to rule as a dictator at the time of their choosing. These “laws” are not only costly, but they also restrict our freedom, literally mandate by mandate. The emergency laws come in the form of Covid lockdowns and vaccine mandates that carry a penalty of being fired for non-compliance.

Furthering the tentacles of the federal government, it has thousands of employees in every state in the nation. It also provides state and local governments with  $721 billion in grants to manage programs the federal government wants to be implemented but does not have the constitutional authority to impose by law or regulation.

With all of its massive spending and millions of workers, laws, and regulations to control every aspect of life, the federal government oozes incompetence. Not only is it bankrupt, but it is also unable to control its own borders, the essence of sovereignty. Its educational system, the core system for supporting future competition with the world, is in disarray. The U.S. ranks 30th in math and 18th in reading, on international assessments. The American people know the nation is not well governed. Seventy-four percent of its people believe the U.S. is going in the wrong direction. Only 21% think it is going in the right direction. Forty-three percent of Americans believe the U.S. will be in a civil war in the next ten years.

While the federal government continues to print more and more money while dismissing as prattle those claiming it has no money; it will soon find that magic money, like magic clothes, is not real. Eventually, the debt will have to be repaid by people who had no say in its borrowing or spending. As a final act to save itself, the federal government will put future generations of Americans into involuntary servitude to it as a means of paying off the national debt. So much for the federal government worrying about the common good for Americans.

William L. Kovacs, author of Reform the Kakistocracy, winner of the 2021 Independent Press Award for Political/Social Change, and former senior vice president at the U.S. Chamber of Commerce.

 

 

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  • A Republican House Must Still Honor its Commitment to America

A Republican House Must Still Honor its Commitment to America

William L. Kovacs

November 2022

A Republican House Must Still Honor its Commitment to America

Dear Republicans, the talking heads and the pollsters were very wrong about the definite red wave. But it looks like you will win control of the House of Representatives. It will be a trying time since the loudest voices will seek retribution against Democrats through much-needed investigations. Undertake a few very well-structured investigations to expose the corruption in the Biden administration, but, please do not forget your Commitment to America. Some of it can be accomplished with control of only the House. Republicans promised to right the ship of state. You will be doing this for the country, not to satisfy primal urges of revenge.

As part of your Commitment to America, you pledged to “Curb wasteful government spending that is raising the price of groceries, gas, cars, and housing and growing our national debt.” A similar promise was made by the Republicans in its1994 Contract with America. The national debt in January 1994 was $4.4 trillion. The national debt in 2022 is almost $31 trillion. Most concerning, Republican administrations increased the national debt during that period by $14.05 trillion, about 53.6% of its increase. Democrats increased the national debt by $12.15 trillion, about 46.4% of the additional debt in that period.

Worst still, 97% of our national debt has increased dramatically since the end of the presidency of Jimmy Carter, the last president to preside over a national debt of less than a trillion dollars. In those forty years, the Republicans added $17.46 trillion to the national debt (59%), and the Democrats added $12.15 trillion (41%). It is imperative that the national debt matter to Republicans when they have the power to do something about it. Pontificating about it on cable television is not sufficient.

Interest payments on the national debt over the next 30 years are estimated to exceed $66 trillion. Each taxpayer’s share of the national debt today is $245,191. The average personal income in the U.S. is $63,211. If Americans are concerned with inflation, wait until they get the bill for the national debt. The national debt will become so burdensome to future generations that it will undermine democracy. If the federal government taxed current citizens the amounts needed to pay for today’s government, a tax revolt would topple the government.

How did the government put us in this position?

The framework of our Constitution has few guardrails for the type of government formed by our elected leaders. Today’s federal government combination of capitalist, socialist, oligarchy, kakistocracy, and woke cult. Moreover, the federal government can tax us as much as it needs to satisfy its wants. From 1932 to 1981, the marginal tax rate in the U.S. ranged between 63% – 91%.

Since it is unlikely, we will pay off the national debt in our lifetimes, our federal government and every American must recognize, we are living on the future productivity of those who have no say in creating our debt. The national debt is unjust to those who will have to pay tomorrow for our spending today.

What can House Republicans do today without control of the presidency?

Our Constitution reads, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”

For Congress to spend more of the taxpayer’s money, it must appropriate new money by enacting a law that requires the approval of both Houses of Congress and a Presidential signature. To spend no money, however, one House of Congress merely needs to do nothing. No provision in the Constitution gives anyone the power to force Congress to spend money. Moreover, Congress is the only government institution controlling the nation’s purse. The House of Representatives can shut the purse.

A few simple ideas for a Republican House to cut almost one trillion dollars from the budget by Just Saying “No.”

Do not fund unauthorized laws. Almost a half-trillion in savings can be achieved by following congressional rules prohibiting the funding of laws that are not authorized. All Congress needs to do is refuse to fund unauthorized laws.

The Congressional Budget Office annually issues a report on “Expired and Expiring Authorizations of Appropriations” for the Fiscal Year. While CBO prepares this report according to the Congressional Budget Act of 1974, the report is to assist lawmakers in complying with House rules by identifying unauthorized laws that should not be funded. Its 2022 report identifies 1,118 authorizations of appropriations that expired before the beginning of FY 2022 and an additional 111 that will expire during FY 2022.

CBO estimates Congress appropriated $461 billion in 2022 to fund unauthorized laws. Moreover, CBO identifies each committee of Congress that has failed to authorize laws under its jurisdiction and the amount of money appropriated to fund these unauthorized statutes. Forty-four percent of the unauthorized laws being funded expired over a decade ago. If Congress is unwilling to review these laws and reauthorize them, that lack of interest alone should be sufficient to let them expire.

Reduce agency budgets for refusing to provide Congress with the information requested. Congress has a constitutional responsibility to oversee federal agencies. Many times, however, federal agencies refuse to provide Congress with the information requested. Usually, Congress, especially the party in opposition to the Executive, must live with the refusal until a president from its party occupies the White House. Then matters are reversed. One mechanism for addressing this issue would be for the House of Representatives to reduce the agency’s appropriations by some percentage each time an agency fails to provide the information requested.

Use spending power as bargaining power. Since Congress cannot be compelled to spend money on any activity, it needs to leverage this power to ensure the Executive implements the policies Congress enacted. From day one the Biden administration refused to protect the southern border of the United States. The border is open to all comers, no matter how much the Republicans complain. By being in charge of the House, however, Republicans have solid leverage to negotiate with the administration by withholding money for programs Biden deems essential.

The leverage should be the Department of Education (“DOE”) since it is owned and operated by Biden’s most significant political supporters, the teachers’ unions. The DOE is a perpetual pay-off to the teachers’ unions. The teachers’ unions donated $43 million to liberal groups in the 2020 election cycle.

By controlling DOE, teachers’ unions foster the teaching of Critical Race Theory, impose mask mandates, and torture children’s minds by telling them they are born racists. The mere possibility of the teachers’ unions losing this power will likely persuade Democrats to accept the reality that building the border wall and enforcing immigration laws is a cheap price to pay to keep DOE.

If Biden concedes, the House Republicans will get the border wall and immigration enforcement. If Biden refuses to negotiate, the Republicans get to eliminate the agency they have wanted to eliminate since 1980, when it was created.

Require all federal agencies to implement GAO’s Generally Accepted Accounting Principles (“GAAP”) or suffer budget cuts. Congress mandates GAO to perform a GAAP analysis of federal spending and assets and provide recommendations to ensure the financial reporting by the agency is transparent and consistent. One specific GAO recommendation is for all agencies to address the government-wide improper payments, estimated to be $175 billion. A Republican House should refuse to fund agencies failing to implement this recommendation.

By implementing these four recommendations, Republicans can reduce the budget by over $850 billion. Only time will tell if Republicans mean what they promise in their Commitment to America. Republicans’ this is your “put up or shut up” moment.

William L. Kovacs, author of Reform the Kakistocracy, winner of the 2021 Independent Press Award for Political/Social Change, and former senior vice president at the U.S. Chamber of Commerce.

This article was first published in The Thinking Conservative.

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  • The Future for the Next Generation: Involuntary Servitude

The Future for the Next Generation: Involuntary Servitude

William L. Kovacs

November 2022

The Future for the Next Generation: Involuntary Servitude

Under our Constitution, the people are the sovereign. We the people then hire the federal government to run the nation for our benefit. But like the Sci-fi movies where robots take over humans, the federal government is constantly expanding its powers to be our master and we, its servants. Both political parties increase their power over us by increasing the national debt. As the debt grows it becomes more unmanageable; eventually resulting in chaos that provides the federal government with the opportunity to fully realize its dream of placing citizens into involuntary servitude to serve its needs.

William L. Kovacs, the author

 

The United States is 246 years old. The last president to return money to the treasury was Calvin Coolidge. Our last six presidents in their forty-two combined years in office, have, on top of appropriations, borrowed, an additional, $27.46 trillion to run the nation. That is 88% of our entire $31 trillion national debt. Each taxpayer’s share of the national debt is $245,191 as of September 22, 2022. It is rising daily. The average personal income in the U.S. is $63,211.

Is our federal government incompetent, or insane or is there a more sinister agenda? Since most of the government is occupied by power-hungry people, its goal is to gain greater control over citizens. The easiest way to achieve greater control is through massive debt. It allows the government to give us what we don’t need, in exchange for taxing future generations. Eventually, it will require confiscatory taxes on citizens to pay off its debt. At that time the journey into involuntary servitude begins.

How did the government put us in this position?

The framework of our Constitution is so broad and vague as to allow the federal government to be capitalist, communist, or socialist. Moreover, the federal government can tax us as much as it needs to satisfy its wants. From 1932 to 1981, the marginal tax rate in the U.S. ranged between 63% – 91%.

Republicans and Democrats are both responsible for the National Debt. Actually, Republicans, for all their righteous calls for fiscal restraint, are responsible for 60% of it. The chart in the image uses data from The American Presidency Project, The Balance, and the Treasury Department to illustrate the increase in the national debt for each president by the fiscal year.

It is unlikely the national debt will be paid off in our lifetimes. This means we are living on the future productivity of those who have no say in creating it.  A truly unjust law to those who will have to pay tomorrow, for our spending today.

The national debt will become so burdensome to future generations that it will undermine democracy. If the federal government taxed current citizens the full amount of the programs it funds, there would be a tax revolt against “unjust taxes.” But the accumulation of massive debt is different from imposing taxes on people. Our representatives avoid accountability and confrontation by shifting the cost of today’s government to future generations.

Each dollar expended by us today without earning that dollar is a dollar our posterity will have to repay for us. Is there a point at which the debt imposed on future generations is so massive that it converts the social obligation of paying reasonable taxes into involuntary servitude to the government?

What is involuntary servitude?

“Involuntary servitude” is defined as “a condition of compulsory service or labor performed by one person, against his will, for the benefit of another person due to force, threats, intimidation or other similar means of coercion and compulsion directed against him.” It is usually found in situations where the servitor is compelled to labor against his will in the liquidation of some debt or obligation.

The International Labor Organization Forced Labor Convention of 1930 deems all involuntary work or service exacted under the threat of a penalty, to be forced labor, therefore, illegal. Under the Convention government-forced or compulsory labor does not include compulsory military service, civic obligations for the benefit of the community, punishment for a crime, and emergency situations such as helping with catastrophes.

Absent from the list of exemptions are mandates imposing taxes so excessive that future generations must work to pay off the debt accumulated by prior generations.  Going forward the Congressional Budget Office estimates our national debt will continue to increase from 100% of GDP in 2022 to 180% of GDP in 2051. This will impose trillions of dollars of additional debt on future generations.

Involuntary servitude is implemented by force

The federal government will have to impose unreasonably high taxes on future generations if it is to pay off the national debt. Anyone who does not pay will be threatened by the Internal Revenue Service (“IRS”) with a fine, confiscation of property, salaries, bank accounts, or imprisonment.

In the so-called “Inflation Reduction Act,” Congress authorizes an additional $79.6 billion for the IRS. $45.6 billion of this money is for enforcing the payment of taxes. The IRS will hire more enforcement agents, and lawyers, and purchase new technology and weapons to increase enforcement efforts.

Placing the situation in perspective is essential to understanding the federal government’s intentions. It is estimated the IRS will hire an estimated 87,000 new agents. This more than doubles its current workforce of 78,661. With its 165,661 federal agents, the IRS will be the fifth largest federal agency by the number of employees.

These new employees are in addition to the 2,300 Special Agents that carry AR-15s, P90 tactical rifles, and other heavy weaponry. According to OpenTheBooks, the IRS currently has 4,600 weapons and 5 million rounds of ammunition. Moreover, the IRS will have significant fire-power backup, should it need it. The Militarization of the U.S. Executive Agencies, prepared by OpenTheBooks, reports that 103 executive agencies, outside of the Department of Defense, spent $2.7 billion on guns, ammunition, and military-style equipment between the fiscal years 2006 and 2019. It estimates there are more federal police officers (200,000) with firearms than U.S. Marines (186,000), and this is before the IRS adds its new enforcement agents.

President Biden routinely talks tough and mocks anyone (from domestic extremists to parents speaking at school board meetings) believing they could challenge the power of the U.S. government. He noted if they [citizens] planned to use guns, they would “…need F-15s and maybe some nuclear weapons.”

Likely 99.9% of citizens are not planning to challenge the federal government, in any manner. Most understand the federal government operates independently of the people in the nation. It is also extremely well-armed and could eliminate anyone or anything that remotely appears challenging. That is not the issue. The issue is that the president of the United States regularly reminds citizens that the federal government has massive military power it can use against them. So much for believing the government works for citizens.

Federal collection threats, will result in involuntary servitude?

If future citizens object to paying off a massive debt they had no part in creating, the federal government will use all the civil and criminal laws against them. It will overwhelm any person that challenges its “God-given right” to take any property for whatever the government believes is owed. These citizens will be forced to work no matter what the tax burden might be, to pay off the national debt.

Paying off a reasonable national debt is a civic duty. Working endlessly, under government threat, for a lifetime to pay off tens of trillions of dollars of debt that these future generations had no part in creating, is involuntary servitude which is prohibited by the XIII Amendment to the Constitution.

What can citizens do?

Citizens today cannot claim there is nothing we can do since the government controls the spending and increases in the national debt. Citizens in a democracy are responsible for the actions of the state. We need to treat government officials as our servants. Citizens have the ability through our vote to control them.  If we continue to allow the government to amass debt, we are telling future generations “they have no rights. All wealth belongs to the government.” At this point, the U.S. becomes an unjust nation that imposes involuntary servitude on posterity. If it continues, it is the end of our Democracy.

William L. Kovacs, author of Reform the Kakistocracy, recipient of the 2021 Independent Press Award for Political/Social Change. He also served as senior vice president for the U.S. Chamber of Commerce and a chief counsel to a congressional committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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  • In Need of a Federal Ban on Gifts to Friends of Congress

In Need of a Federal Ban on Gifts to Friends of Congress

William L. Kovacs

September 2022

In Need of a Federal Ban on Gifts to Friends of Congress

Since the beginning of the republic, there has been a debate over the scope of Congress’s power to spend our money and then tax us to generate more money to spend. James Madison argued Congress could only spend on the items enumerated in the Constitution. Alexander Hamilton argued the Constitution’s Spending clause is independent of the enumerated powers, thus allowing Congress to tax and spend as it deems necessary. The only limitations – spending must be for the general welfare and Congress cannot use taxation as a pretext to indirectly control states.

Continuing to debate the limits of Congressional spending is a waste of time. The Supreme Court has made it clear that Congress can spend on whatever it wants as long as it promotes the general welfare. Only Congress can make that determination.

Such a broad interpretation of Congress’ ability to tax and spend has resulted in a massive expansion of government and a $30 plus trillion national debt that will likely place our posterity in involuntary servitude to the federal government. Most troubling is that the general welfare has morphed from building the canals, bridges, and highways to make the U.S. an economic superpower into trillions of dollars of gifts to special interests and friends. These gifts to private entities come in the form of grants, tax credits, loan forgiveness, and paycheck protection plans.

A few examples of the cost of congressional gift giving.

$600 billion in student loan forgiveness based on the Higher Education Relief Opportunities Act of 2003, which forgave $10,000 – $20,000 of student loan debt for approximately 15 million students.

$ 721 billion in grants to states as a bribe to manage federal programs enacted outside the constitutional authority of Congress to legislate.

Forgiving tens of billions of dollars of federal Paycheck Protection Program loans made to organizations controlled by the elite rich such as Paul Pelosi (husband of the Speaker of the House); Khloe Kardashian, Tom Brady and Reese Witherspoon, Forbes Media, Ruth Chris Steakhouse, The Washington Times, and more than a few members of Congress.

$16 billion in farm aid to offset losses suffered by farmers on tariffs imposed on products sold to  China. The top 10% of farmers receive 70% of the subsidies.

The $330 billion prescription drug industry was granted $64 billion in federal research funding.

Flood insurance subsidies are given to insure high-end housing in flood-prone areas. This insurance program is potentially liable for $1.3 trillion in flood claims while only collecting $3.5 billion in annual premiums. The program has $25 billion in losses that taxpayers will have to pay.

Most recently, through the falsely named “Inflation Reduction Act,” Congress authorized $370 in new tax credits for corporations and individuals if they acquire green energy products or build green energy facilities. The tax credits are to boost corporate sales of electric vehicles, the installation of rooftop solar panels, the development of solar power systems, heat pumps, water heaters, space heating, electric stoves, circuit breaker boxes, additional home insulation, and exterior windows, to name a few beneficiaries. This is in addition to federal regulations imposing energy efficiency requirements on at least sixty products and $577 billion in tax credits and grants for green energy projects since 2004.

A week before the passage of the IRA, Congress authorized $280 billion to incentivize the semiconductor industry to build plants in the U.S. and invest in the new research.  The semiconductor industry is a $573 billion industry that is expected to grow to $1.4 trillion by 2029 due to high demand for its products.

While there is almost no limit to Congress making gifts to its supporters, historical precedents prohibited state governments from giving gifts to private entities. In the mid-1800s, many municipalities and states used public funds to purchase stock in the railroads being built across the continent. Many of these governments lost or were swindled out of large amounts of taxpayer money. To prevent this type of financial loss in the future, forty-five states enacted constitutional limitations preventing gifts to private entities. The limits placed on gifts to private parties came to be called “gift clauses.”

The general gift clause prohibited state and local governments from giving or loaning public funds to private corporations or associations or for private undertakings. The sole purpose of these gift clauses was to prohibit the gifting of public money for nonpublic purposes. Initially, these provisions stopped government speculation with taxpayer money and the gifting of public money to private entities.

Over time, however, the courts began to legislate exceptions to the prohibitions for what they construed as a “public purpose,” a purpose similar to the federal Constitution’s general welfare clause.  Courts simply found legal the gift of public funds to a private entity if the gift would somehow result in a public benefit. The courts further expanded the definition of “public benefit” to include almost anything the legislature believes is a public benefit. Such gifts can be seen in almost every type of government project, from parking lots to sports facilities, corporate rent subsidies, to outright gifts to attract business to a state or locality.

At the federal level, gifts are deemed legal to private parties for almost anything Congress wants to finance, incentivize, or throw money at. Taxpayer money just flows, and the courts find it legal since the appropriations prove that the legislature viewed the gift to private parties to be for a public purpose.

With a $30 trillion-plus national debt, citizens need to demand the enactment of a federal gift clause to limit how Congress spends our money. And while few believe that Congress will ever enact a prohibition on gifts to friends and interest groups, citizens need to demand every person running for Congress to take the following pledge:

I pledge that, as a member of Congress, I will not vote to give, grant, or loan public funds or to extend the credit of the public to any private corporation, association, or private undertaking.

By asking every candidate for Congress to take this pledge, citizens will easily distinguish between candidates seeking to protect the public’s money and those seeking personal gain.

William L. Kovacs has served as senior vice-president for the U.S. Chamber of Commerce, chief counsel to a congressional committee, and a partner in law D.C. law firms, and his book Reform the Kakistocracy is the winner of the 2021 Independent Press Award for Political/Social Change. His second book, The Left’s Little Red Book on Forming a New Green Republic is a collection of quotes from the Left on how to control society by eliminating capitalism, people, and truth.

 

 

 

 

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  • Biden’s Budget Pageant Ignores Easy Ways to Reduce Debt

Biden’s Budget Pageant Ignores Easy Ways to Reduce Debt

William L. Kovacs

April 2022

Biden’s Budget Pageant Ignores Easy Ways to Reduce Debt

On March 28, 2022, President Biden hosted the annual Budget Pageant. This release of a massive book of proposals and charts is rarely taken seriously by a Congress that operates under a dysfunctional appropriations process. Many in Congress quip the budget is “Dead on Arrival.” Unfortunately, those quipsters ignore their primary constitutional responsibilities to raise revenue, pay debts, and provide for the general welfare, whatever that might mean to any given Congress. Instead, Congress usually authorizes the president to print as much money as can be printed with the paper and ink available.

The Budget Pageant continues for a simple reason – the president and Congress need to divert the public’s attention to stupid proposals since both are unwilling to manage government operations with the revenue raised.

For the FY 2023 budget, Biden is proposing to spend $5.9 trillion, which is 30% more than the last pre-Covid budget in 2019. Moreover, Biden fails to mention that taxpayer money is flowing into the treasury at its highest level ever. The Congressional Budget Office estimates a record tax collection of over $ 4 trillion. Why is it so hard for the federal government to live within a $ 4 trillion budget?

Biden’s budget claims it needs more taxes, but it will reduce the national debt by $1trillion over the next ten years, about $100 billion a year. Inflation, however, is running over 8 %, and the interest on the national debt of $27 trillion is $ 305 billion annually at a $1.4% interest rate. A 1% increase in interest rates will require an additional interest payment of $300 billion. A 2% increase in the interest rates will require an additional $600 billion payment. Biden needs a remedial math class. Then Biden proposes to tax billionaires on unsold assets. The only positive aspect of this proposal is it will create significant work for already wealthy lawyers and accountants.

Since the president’s budget proposals are irrelevant, and Congress is the only entity authorized by the Constitution to raise and spend money, it’s time for Congress to act responsibly. Sadly, Congress makes reducing the national debt far too complicated. Members constantly fight to save thousands of federal programs that are only important to lobbyists but irrelevant to most of the American people. Congress should limit its spending to items benefitting the nation.

By refocusing the discussion on the national interest, it is easy to find programs to cut by looking at programs Congress ignores but continues to fund for lack of interest in conducting oversight. If Republicans retake control of Congress and they are serious about reducing the national debt, they can do it without disturbing the economy.

The Seven Doable Debt Reductions Tactics Republicans Can Apply in 2023

  1. Zero Based Budgeting. Zero-based budgeting is defined as the “[A] method of budgeting in which all expenses must be justified for each new period. The process of zero-based budgeting starts from a ‘zero base,’ and every function within an organization is analyzed for its needs and costs.” Using this method will force Congress to review the value of the many thousand federal programs that continue without any oversight. The perfect example is Congress funding programs that it fails to reauthorize.
  2. Congress should not fund unauthorized laws. The most manageable budget cuts would be to refrain from funding laws Congress has not authorized. “In FY 2021 appropriations, the Congressional Budget Office identified 1,068 authorizations of appropriations, stemming from 274 laws, totaling $432 billion, that expired before 2022.” If Congress is unwilling to reauthorize expired laws, Congress should let them expire. Since House Rules prohibit the funding of laws not authorized by Congress, letting those unauthorized laws expire is an easy savings of almost one-half trillion dollars.
  3. Review and vote on every expenditure in the Judgment Fund. The Judgment Fund is the mother of all slush funds. It is a permanent, indefinite, and unlimited congressional appropriation continuously available to pay money judgments entered against the United States and settlements of cases in or likely to be in litigation with the United States. It is so secret that Congress no longer even debates any specific payments. The Department of the Treasury pays the claims upon receiving completed forms. President Obama used the Judgment Fund to deliver $1.7 billion in cash to Iran as a bribe to sign the nuclear agreement. Before 1956 Congress was required to approve each payment from the Judgment Fund. To relieve itself of responsibility, Congress changed the law so it did not have to approve each payment. By reinstating the pre-1956 rules, Congress could save taxpayers tens of billions of dollars by rejecting improper payments.
  4. Enact a fair, simple tax code that focuses on raising money, not legislating behavior. The Income Tax Code is ridden with exemptions, deductions, credits, and deferrals so the very wealthy can avoid taxes and the poorest are exempt from taxes. Congress can reverse this complexity by eliminating the 8-million-word tax code and replacing it with the 1913- four-page Form 1040, which includes instructions. The benefit of this simple approach is it captures a more significant amount of tax owed by closing the “tax gap.” The IRS defines the tax gap as the difference between actual taxes owed for a given tax year and the amount paid. The gap results from the under-reporting of income, non-filing, and tax evasion. While the exact amount is unknown, the IRS estimates it to range from $574 to $700 billion annually. A complex tax code invites under-reporting and manipulation, which is exactly the current tax code.
  5. GAO’s Generally Accepted Accounting Principles (“GAAP”). Congress mandates GAO to perform a GAAP analysis of federal spending and assets and provide recommendations to ensure the financial reporting by the agency is transparent and consistent. Every member of Congress should read these reports and implement the findings on mismanagement. One specific GAO recommendation is for the federal government to address the government-wide improper payments, estimated to be $175 billion. Saving money by not paying the wrong parties seems like a doable procedure. The amount of information available to Congress for making smart debt reduction decisions is overwhelming. It is time Congress implements the advice given it.
  6. Make Federal spending a kitchen table issue. Congress should make a kitchen-table list of the most important national programs. A simple way to approach this task would be for each congressional committee to rank each program within its jurisdiction. The appropriation committees would work down the priorities list until the revenues raised by taxes are expended. At that point, Congress would have to cease spending money on non-priority programs, e.g., studies of shrimp on a treadmill, or admit to the taxpayers; that it wants to borrow money to fund programs of little value. This kitchen-table process of spending only up to revenues received could save another $1plus-trillion annually, even if Congress expended a few hundred billion on some lower value programs.
  7. Eliminate congressional gifts to the largest corporations. Congress gives tens of billions of dollars annually to the largest corporations through grants, tax credits, and loan guarantees. These are pure gifts to Boeing, General Motors, Ford, GE, Chase, and hundreds more. There are simply no reasons Congress needs to subsidize the largest and most profitable global corporations. According to the Good Jobs First report, Boeing, having a market value of $112 billion, received $71 billion in loan guarantees and bailout assistance in 2012. With a market value of $ 68 billion, General Motors received almost $1.1 billion in federal grants or tax credits and over $50 billion in loan guarantees and bailout assistance. Even a smaller, publicly unknown company, like X-Energy, LLC, received a $ 5.3 billion federal grant. Congress provides thirty-four types of tax credits for companies involved with research, renewable fuels, improving energy efficiency, maintaining railroad tracks, making distilled spirits or electric cars, etc. The tax credits allow a company to directly deduct the amount of the credit from its tax bill. These are just gifts to corporations.

Implementing some combination of these seven proposals would reduce the national debt by over $1 trillion a year without disturbing programs Congress views as a “must fund.” If Republicans are serious about reducing the national debt, now is the time to be responsible and just do it.

William L. Kovacs has served as senior vice-president for the U.S. Chamber of Commerce, chief counsel to a congressional committee, and a partner in law D.C. law firms. His book Reform the Kakistocracy is the winner of the 2021 Independent Press Award for Political/Social Change. His second book, The Left’s Little Red Book on Forming a New Green Republic, quotes the Left on how it intends to control society by eliminating capitalism, people, and truth.

 

 

 

 

 

 

 

 

 

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  • Six Easy Steps to Reducing $1 Trillion of National Debt

Six Easy Steps to Reducing $1 Trillion of National Debt

William L. Kovacs

February 2022

Six Easy Steps to Reducing $1 Trillion of National Debt

Americans are obsessed with weight loss but generally, they are getting heavier each year. The same is true for an obese federal budget. Congress pontificates about reducing our massive national debt of $30 trillion but each year it gets bigger. Books don’t help one lose weight, only by reducing food intake can weight be lost. The same is true for budgets. Bloviating against the national debt on cable TV will not reduce debt. Only by cutting programs and reducing laws can the nation reduce the national debt.

In 2021 our federal government spent $ 6.82 trillion in a $ 22.4 trillion economy. Simply, 30% of all economic activity in the U.S. is federal spending.  Another $3.3 trillion was spent by state and local governments. Forty-five percent of our entire economy is government spending. The Government Accountability Office (“GAO”) informed Congress the growth of the national debt is unsustainable and a risk to our future. It’s now time to stop spending and start reducing the nation’s debt to ensure a sustainable nation for our children.

Six easy steps to taking $ 1 trillion annually off the federal spending scale

  1. Do not fund laws that have not been authorized. The easiest set of budget cuts would be to refrain from funding laws that Congress has not authorized. “In FY 2021 appropriations, the Congressional Budget Office identified 1,068 authorizations of appropriations, stemming from 274 laws, tolling $432 billion, that expired before the beginning of the fiscal year 2022.” Since House Rules prohibit such appropriations, it should be an easy savings of almost one-half trillion dollars.
  2. Review and vote on every expenditure of the Judgment Fund. The Judgment Fund is the mother of all slush funds. It is a permanent, indefinite, and unlimited congressional appropriation continuously available to pay money judgments entered against the United States and settlements of cases in or likely to be in litigation with the United States. As an indefinite appropriation, it is so secret that Congress no longer even debates what the amounts are for. The amounts are appropriated, no matter what the amount. The Department of the Treasury just pays the claims upon the receipt of paperwork. This is the fund that President Obama used to deliver $1.7 billion in cash, to Iran as a bribe to sign the Iran nuclear deal. Why should our government officials have billions in a secret fund to cover up illegal activity? Having Congress approve each judgment and settlement as it did before 1956, the U.S. could save taxpayers tens of billions of dollars by rejecting settlements the executive branch makes with its friends.
  3. Enact a fair, simple, tax code that focuses on raising money not legislating behavior. Another easy way to reduce the deficit is to get rid of the 8-million-word tax code and replace it with the 1913- four-page Form 1040. Few deductions and low rates, but everyone pays something, including the wealthiest. The benefit of this simple approach is it captures a greater amount of tax owed by closing the Tax Gap.  The IRS defines the tax gap as the difference between true taxes owed for a given tax year and the amount that is paid. The gap is caused by the under-reporting of income, non-filing, and tax evasion. While the exact amount is unknown, the IRS estimates it to range from $574 to $700 billion, annually. A complex tax code invites under-reporting and manipulation, whereas failing to pay taxes in a simple system, could easily place one in a position of defending a fraud or tax evasion charge.
  4. Follow and implement GAO’s Generally Accepted Accounting Principles (“GAAP”). Congress mandates GAO to perform a GAAP analysis of federal spending and assets and provide recommendations to ensure the financial reporting by the agency is transparent and consistent. Every member of Congress should read these reports on how our money is managed and should implement its findings. One specific GAO recommendation is for the federal government to address the government-wide improper payments, estimated to be $175 billion.
  5. Congress should make a kitchen-table list of what programs are most important to our Republic. The amount of information available to Congress for making smart debt reduction decisions is overwhelming. It is time Congress puts these materials to use. A simple way to approach this task would be for each congressional committee to rank sequentially each program within its jurisdiction, with the most important programs having the lowest number. The budget committee would still allocate a budget for appropriations and the highest-priority programs will be funded first. The appropriation committees would work down the list until the revenue raised by taxes are expended. At that point, Congress would have to cease spending money on programs for which there is no longer any funding, e.g., studies of shrimp on a treadmill, or admit to the taxpayers, it wants to borrow money to fund programs of little value. This kitchen-table process of spending only up to revenues received could save another $1plus-trillion annually, even if Congress expended a few hundred billion on some lower value programs.
  6. Government must operate only for the public purpose. The issue of Congress giving away our money to private entities has been debated since the founding of the Republic. Opponents of giveaways argue taxpayer money can only be spent on matters enumerated in the Constitution. The government asserts it can spend taxpayer money on anything that promotes the general welfare. Continuing this debate is irrelevant since the courts have made it clear legislatures determine what is general welfare. Such a broad interpretation of governments’ ability to tax and spend has resulted in a massive increase in the national debt and a huge expansion of government.

To reduce spending, Congress must appropriate our money for matters that truly benefit the nation while preventing the direct redistribution of wealth to strictly private enterprises that wield influence in government?

The business-as-usual giveaway model is illustrated by the 2020 fiscal year appropriations which resurrected from the grave, billions of dollars in expired tax extenders and spread the benefits to distilleries, race-horses, and Nascar owners, short-line railroad, biodiesel blenders, and other favored industries. The tax credits were even made retroactive. The purchasers of the first 200,000 electric vehicles received up to a $7,500 tax break. Investors in Opportunity Zones received tax deferment on capital gains from for their investment in high-end apartments with yoga lawns and pools surrounded by cabanas and daybeds. Opportunity Zones were to benefit poor areas. The $350 billion dollars a year prescription drug industry benefitted from $64 billion in federal research funding. Flood insurance subsidies continued for beachfront property, notwithstanding that the program has $25 billion in losses, it is potentially liable for $1.24 trillion in claims while only collecting $3.5 billion in annual premiums.

While there is almost no limit to governments’ power to give away taxpayers’ money, there are historical precedents for limiting such gifts. In the mid-1800s, many municipalities and states used public funds to purchase stock in railroads being built across the continent. Many government entities were swindled out of large amounts of money. To prevent future losses, forty-six states enacted constitutional limitations preventing gifts to private entities. These restrictions were called “gift clauses” or “anti-donation” clauses or simply “government gift-prohibitions.”

The government gift-prohibition policies barred state and local governments from giving or loaning public funds to private corporations or associations for private undertakings. Initially, these provisions stopped government speculation with taxpayer money. With a $30 trillion national debt, Congress should enact the wise policies of the mid-1800s by prohibiting gifts, grants, loans, or the extension of the public’s credit to any private corporation, association, or private undertaking.

Such an action would serve to establish Congress as a fiduciary of the taxpayers’ money.

A few modest proposals for reducing the national debt. Is anyone in Congress willing to take up reducing the national debt challenge?

 

William L. Kovacs has served as senior vice-president for the U.S. Chamber of Commerce, chief-counsel to a congressional committee, a partner in law D.C. law firms, and his book Reform the Kakistocracy is the winner of the 2021 Independent Press Award for Political/Social Change. His second book, The Left’s Little Red Book on Forming a New Green Republic, quotes from the Left on how to control society by eliminating capitalism, people, and truth.

 

 

 

 

 

 

 

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  • Rs on House Oversight: Tools to Guard the Republic Now & 2023

Rs on House Oversight: Tools to Guard the Republic Now & 2023

William L. Kovacs

February 2022

Rs on House Oversight: Tools to Guard the Republic Now & 2023

The House Republicans act as if they are powerless to resist the Biden, Pelosi & Squad insanity infecting our government. Republicans’ mumble nothing can be done until we regain the majority in the House in 2023. That thinking is a false negative in Covid jargon. House Republicans on the Oversight and Government Reform Committee (“OGR”), even as a minority, have subpoena power and the ability to start organizing now so that on January 3, 2023, the committee can start swearing in witnesses. It is foolish to waste the next ten months being depressed.

Effective action by non-legislative committees looking into out-of-control spending and government mismanagement goes back decades along with the right of the minority on the OGR to issue subpoenas.

With a $ 30 trillion national debt, an open southern border, consistently confusing and changing vaccine mandates, and what might be another war or just another foreign policy embarrassment, the likely Republican House in 2023, has the proverbial “golden opportunity” to put on the performance of a lifetime. The show is called “Oversight.” History has given the OGR a script and the tools needed to reduce non-essential federal expenditures, root-out corruption, and foster Federalism as our Founders intended. All that is needed is serious planning and a few early subpoenas.

Government mismanagement all starts with spending too much money. Since 2016 the ratio of debt to GDP in the U.S. has ranged from 105% – to 129%. The last time Congress found itself with a national debt exceeding its Gross National Product was the World War II-era when the debt to GDP ratio ranged between 103% – 119%. Today every household in the U.S. owes $223,000 as of its share of the national debt.

Unless Congress accepts our children living in involuntary servitude to the federal government, it must immediately address the issue. To address the rising national debt caused by World War II, Congress created the “Joint Committee on Reduction of Non-Essential Federal Expenditures” (“Joint Committee”), which existed from 1941-1974. Its purpose was to “make a full and complete study and investigation of all expenditures of the federal government with a view to recommending the elimination or reduction of all such expenditures deemed by the joint committee to be non-essential.”

While the Joint Committee lacked legislative authority, it took its investigative role seriously. It recommended eliminating many New Deal programs such as Regional Agriculture Corporations, Government Corporations, the Civilian Conservation Corps, and the National Youth Administration. During its years of operation, our national debt declined from 119% of GDP in 1946 to 31% in 1974. By keeping the focus on the nation’s debt and recommending the elimination of non-essential programs, Congress brought the nation back to fiscal sanity.

In the 1960s, Congress began a series of legislative reorganizations that culminated in 1974 with the enactment of the Congressional Budget and Impoundment Control Act which eliminated the Joint Committee. Some of the Joint Committee functions were transferred to the newly created Congressional Budget Office, (“CBO)”. The remaining responsibilities were transferred to the existing OGR.

The CBO now provides Congress with nonpartisan analysis on budget and economic matters. In addition to producing 600 to 800 formal cost estimates each year, it also provides thousands of pages of advice on legislative proposals amendments. It publishes numerous reports on the budget and the economy. CBO helps Congress understand the economic and budget impacts of its decisions.

The OGR, however, was given very special powers to oversee the Executive branch. House Rules made it the primary investigative Committee in the House of Representatives. It was given authority to investigate “any matter” within the jurisdiction of the other standing House Committees, including the workings of government agencies. To ensure it can secure the information needed, OGR has the authority to issue subpoenas to compel witnesses to testify and produce documents. Even the minority on OGR have subpoena power upon the request of seven members of the Committee. The D.C. Circuit recently upheld the use of this power by the minority.

Additionally, House Rule X, Clause 4 requires OGR to receive and examine reports from the Government Accountability Office (“GAO”), the congressional watchdog over agency activity. GAO examines the operations of all government agencies and issues about 900 reports annually on most aspects of the operations of government.

OGR is also responsible for reviewing the federal/state relationship to ensure it works in a coordinated, constitutional manner. The combination of investigative powers over the entire federal government, a mandate to review GAO reports on government operations, access to the CBO for advice on budget and economic issues, and a mandate to ensure federalism functions constitutionally gives OGR a unique role in protecting our Republic.

Unfortunately, Republicans’ oversight activities have been superficial, at best, for decades. The best example of Republican oversight malpractice is its willingness to deem unauthorized laws authorized to avoid reviewing the effectiveness of the laws and reauthorizing them. In FY 2021 Congress appropriated about $432 billion for 1,068 programs whose authorizations of appropriations had expired. Not one member of the House objected to this legislative scam. The same lack of oversight is endemic with regard to the budget and national debt. Congress has the increases on autopilot. There may be a few hearings and critical words spoken, but the increases always are enacted.

Illegal immigrants are costing taxpayers billions each month since the President is unwilling to enforce immigration and labor laws. Republicans complain, but there is no attempt to use their spending or subpoena powers to stop the president’s illegal activity.

And then there is the total disrespect for Federalism and the sovereignty of states, as illustrated by a President who denies states like Florida lifesaving monoclonal antibodies needed to treat Covid patients. Or a president that opens an entire southern border and burdens the states of Texas, Florida, and Arizona with responsibility for the financial, health, and law enforcement burdens of illegal immigrants, drug dealers, overdose deaths, an increase in crime, and destroyed property.

Why is the Republican minority on OGR so fearful of using its subpoena power to at least get the information on these many questionable activities today, as preparation for January 3, 2023?

If there was ever a time when this nation needs Congress to focus on oversight of the federal government, it is now. The Joint Committee may be gone, but OGR is here in its place. OGR, with access to CBO, GAO, having subpoena power, and the ability to investigate any federal agency and send the results of the investigation to the appropriate legislative committees has far more resources to identify and eliminate the non-essential functions of the federal government than the Joint Committee.

Impossible, some may say, Congress can never get control of the Executive branch. It is just too powerful. Nonsense, one House of Congress, smartly using its power of the purse, can merely refuse to spend money. There is no power in the Constitution or on earth to force Congress to spend money when this occurs. One House of Congress alone can stop the federal government’s rush to policy insanity.

The minority on House OGR should not wait until it is in the majority in January 2023 to start its investigations, research, and planning. Using its subpoena power today will allow it to develop some of the information needed for a solid plan of oversight in 2023. If a journey of a thousand miles begins with a single step, it is time for the Republicans to start walking.

 

William L. Kovacs has served as senior vice-president for the U.S. Chamber of Commerce, chief-counsel to a congressional committee, a partner in law D.C. law firms, and his book Reform the Kakistocracy is the winner of the 2021 Independent Press Award for Political/Social Change. His second book, The Left’s Little Red Book on Forming a New Green Republic, quotes from the Left on how to control society by eliminating capitalism, people, and truth.

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  • It Is Unjust for Congress to Fund Expired, Unauthorized Laws

It Is Unjust for Congress to Fund Expired, Unauthorized Laws

William L. Kovacs

January 2022

It Is Unjust for Congress to Fund Expired, Unauthorized Laws

 

Republicans and Democrats have used their political power to impose a massive and unjust national debt of $30 trillion on future generations. Since this debt has been imposed through a law-making process that did not have the participation of those who will be burdened with its payment, it is an unjust law. As such Congress has a moral duty and the legal power to remedy this injustice. If Congress fails to address this issue, it creates a high probability of future generations living in involuntary servitude to the federal government.

Most Americans understand debt can be reduced in several ways, cut spending, raise taxes, inflate it away or default. Since all options are painful and likely disruptive to the beneficiaries of government spending, Congress just continues spending.

Before continuing with its spending, Congress must keep in mind, complex societies collapse. Massively indebted societies collapse. Societies with their militaries deployed throughout the world collapsed. Highly regulated societies collapse. The U.S. is all these combined, contentedly sitting on a bubble of debt, unable to address the serious risks it poses. Congress and the recipients of government largesse delude themselves into believing collapse can’t happen here. Unfortunately, collapse has happened to every major empire in history and it will happen here unless the risks from debt are reduced.

As with all collapses, societies can live with risk for decades. At some point, however, if not addressed, risk turns into a disaster; society slips into the abyss. Once in the abyss, it can take centuries to reemerge as chaos rules.

To reduce our national debt, everything must be considered: taxes, spending, sale of assets, elimination of overreaching laws and regulations, and transferring to states programs they can implement better and more efficiently than the federal government. While dramatic options may exceed the courage of today’s politicians, there are smaller steps that could reduce the national debt by hundreds of billions of dollars. Even a small step to start reducing the debt would be a giant leap in government accountability.

Congress could obey its rules and stop funding laws that have expired; laws that have no authorization

For FY 2021 appropriations, the Congressional Budget Office “… identified 1,068 authorizations of appropriations – stemming from 274 laws – that expired before the beginning of the fiscal year 2022.”

House of Representatives Rule XXI provides that “[A]n appropriation may not be reported in a general appropriation bill…for an expenditure not previously authorized by law…”

The laws passed by Congress generally fall into two categories under its regular order:

  1. Laws are authorized for a set period of time, for example, one, three, or five years. At the end of the authorized period, Congress must reauthorize the law for it to continue being funded.
  2. Laws that have no expiration date and for which Congress mandates continuous funding, for example, Social Security. These are referred to as mandatory spending laws or entitlements.

This distinction is significant when attempting to reduce spending. Simply, when the authorization period of a discretionary law expires, Congress has the opportunity to let it lapse, amend it, or reauthorize it. Congress can hold oversight hearings to examine the law’s effectiveness. This oversight provides Congress control over the legislative process and, by extension, the regulatory process, since regulations are issued to implement the laws enacted by Congress.  More laws mean more regulation. Fewer laws mean fewer regulations.

Unfortunately, every year, Congress avoids the review of hundreds of expired laws. In fact, between 25% -33% of all laws do not have congressional authorizations. Moreover, since Congress rarely passes all twelve appropriation bills by the October 1 deadline, it merely bundles hundreds of billions of dollars into a Continuing Resolution or Omnibus appropriation to fund hundreds of disparate laws. Since the fiscal year 1997, the budget deadline has never been met. Instead, Congress enacts Continuing Resolutions that fund the government at the prior years’ funding level. Between FY 1998 and 2022, Congress passed 125 Continuing Resolutions.

Within this mindless appropriations process, however, Congress performs one act that debases the legislative process, while sanctioning the perpetual growth of the bureaucracy. This mindless act is a parliamentary procedure that allows the House to waive its Rule XXI by deeming hundreds of unauthorized laws to be authorized for purposes of making appropriations. This simple waiver gives life to hundreds of laws that have expired and for which Congress did not have sufficient interest to determine the continued need for the law. (The Senate does not have a similar prohibition.)

The House’s frequent use of waivers is contrary to almost two centuries of legislative practice for funding the implementation of laws. While there was always an informal process that required Congress first pass a substantive law and then appropriate monies to implement the law, Congress formalized this process in 1837, when the House of Representatives provided by a rule that “no appropriation shall be reported in such general appropriations bills, or be in order as an amendment thereto, for any expenditure not previously authorized by law.”   

This prohibition continues today and it can be enforced by a point of order. Unfortunately, Congress has enacted mechanisms that allow itself to waive the rule by suspension, unanimous consent, or in the House by a special rule, which usually deems the unauthorized laws to be waived.

By circumventing its own rules, Congress avoids having to make the difficult decisions on which laws should continue in effect. It merely allows all laws to remain in effect. Though this charade is an easy way for Congress to avoid doing its job, it is a prime reason why Congress has institutionalized the growth of government.

CBO started collecting data on the funding of unauthorized appropriations as early as 1975 and prepared written reports to Congress starting in 1986. Notwithstanding the amount of excellent information collected and produced by the CBO, Congress has not acted on it even though the amount of funding for unauthorized appropriations increases every year. The tens of billions of dollars that could be saved is staggering. In FY 2015 Congress appropriated about $294 billion for programs whose authorizations of appropriations have expired. In FY 2020 Congress appropriated about $332 billion for programs whose authorizations of appropriations have expired. In FY 2021 Congress has appropriated about $432 billion for 1,068 programs whose authorizations of appropriations have expired.

For Congress to reclaim its lawmaking powers, it does not need to shut down the entire government. All it needs is for a few brave members to stand up and force votes to deny funding for programs that have not been reauthorized. Members of Congress have a choice to review each law and reauthorize, amend, or terminate it, or publicly waive the rules for expediency. Congress consistently chooses the cowardly way of “leadership.”

If members of Congress started raising points of order to stop the funding of expired laws or voted against the waiving of regular order, Congress would begin to assume responsibility for the legislative process by examining every law as each authorization period expires. This process will require Congress to examine what it has enacted and how each law impacts the American people. As this process moves forward, Congress will reduce its budget deficits by tens of billions annually, simply by pruning laws that do not achieve their purpose, or for which the costs greatly outweigh the benefits.

Congress is responsible to the American people. It now needs to act responsibly.