Category Archives: U.S. national debt

Utopia! Bernie Sanders pushes plan for feds to guarantee every American a job

government solve all problems

It’s called “communism,” Bernie. And it DOESN’T WORK, no matter how much you demorats believe you can get it right.

From Fox News: Sen. Bernie Sanders, I-Vt., is preparing to unveil a plan for the federal government to guarantee a job offering $15 per hour and health care benefits to any American worker “who wants or needs one,” The Washington Post reported Monday.

It is not clear when Sanders will announce the plan and a Sanders spokesperson told the Post that it was still being crafted.

It was not clear how Sanders’ plan would be paid for. Republicans have long opposed a federal jobs guarantee, saying such a plan would be too expensive and impractical.

The Post reported that an early draft of Sanders’ plan calls for the government to fund hundreds of projects in categories such as infrastructure, education and the environment. Americans would be entitled to receive a job with one of those projects or receive job training to do so.

Sanders, who ran a surprisingly strong campaign for the 2016 Democratic presidential nomination and is rumored to be running again in 2020, joins two other rumored presidential contenders who have supported a jobs guarantee or offered guarantee plans of their own.

Last week, Sen. Kirsten Gillibrand, D-N.Y. tweeted support for a jobs guarantee, saying it would help “regular Americans who are unemployed and willing to work to better their local community.”

On Friday, Sen. Cory Booker, D-N.J. announced the Federal Jobs Guarantee Development Act, which would call for the Department of Labor to select up to 15 areas to institute a job guarantee. According to Vox, which first reported on Booker’s plan, those jobs would pay the higher of $15 per hour or the prevailing wage and offer paid family leave and health benefits.

“The federal jobs guarantee is an idea that demands to be taken seriously,” Booker said in a statement. “Creating an employment guarantee would give all Americans a shot at a day’s work and, by introducing competition into the labor market, raise wages and improve benefits for all workers.”


3D Chess: How President Trump will use the Omnibus Spending Bill to build the Wall

Three days ago, on Friday, March 23, 2018, President Trump signed the so-called bipartisan “budget deal” into law.

The Consolidated Appropriations Act of 2018 (aka HR 1625) funds the federal government through September 30, 2018. It is a bloated piece of legislation full of pork, which seems to betray many of Trump’s campaign promises by:

  • Not funding the $25 billion for Trump’s US-Mexico border wall. Instead, the bill has only $1.6 billion to repair and upgrade existing fencing along the border.
  • Not penalizing sanctuary cities that refuse to enforce federal immigration laws.
  • Not prohibiting federal funding for the Planned Parenthood abortion mills.
  • Not eliminating federal funding for PBS (Corporation for Public Broadcasting).
  • Not eliminating federal funding for PBS (Corporation for Public Broadcasting).
  • Increasing the budget of the National Endowment for the Arts and the National Endowment for the Humanities by $3 million.

The reaction among Trump’s base to his signing of the “budget deal” was  outrage and talk of revolt. (InfoWars)

But wait!

On the same day that he signed the “budget deal,” President Trump also sent a fascinating and somewhat cryptic letter to the leaders of the House and the Senate (

Text of a Letter from the President to the Speaker of the House of Representatives and the President of the Senate

Issued on:

Dear Mr. Speaker: (Dear Mr. President:)

In accordance with section 7058(d) of division K of the Consolidated Appropriations Act, 2018 (H.R. 1625; the “Act”), I hereby designate as an emergency requirement all funding so designated by the Congress in the Act pursuant to section 251(b)(2)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985, for the accounts referenced in section 7058(d).

The details of this action are set forth in the enclosed memorandum from the Director of the Office of Management and Budget.



What does the letter mean?

To begin, the so-called “budget deal” — the Consolidated Appropriations Act of 2018 — is actually an omnibus spending bill, not a federal budget bill.

Note: The word “appropriations” means funding or spending. The word “omnibus” refers to a legislative bill comprised of two or more general subjects that is designed to compel the executive to approve provisions that he or she would otherwise reject but that he or she signs into law to prevent the defeat of the entire bill.

Congress is supposed to create a new budget for the federal government each other, having been designated by the U.S. Constitution as having “power of the purse”. But Congress has failed in exercising that power by not passing a federal budget bill for FY 2018. It is precisely because they have failed to pass an annual budget that led to Congress passing a series of appropriations bills, like the Consolidate Appropriations Act of 2018, as “stop gap” measures to fund the huge apparatus of the federal government, because federal agencies cannot spend money unless funds are authorized and appropriated.

What is President Trump’s constitutional role in all this?

According to the National Priorities Project, “The Constitution does not, however, specify . . . a role for the president in managing the nation’s finances“.

Is President Trump constitutionally obliged to obey Congress’ Omnibus Spending Bill?

Yes and no.

Appropriations bills, like the Consolidated Appropriations Act of 2018, specify how much money will go to different government agencies and programs. There are two types of spending:

  1. Mandatory spending that the federal government must by law pay out, such as Social Security, Medicare and Medicaid. Being mandatory, this spending is authorized by Congress; it is not subject to appropriations.
  2. Discretionary spending is the part of the U.S. federal budget that Congress appropriates each year to fund spending that are not Social Security and Medicare/Medicaid, which means all the other federal agencies, such as DOD, DHS, Education, Energy, HUD, NASA, and the State Department.

Both Congress and the President must abide by the mandatory spending. It is the discretionary spending part of the Omnibus Spending Bill that President Trump’s enigmatic letter of March 23 addresses.

His letter says:

In accordance with section 7058(d) of division K of the Consolidated Appropriations Act, 2018 (H.R. 1625; the “Act”), I hereby designate as an emergency requirement all funding so designated by the Congress in the Act pursuant to section 251(b)(2)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985, for the accounts referenced in section 7058(d).

(1) Section 7058(d) of the Consolidated Appropriations Act of 2018 refers to “Repurposed Funds“.

(2) The Balanced Budget and Emergency Deficit Control Act of 1985, aka the Gramm-Rudman Act, was the first binding spending constraints on the federal budget, signed into law by President Ronald Reagan. The Act aimed to cut the federal budget deficit (which at the time, in dollar terms, was the largest in history) by providing for for automatic spending cuts (“sequestration”) to all departments and programs by an equal percentage, if the discretionary spending in Congress’ appropriation bills exceeds that year’s budget totals.

Alas, Gramm–Rudman failed to prevent large budget deficits. Balanced budgets did not actually emerge until the late 1990s when budget surpluses (not accounting for liabilities to the Social Security Trust Fund) emerged. However, the budgets quickly fell out of balance after 2000 and have run consistent and substantial deficits since then.

(3) Section 251(b)(2)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985 says:


(2) SEQUESTRATION [automatic spending cuts] REPORTS.—When OMB submits a sequestration report under section 254(e), (f), or (g) for a fiscal year, OMB shall calculate, and the sequestration report and subsequent budgets submitted by the President under section 1105(a) of title 31, United States Code, shall include adjustments to discretionary spending limits (and those limits as adjusted) for the fiscal year and each succeeding year, as follows:


In other words, in his March 23, 2018 letter to the respective leaders of the House and the Senate, President Trump is saying he intends to “repurpose” certain funds that Congress had appropriated as “discretionary spending,” towards “emergency appropriations, overseas contingency operations/global war on terrorism”.

What might those “emergency appropriations” and “global war on terrorism” be?

In his speech to the nation on March 23, announcing that he has signed the Omnibus Spending Bill, President Trump called the funding of the border wall and illegal migrants — and by extension, sanctuary cities and states — a matter of “national security“. His March 23 letter to Congress suggests he intends to “repurpose” or use the discretionary funds appropriated in the Omnibus Spending Bill to construct the border wall and combat illegal immigration, including sanctuary cities.

There is precedent of a president “repurposing” discretionary funds for some other purpose. He is none other than Barack Obama.

From a FoxNews report on July 21, 2009:

President Obama has irked close allies in Congress by declaring he has the right to ignore legislation on constitutional grounds after having criticized George W. Bush for doing the same.

Four senior House Democrats on Tuesday said they were “surprised” and “chagrined” by Obama’s declaration in June that he doesn’t have to comply with provisions in a war spending bill that puts conditions on aid provided to the World Bank and International Monetary Fund.

In a signing statement accompanying the $106 billion bill, Obama said he wouldn’t allow the legislation to interfere with his authority as president to conduct foreign policy and negotiate with other governments.

Earlier in his six-month-old administration, Obama issued a similar statement regarding provisions in a $410 billion omnibus spending bill….

“During the previous administration, all of us were critical of (Bush’s) assertion that he could pick and choose which aspects of congressional statutes he was required to enforce,” the Democrats wrote in their letter to Obama. “We were therefore chagrined to see you appear to express a similar attitude.”

[…] Obama issued his first signing statement after receiving a $410 billion omnibus spending bill. He said the bill would “unduly interfere” with his authority by directing him how to proceed, or not to, in negotiations and discussions with international organizations and foreign governments.

Lastly, there is also another way that President Trump can thwart the omnibus spending bill — by not spending some of the discretionary funds appropriated by Congress, in the interest of slashing the bloated budget.

Indeed, Politico had reported in August 2017:

Lawmakers and activists are preparing for the possibility that President Donald Trump’s administration, in its zeal to slash the federal budget, will take the rare step of deliberately not spending all the money Congress gives it — a move sure to trigger legal and political battles.

The concern is mainly focused on the State Department, where Secretary of State Rex Tillerson has drawn criticism for failing to spend $80 million allocated by Congress to fight Russian and terrorist propaganda . . . . Activists and congressional officials fear such practices could take hold at other U.S. departments and agencies under Trump.

So cheer up, my fellow Deplorables. Things are not as bleak as they appeared to be last Friday. For although he signed the monstrous omnibus spending bill, President Trump has every intention to use the bill to fulfill some of his campaign promises.

When he indeed “repurposes” the discretionary funds in the omnibus spending bill toward building the Wall, the proverbial sh*t will really hit the fan, and the Left’s heads will explode.

When that happens, President Donald John Trump will need our support even more.

Please keep him in your prayers.

H/t John Molloy, Kelleigh Nelson, MomOfIV, MAC, and Reddit.

Update (March 27, 2018):

And here’s the proof:

Trump wall tweet March 25, 2018Trump wall tweet March 25, 2018 (2)

“Build WALL through M” = “Build wall through the military”.

President Trump will use the U.S. Army Corps of Engineers to build the Wall.


Defense contractors: Russian bogeyman is great for our business

On January 17, 1961, in his farewell address as the 34th President of the United States, former General and WWII Supreme Allied Commander in Europe Dwight D. Eisenhower sounded this warning:

“Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But we can no longer risk emergency improvisation of national defense. We have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security alone more than the net income of all United States corporations.

Now this conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence—economic, political, even spiritual—is felt in every city, every Statehouse, every office of the Federal government. We recognize the imperative need for this development. Yet, we must not fail to comprehend its grave implications. Our toil, resources, and livelihood are all involved. So is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

The military–industrial complex is an informal alliance between a nation’s military and the arms industry which supplies it. Together, the complex operates as a vested interest that exerts a powerful influence on public policy.

The worst thing to happen to the military-industrial complex was the end of the Cold War when the Soviet Union imploded.

Have you wondered, as I have, why the Democrats insist on the Russian-Trump collusion story, why the FBI and Special Counsel Robert Mueller continue their witch-hunt, and why the Republicans can’t seem to put an end to the witch-hunt despite having a majority in both houses of Congress?

Here’s the answer.

Lee Fang writes for The Intercept on August 19, 2016:

The escalating anti-Russian rhetoric in the U.S. presidential campaign comes in the midst of a major push by military contractors to position Moscow as a potent enemy that must be countered with a drastic increase in military spending by NATO countries.

Weapon makers have told investors that they are relying on tensions with Russia to fuel new business in the wake of Russian’s annexation of Crimea and modest increases in its military budget.

In particular, the arms industry — both directly and through its arsenal of hired-gun, think-tank experts and lobbyists – is actively pressuring NATO member nations to hike defense spending in line with the NATO goal for member states to spend at least 2 percent of gross domestic product on defense.

Retired Army Gen. Richard Cody, a vice president at L-3 Communications, the seventh largest U.S. defense contractorexplained to shareholders in December that the industry was faced with a historic opportunity. Following the end of the Cold War, Cody said, peace had “pretty much broken out all over the world,” with Russia in decline and NATO nations celebrating. “The Wall came down,” he said, and “all defense budgets went south.”

Note: General Richard A. Cody, 67, was the 31st Vice Chief of the Staff of the U.S. Army (June 2004 to July 2008). He retired from the Army on in August 2008 and joined defense and aerospace contractor L3 Technologies as Senior Vice President of Washington Operations. Founded in 1997 and headquartered in Manhattan, L3 Technologies is one of the top ten U.S. government contractors.

Now, Cody argued, Russia “is resurgent” around the world, putting pressure on U.S. allies. “Nations that belong to NATO are supposed to spend 2 percent of their GDP on defense,” he said, according to a transcript of his remarks. “We know that uptick is coming and so we postured ourselves for it.

Speaking to investors at a conference hosted by Credit Suisse in June, Stuart Bradie, the chief executive of KBR, a military contractor, discussed “opportunities in Europe,” highlighting the increase in defense spending by NATO countries in response to “what’s happening with Russia and the Ukraine.”

The National Defense Industrial Association, a lobby group for the industry, has called on Congress to make it easier for U.S. contractors to sell arms abroad to allies in response to the threat from Russia. Recent articles in National Defense, NDIA’s magazine, discuss the need for NATO allies to boost maritime military spending, spending on Arctic systems, and missile defense, to counter Russia.

Many experts are unconvinced that Russia poses a direct military threat. The Soviet Union’s military once stood at over 4 million soldiers, but today Russia has less than 1 million. NATO’s combined military budget vastly outranks Russia’s — with the U.S. alone outspending Russia on its military by $609 billion to less than $85 billion.

And yet, the Aerospace Industries Association, a lobby group for Lockheed Martin, Textron, Raytheon, and other defense contractors, argued in February that the Pentagon is not spending enough to counter “Russian aggression on NATO’s doorstep.”

Think tanks with major funding from defense contractors, including the Lexington Institute and the Atlantic Council, have similarly demanded higher defense spending to counter Russia.

Note: Hadley is a member of the Council on Foreign Relations.

Stephen Hadley, the former National Security Advisor to President George W. Bush now serving on the board of Raytheon, a firm competing for major NATO military contracts, has argued forcefully for hiking defense budgets and providing lethal aid to Ukraine. Hadley said in a speech last summer that the U.S. must “raise the cost for what Russia is doing in Ukraine,” adding that “even President Putin is sensitive to body bags.”

The business press has noticed the development. The Washington Business Journal noted that “if anyone is benefiting from the unease between Russia and the rest of the world, it would have to be Bethesda-based Lockheed Martin Corp,” noting that the firm won a major contract from Poland, which is revamping its military in response to Russia. Roman Schweizer, an analyst for the defense industry with Guggenheim Securities, predicted last year that U.S. arms sales would continue to rise, particularly because “eastern NATO countries will increase procurements in the wake of continued Russian activity in Ukraine.”

At the Defence Security Exposition International, an arms dealer conference held in London last fall, contractors were quick to use Russia and rising defense budgets to hawk their products. “The tank threat is … much, much more closer to you today because Putin is doing something” in eastern Ukraine, a shoulder-fired-rocket touting representative from Saab told Defense One.

“Companies like Lockheed Martin and Boeing have pledged to increase the share of exports in their overall revenues, and they have been seeking major deals in East and Central Europe since the 1990s, when NATO expansion began,” said William Hartung, director of the Arms & Security Project at the Center for International Policy. Hartung noted that as some nations ramp up spending, U.S. firms will be “knocking at the door, looking to sell everything from fighter planes to missile defense systems.”

“Russian saber-rattling has additional benefits for weapons makers because it has become a standard part of the argument for higher Pentagon spending — even though the Pentagon already has more than enough money to address any actual threat to the United States,” he said.

The Bipartisan Budget Act of 2018, aka the much-touted GOP budget deal, has no funding to construct the US-Mexico wall, but increases defense discretionary funding cap by $80 billion in FY2018 and $85 billion in FY 2019, as well as an additional $160 billion in uncapped funding for overseas military and State Department operations. In fact, the GOP budget deal increases military funding even more than than the already large sums that President Trump had requested in his 2018 budget proposal.

Altogether, the budget deal increases federal spending by more than $500 billion, further inflating, instead of reducing, America’s national debt — which now stands at $20.76 TRILLION.

So much for the Republican Party being a party of fiscal conservatism and smaller government.


Trump’s Wall is stymied by GOP budget deal

In July 2017, the House of Representatives approved President Trump’s request for $1.6 billion to start building the US-Mexico border wall. Construction was expected to in September in San Diego. Instead, what actually began in September was construction of eight wall prototypes.

But HR 1892: the Bipartisan Budget Act of 2018, which was signed into law on February 9, 2018 by President Trump, not only contains no funding to build the wall, it is fiscally irresponsible.

On May 18, 2017, the GOP-majority (238 R, 193 D) House of Representatives had passed HR 1892, with money for the wall, by a vote of 411 – 1. On February 6, 2018, the GOP-majority (51 R, 47 D, 2 I) Senate passed the amended HR 1892 as SA 1930 — with no funding for the wall — by a vote of  71 – 28. ( Clearly, the problem lies in the Senate.

The lack of funding for the Wall is not the only thing wrong with the Bipartisan Budget Act of 2018. In the words of conservative Congressman Tom McClintock (R-CA), who voted no on HR 1892:

“This measure abandons any pretense of fiscal responsibility and increases federal spending caps by nearly $300 billion ($2,400 per household) over the next two years. It sets up a structure that will allow Congress to bypass its own budget rules and extends a laundry list of subsidies and special-interest tax breaks. It also suspends the debt limit for a year, for obvious reasons. It has a few silver linings: it repeals IPAB (Obamacare’s rationing board), gives the Pentagon predictable funding for the next two years and provides disaster relief.

Congress approved a massive tax reduction with my support in December. It is essential for economic growth and is already having a dramatic positive effect on wages and business expansion. However, having cut taxes, Congress has a keen responsibility to restrain spending growth – a responsibility it repudiates with this measure.

Taxes and debt are both driven by spending. Indeed, they are the same thing. Once we have spent a dollar, we’ve already decided to tax it: the only question is whether we tax it now, or borrow it now and tax it in the future. But borrowing also has serious implications for the present: government borrows from the same capital pool that would otherwise be available to loan for consumer and home purchases and business expansion. A lack of fiscal restraint now undermines the economic growth we have achieved with the tax cuts.

Interest rates are already rising . . . .  A one percent increase in interest rates would add $200 billion to our ANNUAL borrowing costs, dwarfing the few cost-savings reforms we’ve managed to enact and threatening a debt spiral that would end in a sovereign debt crisis.”

Writing in The Federalist, Robert Tracinski sarcastically concludes:

“President Trump signed a deal to avert a government shutdown for another two years by basically giving the Democrats all the spending they wanted.”

Meanwhile, construction on the Wall is limited to:

(1) Replacing a section of border wall in California, the first wall contract awarded in the Trump administration outside of eight prototypes that were built last year in San Diego.

Work began on February 21, 2018. The section that is being replaced is a little more than two miles in downtown Calexico. A barrier built in the 1990s from recycled metal scraps and landing mat will be torn down for bollard-style posts that are 30 feet high, significantly taller than existing walls. (San Diego Union Tribune)

(2) The Trump administration also has issued waivers to build in San Diego and Santa Teresa, N.M.

Note: As explained by USA Today‘s VC Star, “waivers” refer to a law passed by Congress in 2005 which gave Homeland Security broad authority to waive “all legal requirements” to build border barriers, after years of ultimately unsuccessful court challenges by environmental groups against border wall construction on grounds that it violated environmental laws. George W. Bush’s administration issued five waivers, which allowed the government to build hundreds of miles of new U.S.-Mexico border fencing, thereby extending the wall to nearly one-third of the border, totaling 650 miles.

The Center for Biological Diversity had sued the Trump administration, arguing that the administration’s waiver to replace a stretch (15 miles) of wall in San Diego does not apply to replacing barriers.

Homeland Security said the San Diego waiver falls within the scope of the 2005 law and that the area is a high priority for new security measures including construction of border barriers and roads. Indeed, the Border Patrol’s San Diego sector — which is only 8% of the total U.S. border with Mexico — logged nearly 32,000 arrests last year and seized more than 4 tons of marijuana and more than a half-ton of cocaine.

Meanwhile, the AP reports (via Student News Daily) on January 19, 2018, that a U.S. official with direct knowledge told the AP that the eight wall prototypes in San Diego had withstood attempts by tactical teams to breach them, indicating if and when the Wall is constructed, it should stop border crossers. The official spoke on condition of anonymity because the information is not authorized for public release.

Military special forces based in Florida and U.S. Customs and Border Protection special units spent three weeks trying to breach and scale the eight prototypes, using jackhammers, saws, torches and other tools and climbing devices. The see-through steel barriers topped by concrete were noted to be the best overall design.

Ronald Vitiello, acting deputy commissioner of Customs and Border Protection, said after visiting the prototypes in October that he was struck most by the 30-foot heights, which are significantly higher than the existing barriers. The highly trained testers scaled 16 to 20 feet unassisted but needed help after that. Testers also expressed safety concerns about getting down from 30 feet. Only once did a tester manage to land a hook on top of the wall without help. Tubes atop some models repelled climbing devices but wouldn’t work in more mountainous areas because the terrain is too jagged.

The Trump administration had insisted wall funding be part of any immigration deal. The administration has asked for $1.6 billion this year to build or replace 74 miles of barriers in Texas’ Rio Grande Valley and San Diego, and plans to request another $1.6 billion next year.

A proposal by Customs and Border Protection calls for spending $18 billion over 10 years to extend barriers to cover nearly half the border, though it is unclear whether President Trump supports that plan. The agency proposes 316 miles of additional barrier by September 2027, bringing total coverage to 970 miles. It also seeks 407 miles of replacement or secondary fencing.

Mexico has repeatedly rejected President Trump’s demand that it pay for the wall.

See also:


The tolerant left: Bette Midler suggests Rand Paul should be attacked for his vote on the spending bill


Remember folks, #LoveTrumpsHate!

From Fox News: Bette Midler shocked the Twitterverse on Thursday with a post suggesting Sen. Rand Paul, R-Ky., should be physically attacked for his stance on the spending budget in the Senate.

Midler tweeted Thursday evening, “Where’s Rand Paul’s neighbor when we need him?”

Midler’s tweet was referencing a violent November incident during which Paul was assaulted by his neighbor and suffered several injuries.

Rene A. Boucher, 58, admitted to attacking an unsuspecting Paul in his yard and is facing 21 months in prison. Paul suffered bruises to his lungs and broken ribs, and contracted pneumonia following the attack.

One of Paul’s aides, Sergio Gor, called out Midler for a tweet that crossed the line.  “This is disgusting @BetteMidler calling for violence. She should be ashamed,” Gor tweeted.

A rep for Midler did not return Fox News’ request for comment.

The Hollywood star’s tweet came after the former 2016 GOP presidential contender stalled his chamber’s attempt to quickly pass legislation keeping federal agencies open. The libertarian said “I object” when Senate leaders tried speeding a vote on the measure.

Paul complained the new budget accord would drive up federal deficits.

“I ran for office because I was critical of President Obama’s trillion-dollar deficits,” he told the chamber’s leaders. “Now we have Republicans hand-in-hand with Democrats offering us trillion-dollar deficits.”

He said he could not “look the other way because my party is now complicit in the deficits.”

Paul said he was asking for a 15-minute debate and then a vote on his amendment, which was certain to lose. He said the 652-page measure was “printed at midnight” and was a bill that “no one has read.”

Paul’s fellow Kentuckian, Senate Majority Leader Mitch McConnell, and Senate Minority Leader Chuck Schumer, D-N.Y., had no intention of caving in, knowing that would inevitably spark demands for amendment votes by other senators. Instead, they offered him a procedural vote, which Paul declined.

The move led the government to temporarily shut down from 1 a.m. on Friday until the Senate passed the deal just before 2 a.m.. However, the government had been officially shuttered for nearly two hours.

The House rushed to approve its version, wrapping up the vote just after 5:30 a.m. President Donald Trump signed the bill three hours later, reopening the government.


Obamaphone massive fraud & abuse: GAO finds 36% with Obamaphones are not eligible

The Federal Communications Commission (FCC) has a welfare program called Lifeline, popularly known as Obamaphones, which provides discounts to eligible low-income households for home or wireless telephone and, as of December 2016, broadband service. Administered by the not-for-profit Universal Service Administrative Company (USAC), Lifeline disbursed about $1.5 billion in subsidies to 12.3 million households in 2016.

The subsidies are paid for by all of us via a fee charged on our telephone bills. 

While the Lifeline program predates the Obama administration, having been created in the 1980s, it was vastly expanded under Obama.

Now, an investigation by the Government Accountability Office (GAO) found that as many as 36% — more than one in three — of those supposed low-income households given Obamaphones are actually of dubious qualification.

On June 29, 2017, the GAO released an 89-page report on its findings, titled Telecommunications: Additional Action Needed to Address Significant Risks in FCC’s Lifeline Program. Here are some highlights:

(1) To begin, although the GAO recommended that the FCC conduct an evaluation of its Lifeline program more than two years ago in March 2015, the FCC has not done that. In a July 2016 Order, the FCC finally announced its plan for an independent third party to evaluate Lifeline’s design, function, and administration by December 2020.

(2) The Lifeline welfare program depends on a flawed system of over 2,000 phone companies, called Eligible Telecommunication Carriers, to (a) provide the discounts for the phone and broadband services, which Lifeline then reimburses; and (b) verify subscriber eligibility. But the GAO notes that “This complex internal control environment is susceptible to risk of fraud, waste, and abuse as companies may have financial incentives to enroll as many customers as possible.” The FCC says it will create a third-party national eligibility verifier by 2019 to determine subscriber eligibility.

(3) Given the Eligible Telecommunications Carriers’ self-interested, financial incentives to enroll as many customers as possible, it should not be surprising that the GAO investigation discovered that as many as 1.2 million — 36% or more than 1 in 3 — Lifeline recipients are not qualified for the Obamaphones. In the words of the GAO report:

“Based on its matching of subscriber to benefit data, GAO was unable to confirm to whether about 1.2 million individuals of the 3.5 million it reviewed, or 36 percent, participated in a qualifying benefit program, such as Medicaid, as stated on their Lifeline enrollment application.

(4) Although all Americans with phone service are paying for the Lifeline program, strangely the Lifeline funds of more than $9 billion in net assets (as of September 2016) are in a private, non-government (i.e., outside of the Department of Treasury) bank account called Universal Service Fund (USF). The GAO points out at least two problems with this arrangement:

  • Federal government funds outside the Treasury do not have the same rigorous management practices and regulatory safeguards as other federal programs.
  • If the Lifeline funds are in the Treasury, some of the $9+billion in net assets could be used to offset federal debts, not to mention help reduce the crushing $20 trillion national debt.
  • Although the GAO had recommended in 2005 to the FCC to move Lifeline’s Universal Service Fund to the Department of Treasury, it was only this March 2017, some 12 years later, that the FCC finally developed a preliminary plan to move the fund to the Treasury. The GAO report warns that “Until FCC finalizes and implements its plan and actually moves the USF funds, the risks that FCC identified will persist and the benefits of having the funds in the Treasury will not be realized.”


Shocking: 24% Americans don’t have even one dollar in emergency savings

I’ve posted about Americans’ dismal state of finances before, but this news shocked even me.

Today, released the results of its June Financial Security Index survey that 24% of Americans — 1 in every 4 Americans — don’t have even a single dollar saved for an emergency.

According to the U.S. Census Bureau, the population of the United States is 325.277 million. 24% of Americans = 78.07 million.

What will these 78 million Americans, who don’t have even $1 in savings, do when their welfare and Social Security checks stop?

Some more Bankrate survey findings:

  • As many as 27% of Baby Boomers — those born between 1946 and 1964 who are 53 to 71 years olddon’t have even a dollar in savings.
  • Only 31% of Americans — fewer than 1 in every 3 Americans — have what’s considered an adequate savings cushion: enough to cover 6 months’ worth of expenses or more.

Some more financial info. from Catey Hill for Money-ish, June 20, 2017:

  • Americans have misplaced money priorities, valuing vacations more than saving for retirement: A study released this week by COUNTRY Financial found that more Americans (36%) are concerned about affording that vacation than having adequate retirement savings (32%), which would explain why more than 50% of Americans will be broke when we retire, according to a survey from
  • Americans have more than $1 trillion in credit card debt: According to data released this year from the Federal Reserve, Americans owe $1.0004 trillion on their credit cards, up 6.2% from a year ago — the highest amount owed since January 2009. But that’s just credit card debt. Americans also owe more than $1 trillion in car debt and student loans.

See also:

H/t Will Shanley