Category Archives: Public Policy and Governance

As sure as the sun comes up in the morning, Indiana citizens can be counted on to grouse about taxes. While the complaints usually focus on how much we pay (no matter what the rate, it’s too much), I have a theory that it isn’t the absolute amount that gripes us. It’s whether others are paying their fair share, and above all, it’s what our taxes are being used for.

 

I may be idiosyncratic, but I’m very willing to pay taxes—my “civic dues”—for services I think government ought to be providing: police, fire and environmental protection, streets and sewers and parks. Individual lists may differ. It all comes down to what we think government’s job is.

 

Which brings me to Mitch Roob and the good folks over at Family and Children’s Services.

 

FSSA has been sued by the Freedom From Religion Foundation for paying a “Pastor” (the quotes are because according to the Star, the gentleman in question appears to have simply declared himself to be such—he lacks any credentials other than his own say-so) to provide “spiritual counseling” to the employees of that government agency. According to the Complaint, the Pastor was hired—for $60,000 a year!—to “encourage a faithful environment in the workplace.”

 

Why in the world is Indiana spending our tax dollars to provide “a faithful environment” for state employees? Put aside, for the moment, that this practice is likely a violation of the First Amendment’s Establishment Clause. Put aside the question of how a very Christian pastor will address the “spiritual needs” of Jewish, Muslim, Wiccan or freethinking employees. Even put aside the fact that this particular Pastor holds two other jobs and rarely shows up. Looking at it solely from the standpoint of what a government agency like FSSA is supposed to do, it is inexplicable.

 

Caseworkers at FSSA are among the most poorly paid and overworked members of the state workforce, as numerous studies have confirmed. Their clients are Indiana’s poorest and most disadvantaged citizens. Those clients have seen dramatic cutbacks in services over the past several years. The poor pay of caseworkers and pitiful level of benefits are routinely justified by a (genuine) lack of adequate funding.

 

So we violate the U.S. Constitution to pay a part-time “chaplain” nearly three times what we pay a caseworker, so that he can provide those caseworkers with a “faithful environment”?  

 

I may be a voice in the wilderness here, but I am quite willing to pay taxes that are used to help Indiana’s poor children and disabled adults, or to provide assistance to struggling Indiana families. I am equally willing to pay taxes to provide state employees who are doing proper government work with a living wage and manageable workloads. But if those employees want “spiritual counseling,” it is easily available from their own Pastors, Rabbis or Imans, at no cost to the taxpayers of Indiana.

 

If this is how my tax money is being spent, then yes, my taxes are too high.

 

    

 

 

 

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Partisan apologists for the Bush administration—joined by cynics of all political persuasions—shrug off recent disclosures about the firing of eight U.S. Attorneys. Just politics as usual, they yawn. Those discharged served “at the pleasure of the President,” and can be fired for no reason at all, so what’s the big deal?

 

Bud Cummins, one of the eight fired Prosecutors, recently answered that question. In an article in Salon, he acknowledged, “The president had an absolute right to fire us. We served at his pleasure.” But Cummins went on to explain the damage that is done when dismissal is based upon the prosecutor’s unwillingness to break the rules to “help” favored politicians.

 

“Put simply, the Department of Justice lives on credibility. When a federal prosecutor sends FBI agents to your brother’s house with an arrest warrant, demonstrating an intention to take away years of his liberty, separate him from his family, and take away his property, you and the public at large must have absolute confidence that the sole reason for those actions is that there was substantial evidence to suggest that your brother intentionally committed a federal crime. Everyone must have confidence that the prosecutor exercised his or her vast discretion in a neutral and nonpartisan pursuit of the facts and the law.”

 

We might draw an analogy to judicial selection. Everyone understands that the party in power can appoint federal judges whose judicial philosophy it favors. Would we then shrug our shoulders and say “politics as usual” if judicial appointments went to people who had promised in advance to rule on cases the way the administration wanted? Of course not. Choosing someone with a compatible judicial philosophy is one thing;  choosing someone who is corrupt is another.

 

Joseph D. Rich served in the Justice Department for 35 years, and was chief of the voting rights section from 1999 to 2005. As he recently wrote in the LA Times, he worked under Attorneys General with very different political philosophies, from “John Mitchell to Ed Meese to Janet Reno. Regardless of the administration, the political appointees had respect for the experience and judgment of longtime civil servants.” Not so the Bush Administration, which hired and fired solely on the basis of political loyalty.

 

“I personally was ordered to change performance evaluations of several attorneys under my supervision. I was told to include critical comments about those whose recommendations ran counter to the political will of the administration and to improve evaluations of those who were politically favored.”

 

The evidence we’ve seen so far suggests that prosecutors were dismissed because they refused to play politics—to bring bogus charges against Democrats, or stop investigating high-ranking Republicans. That’s bad enough—but what does that suggest about the U.S. Attorneys who were not fired? Their reputations have also been sullied, in most cases unfairly, because it is impossible not to wonder whether they kept their positions by “playing ball.”

 

When the White House trades justice for power, who can you trust?

 

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Over the past few years, conservative members of Congress have devoted considerable energy to efforts to repeal the Estate Tax. An expensive PR campaign has hammered at the awful unfairness of the “Death Tax.” People unfamiliar with the tax and its application have been led to believe that heirs are routinely having to sell the family farm to pay confiscatory taxes. They’d probably be surprised to learn that 99 percent of estates pay no estate tax at all. 

 

Among the 1% of estates that do pay these taxes, the "effective" tax rate — that is, the actual percentage of the estate that is paid in taxes — averaged about 20 percent in 2005 (the latest year for which IRS data are available), far below the statutory rate of 48 percent. 

 

Although few families pay, the Center on Budget and Policy Priorities calculates that repeal would reduce tax revenues by a trillion dollars in the first ten years. That’s because the 1% of Americans who do pay the tax are very, very wealthy.

 

Meanwhile, as policymakers have argued whether the Estate tax imposes an unfair burden on our wealthiest citizens, they have been shockingly unmoved by a far more confiscatory and widespread “death tax”—the requirement that elderly citizens entering nursing homes impoverish themselves before Medicaid will pay for their care.

 

Millions of older Americans who have worked and paid taxes their whole lives cannot afford the ever-escalating costs of long-term care. Very few insurance policies cover these costs, and those that do are far too expensive for most middle-class retirees.

 

Before these vulnerable Americans can receive the services they need, federal law requires that they “spend down” their assets. That is, they must apply virtually everything they have to payment of the initial nursing home charges. Once they no longer have assets, medicaid will pick up the costs. There are few exceptions: prepaid funeral expenses, or a home that remains occupied by a spouse. Over six million elderly Americans are currently receiving Medicaid. All of those seniors have thus paid the “tax”—i.e. the spend-down. Its “effective rate” is 100%. 

 

My mother spent her last years in a nursing home. Many of the residents had worked hard their entire lives. Like the wealthy, most had hoped to pass their possessions and savings on to their children and grandchildren. Unlike the wealthy, they couldn’t afford estate planners and lawyers to help them shelter their assets and minimize the impact of federal rules. Their savings were gone, and all too often their pride and independence had vanished with the money.

 

Some wealthy Americans believe this state of affairs is wrong. They include Warren  Buffett, George Soros and William Gates, Sr. They have urged Congress to reject President Bush’s push to repeal estate taxes, arguing that "repealing the estate tax would enrich the heirs of America‘s millionaires and billionaires while hurting families who struggle to make ends meet."

 

In other words, agonize less over burdening George Soros, and worry more about wiping out Mr. Average Citizen.

   

 

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It isn’t only FEMA. Everywhere you look, Administration officials are doing “a heck of a job.”

 

A recent audit of the Justice Department, conducted by the department’s own Inspector General, concluded that only two of Justice’s twenty-six issued reports of terrorism prosecutions have been accurate. The department has routinely inflated the number of terrorists being charged by including immigration, marriage fraud and drug trafficking cases entirely unrelated to terrorist activities.

 

Maybe this was just an honest series of reporting errors, rather than an effort to pad the statistics for political purposes, but either way, it is just one more disquieting piece of evidence that—to put it mildly—all is not well at Alberto Gonzales’ Justice Department.

 

While it’s no secret that Constitutional scholars have been overwhelmingly critical of Gonzales’ embrace of the so-called “unitary executive” theory (which places the President above the law in many situations), his interpretation of Presidential authority can be categorized as an honest difference in perspective. Other problems cannot be so easily dismissed.

 

There is, for example, the case of Sue Ellen Woolridge, until last month the chief of the department’s environmental enforcement division. Woolridge bought a million dollar vacation home with one Don Duncan, the top lobbyist for ConocoPhillips. Nine months later, on behalf of the Justice Department, she signed a settlement agreement with ConocoPhillips that allowed the oil company to delay installing pollution-control equipment and to delay paying fines. Making this deal smell even worse was the identity of the other co-owner of this beach house: Ms. Woolridge’s “boyfriend,” Stephen Griles, a former lobbyist for the oil industry who had been appointed to an environmental enforcement position at the Department of the Interior, and who is currently under investigation in connection with the shenanigans of Jack Abramoff.

 

Can we spell “appearance of impropriety?”

 

The Congressional investigation into Woolridge’s activities has now been joined by several inquiries into the firings of seven U.S. Attorneys. All were Republicans appointed by Bush, and all but one had received positive job reviews. The Washington Post reports that “most of the prosecutors were overseeing significant public-corruption investigations at the time they were asked to leave.” One of them—Carol Lam, of San Diego—had obtained a guilty plea from Randy “Duke” Cunningham, and had just indicted others in connection with that case, among them a high ranking CIA official.

 

Gonzales has thus far ignored communications from Congressional committees requesting an explanation of these firings.

 

John Dean, former White House Counsel for Richard Nixon, recently summed up the situation at the Justice Department. Calling for Gonzales to resign, Dean’s criticism was trenchant.  “In the history of U.S. Attorney Generals, Alberto Gonzales is constantly reaching for new lows. So dubious is his testimony that he is not afforded the courtesy given most cabinet officers when appearing on Capital Hill: Congress insists he testify under oath. Even under oath, Gonzales’ purported understanding of the Constitution is historically and legally inaccurate, far beyond the bounds of partisan interpretation.”

 

Heck of a job.

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Governor Daniels has proposed a 25-cent cigarette tax to fund health insurance for at least some of Indiana’s children who are currently uncovered. It’s another proposed “patch” for our costly, byzantine and inefficient medical system, but it would be something. Real reform would never pass.

 

Americans don’t want “socialized” medicine—but of course, that is what we have now. Only we have socialized our system through insurance companies rather than through government, and have thereby managed to get the worst of both worlds—highly regulated care that is over twice as expensive as the next most expensive country’s.

 

Forty-six million Americans are currently uninsured; another forty million will experience lapses of a month or more in any given year. Half of all personal bankruptcies—costing businesses millions—are due to medical bills. Because we make medical insurance an employer responsibility, the cost of American goods is inflated—over two thousand dollars of the cost of each General Motors car covers health care.      

 

What if we had a “single payer” system like several in Europe—a system that covered everyone, was funded through taxes and administered by existing insurance companies?

 

There would be an immediate payoff in economic growth. Health insurance (for companies that can still afford it) is the single largest “drag” on new job creation. Aside from the cost of the insurance itself, administering benefits consumes untold hours of HR time. Smaller companies—the real engines of economic growth—are increasingly unable to offer health benefits, putting them at a competitive disadvantage for good employees. If we de-coupled health insurance from employment, companies would be able to add workers and increase wages.

 

Individuals would save money, too, and not just on uninsured medical expenses. Automobile and homeowners insurance premiums would decline, because underwriting would no longer need to take the costs of medical care into account.

 

But what about the price tag? Most health economists believe the additional taxes needed would be minimal, and not just because there would be economies of scale. Right now, between programs like Medicaid and Medicare and coverage for public employees—police and fire personnel, public school teachers, and millions of municipal, state and federal employees—government is already paying for the health care of 45% of the American population. Just  standardizing that coverage would save billions.

 

Medical costs in the U.S. include paychecks for thousands of employees in doctors’ offices and hospitals whose only job is to comply with conflicting insurer regulations, submit or reject claims and collect—or argue about—amounts due. (Thirty percent of total U.S. healthcare costs are administrative; meanwhile, much-maligned Medicare keeps its overhead under 3%.) Eliminating insurance companies’ marketing costs and negotiating with drug manufacturers and other medical vendors for lower prices would generate huge savings. Costs also decline when people  get timely care, rather than costly emergency room attention when they can no longer ignore the problem.

 

A cigarette tax is like giving aspirin to someone whose appendix has ruptured. There’s momentary pain relief, but he still needs an operation.

 

 

 

 

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