First, let me offer congratulations to the 165,000 families whose personal unemployment rate went from 100% to 0%, always a joyous event, both in terms of economics, as well as self-worth and esteem, during the last month!

Unfortunately, it is widely estimated that the minimum average monthly number of new jobs needed, to maintain both work force participation levels and reduce underemployment and unemployment numbers (U6 is currently in excess of 22,000,000 Americans, and the civilian work force increases by more than 200,000 a month) is 250,000!  And the percentage of those employed to our total population has now shrunk to a  low of 56.8%.  This is a different number than the civilian work force participation rate which is now at 63.3% (the ratio of those in the work force to those that are employed and unemployed and still looking for work.)  Of the 165,000 added 176,000 were in the private sector.  This is also a cause for celebration, as it means government employment shrunk by 11,000!

Let’s look closer at one segment of the employment numbers, that of the food and beverage (sometimes denominated as the leisure and hospitality) industry.  We were told that included within the 165,000 new jobs were 39,000 jobs in this sector – that is clearly a good thing.  We were also told that included within the 165,000 new jobs were 278,000 involuntary part-time and 163,000 voluntary part-time or temporary jobs, for a total of 441,000 new part-time jobs, which in turn means that the reciprocal or 276,000 FULL-TIME JOBS WERE LOST – CLEARLY NOT A GOOD THING.  Part-time is defined as all jobs less than 32 hours per week. During the past year involuntary part-time employment increased by 222,000 jobs.  Another factor to consider is that the average work hours continued to fall and is now down to 34.4 hours.

If we put all of this information together with the number of total jobs existent in the food and beverage sector we can easily make an explanatory supposition that this increase is related causally to Obamacare.  We know that employers in general are acting to arrange their affairs to comply, or avoid the necessity to comply, with the mandatory coverage and penalty provisions.  This would naturally lead to reduced hours, less than 30 per week and additional part time employee head-counts, at the ratio of 3 to 1.  In other words if an employer has 21 employees capable of part time scheduling and had previously had them working 40 hours, the employer could now provide the same hourly coverage with 28 employees working 30 hours per week.

There are 14,000,000 employees in the food and beverage sector of the labor market. If only 50% of those jobs were capable of part-time scheduling and only 50% of the employers capable of scheduling those employees were to make this calculation and take the above action, this would result in the “manufacture” of 1,112,000 additional “jobs” (all of them part-time) and the loss of 3,500,000 fulltime jobs, having the result of changing the “Job Report Top Line Unemployment Rate from 7.6% to 6.8% without doing our economy any good at all!

Perhaps that is the real intention of Obamacare: if we can just (a) encourage more employers to make their employees part-time and (b) encourage more former employees to leave the work force we can drive the Unemployment Rate down and at least claim to have a fully recovered economy, unless of course you really care about more than just having fun with numbers!

Ronald C. Lazof is the Managing Director of Prism Advisors LLC.

The Swine Line is the official blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). CAGW is a 501(c)(3) nonprofit, nonpartisan organization that strives through investigative research and public education to eliminate waste, fraud, abuse, and mismanagement in government.

CCAGW is the 501(c)(4) lobbying affiliate of CAGW.The comments, links, and views expressed herein do not necessarily reflect those of CAGW or CCAGW. While CAGW/CCAGW assumes no responsibility for comments posted by outside individuals, CAGW/CCAGW reserves the right to delete or edit any comment found to be offensive or inappropriate.

The FedRAMP program is suppose to streamline security certifications of cloud service providers to the federal government.  GSA calls the FedRAMP process a “do once, use many times” framework for cloud security certification, with the expectation that the process will reduce the amount of time spent on individual risk assessments by various agencies.  As reported in a previous blog post, the FedRAMP authorization process continues to move slowly.  GSA had set a goal of certifying the first three vendors by the end of 2012.  It is now mid-May 2013, and the third vendor has only just received authorization.  GSA certified Autonomic Resources in December 2012 and CGI in February 2013.  There remain over 80 applications in the queue waiting to be processed.

At a May 14, 2013 House Oversight and Government Reform Government Operations Subcommittee hearing, concerns were raised over the lengthy process for FedRAMP’s certification process.  However, witnesses commented that while the time to process the applications is long, FedRAMP is breaking new ground, providing a new process for ensuring security in the cloud.  By June 2014, all cloud services suppliers will be required to prove they meet the standard set of risk controls as defined by FedRAMP.

Even with the FedRAMP certification, some federal agencies will seek additional security information from cloud vendors before certifying them for their particular needs.  As pointed out in a January 16, 2013 article by Doug Miller of Milltech Consulting, it is important to understand that FedRAMP P-ATOs only address low to moderate risk levels.

While most federal agencies will be able to use FedRAMP’s provisional authority to operate as a baseline for their own security certification processes, some will still need to perform additional tests to address any high risk level requirements.

Reuters reports the non-profit “Enroll America” seems to be the prime beneficiary of these funds, at least so far.  The group was founded by principals from the group “Families USA,” a big supporter of Obamacare.  It is led by Anne Filipic, who…drum roll please…worked in the Obama White House on public engagement projects and Chris Wyant who ran the president’s eastern Ohio field office.  (Hmmm, I wonder how quickly they got their 501(c)3 non-profit status?)

Reuter’s reports that only the Robert Woods Johnson Foundation has given a grant.  Also solicited was H. & R. Block, the tax preparation company, but they have said they have made no commitment to provide financial assistance to “Enroll America.”

However, prior news reports indicate that insurance companies, and perhaps other health industries, were also approached by Secretary Sebelius.  Since these entities are regulated by HHS, such solicitations would be improper, if not outright illegal.

Congress has gotten into the act and is now investigating the episode.  The Energy and Commerce Committee has sent a letter to HHS and several companies expressing concern that Secretary Sebelius has asked for donations from a regulated industry and has demanded a list of individuals, companies, and organizations that received the fundraising pitch.  The committee also wants to know, “a list of HHS employees that participated [in the effort], a summary of the communications and information relayed, and detailed information on the funding sources and amount spent/allocated to implement the law.”  You can click here and here to review the letters sent by the committee.

The peeling back of the onion begins yet again on another administration scandal.

CCAGW, along with ten other taxpayer watchdog and consumer groups, distributed a nice primer on the “Terrible Twelve” items currently contained in the behemoth that should be of serious concern:

“Washington’s Farm Policy is a nearly trillion dollar tangle of agriculture subsidies, welfare payments and environmental patronage.  There is tremendous need for reform.  Current subsidy programs are rooted in the 1930s, when prices for crops and livestock bottomed out and farm families were desperate for income.  Agriculture today could not be more different.  Farmers are pulling in record-high levels of income and carrying record-low levels of debt.  Technology has eliminated many of the risks that once plagued farming, and the profitability of crops that go without subsidies demonstrates independent agriculture is viable in the 21st Century.  There is no way to justify continuing to give tens of billions of dollars to the farm industry.”

1. Direct Payments.  Taxpayers are lavishing billions of dollars on successful farm enterprises whether or not the farm is actually growing the crops for which they are receiving the subsidies or growing any crop at all.

2. Federal Crop Insurance.  In 2012 taxpayers spent more than $14 billion subsidizing agriculture businesses buying crop insurance (and thus subsidizing insurance companies) for everything from almonds to oysters.

3. Shallow Loss Programs.  A new open-ended income program will put taxpayers on the hook for guaranteeing record prices.  This shallow loss coverage would cost taxpayers billions of dollars and potentially violate World Trade Organization rules.

4. USDA Trade Promotion Programs. Taxpayers spend some $200 million annually to support advertising campaigns that benefit large corporate enterprises and agricultural special interests.

5. Sugar Program. A small number of sugar producers receive enormous benefits, while the costs are spread across the U.S. economy, harming consumers, taxpayers, and the sweetener-using industries.

6. Dairy Market Stabilization Plan (DMSP).  The DMSP would impose government controls and regulations on the nation’s milk supply, penalize farmers for exceeding government milk production “quotas,” artificially inflate the price of dairy products for families and drive the cost of federal food programs higher.

7. Target Prices. Government-set price targets—about 40% higher than the previous farm bill and in many cases higher than record levels seen between 2005 and 2010—would expose taxpayers to billions in payments if crop prices dip slightly.

8. Rural Broadband. The Rural Utilities Service Broadband Loan Program is a classic example of waste and market distortion. In addition to the cost, in many areas, the practice of guaranteeing loans serves to undercut existing private-sector investment.

9. Mandatory Assessments. Mandatory assessments on farmers to promote commodities cost consumers and skirt constitutional provisions that only Congress has the power to tax. The program also violates basic principles of free speech, forcing some producers to pay to communicate messages against their will.

10. Cotton Program. Federal subsidies for domestic cotton are so high, they violate international trade rules. To keep Brazil from enacting retaliatory tariffs which would hurt American consumers, taxpayers send a $147.3 million check to the Brazilian Cotton Institute every year. Contact: James Valvo jvalvo at afphq.org

11. Ethanol. The Feedstock Flexibility Program is the definition of cronyism. With taxpayer dollars, the federal government buys up subsidized surplus sugar and sells it at a loss to ethanol makers.

12. Biomass. Since 2008, the Biomass Crop Assistance Program (BCAP) has proven to be a failure. Even though this wasteful, market-distorting program is replete with loopholes and is not currently funded, it would be revived by the draft farm bill.”

On Direct Payments, the GAO has issued several scathing reports on the program, but here is the gist of their findings from a July 3, 2012 report :

“From 2003 through 2011, the U.S. Department of Agriculture (USDA) made more than $46 billion in direct payments to farmers and other producers. These producers planted varying percentages of acres that qualified for payments based on their historical planting yields and designated payment rates (qualifying acres).

“Cumulatively, USDA paid $10.6 billion—almost one-fourth of total direct payments made from 2003 through 2011—to producers who did not, in a given year, grow the crop associated with their qualifying acres, which they are allowed to do. About 2,300 farms (0.15 percent of farms receiving direct payments) reported all their land as “fallow,” and producers did not plant any crops on this land for each year for the last 5 years, from 2007 through 2011; in 2011, these producers received almost $3 million in direct payments.”

The Congressional Budget Office is now scoring Obamacare at a cost of $1.8 trillion over ten years.  But let’s go back to yesteryear when Americans were promised by the president and Congress that Obamacare would cost less than $1 trillion over ten years.  President Obama said in a joint session before Congress in 2009 that his health plan “will cost around $900 billion over 10 years.”

Furthermore, to bend down the healthcare cost curve, officials in the White House and members of Congress met and negotiated with the healthcare industry several times and extracted billions of dollars to pay for Obamacare.  And how much is the industry already paying?

At minimum, the pharmaceutical industry will pay $26 billion and hospitals will pay $58.8 billion in just new fees over ten years.  The medical device industry will pay a 2.3% excise tax on total sales each year, which is estimated to cost the industry $30 billion over ten years.  Of course, the industry will pay much more due to a variety of other provisions in the healthcare law, in lost R&D opportunities, and jobs.

In February, the Obama Administration announced it was closing down to new applicants the high-risk pool that was created under the healthcare law because there was not enough funding.  Started in 2010, the high-risk pool was suppose to last until 2014 when Obamacare was up and running.  Many policy experts thought there was never enough money in the high-risk pool to start with but the salient point here is Congress is never good about predicting what a government-run program will cost and usually always underestimates its price tag.  For example, Congress predicted in 1967 that Medicare would cost $12 billion in 1990.  Its actual cost was $110 billion in that year.

Is this demand by a government official – oh sorry – this “request” by a government official for donations from industry even illegal?  According to the Washington Post Federal regulations do not allow Department officials to fundraise in their professional capacity.  They do allow Cabinet members to solicit donations as private citizens as long as they do not solicit funds from a subordinate or from someone who does business or seeks to do business with the Department they represent.  HHS spokesman, Jason Young noted that there is a special provision in the Public Health Service Act that allows the secretary to encourage donations to nonprofit groups working to provide healthcare information.  However, a health industry official said there was a “clear insinuation by the administration that the insurers should give financially to the nonprofits.”

Hmmmm….talk about threading the needle!

As predicted by many of us in the “smaller government is better crowd,” Obamacare is going to cost taxpayers much more than it was predicted to cost.  It is also clear the roll-out of Obamacare is going to be a “train wreck” and there is panic in Washington as 2014 gets closer and closer.

\ http://www.realclearpolitics.com/video/2013/05/15/axelrod_government_so_vast_obama_cant_know_about_wrongdoing.html

About a year ago, members of Congress were beginning to hear about how various conservative groups were being hassled by the IRS.  Their staff met with the Treasury Department inspector general’s office about the matter.  As a result, the inspector general began investigating the complaints about the IRS overreach.  The inspector general released his report on Tuesday.

I do not need to bother you with much further detail about the matter because it is all over the news, it is clear the issue is not going away, and new information will likely be discovered.  The House Ways and Means Committee is having a hearing this Friday and the House Committee on Oversight and Investigations is planning a hearing next Wednesday.  Senators Max Baucus (D-MT), Carl Levin (D-Mich), and John McCain (R-Ariz.) have called for hearings as well.  But what you may have missed in all the kerfuffle is an editorial in the Wall Street Journal by James Bovard, a Libertarian author that focuses on waste, abuse, and corruption in government.  He details how these recent actions by the IRS are not the first time the agency has conducted highly questionable and political witch-hunts on behalf of a president and his administration.  It is worth the read.

Bovard discusses how President Franklin Roosevelt used the agency to go after newspaper publishers, such as William Randolph Hearst, who opposed the New Deal or to intimidate his political rivals.

It is shocking to read Bovard’s tale of how President John Kennedy at a press conference let it be known that he expected the IRS to “be vigilant in policing the tax-exempt status of questionable (read: conservative) organizations.”  Days later the “Ideological Organizations Audit Project” was created that hounded several conservative groups.  His administration also used the agency to go after steel companies so that they would support “voluntary” price controls.  If they did not, their reward was an audit.

And who can forget President Nixon’s enemy list and how his administration went after organizations and individuals that spoke out against his policies?

Bovard points out that for several years following Nixon, public outage at the IRS was limited to their usual abuse of individual innocent taxpayers, until President Clinton came along.  First reported in a Wall Street Journal column, the Clinton administration and the Democratic National Committee produced a report “Communication Stream of Conspiracy Commerce” that went after magazines, think-tanks, and other groups and individuals that were critical of President Clinton.  In the years that followed, many groups mentioned in the report were audited by the IRS, as well as several high-profile individuals.

All of this injustice should remind American citizens why our founding fathers wanted a small, federal government and for most of the power to be relegated to the states and to the individual.  It is precisely this type of abuse of power they wanted to avoid.

Citizens Against Government Waste’s (CAGW) most recent cloud computing report, the 2012 Federal Cloud Review discussed the potential for savings in federal information technology (IT) through greater adoption of cloud computing.  As the federal government shifts its operations towards increased use of cloud computing tools, there will be less need for it to operate the large number of federal data centers it currently owns as part of its IT portfolio.

In the past 15 years, the federal government’s growing need for IT led to a large increase in the number of federal agency data centers.  According to testimony provided by the Government Accountability Office (GAO), there were 432 federal data centers in 1998.  By 2009, that number had risen to more than 1,100 operating at a significant cost to the federal government in hardware, software, maintenance, real estate and energy use.

In 2010, as part of the administration’s 25 Point Implementation Plan to Reform Federal Information Technology Management, the Federal Data Center Consolidation Initiative (FDCCI) was instituted to reduce the number of data centers across the country.  At the May 13 hearing, GAO testified that under FDCCI, the federal government has made some progress towards closing 40 percent, or 1,253 of its 3,133 total federal data centers operating across 24 participating agencies.  This statement was reiterated by the U.S. Department of Interior’s Chief Information Officer Bernard Mazer, who indicated that as of May 10, 2013, agencies have closed 484 data centers with plans to close 855 by the end of fiscal year 2013.  Mr. Mazer highlighted the use of cloud-based technologies by agencies to accelerate data center consolidation efforts.

However, GAO cited issues with the Office of Management and Budget’s (OMB) lack of adequate tracking and reporting on performance measurements, including cost savings, which limit the government’s ability to oversee agency progress toward key goals and objectives.  In March 2013, OMB issued a memorandum shifting integration of the FDCCI to the PortfolioStat initiative which conducts an annual review of federal IT investments.  According to Mr. Mazer, this movement is expected to strengthen the focus on tracking cost savings from the data center consolidation.

According to testimony provided by Steve O’Keeffe of MeriTalk, more than 56 percent of federal IT professionals surveyed graded their agency’s consolidation efforts at “C” or below, and only half believe their agency is on target to close 1,200 data centers by 2015.  Among the challenges cited by the May 13, 2013 MeriTalk report were overcoming mission owner objections (45 percent), finding the budget to consolidate (48 percent), shutting down or consolidating applications (33 percent), security issues (18 percent), and completing data center inventories (15 percent).

CAGW President Tom Schatz provided the committee with a statement for the hearing record, in which he pointed out that, “…a tight rein must be kept on the data reporting of the status of federal IT projects, including the data center consolidation effort through both the IT Dashboard and the PortfolioStat.  Taxpayers should continue to keep a watchful eye on federal IT investments, particularly cloud computing and data center consolidation efforts.”

The use of new technology tools to improve IT management provide opportunities for the federal government to save taxpayer dollars while increasing efficiency.  However, without proper metrics to evaluate agency progress and cost benefits as the federal government moves forward with cloud computing adoption and data center consolidation, it is difficult to discern the actual savings accrued.

The farmers love this bill,

High, HIGH, the dairies go,

The farmers love this bill!”

While it’s a tortured version of the original, the verse scribbled above represents a more fitting rendition of the classic nursery rhyme these days, given ongoing congressional action.  Today, the Senate will markup its version (S. 10) of this year’s farm bill, the Agriculture Reform, Food and Jobs Act of 2013.  The House of Representatives is expected to follow suit tomorrow.

Based on last year’s failed farm bill, the Council for Citizens Against Government Waste (CCAGW), along with ten other watch-dog groups, published the “Terrible Twelve,” an indictment of the usual suspects likely to be found corrupting any attempt to develop a more rational, market-oriented agricultural policy.  Following the preamble, which is re-printed here, we have listed twelve bad seeds that deserve to be rooted out of this year’s farm bills.

From “Farm Policy: the ‘Terrible Twelve’ (That actually relate to farming):”

“Washington’s Farm Policy is a nearly trillion dollar tangle of agriculture subsidies, welfare payments and environmental patronage.  There is tremendous need for reform. Current subsidy programs are rooted in the 1930s, when prices for crops and livestock bottomed out and farm families were desperate
for income.  Agriculture today could not be more different.  Farmers are pulling in record-high levels of income and carrying record-low levels of debt.  Technology has eliminated many of the risks that once plagued farming, and the profitability of crops that go without subsidies demonstrates independent agriculture is viable in the 21st Century.  There is no way to justify continuing to give tens of billions of dollars to the farm industry.”

The dozen agricultural “bad actors,” along with the organizations that can provide additional information for each, are listed here.

1. Direct Payments. Taxpayers are lavishing billions of dollars on successful farm enterprises whether or not the farm is actually growing the crops for which they are receiving the subsidies or growing any crop at all. Contact: Diane Katz diane.katz@heritage.org and Fran Smith fbsmith@cei.org.

2. Federal Crop Insurance. In 2012 taxpayers spent more than $14 billion subsidizing agriculture businesses buying crop insurance (and thus subsidizing insurance companies) for everything from almonds to oysters. Contact: Andrew Moylan amoylan@rstreet.org and Josh Sewell josh@taxpayer.net.

3. Shallow Loss Programs. A new open-ended income program will put taxpayers on the hook for guaranteeing record prices. This shallow loss coverage would cost taxpayers billions of dollars and potentially violate World Trade Organization rules. Contact: Josh Sewell Josh@taxpayer.net and Andrew Moylan amoylan@rstreet.org.

4. USDA Trade Promotion Programs. Taxpayers spend some $200 million annually to support advertising campaigns that benefit large corporate enterprises and agricultural special interests. Contact: Leslie Paige lpaige@cagw.org.

5. Sugar Program. A small number of sugar producers receive enormous benefits, while the costs are spread across the U.S. economy, harming consumers, taxpayers, and the sweetener-using industries. Contact: Fran Smith fbsmith@cei.org.

6. Dairy Market Stabilization Plan (DMSP). The DMSP would impose government controls and regulations on the nation’s milk supply, penalize farmers for exceeding government milk production “quotas,” artificially inflate the price of dairy products for families and drive the cost of federal food programs higher. Contact: Leslie Paige lpaige@cagw.org.

7. Target Prices. Government-set price targets—about 40% higher than the previous farm bill and in many cases higher than record levels seen between 2005 and 2010—would expose taxpayers to billions in payments if crop prices dip slightly. Contact: Josh Sewell josh@taxpayer.net.

8. Rural Broadband. The Rural Utilities Service Broadband Loan Program is a classic example of waste and market distortion. In addition to the cost, in many areas, the practice of guaranteeing loans serves to undercut existing private-sector investment. Contact: David Williams davidwilliams@protectingtaxpayers.org and James Valvo jvalvo@afphq.org.

9. Mandatory Assessments. Mandatory assessments on farmers to promote commodities cost consumers and skirt constitutional provisions that only Congress has the power to tax. The program also violates basic principles of free speech, forcing some producers to pay to communicate messages against their will. Contact: Diane Katz Diane.Katz@heritage.org.

10. Cotton Program. Federal subsidies for domestic cotton are so high, they violate international trade rules. To keep Brazil from enacting retaliatory tariffs which would hurt American consumers, taxpayers send a $147.3 million check to the Brazilian Cotton Institute every year. Contact: James Valvo jvalvo@afphq.org.

11. Ethanol. The Feedstock Flexibility Program is the definition of cronyism. With taxpayer dollars, the federal government buys up subsidized surplus sugar and sells it at a loss to ethanol makers. Contact: Fran Smith fbsmith@cei.org.

12. Biomass. Since 2008, the Biomass Crop Assistance Program (BCAP) has proven to be a failure. Even though this wasteful, market-distorting program is replete with loopholes and is not currently funded, it would be revived by the draft farm bill.  Contact:  Josh Sewell josh@taxpayer.net.

The bottom line is a fairly straightforward one.  At a time when all Americans, not just farmers, are experiencing financial hardships in a sluggish economy, taxpayers and consumers simply cannot afford to prop up a single industry – not even farmers, who (on average) are actually faring better than non-farm families.

On June 21, 2012, the Senate voted 64-35 in favor of S. 3240, the Agriculture Reform, Food, and Jobs Act of 2012.  S. 3240 would have some eliminated profligate programs, such as the Average Crop Revenue Election program, direct payments, and counter-cyclical payments.  However, the bill did not do nearly enough. Although the Congressional Budget Office (CBO) originally projected that S. 3240 would cut the deficit by $23.1 billion over a 10-year period, CBO re-estimated the savings on March 1, 2013 and reduced the amount by 43 percent to $13.1 billion.

The House version of the Farm Bill in the 112^th Congress, H.R. 6083, would have reduced spending by $35.1 billion over 10 years.  The bill included many of the same changes in farm programs proposed in the Senate bill.  The additional savings in the House bill were largely achieved through revisions in the nutrition title, affecting program eligibility for the Supplemental Nutrition Assistance Program, or food stamps, which accounts for more than 70 percent of the overall Farm Bill.

The House and Senate recently released drafts of their proposed Farm Bills, and the initial picture for taxpayers is not pretty.  Using the dairy portion of the bill as an example, both bills include proposals to replace the current dairy program (already a wasteful arranged of subsidies that artificially inflate prices for consumers) with the onerous Dairy Market Stabilization Program (DMSP).   CCAGW, along with many other free-market organizations, recently released a letter opposing the DMSP, which read in part:

The Farm Bill proposes to replace milk price supports with the DMSP, a program that will result in more frequent and more intrusive government manipulation of milk prices and markets.  Instead of being triggered only occasionally, the DMSP will be in effect whenever dairy farmer profit margins decline, up to 40 percent of the time according to one study.    Like price supports, the DMSP would manage both supply and demand for milk in order to keep prices artificially high.  Consumers will pay even more for dairy products, government funds will be wasted on dairy purchases, and dairy industry and job growth will be stunted.  Taxpayers and consumers can visit YourMilkMoney.org for more information on the issue.

After last year’s failed effort to reform America’s outdated agriculture policies, the 2013 Farm Bill must not include the same mistaken provisions.  At a time when all Americans, not just farmers, are experiencing financial hardships in a sluggish economy, taxpayers simply cannot afford to prop up a single industry.