Category: Budget

How About Just Dropping the Maximum Payroll Tax Limit

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You know, when the Wall Street Journal is discussing how the the increasingly excessive pay for executives is endangering Social Security, it’s time to do something.

We are not talking about the Workers’ Daily World here, or even the New York Times. We are talking about the daily voice of “rich pig capitalism”, and they are talking about how much this is damaging to society:

…

Executives and other highly compensated employees now receive more than one-third of all pay in the U.S., according to a Wall Street Journal analysis of Social Security Administration data — without counting billions of dollars more in pay that remains off federal radar screens that measure wages and salaries.

…

The growing portion of pay that exceeds the maximum amount subject to payroll taxes has contributed to the weakening of the Social Security trust fund. In May, the government said the Social Security fund would be exhausted in 2037, four years earlier than was predicted in 2008.

(emphasis mine)

Here’s a solution, have the employers portion of social security apply to all forms of remuneration that could be construed as wages, with out a top end to be taxed, and have the employee portion kick in above $1 million a year.

You could call it the They Who Must Not Be Named, Terell Owens, or Bernie Madoff tax.

Seriously, wages in this case are zero sum. When these guys get more, the rest of us get less.

Senate Kills F-22

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Amendment approving it being stripped from the Defense Appropriations Bill passes passes 58-40.

I’m with SecDef Bob Gates on this. The push behind this is to have the USAF be able to achieve air supremacy against any potential future foe, and the costs end up killing men on the ground, and citizens in the streets, now.

We still maintain the ability to achieve air superiority against any potential future foe, and air supremacy against any probable opponent, and it saves money for better readiness in a counter-insurgency scenarios that are the most likely future conflicts for the next ¼ century.

Additionally, it frees up money to provide for things like vaccinating and educating our children.

The F-22 was about ensuring that in the worst possible conflict the USAF would be at virtually no risk of air to air casualties, at the expense of everyone else.

While that might be nice for the fighter jocks, the marginal utility of air supremacy vs air superiority means very little to the guy on the ground, or the tax-payer.

Major Change in Pentagon Strategy

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General James Cartwright, vice-chairman of the JCS, has announced that the so-called two war strategy will be dropped at the next DoD Quadrennial Defense Review (QDR).

This is an unalloyed good. Not only has this policy, that the US should be able to defeat two “near peer” opponents in short order, created a ruinously expensive military, but it has also created a military that is ill suited to the current conflicts that we are involved in, where over-reliance on high-tech, and under reliance of boots on the ground, has led to our military losing, as opposed to winning, hearts and minds on the ground.

Veto Threat on F-22 and F136 Authorizations

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President Obama has threatened a veto on both programs.

I’m of a mixed mind on the programs.

While it is clear that the F-22 is overpriced, and does not address foreseeable threats, the F136 alternate engine for the JSF seems like a good idea.

The P&W F100/GE F110 engine competition saved a lot of money, and produced more reliable engines.

What’s more, the F136 seems to have more growth potential than the F135, and this is needed, particularly for the STOVL F-35B.

Additionally, the funds to continue F136 development are about the cost of procuring just 2 more F-22s.

Why I Love Barney Frank*

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In describing the defense budget, the distinguished gentleman from Massachusetts correctly describes the folks pushing for more defense spending, who normally oppose all spending because of deficit issues, as thinking thinking that, “the Pentagon is funded with Monopoly money that somehow doesn’t count.

It gets better when he talks about F-22 supporters:

These arguments will come from the very people who denied that the economic recovery plan created any jobs. We have a very odd economic philosophy in Washington: It’s called weaponized Keynesianism. It is the view that the government does not create jobs when it funds the building of bridges or important research or retrains workers, but when it builds airplanes that are never going to be used in combat, that is of course economic salvation.

Heh.

Here is a recording of the interview.

*In a 110% purely heterosexual kind of way, of course, as the General would say.

GE-Rolls Gets Smart on F136 JSF Alternate Engine Bid

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With the Pentagon gunning for the GE-Rolls Royce alternate engine, because they want their pig, the F-35 JSF, to fly as soon as possible, and the Pratt & Whitney’s F135 is already paid for, the alternative engine is behind the 8-ball, even if all indications are that it will provide superior performance, and that the competition between the two engines is likely to provide significant cost savings over time.

The F100/F110 competition between P&W and GE saved about 20%, but the basic F-110 was already flying as the F-101 on the B-1 bomber before it challenged the F-100.

The problem is that the services, particularly the Air Force and the Marines, want the JSF right now even more than they want the JSF get it right, and the money spent developing the F136 engine could be used to accelerate keep the schedule from slipping quite so much.

I think that it’s penny wise and pound foolish, but things being what they are, the Pentagon, and Lockheed are right about the fact that once the aircraft enters squadron service, it will be much harder to cancel.

Well, the F-136 team just had a cunning plan.

In fact, it’s so cunning, if you put a tail on it, you could call it a weasel: They are looking at making a firm, fixed-price contract proposal (paid subscription required) for the engine, which would make it a “known known”, as opposed to a “known unknown” (or maybe an “unknown unknown”, I gotta stop trying Rumsfeld-Speak, my head hurts).

In any case, the F136 does have friends on the House Armed Services Committee, who just added money for it back into the budget.

Obama to California: Drop Dead*

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I can;t say that I blame Barack Obama on the decision not to provide aid to California.

Unlike the situation with some cities in the 1970s, where much of the problem came from the fact that they were taxed to create suburban and exurban sprawl, getting little in return, California has had a failed government for at least the past 30 years, and the people who committed this crime are not the politicians, though they have been willing accomplices, but rather the whole population of the state, who have, though overuse and abuse of the initiative process, created this situation.

It’s not just prop 13, which capped property taxes to the benefit of corporate land owners, it’s a whole series of policies that have created mandates on the budget without a way to generate revenue.

I would suggest, in a sort of “fighting fire with fire” way, that someone in California circulate a new petition for a law that would require that anything passed by the initiative process that still has the force of law be brought up for a new vote every 10 years, or more accurately, every general statewide election closest to 10 years, so as not to have to pay for special elections, just the cost of putting it on the ballot.

I think that there would be a lot of trash that would be discarded, but would not be by the cowards in California state politics.

*Here is the historical reference to New York’s budget crisis in the 1970s.

Now This is Good Policy

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The House Ways and Means Committee is considering generating additional $37 billion in additional revenue by removing the deductiblity of direct to consumer advertising for prescription drugs.

The Chairman, Charles Rengel is talking about it favorably, and I think it does good on a number of levels:

  • It generates more taxes.
  • It reduces the artificial demand for the new under patent prescription drugs that are frequently not much better than their predecessors.
  • It redirects sales efforts to the doctors, who are better equipped to weigh the merits.
  • It would likely make drug companies more amenable to moving their drugs to over-the-counter, where they could deduct the ads, saving everyone money.

Governor Mark Sanford (R) Gets Served

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Both figuratively and literally, as the South Carolina Supreme Court just voted 5-0 to order the governor to apply for stimulus money, and served him a writ of mandamus, which is basically an order, so if he doesn’t, they can throw his ass in jail.

He had refused to spend the money on education, and the legislature overruled him, but Sanford, continued to maintain that only he had the authority to request the money.

Basically, this is about a Presidential run in 2012, and he is appealing to the ever shrinking Republican Party base.

Damn! This Crap Never Dies, Does It?

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2 of the significant cancellations of the budget proposed by SecDef Gates were the USAF’s Transformational Satellite (TSAT), and the Army’s Future Combat System (FCS), but like the slasher flick villain, they’re back.

The USAF is now looking for funding of a “technology demonstrator” which would mirror TSAT’s capabilities, with an obvious eye towards reviving the program, and Army Chief of Staff General George Casey is saying that the FCS has not been killed, prime contractor Boeing still touting fictitious milestones being passed, and a senior acquisition officer saying that it would be split into 3 parts.

So, we’ll services coming after this again, and again, even though the gear and tech from the FCS that was supposed to enter service in 2011 has now been delayed.

The Iron Triangle at its finest.

A Big Story on the Nuclear Non Proliferation Front

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The U.S. National Nuclear Security Administration has requested no funds for the reliable replacement warhead program, which means that Barack Obama has largely eschewed a reeplenishment and update of the US nuclear arsenal.

They are seeking $143 to develop advanced validation methods of existing warheads, but one of the promises inherent in the Nuclear Non-Proliferation Treaty was that the nuclear powers would gradually denuclearize themselves, and it appears that this is a big step towards this.

I am so (NOT) Shocked: Social Security and the Sky is Falling Edition

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Reductions in employment have reduced receipts for Social Security, which has pushed up the theoretical insolvency date, to 2037, and of course, everyone is running like chickens with their heads cut off trying to figure out how to hand everything to the Wall Streeters who completely f$#@ed the nation as a result.

It is true that Medicare is in trouble, but Social security, not so much.

Economics Update

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The US trade deficit rose in March, to 27.6 billion, on falling exports and the recent increases in oil prices.

Imports fell by $1.6 billion, but exports fell by $3 billion.

We will not be, as the Japanese did, exporting our way out of this trade deficit.

This is one reason why the American Express/CFO Research Services survey has 59% of CFOs seeing more layoffs.

Of course, the fact that nationwide, US home prices fell the most on record, 14% year over year, and the only markets where home sales are rising are where vultures are sweeping in to buy cheap foreclosure properties.

On the bright side, the National Federation of Independent Business’ monthly index of small business sentiment was up for the first time in 4 months.

It appears, however, that credit card company Advanta is not so optimistic. The company, which specializes in credit cards for small businesses, is shutting down its lending operations on June 10, after uncollectible debt exceeded 20%.

They are not shutting down, they are just shutting down all their credit lines, and just taking payments, which is awfully close to shutting down, so the credit cards just become so much plastic.

The deficit is not looking good either, with tax receipts so low that the federal government ran its first April deficit since 1983.

In energy, oil was up today, briefly breaking $60/bbl for the first time since November, before settling at $58.85/bbl.

This, along with banking changes and interest rate increases, is why the ruble is on a tear right now, and the US dollar fell to a 4 month low on comments by a number of experts that the recession is bottoming….Yeah….sure…

Elections Have Consequences: Who Hoo!!!!!!!!

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Barack Obama’s new budget eliminates abstinence-only funding and a kick back program to churches.

From Page 491 of the budget (PDF):

The 2010 Budget proposes a new Teen Pregnancy Prevention Initiative to support community-based and faith-based efforts to reduce teen pregnancy using evidence-based and promising models. In addition, a new Strengthening Communities Fund will help build the capacity of non-profit organizations and State, Local and Tribal entities to better serve low-income and disadvantaged populations. This Budget also proposes funding for (1) a new child welfare initiative, and (2) a human services case management system for Federally-declared disasters. This Budget eliminates funding for Community-Based Abstinence Education, the mandatory Title V Abstinence Education program, the Compassion Capital Fund, and Rural Community Facilities.

The items in bold are two abstinence only education programs, aka the Bristol Palin teen parent plan, and the Compassion Capital Fund is a slush fund for churches set up by Bush and His Evil Minions™.

Wicked cool!

Defense Budget Finally Out

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So, the details are out, and we have a big, confusing, and sprawling story from a big confusing, and sprawling building, the Pentagon.

Here are some links, and some things that I find noteworthy.

Specific programs:

With $439 million budgeted, the USAF is definitely going full speed on the tanker replacement bidding.

The Next Generation Bomber and the F-136 alternate JSF engine are on the chopping block, and the Gerald Ford class aircraft carrier has been delayed a year to work out the bugs on its electric catapults.

Star Wars takes a hit, with both the multiple kill vehicle and the airborne laser being canceled.

UAV’s did very well, with the Raven (shown) getting over 700 orders.

Aviation:

The DEW Line has a rundown.

Classified:

The Pentagon classified budget is now, up above $50 billion, which, on its own, makes the black programs something like the 3rd largest military budget in the world.

US Army:
spending on Helos is up, as are both unmanned vehicles and the number of active duty soldiers.

Navy:

We already know the story, cancellation of the DDG-100, restart of the Brukes, and continued procurement of the LCS, more here, here, and here.

Short version, it’s a generally down, but the Navy has done OK.

USAF

Basically, talk to the deer.

The USAF did not fare well, with the end of the F-22 and C-17 production lines, underfunding of the Air Force One replacement, the Joint Dual-Role Air Dominance Missile (JDRADM), and the follow on to the Predator drone, and the cancellation of the TSAT satellite system.

Cost Guard:

Not the Pentagon, it’s technically in the Department of Commerce, but its budget is up by about 3%.

NASA Head is So Far Up It’s Ass it Resembles a Klein bottle

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Remember that permanent moonbase that NASA has been pushing for the past few years????

OOPS!! just kidding!

After four years of bold talk about focusing its return-to-the-Moon programme on a permanent international outpost at the Moon’s southern polar Shackleton crater, NASA now suggests its plans may stop at less ambitions Apollo-style sorties.

Seriously, it appears that NASA looks at its long term goals with the same seriousness as your average LOLKat on a catnip binge.

As I’ve said before, these are people who let Star Trek inform their decisions way too much.

Washington’s Various Serious People in Action

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Here we see Republican Senator Susan Collins saying that we should cut the stimulus money for flu pandemic.

They cut the money, because they are “centrists”, and unless they do something to throw their weight around, it means nothing, so Collins killed the money on pandemic preparedness, to show “fiscal responsibility”, and we may be on the brink of a major flu outbreak.

Bobby Jindal lambasted volcano monitoring, and Mount Redoubt erupted.

Republican spending cuts are making me very nervous about the next shoe to drop.