Newsletter 44

Number 44

SAFE

Secure America's Future Economy

Winter 2006

In the long run, there can be no solution to the government’s financial woes without restructuring the entitlement programs (Social Security, Medicare and Medicaid) that will otherwise push outlays through the roof as the baby boomers retire and lead to huge tax increases, abrupt benefit cuts, and/or a reckless increase in the National Debt (and ensuing fiscal meltdown). While the debate as to what should be done goes on, however, why not at least eliminate the current deficit?

Some people would balance the budget with tax increases (generally on people other than themselves), but SAFE supports spending cuts and we are backing our preference with action.

For the past two months, your directors have been writing letters advocating elimination of federal government grants (some $475 billion per year). We have submitted one letter per week to Delaware’s largest newspaper, The News Journal, and also sent letters to the Delaware State News and Delaware County Daily Times (near Philadelphia).

Letters to date, many of which have been published, can be found on the Initiatives page of this website (s-a-f-e.org). Also, several of them appear later in this newsletter.

It may seem radical to eliminate federal grants, which include a whole barnyard of sacred cows, but their availability leads to a lot of waste (see Grant Drawbacks, page 2). Moreover, this thrust honors the spirit of the 10th Amendment (1791): “the Powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”

Repetition is the first step toward getting an idea accepted, and we would love to see all of you joining in this campaign. See Help Wanted.

Federal grants to state & local governments and the private sector constitute some 17% of the annual federal budget ($2.5 trillion in 2005), making them a natural target for scrutiny if we are serious about cutting government spending. Also, as Chris Edwards points out in “Downsizing the Federal Government” (Cato Institute, 2005), grants have some inherent disadvantages versus other programs of the federal government:

1. They encourage overspending for the stated grant purposes due to the perception that someone else is paying part of the cost.

2. They unfairly redistribute taxpayer money between states. Some states lose out - others build “highways to nowhere”.

3. They reduce state government flexibility and innovation. The 2002 No Child Left Behind education law with top–down federal control is a good case in point.

4. They foster costly federal, state and local bureaucracies to track compliance with the complex rules established for grant applications and administration.

5. They cause time & information “overload.” Members of Congress spend a lot of time on hearings, meetings, press conferences and ceremonies connected with obtaining and delivering grants.

Sure, some grant programs are worthwhile and would be funded at the state or local level if federal funds were not provided. Such decisions can best be made at the state and local levels, however, rather than by the federal government.

RECENT POSTINGS (s-a-f-e.org)

*Letters from SAFE Directors re elimination of federal government grants.

*Review of Chris Edward’s book, “Downsizing the Federal Government”. (See also government downsizing article in newsletter 43, Fall 2006).

And remember, SAFE newsletters for the past several years are posted on this Website so that you can readily print out copies of any article, e.g., the piece about “global warming” in newsletter 42, or share them by referring friends, family, and other contacts to the SAFE Website.

The “pay-go” rule passed by the House of Representatives in early January will prohibit any tax-cut or entitlement legislation unless the cost is covered by offsetting “revenue” increases or expense reductions. This sounds fair, but remember that the rule will do nothing to impede the explosive growth of currently existing entitlements. Also, “tax cuts” include (a) the extension of the Bush tax cuts beyond their scheduled expiration dates, and (b) legislation to shield middle class wage earners (some 23 million this year and 30 million by 2010) from the Alternative Minimum Tax that they were never intended to pay in the first place.

Identification will be required of the sponsors of the “earmarks” used by members of Congress to insert thousands of special projects in the federal budget. Fine, such disclosure may save a few billion dollars over time, but far greater savings could be achieved by eliminating federal programs that have outlived their usefulness or were not a good idea in the first place.

A Social Security deal is rumored to be under consideration, whereby President Bush would give up on personal retirement accounts in favor of a big payroll tax increase and some modest trimming of Social Security benefits. SAFE says “no deal.” We will continue to work for measures that would make Social Security an insurance plan (vs. welfare). For more, see the SAFE Website

These are among the points that SAFE will be making – in this letter, on this Website, in contacts with the media and legislators, and through word of mouth – in 2007 and beyond. If you agree, please join us in the effort to restore fiscal sanity to Washington.

SAFE members should welcome the “Sunshine Act” (or Federal Funding Accountability and Transparency Act of 2006), which requires full disclosure of all recipients of federal grants, contracts, loans, etc. According to Citizens Against Government Waste, this legislation directs the Office of Management and Budget to create a searchable database that identifies each entity that receives federal funding, the amount received, how the money is being used, and where the entity is located.

The Sunshine Act was introduced in the Senate on 4/6/06 by Tom Coburn (D-0K), and co-sponsored the same day by John McCain (R-AZ), Barack Obama (D-IL) and Tom Carper (D-DE). SAFE President Bill Whipple recently wrote a letter of appreciation to Senator Carper, albeit pointing out that even greater savings can be achieved from eliminating government programs (downsizing). Members in the other states may also want to thank their Senators.

I have a solution. . .tell me what you want me to tell you.

We don’t lose . . .we misplace.

Be surprised. . order from a Chinese restaurant menu.

At a low-key November 2006 annual meeting, the Board re-elected directors (see page 6), adopted a revised Constitution (reflecting our recent name change and removing the requirement that directors be at least 60 years of age), and agreed to push for government downsizing (this effort is now underway, as discussed herein).

Several more directors could be accommodated on SAFE’s Board, and we would welcome your suggestions as to candidates. The inclusion of some younger directors would harmonize with our intention of appealing to a broader demographic segment.

Maurice McTigue of New Zealand was a major player in the recovery of the New Zealand government from a very difficult financial situation. SAFE sponsored his May 2001 visit to Wilmington, DE to speak before about 150 members of the Retired Men’s Luncheon Club. He was given an unprecedented standing ovation.

McTigue is now a Vice President of the Mercatus Center at George Mason University, Fairfax, VA. He uses his New Zealand experience to help people in the federal government hold themselves accountable for results. Specifically, the Mercatus Center played an important role in the new focus on accountability by the Federal Office of Management and Budget. As a result, 96 government programs worth $6.5 billion were de-funded over the past two years.

We view this as a promising start, which shows it is politically possible to terminate government programs that don’t work.

The Mercatus Center is working with members of Congress and their staff members and others inside and outside of the government, in an effort to decrease the size and power of the government. Other organizations doing the same include Cato Institute, Heritage Foundation, National Taxpayers Union, and Citizens Against Government Waste.

All of these organizations are orders of magnitude larger than SAFE, more knowledgeable and in closer contact with the government. We applaud and support them.

Our support includes going way beyond the $6.5 billion saving mentioned above. We hope to be a seed for a grass roots movement to downsize the U.S. Federal government.

We have copies of a very interesting Maurice McTigue lecture at Hillsdale College (Michigan): “Rolling Back Government: Lessons from New Zealand”. To get one, write us at 2124 Brandywood Drive, Wilmington, DE 19810.

It’s all in how you look at things:

Despite appearances, the two circles above are the same size.

If ten or twenty letters are good, a couple of hundred would be awesome! Here’s how you can help get us there.

Review some of the letters already submitted (several appear below, more are on this SAFE Website). Also, if you have the time and inclination, pick up a copy of Chris Edwards’ book; it is available from Amazon.com, through Cato, or probably at bookstores.

Delaware members, feel free to borrow ideas that have already been written, but try to put the message in your own words because newspaper people have a prejudice against “copycat letter” campaigns.

Members outside of Delaware, feel free to compose you own letter or use any of the following letters “as is” in your state. In some cases, we’re writing in specific assignments below to avoid “copycat letters” going to the same publication. Remember to include your address and telephone number on the letter so that recipients can verify that you sent it.

You can do even more by following up your first letter with another after enough time elapses for the newspaper to accept it, and/or recruiting like-minded friends to join the campaign.

Please let us know when you submit a letter, date, your name, and e-mail to Bill Morris, or mail to SAFE, 2124 Brandywood Drive, Wilmington, DE 19810.

This is a special situation for us members of SAFE, a chance to really start something good.

Let’s go for it!

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In the last several decades of increasing bi-partisan fiscal irresponsibility, the politicians only preferred as a solution to handling our ever-expanding budgets, increased taxes.

Every householder knows that budgets can be maintained by increasing income, or, just as effectively, by reducing spending. Our Federal Government could look to its Grant programs ($425 billion) for immediate and significant cost reductions.

Grants are an insidious poison in several ways, one of which is the costly federal, state and local bureaucracies required for the applications to receive and the administration of the grants for the entire time it is in effect. For example, one anti-drug program for schools has a 74-page application kit that references 1,300 pages of regulations that grant recipients must follow. This takes a small army of people to follow and to monitor the activity, and not much useful comes of this bureaucratic cost in time and dollars.

If a project is worth doing, we should pay for it. If it is not worth doing, why do we ask others to pay for it through federal grants?

It’s time we taxpayers paid more attention to the legislation from on high and held these elected officials for the waste of our resources.

President Bush has just announced that he will submit a five-year spending plan to balance the Federal budget by 2012 without raising taxes. Great, but I wonder why it should take that long.

Curbing “pork barrel” spending programs (Congressional earmarks for pet projects) would save billions of dollars, and the president should be commended for proposing this step. Far more money could be saved, however, by eliminating federal grant programs ranging from $186 billion for the federal share of Medicaid and the $71 billion cost of the Department of Education (mainly grants) to 50 different programs for the homeless in eight federal agencies. For more information, see “Downsizing the Federal Government,” Chris Edwards, The Cato Institute.

This is not to say that the functions in question are not needed, but the state & local governments or private sector, as the case may be, should be responsible for funding and running them. Federal grant programs encourage overspending for the stated grant purposes, foster the growth of federal, state and local bureaucracies to document compliance with federal mandates, and reduce the flexibility and innovation of recipients. Is there truly some reason to believe, for instance, that the states, school districts, teachers, and parents of this country cannot be trusted to determine how our young people should be educated?

My son and wife and four children, 14, 12, 8, and 6 visited us this weekend; it’s hard to believe that I was able to handle three children of the same ages years ago.

An old wife’s tale . . .in our home, every garment is turned inside-out before being put in the clothes washer.

Congress is guilty of child abuse. When our kids start working, they will be faced with high taxes and maybe with a financial crisis. The reason: Congress is not reforming Social Security, has added a huge prescription drug program, and has accumulated a huge federal debt.

If I were a member of Congress, I would work for the kids. I would let the parents know about it in hopes of gaining their support. If that didn’t get me re-elected, I would still feel good that I did the right thing.

I would work for Social Security reform and for big cuts in spending. A very useful reference on spending cuts is provided by “Downsizing the Federal Government,” a book by Chris Edwards. I paid only $12 for my copy. My favorite cut is federal government grants, which cost almost $500 billion per year. This book convincingly explains why federal grants should be eliminated or paid for at lower levels of government.

Congress and the administration have been ignoring the elephant in the living room – the retirement of the baby boomers. Demands for Social Security and Medicare will be much larger than the taxes these workers will be willing to pay.

The danger of this situation for the next generation is explained in Peter G. Peterson’s book, “Running on Empty.” Peterson, former chairman of the Federal Reserve Bank in New York is very knowledgeable and we need to take his warning very seriously.

Congress and the administration have not only failed to consider the danger for the next generations, they have made the situation worse by increasing the federal debt. This is truly irresponsible.

For the sake of our children and grandchildren, we should demand a big change in policy before it’s too late. Large cuts in spending are needed to pay down the debt. The government should be downsized to make room for Social Security and Medicare. Big cuts are possible as outlined by Chris Edwards in his book, “Downsizing the Federal Government.” Elimination of federal grants ($467 billion in 2005) would go a long way toward protecting the next generations.

Here’s what’s going on: We send taxes to Washington, D.C. The bureaucrats spend part, then let us have the rest if we spend it according to their complicated rules.

I say, use the money to pay off debt, to help protect our children and grandchildren. Let the states raise the money they want to spend.

What a great description . . . future negotiations of the violence area will come to “diplomatic dancing”.

I watched the recent PGA tournament on TV last week . . . why do people say golf is so tough?

I take a certain pill once a week (you may too) . . . Tuesdays come along very often it seems.

Golly. . . streets are empty, sidewalks are walkable, supermarkets are super empty, pharmacy waiting lines are gone, restaurants offer water, fish are not bothered by bathers, barber shops are “walk-ins” and boards are visible on the boardwalk. Come to Ocean City. Forgot, no bikers.

Driving along is a luxury. . .no lifting, pushing or shoving, just looking, steering and occasionally braking. Forgetting for a moment that once I get out after difficulty I’ll have to face a sore back, troublesome walking and a balance struggle.

Don’t remember ever making a coin box phone call to my home as a youngster. . didn’t have the nickel.

VITAMIN D FOR FLU

My multivitamin pill includes 400 IU (International Units) of vitamin D. On my wife’s suggestion, I am taking an additional 800 IU during the winter. Since my wife’s suggestion, we received the February “Life Extension” magazine ( let.org ) which includes an article indicating that lack of sun exposure (which provides vitamin D) is the reason for prevalence of flu in winter. One physician who has studied vitamin D takes 1,000 IU per day. Another physician, and his family, takes 5,000 IU per day. Research indicates that healthy people can take up to 10,000 IU per day, but certain people should not take vitamin D. Consult your doctor. I am not even a PhD.

Bill Morris

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