Tuesday, October 16, 2012

Subsidizing inefficiency.


Amtrak snack bars lost $84.5 million last year; $833 million in 10 years

Federal spending over the past 20 years has surged 71 percent faster than inflation, much of it on bloated and wasteful programs and services, including Vice President Joe Biden's favorite mode of travel: Amtrak.
According to the newly revised Heritage Foundation report, "Federal Spending by the Numbers," the rail service lost $84.5 million alone on its food and beverage services in 2011, and $833.8 million over the past 10 years. "It has never broken even on these services," said Heritage.
The regularly revised analysis found that federal spending spiked this year to $3.6 trillion, which is nearly 23 percent of the U.S. economy. And to illustrate why the federal deficit has reached $1 trillion each year of the Obama presidency, Heritage determined that for every $6.80 Washington collects in taxes, it spends $10, meaning that the Treasury has to borrow the remaining $3.20.
Debt and federal spending is a major issue in the presidential election, with President Obama pledging to keep an eye on it and Mitt Romney promising deep cuts. Heritage warned, however, that if spending is allowed to continue at the current pace, federal spending will reach $5.5 trillion in a decade.
Not surprisingly, entitlement programs such as Medicare, Medicaid and Social Security, are driving growth. But anti-poverty programs have also surged by 49 percent in just the past decade. And spending on another politically touchy issue, food stamps, has more than tripled since 2002.
Heritage noted that the current spending crisis doesn't include the oncoming program and spending changes required by Obamacare, which will spend $1.7 trillion over 10 years. The group explained that Obamacare will increase federal health spending by 15 percent, bringing it to 44 percent of all mandatory spending.
What's more, "Obamacare's 18 new or increased taxes and penalties raise $836 billion in new taxes between 2013 and 2022."
Heritage offered a few examples of waste worthy of cutting or consolidating:
-- In fiscal year 2010, the federal government spent nearly $1.7 billion to maintain 77,700 underused or unused buildings.
-- Eliminating both the New Starts and Small Starts transit grants programs would save taxpayers $5.6 billion over the next five years and $16.3 billion over 10 years. It would get the federal government out of the business of subsidizing high-cost, low-value local transit projects, such as $900 million for a 10-mile extension of the Bay Area rail system in San Jose and a $1.6 billion grant to construct a Honolulu rail line.
-- The Department of Agriculture's Office of the Chief Information Officer funded a $2 million intern program. Only one intern was hired full time as a result.
-- The U.S. Navy bought 450,000 gallons of biofuels for $12 million, or almost $27 per gallon, to conduct exercises to showcase the fuel and bring it closer toward commercialization. It is the largest biofuel purchase ever made by the government.
-- The Internal Revenue Service stored 22,486 items of unused furniture in a warehouse at an annual cost of $862,000.
-- The State Department began a Diplomatic Culinary Partnership program in 2012. Over 80 American chefs have been inducted into the American Chefs Corps and will support the State Department by preparing food for visiting officials and traveling around the world to engage in "culinary diplomacy."
-- The Department of Agriculture's Market Access Program spends $200 million a year to help U.S. agricultural trade associations and cooperatives advertise their products in foreign markets. In 2011, it funded a reality TV show in India that advertised U.S. cotton.
-- The Conservation Reserve Program pays farmers $2.1 billion annually not to farm their land for a period of at least ten years.

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