Nel's New Day

August 20, 2015

Pentagon Loses Taxpayer Money, Wants More

More money for defense and less money for taxpayers—that’s what Republicans want. Hillary Clinton’s emails a horrible and deliberate defense disaster—that’s what Republicans want to prove. The Pentagon missing $8.5 trillion? No mention and probably no problem. This expenditure is more than China’s economic output last year. The Defense Department’s budget was $567 billion, but no one knows how much of that money is spent as intended. The Pentagon is the only federal agency that has failed to comply with a two-decade-old law requiring audits of all government departments.

An extensive investigation by Scot Paltrow reveals the way that the U.S. military failed to submit to an audit, flouted federal law, and concealed the loss of billions of dollars through waste and fraud. Employees for the U.S. Department of Defense were told to put input fake data, called “plugs,” to reconcile military books with those of the U.S. Treasury. Now the records are filled with missing, unidentified, and wrong numbers. The same thing happened at the operational level.

The Pentagon consistently ignores warnings about its accounting practices from oversight agencies. It fails “to keep track of its money—how much it has, how much it pays out, and how much is wasted or stolen,” according to Paltrow. “Widespread pay errors inflict financial hardship on soldiers and sap morale, [but] pay errors are only a small part of the sums that annually disappear into the vast bureaucracy that manages more than half of all annual government outlays approved by Congress.” Accounting errors lead to loss of soldiers’ wages from unfounded accusations that soldiers have been overpaid. Without their salary, soldiers are forced to get food from charity pantries.

The Pentagon continues to spend money of supplies it doesn’t need and stores other items that it doesn’t need because it doesn’t keep track of weapons, ammunition, etc. It has a backlog of more than $500 billion in unaudited contracts with outside vendors, but it doesn’t know how much of that money has been paid for real goods and services. The Navy can’t account for ships, submarines, and other physical assets even after the $1 billion it spent to upgrade record-keeping.

Most of the Pentagon’s incompatible accounting and business-management systems—maybe 2,200 or 5,000, depending on who’s counting—were built in the 1970s and use obsolete computer languages on old mainframes. Even if someone could search for data, much of it is corrupted and just plain wrong. The tens of billions of dollars used to upgrade technology failed, adding to the waste. In the meantime, military knowingly signs off on entries that it knows to be false. Corporate managers certifying false financial reports suffer criminal penalties; the Pentagon’s officials have none.

Every year, the Pentagon buys more of what it already has in excess, defined as a three-year supply. In 2008, for example, it had 15,000 parts in stock for the “vehicular control arm” of the Humvees, equal to a 14-year supply. From 2010 through 2012, it bought another 7,437 of them at considerably higher prices as demand dropped by almost half. Nobody knows if these have been stored in the right bins, which makes inventory impossible. Nothing has been done to track employee theft. The Pentagon ordered the Defense Department to have a labeling system, a directive that the DOD ignored.

Obsolete supplies aren’t monitored although the Army is trying to detonate some C4 plastic explosives made in 1979. Nothing has been done with runway flares from the 1940s and warheads for Sparrow missiles not fielded since the 1990s. Rocket-launch systems retired in the 1980s take up space. “Keeping all those useless bullets, explosives, missiles, rifles, rocket launchers and other munitions costs tens of millions of dollars a year,” Paltrow reported.

Despite all these issues, Secretary of Defense Chuck Hagel said that a cut of $52 billion in 2014 was “too deep, too steep, and too abrupt.” His claim that “this is an irresponsible way to govern” sounds like the way that the Pentagon manages its finances. Hagel had no idea how much money the Pentagon had. In one office (Columbus, Ohio), duplicate entries across multiple ledgers led to mistakes for the Air Force in 2009, totally $1.59 trillion which included $538 billion for plugs—roughly eight times what the Air Force was allotted for that year.

Efforts to fix the problem have consistently failed. Deputy Secretary of Defense Gordon England established the Business Transformation Agency in 2006 to upgrade business operations and prepare the department for auditing. By 2009, the department had spent over $10 billion a year, but it didn’t stop business as usual. Defense Secretary Gates shut down the project in 2011.

How much of the $3 trillion spent on contracts for goods and services during the past ten years has been wasted in overpayments or never spent is not known. Bills are easily padded because detailed invoices are not required. The tremendous backlog to audit fulfillment of contracts came to 24,722 contracts worth $573.3 billion by the end of 2011. The Army’s backlog was 450,000 contracts in 2012. The Navy and Air Force don’t know what their backlogs are. To take care of the problem, the value at which a contract is automatically audited rose from $15 million to $250 million.

GOP presidential candidate Carly Fiorina is campaigning on making the U.S. Department of Education a “whole lot smaller.” As president, she would make the department “justify every single dollar every single year.” Nobody says that about the military. Fiorina also said that she doesn’t know what the Department of Education does. She could easily find the department’s reports and charts about its goals, the sources of its expenditures, and comparisons to previous year. It’s right here.

The Department of Education provides grants, including Pell grant funding; makes sure that states spend federal money as they should; keeps schools from gender discrimination per Title IX; and collects national education data. Without federal oversight, states won’t spend the Title I money as intended to effect education equality. The Department also checks on the for-profit college industry, i.e., fining Corinthian Colleges because it misrepresented job placement data.

Fiorina decried “complicated accreditation” for these for-profit colleges that she found to be “expensive.” These colleges, however, have higher student loan debt and poor completion rates because their accreditation rules are already too loose. HuffPo reported that accrediting boards frequently have executives from for-profit colleges, perhaps the reason that none of the five major companies had the accreditation revoked in the past ten years and fraudulent job placement data was ignored.

The budget for the Department of Education for this year is $68.8 billion, and the agency knows where its money goes because it’s the law. The Department of Defense’s budget is $567 billion—about 12 percent of the budget for the Department of Education—and the DOD has no idea where it goes because it flouts the law. Below is what $8.5 trillion dollars looks like in $100 bills. That’s what the Pentagon has been allotted during the past 20 years with no accountability.

trillions of dollars

Food stamp fraud may account for about $500 million (less than one cent per each dollar of the $82 billion), but the Pentagon has lost $8.5 trillion. That amount has cost each household approximately $70,000. In 2013, about 45.3 million people, including 14.7 million children, lived in poverty in the United States—14.5 percent of the population and the largest number in the 54 years that statistics have been kept. Almost one in five children live in poverty.

Lack of government support has driven tuition for higher education sky-high. The student debt is now at $1.2 trillion in the United States, and the costs will cripple the future for both young people and the economy. People will have to pay down this debt instead of buying houses and cars, shoring up the GDP.

Conservatives caused this inequality, but they are determined to deny help to any of these people. Yet they are willing to distribute over one-half trillion dollars every year to an agency that has no idea how the taxpayer money is spent. For conservatives, a steak or shellfish or shredded cheese is outrageously out-of-bounds for food stamp recipients, but 22,437 extra Humvee front ends are just fine. Billions of taxpayer dollars for failed business systems or excessive purchases of supplies or unfulfilled government contracts or unpaid soldiers or lack of audits that break the law are acceptable. Conservatives need to look at their priorities.

December 26, 2013

Stop Poverty

It’s been a half century since President Lyndon B. Johnson declared a “war on poverty.” Fifty years later, the income inequality in the United States is much worse. Poverty in other countries is obvious: we see films of people with no food living in cardboard boxes. But in the United States, many people think that the only reason for poverty is laziness. There’s a resentment that people in poverty still have cell phones and television sets. There’s the feeling, especially among conservatives, that truly poor people would be those in the cardboard boxes without food or possessions.

As the recession kept wages down and the middle-class shrinking during the past half decade, the people of the nation are going downward, making less and less while the wealthy have a rapidly increasing upward trajectory. Poverty in our country is malnutrition that leads to poor health with the effects passed on from one generation to the next. Poverty is losing a job and then a home so that they had to declare bankruptcy and move in with friends or relatives.

Greg Haufmann has found solutions from activists around the country:

Sister Simone Campbell, leader of “nuns on the bus” and anathema to Catholic Church directors who want her to concentrate on fighting abortion and marriage equality instead of helping the poor:  “Support an increase in the minimum wage to more than $11 per hour.” Of people below the poverty line, 57 percent of individuals and family members either worked or lived with a working family member in 2011. Walmart could pay its workers $12 an hour by raising its prices just 1 percent. That would cost each shopper an average of $12.50 for an entire year. year.

Coalition of Immokalee Workers: “Help end sexual harassment, wage theft, and forced labor in the fields—join the Fair Food Program today.” In the past, countless workers in Florida’s fields growing and harvesting oranges and tomatoes suffered daily humiliation and abuse ranging from wage theft to sexual harassment and even forced labor. A new program has set the highest human rights standards in fields today, working to stop its slavery in the 21st century. Publix Super Markets, a large supermarket chain across six Southern states, refuses to support the program.  Almost 100,000 people have asked CEO William Crenshaw to join the program to end slavery in Florida.

Ralph da Costa Nunez, president and CEO, Institute for Children, Poverty, and Homelessness: “Make a Personal Commitment to Helping Homeless Families.” Over one-third–over 500,000—of people living in the U.S. in shelters are parents and their children. Family homelessness has increased by more than 13 percent in the past five years.

Dr. Deborah Frank, founder and principal investigator, Children’s Healthwatch: “Fund the federal Low Income Home Energy Assistance Program (LIHEAP) at the maximum authorized level.” Insufficient heating and cooling is responsible for poor health, increased hospitalizations, and developmental delays in young children. Although current funding at $4.7 billion in 2014 won’t meet all the needs of people in poverty, it can help.

Sarita Gupta, executive director, Jobs with Justice/American Rights at Work and Co-Director, Caring Across Generations: “Support of a living wage and basic labor protections for home care workers.” Homecare workers compose one of the largest occupations in the nation, but many of them make below minimum wage. The “companionship exemption” excluded most homecare workers from basic labor protections for almost all other workers in the U.S. Two years after President Obama promised federal minimum wage and overtime protections for most homecare workers—and a year after the public comment period closed—there is still no new rule.

Judith Lichtman, senior adviser, National Partnership for Women & Families: “Urge Congress to pass the Healthy Families Act (H.R. 1286/S.631) and a national paid leave program.” More than 40 million workers in this country—and more than 80 percent of the lowest-wage workers—cannot earn a single paid sick day to use when they get the flu or other common illnesses. Millions more cannot earn paid sick days to use when a child is sick. For the average worker, taking off 3.5 unpaid days is equivalent to a month’s worth of groceries for the family. Because they do not have sick leave, they may be communicating contagious germs to everyone who comes in contact with the same items as the sick person—creating a chain of illness.

Tiffany Loftin, president, United States Student Association (USSA): “Increase regulation of private student loans and hold Sallie Mae accountable for its role in the student debt crisis.” Student debt was the only type of household debt that grew during the last five years. Each student owes an average of $27,000 by graduation. Sallie Mae, the largest private student lender, has high interest rates. The company fails to give borrowers their repayment options, promoting defaults on loans, and lends money at between 3.5 percent and 5 percent higher than it borrows.

Elizabeth Lower-Basch, policy coordinator, the Center for Law and Social Policy (CLASP): “Support Pathways Back to Work.” Subsidized and transitional jobs are the best way to give unemployed workers the opportunity to earn wages, build skills, and connect to the labor market, while also giving businesses an incentive to hire new employees when they might not be able to do so otherwise.

Marci Phillips, director of public policy and advocacy, National Council on Aging: “Invest in the Older Americans Act.” This proposed bill includes a number of programs that keep seniors healthy and independent in their own homes instead of in expensive institutions. Services include healthy meals, in-home care, transportation, benefits access, caregiver support, chronic disease self-management, job training and placement and elder abuse prevention, but funding has not kept up with the need, especially after the sequester.

Rebecca Vallas, staff attorney/policy advocate, Community Legal Services: “Tell Congress no cuts to Social Security and SSI through the Chained CPI.” The two-year budget didn’t touch these programs, but fight is not over. The debt ceiling crisis comes in January, very likely complete with extortion. Although Social Security now matches inflation, the method of determining cost of living is highly inaccurate for seniors. Those on low-income won’t be buying new houses and cars, measures that keep inflation down. Their money goes for food, utilities, and drugs—items that are more rapidly increasing in cost than the other items that lower inflation. In just one example, my water bill has gone up an average of 5 percent every year for the past 20 years, and the city plans on an increase of 50 percent in the next five years.

Jim Weill, President, Food Research and Action Center: “Tell Congress: Increase, Don’t Cut SNAP (Food Stamp) Benefits.” House GOP members who tried to pass a farm bill without any food stamps ignored the fact that most people in the country understand the importance of this program: 73 percent of voters believe the program is important to the country; 70 percent say cutting it is the wrong way to reduce government spending; and 77 percent say the government should be spending more (43 percent) or the same (34 percent) on SNAP. This support crosses parties, demographic groups, and rural, urban and suburban lines.

Debbie Weinstein, executive director, Coalition on Human Needs: “Tell Congress to stop harmful cuts to anti-poverty programs now.” Sequestration cut education, food programs, jobs, housing, and clothing programs. They keep people poor, cost jobs and stall economic growth for everyone.

Johnson’s attempts to alleviate poverty worked for almost two decades until Ronald Reagan became president. During this two terms, the country quickly began to lose the painful gains of the century: increased productivity benefited only the wealthy, poverty concentrated in inner cities with chronic joblessness and racial segregation, and trade union membership plummeted along with pensions. The U.S. led the industrialized world in child poverty and incarceration. The value of the minimum wage eroded. Conservatives blamed the resulting problems on Johnson’s Great Society and began its three-decade war on social spending.

The above solutions may sound complicated, but a letter to today’s Oregonian from Rex Burkholder simplified several solutions. He makes a lot of sense to me.

“Here are a few ideas I’d like to see Oregon’s business community get behind in their effort to end poverty:

  1. Decriminalize drugs. Addicts are ill and need help, not incarceration.
  2. Shut down lottery and video poker, poor returns on investment.
  3. Treat the mentally ill instead of putting them on the streets.
  4. Raise the minimum wage to its 1970s equivalent, about $15 an hour in today’s dollars.
  5. Spend our public infrastructure funds through a Civilian Conservation Corps-type program instead of using out-of-state contractors.
  6. Put shop class back into every high school. We still need carpenters, plumbers and other tradespeople.

“How to fund it? Legalize and tax marijuana. Less damage than tobacco or alcohol and lots of demand.”

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