Excise tax and the Spanish-American War.

SeaFox

macrumors 68030
Original poster
Jul 22, 2003
2,534
806
Somewhere Else
Excise tax on your phone bill may be on way out

By Leslie Cauley, USA TODAY
NEW YORK — Some say it's absurd. According to seven federal courts, it's also illegal. But one thing is for sure: America's excise tax on phone service has soaked consumers for more than a century.

Rep. Gary Miller, R-Calif., recently introduced legislation in the House — supported by 98 co-sponsors — aimed at repealing the tax, which was imposed in 1898 to help pay for the Spanish-American War. The war was over in six months, but the tax stayed.

The general excise tax has so far cost consumers about $300 billion, says the Congressional Research Service. The entire Spanish-American War cost only about $6 billion, adjusted for inflation.

AT&T says the tax is grossly unfair to consumers. "This is a 19th-century tax on a 21st-century technology," says Jim Cicconi, AT&T's general counsel. "It makes no sense, and it ought to be repealed."

Gene Kimmelman, director of Consumers Union, agrees. "This is the poster child for how messed up our telephone pricing system is today," he says. "It makes no sense to have to pay a tax to fight a war that was over more than 100 years ago."

This year, consumers and businesses will fork out another $6 billion in general excise taxes — enough to pay for the Spanish-American War all over again, notes Rep. Christopher Cox, R-Calif.

"The original purpose of the tax was to raise revenue for a specific purpose, and to do so in a way that would not be noticed by the average consumer," he says. "Today, the purpose is gone, and consumers are definitely feeling the pinch."

It was originally a tax on the affluent because phone service was a luxury in 1898.

Now, general excise taxes show up each month as a line item on phone bills. Businesses and consumers pay the same: 3% of the total. On a $100 phone bill, that works out to $3. On a $10,000 bill — not uncommon for businesses — the tab is about $3,000.

Over the years, the excise tax has shot up to as high as 25%. During the inflation-driven 1970s, the tax hovered in the 10% range. Because the tax is applied evenly, with no regard for income, poorer consumers are hit hardest.

Seven federal courts have so far declared the tax to be illegal. The rulings came in response to lawsuits by taxpayers who were balking at paying.

The government's latest loss was in May. That ruling, which involved the American Bankers Insurance Group, was issued by the 11th U.S. Circuit Court of Appeals.

Verizon says it's time for the agency to throw in the towel. "(The IRS) is 0-7," says Mark Mullet, a Verizon vice president. "They're either going to have to come up with a new strategy on how to win this, or just decide they can't collect it."

Miller's bill appears to be gaining momentum. A companion bill was introduced this week in the Senate. In addition to AT&T and Verizon, SBC, Time Warner, Comcast and America Online are all supporters. Cox, one of the House bill's co-sponsors, says consumers stand to benefit most if the measure passes.

"Clearly, the Spanish-American War was paid for and won," he says. "It's time we put the tax to its rightful repose."
 

stubeeef

macrumors 68030
Aug 10, 2004
2,702
2
What do you expect, government inherently wants to grow. In NC they just re-upped the "temporary" 1/2% sales tax. Lied to us again. The worst part is not the taxes we pay, it is how inefficently they are used. Like giving 1 billion to a charity so that 1 million can be dispersed.
I hate our tax structure, our government waste, and those who want the government to do more.
 

rabadash

macrumors newbie
Jun 6, 2005
14
0
I was just noticing, but when it says the tax is 3% of the total bill, and that the cost is $3 for a $100 bill, and $3000 for a $10,000 bill, is there something I'm missing? Oh well, at least I now know that everytime I make a phone call I'm helping out T.R. and those roughriders.
 

aloofman

macrumors 68020
Dec 17, 2002
2,206
0
Socal
rabadash said:
I was just noticing, but when it says the tax is 3% of the total bill, and that the cost is $3 for a $100 bill, and $3000 for a $10,000 bill, is there something I'm missing? Oh well, at least I now know that everytime I make a phone call I'm helping out T.R. and those roughriders.
I think they intended to say a bill of $100,000 wasn't uncommon for large businesses.
 

miloblithe

macrumors 68020
Nov 14, 2003
2,076
28
Washington, DC
stubeeef said:
Like giving 1 billion to a charity so that 1 million can be dispersed.
I hate our tax structure, our government waste, and those who want the government to do more.
2004

Total Revenues: $2.350 trillion
Total spending: $2.763 trillion
Total useful spending (by stu's calculations): $2.76 billion

Social spending: $1,577 billion
Military spending: $357 billion
Interest on national debt: $322 billion
Administrative agencies: $225 billion
Homeland security: $117 billion
Transportation: $61 billion
Environment, fish, wildlife, parks, interior: $42 billion
State and foreign affairs: $38 billion
NASA: $15 billion
Judiciary: $5.5 billion
Congress: $3 billion
President: $.3 billion

I'm not surprised you're against social spending. I mean, who isn't. Damned old people. And don't get me started about the poor. The military is out though. Clearly not within your $2.76 billion budget.

Oh, and Stu, I commend you on your hatred for those in our goverment who are working hard to make our country better and who want our government to do more for its citizens. That's some well placed hatred.
 

Josh396

macrumors 65816
Oct 16, 2004
1,128
0
Peoria/Chicago, IL
miloblithe said:
I'm not surprised you're against social spending. I mean, who isn't. Damned old people. And don't get me started about the poor. The military is out though. Clearly not within your $2.76 billion budget.

Oh, and Stu, I commend you on your hatred for those in our goverment who are working hard to make our country better and who want our government to do more for its citizens. That's some well placed hatred.
I agree with what you have to say 100%, especially about those in government actually trying to help out American citizens. Another thing I never understood is how people could say that they hate a certain politician when they have never met that person and will probably never know anything about them. I can understand with disagreeing with their policies but how could you feel hatred towards them? While I know there are some who are corrupt or wrong for the position, there are many who deserve respect.
 

stubeeef

macrumors 68030
Aug 10, 2004
2,702
2
miloblithe said:
2004

Total Revenues: $2.350 trillion
Total spending: $2.763 trillion
Total useful spending (by stu's calculations): $2.76 billion

Social spending: $1,577 billion
Military spending: $357 billion
Interest on national debt: $322 billion
Administrative agencies: $225 billion
Homeland security: $117 billion
Transportation: $61 billion
Environment, fish, wildlife, parks, interior: $42 billion
State and foreign affairs: $38 billion
NASA: $15 billion
Judiciary: $5.5 billion
Congress: $3 billion
President: $.3 billion

I'm not surprised you're against social spending. I mean, who isn't. Damned old people. And don't get me started about the poor. The military is out though. Clearly not within your $2.76 billion budget.

Oh, and Stu, I commend you on your hatred for those in our goverment who are working hard to make our country better and who want our government to do more for its citizens. That's some well placed hatred.
Oh silly monkey boy, I refer to the ineffeciency, not intent. I give 400 a month to charity, but effcient ones. I would imagine that for every dollar given the government in tax .05¢ gets to someone who needs it. (just a wag).
I am not against social spending, kindly point where I have ever said so. I am against Gov waste and ineffeciency in disursing wealth. They suck at it. Keep up.
The government is in no way shape or form a benevolent entity. They suck resources and freedom at every move. I would prefer that the 20% working hard stay and the 80% creating more red tape leave. Government waste is nothing less than colossal, you sound as though you are a gov employee, if so try and sell your wares elsewhere, cause I aint buying.

Because I don't want to say you are trolling, please show where I hate those working hard in government, or against the poor? You have made some wild and unsupportable accusations, typical of the "government is just trying to help" crowd (I would love to sell you some realestate on mars, it is expensive, but full of raw materials. You can use it to help the poor, you do want to help the poor don't you, cause if you don't do it this way, you are selfish and hate helping old people and the poor.)
I am very mad at you right now, how dare you even accuse me of any of that crap.
 

hoyboy9

macrumors member
Oct 1, 2004
50
0
stubeeef said:
Oh silly monkey boy, I refer to the ineffeciency, not intent. I give 400 a month to charity, but effcient ones. I would imagine that for every dollar given the government in tax .05¢ gets to someone who needs it. (just a wag).
I am not against social spending, kindly point where I have ever said so. I am against Gov waste and ineffeciency in disursing wealth. They suck at it. Keep up.
The government is in no way shape or form a benevolent entity. They suck resources and freedom at every move. I would prefer that the 20% working hard stay and the 80% creating more red tape leave. Government waste is nothing less than colossal, you sound as though you are a gov employee, if so try and sell your wares elsewhere, cause I aint buying.

Because I don't want to say you are trolling, please show where I hate those working hard in government, or against the poor? You have made some wild and unsupportable accusations, typical of the "government is just trying to help" crowd (I would love to sell you some realestate on mars, it is expensive, but full of raw materials. You can use it to help the poor, you do want to help the poor don't you, cause if you don't do it this way, you are selfish and hate helping old people and the poor.)
I am very mad at you right now, how dare you even accuse me of any of that crap.
I am just as angry as you are. That comment by miloblithe was absolutely out of line. I also agree with you that the government has no business being a benevloent caretaker. If our congresmen were forced to run the government as a business, like it should be, then we would be much better off. The government is way too big, and spends way too much. And don't even get me started on the deficits. The political situation in this country is just disgusting. The "small government" Republicans have become big spenders, and the Democrats are up to their usual expanding of social programs and federal power. It's a vicious circle.

Let private chartities, businesses and churches take care of social problems. At least we can choose charities that won't waste our money. The ones that aren't successful will die, leaving the better ones behind. We don't have any choice if we let the government do it. And we don't need any more evidence than the monetary balance presented in this thread to see that the government sucks at managing money. Just look at the situation we're in now with social security and medicare. Both programs will bankrupt themselves within my lifetime. It's time to get rid of them and let the private sector perform these tasks. We'll be much better off in the long run.

THE GOVERNMENT'S ROLE IS NOT TO TAKE CARE OF US. IT IS THERE TO ENABLE US TO TAKE CARE OF OURSELVES. If all Americans understood this, my God we'd be much better off. Our government needs to be radically reduced. I don't need Uncle Sam dictating to me what is best for me. Leave me alone.
 

miloblithe

macrumors 68020
Nov 14, 2003
2,076
28
Washington, DC
stubeeef said:
Oh silly monkey boy, I refer to the ineffeciency, not intent. I give 400 a month to charity, but effcient ones. I would imagine that for every dollar given the government in tax .05¢ gets to someone who needs it. (just a wag).
I am not against social spending, kindly point where I have ever said so. I am against Gov waste and ineffeciency in disursing wealth. They suck at it. Keep up.
The government is in no way shape or form a benevolent entity. They suck resources and freedom at every move. I would prefer that the 20% working hard stay and the 80% creating more red tape leave. Government waste is nothing less than colossal, you sound as though you are a gov employee, if so try and sell your wares elsewhere, cause I aint buying.

Because I don't want to say you are trolling, please show where I hate those working hard in government, or against the poor? You have made some wild and unsupportable accusations, typical of the "government is just trying to help" crowd (I would love to sell you some realestate on mars, it is expensive, but full of raw materials. You can use it to help the poor, you do want to help the poor don't you, cause if you don't do it this way, you are selfish and hate helping old people and the poor.)
I am very mad at you right now, how dare you even accuse me of any of that crap.
All right. We're making progress. You've upped your estimate of the goverment from 0.1% efficiency to 5% efficiency--a 50-fold increase! And you're up to thinking 20% of government employees do their jobs well! Let's keep talking!

I am actually a government employee. I work for the military.

I think it would be interesting to look at government effficiency using real numbers. The problem is that the government tends to try to do things that private companies and charities can't really do. National defense is always a good example, but there are many other public goods for which government is the best avenue of pursuit. I've been trying to find numbers for government efficiency, but so far all of what I've found for the US is the two pedantic sides of the social security debate, with democrats claiming the social security admin has one percent overhead costs compared to overhead costs up to 15% in private accounts. They don't mention that the private accounts with 15% overhead are life insurance which is a completely different kind of investment. And then I've found republican websites claiming that the 1% figure is bogus because it doesn't include the time people spend on the phone calling the social security administration and the time they spend filling out forms to get their benefits, which is a laughable argument. Any private investment company would require forms to be filled out and people would have questions for that firm which they would call in. It's probably more or less a wash.

But I digress. Good charities and non-profits operate well under 20% overhead. Very good ones are at less than say 10%. But these numbers are not necessarily easily comparable either. Non-profit and charities vary widely. A non-profit that is primarily funded through corporate donations or government grants is likely to be far more "efficient" than a non-profit that has to fundrase primarly from individual donations, because the fundrasing effort will take a lot of resources both encouraging people to give and in processing their numerous but small donations. It's true a non-profit that is largely government funded has to hire expensive grant writers rather than enthusiastic college kids, but if one grant writer paid $60,000 gets you a $20 million grant, that's going to be far more "efficient" than one phone bank operator paid $10 an hour who brings in $200 in donations during his shift. It's comparing apples and oranges. Likewise, comparing corporate, non-profit, and government "efficiency" is not just as simple as looking at overhead as a percentage of revenue unless these entities are all trying to do the exact same thing. Even then, they are likely to be funded in different and not necessarily comparable ways. The private investments vrs social security has some potential, but I couldn't find a 'nuetral' study in the time I spent looking, just partisan pro-social security and anti-social security analysis like the stuff I mentioned above.

So let's look for some good studies, if we're serious about this debate. Otherwise, you can decide to go on assuming that government is innefficient and I'll go on assuming that government is better at some things (public goods) and corporations are better at others (private goods) and charities are good at some kind of combined effect of social goods and making donors feel good about themselves (as well they should).

As for Mars realestate, no thanks. I don't think you have a legal right to sell it.
 

stubeeef

macrumors 68030
Aug 10, 2004
2,702
2
miloblithe said:
All right. We're making progress. You've upped your estimate of the goverment from 0.1% efficiency to 5% efficiency--a 50-fold increase! And you're up to thinking 20% of government employees do their jobs well! Let's keep talking!
Up to thinking 20%?!!! WTF? No wonder the military has so many problems! Up from what number???? It is down in acutality! And is true gobley goop speak no apology to me.

TROLL.
 

miloblithe

macrumors 68020
Nov 14, 2003
2,076
28
Washington, DC
Did you read the rest of my port or are you just going to respond to the part of it that's obviously a joke? Are you saying that you won't read the rest until you get your apology? How about your apology for hating "those who want the government to do more"?

I'm sorry if I seriously hurt your feelings. I was trying to make a joke and point out that the language you were using is needlessly inflamatory: claiming that the government only usefully spends one dollar in 1000 and claiming to hate people who want the government to do more, which presumably includes yourself if you want the government to be more efficient.

The actual questions are interesting. How effective is government and what tasks are best left to private industry or to charity.
 

stubeeef

macrumors 68030
Aug 10, 2004
2,702
2
miloblithe said:
Did you read the rest of my port or are you just going to respond to the part of it that's obviously a joke? Are you saying that you won't read the rest until you get your apology? How about your apology for hating "those who want the government to do more"?

I'm sorry if I seriously hurt your feelings. I was trying to make a joke and point out that the language you were using is needlessly inflamatory: claiming that the government only usefully spends one dollar in 1000 and claiming to hate people who want the government to do more, which presumably includes yourself if you want the government to be more efficient.

The actual questions are interesting. How effective is government and what tasks are best left to private industry or to charity.
I found no funny in what you accuse me of, I never said anything of the sort about not wanting the government to spend on social issues, or that I hate government workers, or Damn the old (raised by my grandparents). You massively confuse my contempt for government bureacracy and ineffecientcy with a true desire to help those who truely need help, not help government fat cats. I do greatly oppose, and hate the position of those who wish the government to "do more".
 

miloblithe

macrumors 68020
Nov 14, 2003
2,076
28
Washington, DC
You know that government salaries are much lower for high-end jobs than are private sector salaries. A government lawyer, or IT professional, or top-level beaurocrat makes far less than does a corporate lawyer, private-sector IT professional, or CEO. I'm not sure there are any government 'fat cats'.

Of course, NGO salaries are usually even lower.

Efficiency is an interesting question. How do you measure it? In one of the NGOs I worked in and for most grant-giving NGOs efficiency tends to be measured in how much money your organization gives out compared to how much it takes in. So, if the organization takes in $10 million and gives out $9 million in grants and spends $1 million on internal salaries and overhead, it's 90% effficient? Right? But the real question is how effective the $9 million is. What did that $9 million fund? How many people did it affect and how much did it affect them? Perhaps an organization that takes in the same $10 million and spends $2 million internally but uses it to figure out how to spend the remaining $8 million effectively is going to be the more effective NGO, but it will not be the more 'efficient' one. What I mean by this is that it's really important to analyze the right data--to look for the right indicators.

Cutting down on government waste sounds like a great idea--one which I completely agree with. Who wouldn't? Getting rid of ineffective programs or streamlining processes would be great. Why waste money? The problem is that there may be a lot less waste than people imagine. There also may be a lot more waste but the causes of it might not be what people expect. On the other side, I think charities and businesses might not be as efficient as some people think. Polution is the best example for business. The theoretical factory poluting down river that doesn't have to deal with the effects of its polution (the government will be left to do that) doesn't care what the polution costs. The factory might be turning a profit, but the environmental costs could be much higher, making the net effect for us all a negative. Charities might not be so efficient either, depending on what you want them to do. Taking the cold calling example I gave above, that caller needs to be paid (unless they are a volunteer, but even then they could be volunteering their labor more productively). In some cases it may make more sense simply taxing people and using that money to solve a problem than it would be to put in all the effort to inform people, raise the money, and then implement the project.
 

altair

macrumors regular
Nov 22, 2002
221
0
Seattle, WA
hoyboy9 said:
the Democrats are up to their usual expanding of social programs and federal power.
Kinda silly to say the Dem's are expanding federal power in the face of the latest republican activity.

Federal power used to keep a women on life support.

People in colorado and the rockies having their land torn up so natural gas companies can drill. here

Then we all know about the patriot act and it limiting our individual rights, in the name of expanding federal power.

Trying to limit individual rights, in the name of "saving the sanctity of marriage" Just like you say later, you dont need uncle sam dictating to you what you can and cant do, just leave ya alone.

Anyway, just dont like blanket statements, and singled you out, sorry.
 

CanadaRAM

macrumors G5
The myth of rampant government inefficiency is supported by atypical examples. You can always find the $6000 hammer or the commemorative golf balls at $10 each.

The reality where I live is that after 20+ years of budget cutbacks and expanding population, the LINE STAFF (the actual people who do the work as opposed to the political and bureaucratic staff) of the government agencies delivering essential services have been cut back well below viable levels, programmes have been cut, people are stretched way thin delivering education, health services, regulatory and revenue services (for industry and primary resource extraction), those types of mildly important things.

Where some services have been contracted to the private sector, we are finding in some high profile cases (surprise, surprise) that the workers are paid half as much, and service has dropped to unacceptable, even hazardous levels (recent example here, hospital cleaning and food services). In many cases (especially in non-revenue, essential service and regulatory functions, as a previous poster pointed out) the private sector cannot do a "better" or "more efficient" job than government. (Another cherished myth).

And indeed, when given the chance, the private sector is way better at wasting money than the government (our own AdScam: government contracted out administration of federally supported cultural programmes, private sector promptly ripped the programmes off for $100 million)

You can pick out examples of waste at the top. But to contend that the front lines of government service are overfunded or wasteful, or are giving the citizenry "too much" service, or that social services should be shouldered by churches and charities, that is simply not the reality from where I sit.
 

stubeeef

macrumors 68030
Aug 10, 2004
2,702
2
For Immediate Release
Contact: Mark Carpenter/Tom Finnigan
(202) 467-5300
July 7, 2004

Related Links:

Press Release Archive

Cost of Government Day:
Wasteful Spending Takes Its Toll

(Washington, D.C.) - Citizens Against Government Waste (CAGW), in recognition of Cost of Government Day, today expressed outrage at the federal, state, and local governments' continued abuse of hundreds of billions of tax dollars in outdated, ineffective, duplicative, and wasteful programs and agencies. Cost of Government Day is the date on which the average American worker has earned enough to pay off his or her share of tax and regulatory burdens imposed by all levels of government, according to Americans for Tax Reform (ATR). CAGW recommends that governments at all levels move to aggressively cut taxes and waste and reduce regulations to diminish American families' tax burden.

"It does not require more than half the national income for the government to protect the life and liberty of every American," CAGW President Tom Schatz said. "A huge chunk of these tax dollars gets regurgitated in the form of wasteful programs."

According to the report, Americans now work more than half of the year 189 days to pay their share of the cost of government. Americans worked one day less than last year, but this meaningless decline was after a 10-day jump from 2000 to 2003. To put the modern tax burden in historical perspective, the American Revolution was fought over British taxes that consumed 3 percent of colonial income. Serfs of the Middle Ages turned over about one-third of what they produced to their landlords.

"We surrender more than half of our working lives to the government," Schatz continued. "In exchange, we get $50 million for an indoor rainforest in Coralville, Iowa. Taxpayers should be outraged by the government's ongoing waste of their hard-earned money."

Earlier this year, CAGW identified 10,656 federal pork projects in its 2004 Congressional Pig Book, an increase of 13.8 percent from last year. The cost of these projects was $22.9 billion, or 1.6 percent more than last year's total of $22.5 billion. The group also identified $1.3 trillion in savings over five years in its Prime Cuts report.

"As the cost of government turns more American lives into a financial struggle, the government invents new ways to increase its share," Schatz continued. "Cost of Government Day is today because members of Congress have chosen to spend tax dollars on projects such as the International Fund for Ireland and the National Wild Turkey Federation in South Carolina."

"Cost of Government Day reminds taxpayers how much easier their lives would be without profligate government spending," Schatz concluded. "The vigilant uncovering of waste, fraud, abuse, and mismanagement exposes the lie that high taxes are necessary for essential government services."

The complete report can be accessed on ATR's website: http://www.atr.org.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.
LINK

edit:I just bought some gas for the minivan, it hauls the family of 5. Gas was $2.13 per gallon, and I bought 18 gallons after driving 391 miles yielding just over 21mpg. The gas cost just over $38 of which I paid 42.7¢ tax per gallon, or 20% tax, totalling $7.68. We will drive approx 15,000 miles with this van this year, at 21mpg, we will buy 714 gallons and pay $305 in taxes just for gas, then $186 in property tax on our 6 yr old van that cost hundred s in sales tax, license fees, etc...
Nearly 500.00 in taxes to drive the van around this year. Not income taxes, Not taxes on a profit I have made, but taxes on an item that gets us to work to pay taxes, that gets the kids to school, that gets us to the grocery store, and doctor. Of course this is on one vehicle, not my 89 CRX HF that gets 46mpg combined, but only has 2 seats. it is another 27+111=$138 in just ownership and gas taxes (not taxes on tires, license, and car repairs, or annual inspections). This is $638 on two old cars for ownership and gas only.
You mention government pay, but not benefits, my wife pays $0 health insurance premiums as a school teacher, and gets a pension, and has a version of a 401k. I know of no one personnaly getting a pension. Most people I know pay hundreds (thousands per year) in healthcare premiums and have 0 in pensions.
 

miloblithe

macrumors 68020
Nov 14, 2003
2,076
28
Washington, DC
Can you explain to me how "Americans now work more than half of the year 189 days to pay their share of the cost of government" and yet government expenditures are 30 some percent of GDP. In their report they claim that "the cost of government consumes 51.6 percent of national income."

Aha. Their claims are based on their _estimates_ of the regulatory burden. This is crap math. Regulation is made to correct inefficiencies in the market. No reasonable economist thinks that markets function perfectly on their own. Reasonable debate centers on how much regulation is useful and what kinds of regulation are most efficient (tariffs vrs. quotas and the like). The report doesn't show how the costs of regulations are calculated. Probably because they expect their loyal readers not to question the validity of their claims.

Oh, and that's a nice, even-handed study and source.
 

stubeeef

macrumors 68030
Aug 10, 2004
2,702
2
How's your pension?
According to the CBO 2004 Discretionary spending was 39% of spending, nearly 900 billion.
http://www.cbo.gov/showdoc.cfm?index=1944&sequence=0
Individual and Social Security taxes were 81.6% of "revenue", corp & other was the rest.
The individual burden is nothing less than stiffeling.

edit, make sure you are counting apples and not eating oranges. Tax day takes into account Federal AND state, AND local taxes, not just fed. Keep up.
How's your pension?
 

stubeeef

macrumors 68030
Aug 10, 2004
2,702
2
More underpaid government employees, with pensions.........
For Immediate Release
TSA Audit an Outrage

(Washington, D.C.) Citizens Against Government Waste (CAGW) today called for a scaling back of the Transportation Security Administration (TSA) after an audit revealed massive waste in a one-year contract given to a private firm after the terrorist attacks of September 11, 2001. The audit, performed by the Defense Contract Audit Agency and obtained by The Washington Post, calls into question $303 million of the $741 million spent by NCS Pearson Inc. to hire 60,000 airport passenger screeners.

“The government spent $12,350 to hire each screener," said CAGW President Tom Schatz. “That is more than half of the first-year screener salary of $23,600. There is no organization in the world that should spend that much to hire an employee. These have to be the most expensive employees in U.S. history, and this extravagance must stop.”

The lack of oversight and the failure to follow federal contracting rules led to such expenses as $1,180 for 20 gallons of Starbucks Coffee $3.69 a cup at the Santa Clara Marriott in California.

“They paid latte prices for regular coffee,” Schatz continued. “This ranks as one of the most wasteful government contracts in memory. Post-9/11 urgency is no excuse for what looks like free-for-all looting of taxpayer dollars.”

Important details of the contract were not fixed, allowing the total cost to balloon by more than 700 percent. The hiring process was conducted at 150 hotels and other meeting facilities rather than Pearson’s 925 private centers a disputed decision that resulted in adding $343 million to the cost of the contract. Much of the waste revolves around the army of 168 subcontractors hired by Pearson mostly without competitive bidding. Examples include: $30 to $40 per hour for security guards in the Virgin Islands, double the normal rate; $1,540 to rent 14 extension cords at $5 per day for three weeks at Wyndham Peaks Resort and Golden Door Spa in Telluride, Colo.; and $8,100 for elevator operators at the Marriott Marquis in Manhattan. The company that booked the hotels - which did not even enter into a formal contract with Pearson - took 10 percent off of every room it booked, so it had no incentive to keep costs down. Although Pearson executives blocked a complete review, auditors reviewed “about two dozen of 150 assessment centers and documented unsubstantiated spending at nearly every turn.”

The federal government has spent more than $4 billion on improving transportation security since 9/11. In January 2005, Richard Skinner, acting inspector general of the Homeland Security Department, testified that TSA screeners fared no better in detecting prohibited items than screeners prior to 9/11. An April 2005 Government Accountability Office report found that privately employed screeners outperformed government screeners. The Bush administration might soon recommend major reductions in TSA’s mission.

“Turning over airport security to a massive federal bureaucracy was a wasteful endeavor from the start,” Schatz continued. “It is time to protect both taxpayers and passengers in a more efficient and less costly manner.”

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.
link
 

miloblithe

macrumors 68020
Nov 14, 2003
2,076
28
Washington, DC
“The government spent $12,350 to hire each screener," said CAGW President Tom Schatz. “That is more than half of the first-year screener salary of $23,600. There is no organization in the world that should spend that much to hire an employee. These have to be the most expensive employees in U.S. history, and this extravagance must stop.”
An employee that costs $35,950 in their first year and less afterwards has to be the most expensive employee in U.S. history?

edit, make sure you are counting apples and not eating oranges. Tax day takes into account Federal AND state, AND local taxes, not just fed. Keep up.
And it also counts estimated regulatory costs. Did you even read my post or their report? Try to keep up.

And what are you going on about pensions for? What is your point? Your wife has one. You don't. OK. I've got that. You're mad that government employees have them. Check. Um. Why?
 

stubeeef

macrumors 68030
Aug 10, 2004
2,702
2
miloblithe said:
An employee that costs $35,950 in their first year and less afterwards has to be the most expensive employee in U.S. history?
A 50% finders fee is so out of line, only a government employee could not see how expensive that is!

And it also counts estimated regulatory costs. Did you even read my post or their report? Try to keep up.
if they are only 75% correct it is still way to much. Adding Federal, SS/MC/MC, State, City, Licenses, sales tax, property tax, is beyond control. Did you see in the CBO where individuals account for 82% of govern revenue?

And what are you going on about pensions for? What is your point? Your wife has one. You don't. OK. I've got that. You're mad that government employees have them. Check. Um. Why?
You are the one saying how under compensated government employees are. I know lawyers that are working for the government and even banks, they know they make less, but admit to working half the load they would work in a firm.
Pay is one issue, but heathcare costs and pensions are valuable benefits. Most people seek government jobs because of the high pay to work ratio, and benefits. I (maybe wrongly) believe most people that leave the government do so because of frustration, not pay.
 

MongoTheGeek

macrumors 68040
stubeeef said:
A 50% finders fee is so out of line, only a government employee could not see how expensive that is!
The 50% was expressed as cost of hiring not as a finders fee. Part of it might have been a finders fee but there is also training and equipping to consider. At least $1000 of equipment. There are also layers of bureaucracy which get added. You can't have 5 workers without a supervisor. I am not saying the TSA didn't spend money like a drunken sailor. I am saying that some of the costs are justified.

stubeeef said:
You are the one saying how under compensated government employees are. I know lawyers that are working for the government and even banks, they know they make less, but admit to working half the load they would work in a firm.
Pay is one issue, but heathcare costs and pensions are valuable benefits. Most people seek government jobs because of the high pay to work ratio, and benefits. I (maybe wrongly) believe most people that leave the government do so because of frustration, not pay.
I know I've been tempted to quit my skilled position to take an unskilled public sector job because the combined benefits/pay are far better than what I have.
 

lord_flash

macrumors regular
Aug 6, 2003
166
0
Brighton, England
stubeeef said:
I would love to sell you some real estate on mars, it is expensive, but full of raw materials.
Not a rational point in the first place, but, out of interest, who do you think would buy property on mars from you? Without a government to protect that land, providing policing to stop others stealing it, what use are any rights in land.

I will never understand why there are so many people determined to believe the government is against them, or stealing their money for their own ends. Even the US government isn't run for a profit. And donating money to charity, while comendable, doesn't mean you should be exempt from your own country. Do you use the roads? Have you flown in an aircraft? Neither streets nor air-trafic control are free.

If you want your government to save money and life to be cheaper for you, then persuade them to reduce the amount American farmers recieve in protectionist subsidy (also saving you all that red cross money, since africans would then have the chance of free trade with the states) and stop wasting money on unwinnable wars (drugs, terror).
 

stubeeef

macrumors 68030
Aug 10, 2004
2,702
2
thanks mongo, got that finders fee part wrong.

I am not aware of another 23,000 paying job that cost 12,000 to put in place, with the possible exception of some co-pilots (very few). The worst part is the lack of increased performance of the previous private screeners, I don't mind paying more to GET MORE, it is the blowing the money overboard that drives me nutz!

He is a pitful example.
Under Government and Military budget rules, it has been a use it or lose it world. If a Navy squadron did not use all of its fuel by Sept 30th, they had little justification for more the next year (picking on the Navy, all branches were/are as bad). So what would they do? For years (not anymore) they would launch the planes with full fuel on the 30th, and they would climb up and dump it. Yes dump it, cause in the Government world of smarts, this is how the budget works. INSANITY RULES.
Please view my post in the political thread on the Dept of Education, and methods they have used over the decades to reduce effecientcy and waste billions.