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SBJ Special Report

Nov 15, 2011 -  The federal government’s Office of Management and Budget (OMB) announced today that the Administration cut what it terms “wasteful and improper payments” by $17.6 billion dollars in 2011 as part of the Obama Administration’s ‘Campaign to Cut Waste,’ fueled by decreases in payment errors in Medicare, Medicaid, Pell Grants, and Food Stamps. 

And,  OMB Director Jack Lew issued a memo to agencies today directing them to step up their oversight of contractors and grant recipients in order to eliminate unnecessary risk of waste, fraud and abuse. Specifically, the guidance directs agencies to strengthen their suspension and debarment procedures – tools that allow the Federal government to stop doing business with bad actors who put taxpayer dollars at risk.

Combined with the improper payment cuts in 2010, agencies have avoided making over $20 billion in improper payments in the two years since President Obama issued an Executive Order initiating an aggressive campaign against wasteful payment errors.

“When the President and I launched the Campaign to Cut Waste we knew success would be measured by results, not rhetoric,” said Vice President Biden Tuesday morning. “The sharp reduction in payment errors announced today demonstrates this Administration is serious about cutting waste,” he added.

“Because of the sustained commitment from the President, the Vice President, and leaders across the Administration – and the effective use of technology – we are seeing real progress cracking down on this waste of taxpayer dollars that has persisted for far too long,” said OMB Director Jack Lew. “Through aggressive and innovative solutions being deployed by Federal agencies, we are on track to meet the President’s bold directive to prevent $50 billion in payment errors by the end of 2012. This is a good step, but not the end. We will continue to work day and night to prevent taxpayer dollars from being wasted in payments to the wrong people or in the wrong amount.”

Improper Payments  Cuts Prevents $17.6 Billion in Waste

In 2010, the President announced that by the end of 2012, the Administration would avoid $50 billion in improper payments, cut Medicare fee-for-service errors in half, and recapture $2 billion in overpayments to contractors.  Thanks to the Campaign to Cut Waste, the Administration is on track to meet or exceed these goals, Biden states.  Specifically, the Administration:

- Cut the 2011 government-wide error rate to 4.7 percent, a sharp decrease from the 2010 error rate of 5.3 percent and the 2009 error rate of 5.42 percent.

- Prevented $17.6 billion in wasteful improper payments as a result of the declining error rate.  When combined with results from last year, the total amount of error avoided since 2009 totals over $20 billion.  Also, for the first time in six years, the total amount of improper payments reported declined from the previous year.  

- Recaptured over $1.2 billion in overpayments from government contractors last year.  When combined with the roughly $700 million in overpayments recaptured in the previous year, the government is very near to achieving the President’s $2 billion mandate.

These results were driven by successes in specific programs where results are improving because Federal agencies are increasing scrutiny of payments by initiating more robust audits, leveraging new technologies, or building partnerships with States focused on improved program integrity.  

As examples, the Administration points to:

1)      Medicare and Medicaid. The Medicare fee-for-service error rate fell from 9.1 percent in 2010 to 8.6 percent in 2011.  Since 2009, the error rate has fallen more than 2 percentage points. The overall error rate for Medicare programs fell from 10.2 percent in 2010 to 8.6 percent in 2011.  Since 2009, the error rate has fallen nearly 3.2 percentage points.

- Medicare fee-for-service avoided about $7 billion in payment errors.

- Medicare Part C avoided about $5 billion in payment errors.

- Medicare Part D reported a composite error rate for the first time, with an error rate of 3.2 percent, well below the government average.

- In addition, the error rate for Medicaid fell to 8.1 percent in 2011 from 9.4 percent in 2010, avoiding about $4 billion in payment errors since 2009.

2)      Supplemental Nutrition Assistance Program (SNAP – Formerly Food Stamps). The error rate for the SNAP program reached an all-time low, falling to 3.8 percent this year, avoiding a projected $800 million in payment errors compared to before the President issued his directive.  The program has decreased its error rate every year of the Obama Administration. USDA also reduced the prevalence of trafficking to 1 percent.  This decline can be attributed to USDA’s work with States reducing fraud and holding bad actors accountable. Using the latest technology to identify suspicious activity and putting boots on the ground to investigate it, USDA has permanently disqualified more than 8,300 retail stores over the last ten years. In fiscal year 2011, USDA conducted nearly 5,000 undercover investigations to counter fraud. In fiscal year 2010 alone, States conducted 847,000 fraud investigations, disqualified 44,000 individuals, and recovered $287 million in recipient claims.  

3)      Pell Grants.  The error rate for Pell Grants went down to 2.7 percent (2011), avoiding roughly $300 million in payment errors compared to prior to the President’s directive. In 2010, the Department of Education implemented a process to allow Federal Student Aid applicants filling out online applications to go to the Internal Revenue Service (IRS) website to retrieve their income information and transfer it directly to their application. This process helps prevent improper payments in the Pell Grant Program by making it easier for students and parents to enter the correct tax return information and receive the correct amount of student aid.  This reform simplified the aid application process and will continue to reduce improper payments further as more students use the system in future years.

Other major programs contributing to error rate reductions with improved results this year include the Earned Income Tax Credit (Treasury), Supplemental Security Income (Social Security Administration), and Rental Housing Assistance Programs (Housing and Urban Development).

“The results announced today demonstrate that the government is on track to meet the President’s directive to prevent $50 billion in error by 2012 and the Administration will continue to ramp up efforts.  Nine months ago, the President proposed in his 2012 Budget even more aggressive tools that will help drive down this waste. If Congress passes these proposals, they will result in more than $160 billion in savings to the Federal Government over the next decade. As part of a series of executive actions announced this fall because we can’t wait for Congressional Republicans to act, the Administration is launching new pilot programs to further the progress being made cutting waste and fraud in Medicare and Medicaid and stepping up efforts to bar bad actors who put taxpayer dollars at risk for waste and fraud from doing business with the Federal government,” Biden added.  

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SBJ Staff Report

Oct 17, 2011 – Georgia’s U.S. Senators, Saxby Chambliss, R-GA and Johnny Isakson, R-GA, signed on to co-sponsored the ‘Jobs Through Growth Act’ last week, a Republican alternative to the president’s jobs bill that failed in the Senate last week.

The Jobs Through Growth Act reforms the tax code, cuts spending and reins in overregulation to help foster an environment in which the private sector can grow, invest and create jobs in America again, according to the Senators in a joint statement.

“We don’t need to raise taxes on Americans to stimulate the economy – we need to reduce corporate taxes, reform the tax code, eliminate burdensome and costly regulations, put a two-year moratorium on additional regulations from Washington, and repeal Obamacare,” said Chambliss.

“This bill contains the best ideas from Republicans on ways to strengthen our economy, encourage more job creation and greater investment, and begin putting America back on a sustainable fiscal path,” he added.

“As someone who ran a company in Georgia with hundreds of employees for three decades, I understand that over-taxing and over-regulating business is a recipe for stifling job growth and economic recovery,” said Isakson. “Unlike the President’s jobs plan, this alternative bill contains solutions that are based on free-market principles that will empower the private sector, rather than the federal government, to get people back to work and get our country back on track.”

The bill, introduced by U.S. Sens. John McCain, R-Ariz., and Rand Paul, R-Ky., includes provisions such as the passage of a Balanced Budget Amendment, and the repeal of Obamacare. A full summary of the legislation is below:

JOBS THROUGH GROWTH ACT

The Republican Plan To Put Americans Back To Work

SPENDING REFORM

- Require a Balanced Budget Amendment to the Constitution - (S.J.Res.10, Sen. Hatch)

Limit the ability of Washington to raise taxes to pay for runaway spending and would enshrine firm tax and spending limitations in our Constitution. Job creators will have certainty that Washington will not continue to grow unchecked and consume more and more resources that would otherwise be available to fuel job creation.

- Enact Enhanced Rescission Authority - (S.102, Sens. McCain & Carper)

This bipartisan proposal would give the President the statutory line-item veto authority to reduce wasteful spending. This is an important tool to ensure that tax dollars are spent wisely and efficiently. Congress would vote up-or-down on proposed spending cuts.

TAX REFORM

- Reduce and Reform Individual, Small Business and Corporate Taxation

A simplified tax system will keep more money in the hands of consumers, small businesses and job-creators. Reduce individual income tax rates to a maximum of 25 percent with two marginal rates. Within 90 days, the Senate Finance Committee will report back on recommended changes in credits and deductions to make this revenue neutral.

Reduce the top corporate tax rate to no more than 25%. Within 90 days, the Senate Finance Committee will report changes in credits, deductions and subsidies, with priority given to eliminating all industry-specific provisions and revenue neutrality.

- Repatriation and Territorial Reform

Our current corporate tax code is outdated and is a major reason why there is up to $1.4 trillion in foreign earnings trapped overseas in countries where U.S.-based multinational companies do business. Under a reformed territorial system of corporate taxation, this plan would create a permanent incentive for companies repatriating foreign earnings to the U.S. economy.

- Withholding Tax Relief Act - (S. 164, Sens. Scott Brown, Olympia Snowe, David Vitter)

Removes the undue burden on businesses of all sizes by repealing the provision in the tax code requiring federal, state and local governmental entities to withhold 3% of payments due to private vendors who supply their goods and services.

REGULATION REFORM

- Repeal the Job-Killing Health Care Law Act - (S.192, Sen. DeMint)

Repealing and replacing Obamacare will remove over $550 billion in new taxes, over $300 billion in higher health care costs, and $2,100 in increased family insurance premiums from employers and workers. The job-destroying policies of Obamacare are estimated to cost the economy at least 800,000 jobs and hit small businesses especially hard. Studies have demonstrated Obamacare ¡V not yet fully implemented ¡V is a huge driver of unemployment. Economists have referred to the passage of Obamacare as a ¡§structural break in job growth,¡¨ an economic term describing the correlation between a single event and resulting job-loss. Obamacare ruined our 2010 recovery slowing private sector hiring to one-tenth of its previous clip, down to just 6,500 jobs per month. In addition, nearly 80 percent of small businesses and 70 percent of all businesses may be forced to drop their current health care plans.

- Medical Malpractice Reform ¡V (S. 197 ¡V The Medical Care Access Protection Act)

Medical malpractice abuse in the US health care system is out of control. Junk lawsuits drive up the cost of health care and the system must be reformed. Reform Medical Malpractice law based on Texas "stacked caps" to improve patient access to health care and provide improved medical care by reducing the excessive burden the liability system places on the health care delivery system.

- Financial Takeover Repeal - (S.712, Sen. DeMint)

We need to lift the burdens the Dodd-Frank bill placed on community banks and the small businesses that depend on them for financing, from oppressive new regulations to the resulting uncertainty that prevents growth. Repealing Dodd-Frank will also significantly reduce financing costs for consumers and businesses, as well as reduce costs to manufacturers in hedging their risks in the financial markets. Research compiled by the Financial Services Roundtable indicates that the cumulative weight of new financial rules, from Dodd-Frank to similar efforts abroad, could cost the U.S. economy 4.6 million jobs by 2015.

- Regulations from the Executive In Need of Scrutiny (REINS Act) - (S.299, Sen. Paul)

The REINS Act would require Congressional approval by joint resolution of any federal rule that would cost the economy $100 million or more.

- Regulation Moratorium and Jobs Preservation Act - (S.1438, Sen. Ron Johnson)

Prohibits any federal agency from issuing new regulations until the unemployment rate is equal to or less than 7.7 percent (the unemployment rate in January 2009).

- Freedom from Restrictive Excess Executive Demands and Onerous Mandates Act - (S.1030, Sens. Snowe and Coburn)

Streamlines and strengthens the Regulatory Flexibility Act by requiring regulators to include (indirect) economic impacts in small-business analyses, requiring periodic review and sunset of existing rules, and expanding small business review panels as a requirement for all federal agencies, instead of just the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA).

- Unfunded Mandates Accountability Act - (S. 1189, Sen. Portman)

Requires agencies specifically to assess the potential effect of new regulations on job creation and to consider market-based and non-governmental alternatives to regulation; broadens the scope of Unfunded Mandate Reform Act to include rules issued by independent agencies and rules that impose direct or indirect economic costs of $100 million or more; requires agencies to adopt the least burdensome regulatory option that achieves the goal of the statute authorizing the rule; creates a meaningful right to judicial review of an agency¡¦s compliance with the law.

- The Government Litigation Savings Act - (S.1061, Sen. Barrasso)

Reforms the Equal Access to Justice Act (EAJA) by disallowing the reimbursement of attorney¡¦s fees and costs to well-funded special interest groups who repeatedly sue the federal government. The bill retains federal reimbursements for individuals, small businesses, veterans and others who must fight in court against a wrongful government action. By eliminating taxpayer-funded reimbursement of attorney¡¦s fees for wealthy special interest groups, the legislation helps eliminate repeated, procedural lawsuits that delay permitting, exploration and land management.

- Employment Protection Act of 2011 - (S.1292, Sen. Toomey)

Requires the EPA to analyze the impact on employment levels and economic activity before issuing any regulation, policy statement, guidance document, endangerment finding, or denying any permit. Each analysis is required to include a description of estimated job losses and decreased economic activity due to the denial of a permit, including any permit denied under the Federal Water Pollution Control Act.

- Farm Dust Regulation Prevention Act - (S.1528, Sen. Johanns)

Prevents the EPA from regulating dust in rural America, while still maintaining protections to public health under the Clean Air Act. The EPA is currently considering a dust standard that would, by the agency¡¦s own admission, double the number of counties that are in nonattainment status and put activities like tilling soil, harvesting crops and driving down unpaved roads under the purview of federal regulations. Under this bill, the EPA would still be allowed to regulate dust, but only after demonstrating scientific evidence of substantial adverse health effects of farm dust.

- National Labor Relations Board Reform - (H.R.2587, Rep. Tim Scott)

From back-door card-check, to threatening jobs in South Carolina, the out-of-control National Labor Relations Board (NLRB) is paying back union officials at the expense of worker rights and jobs. To create more jobs, legislation prohibiting the NLRB from stopping new plants and legislation to prevent coercive, quick-snap union elections should be passed.

- Government Neutrality in Contracting Act - (S.119, Sen. Vitter)

Repeals the President’s order requiring government-funded construction projects to only use union labor. This would reduce costs of federal jobs projects by as much as 18 percent.

- Financial Regulatory Responsibility Act - (S. 1615, Sen. Shelby)

Requires financial regulators to conduct consistent economic analysis on every new rule they propose, provide clear justification for the rules, and determine the economic impacts of proposed rulemakings, including their effects on growth and net job creation.

- Regulatory Responsibility for our Economy Act - (S. 358, Sen. Roberts)

Codifies and strengthens President Obama's January 18th Executive Order that directs agencies within to review, modify, streamline, expand, or repeal those significant regulatory actions, that are duplicative, unnecessary, overly burdensome or would have significant economic impacts on Americans. It directs meaningful review and possible revocation of regulations counter to our nation's economic growth.

- Reducing Regulatory Burdens Act - (H.R. 872, Rep. Bob Gibbs)

Eliminates a new duplicate EPA regulation that will cost millions of dollars to implement without providing additional environmental protection. The current rules for pesticides, which have been in place for decades, will remain in force.

DOMESTIC ENERGY JOB PROMOTION

- The Domestic Jobs, Domestic Energy, and Deficit Reduction Act - (S.706, Sen. Vitter)

Will require the Interior Department to move forward with offshore energy exploration, and create a timeframe for environmental and judicial review.

- The Jobs and Energy Permitting Act - (S.1226, Sen. Murkowski)

Eliminates confusion and uncertainty surrounding the EPA¡¦s decision-making process for air permits, which is delaying energy exploration in the Alaskan Outer-Continental Shelf (OCS). It will create over 50,000 jobs and produce one million barrels of oil a day.

- The American Energy and Western Jobs Act - (S.1027, Sen. Barrasso)

This bill streamlines the preleasing, leasing and developmental process for drilling on public land and requires this Administration to create goals for American oil and gas production.

- Mining Jobs Protection Act - (S.468, Sens. McConnell, Inhofe, Paul)

Requires the EPA to ¡§use or lose¡¨ their 404 permitting review authority. Under this bill the EPA will have 60 days to voice concerns about a permit application, or the permit moves forward. Any concerns voiced by the EPA would need to be published in the Federal Register within 30 days.

- Energy Tax Prevention Act - (S.482, Sen. Inhofe)

Prohibits the EPA from using the Clean Air Act to regulate greenhouse gases. It is estimated that greenhouse gas regulation could result in a loss to the economy of as much as $75 billion and 1.4 million jobs by 2014.

- Repeal Restrictions on Government Use of Domestic Alternative Fuels

Repeal Section 526 of the Energy Independence and Security Act of 2007, which prohibits federal agencies from contracting for alternative fuels, such as coal-to-liquid fuel. This provision stifles the coal industry and puts our national security at risk by limiting the Pentagon¡¦s ability to get its fuels from domestic sources.

- Public Lands Job Creation Act - (Sen. Heller)

Eliminates a burdensome and unnecessary delay in approval of projects on federal lands by allowing the permitting process to move forward unless the Department of the Interior objects within 45 days. This will streamline the permitting process for domestic energy and mineral production on BLM lands without compromising environmental analysis.

EXPORT PROMOTION

- Renew Trade Promotion Authority - (S. Amdt. 626, Sen. McConnell)

Provide the President with fast-track authority to negotiate trade agreements that will eliminate foreign trade barriers and open new markets for American goods.

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By Lou Phelps, SBJ Staff

Oct 17, 2011 - With strong bipartisan support, both the House and Senate finally approved long-stalled free trade agreements with South Korea, Colombia and Panama last Wednesday evening.  The approvals pave the way for a $13 billion boost in exports to the countries and could create tens of thousands of jobs, according to Congressman Jack Kingston (R) who voted in favor of the agreement with Panama and Korea, though he opposed the trade agreement with Columbia.

Congressman John Barrow (D) voted for the trade agreements with Columbia, but voted against the trade agreement with Panama and Korea – completely opposite from the positions taken by Kingston.

President Barach Obama had been on a road tour for the past few weeks around the U.S. trying to call attention to the stalled agreements, urging the public to pressure their Congressmen to pass the measures. Federal officials had negotiated the agreements with the three countries more than four years ago.  However, Obama’s support was due to an agreement he negotiated with Republican John Boehner that the Republican leadership would extend the benefits programs for U.S. workers who lose their jobs overseas, the concerns of many Democrats about the Bush Administration-era trade agreements.

“From our world-famous Vidalia onions to chemicals, machinery to cotton, and carpets to boats, exports are big in Georgia.  Last year, Georgia exported $28.9 billion worth of goods and exports supported more than 82,000 jobs,” said Kingston, after the vote.  He did not comment on imports that will be allowed as part of the agreements.   

“These free trade agreements will create new opportunities, expand market access and level the playing field for Georgians.  Together they will be a much-needed shot in the arm and will empower businesses to create jobs.  While Georgia already maintains huge trade relationships with the three countries – exporting more than $1.1 billion to them in 2010 – reducing tariffs on Georgian goods stands to increase the relationship and boost Georgia’s economy dramatically if past free trade agreements are an indication,” he added.  

The agreements have been stalled in Congress for a number of years. Many Democrats have been concerned that the agreements would threaten U.S. jobs, and some Republicans objected to aid for U.S. workers who lose their jobs that move overseas.

 The Bush Administration first negotiated the agreements which were later revised by the Obama Administration to demand the worker aid. The worker-aid legislation passed 307 to 122, after John Boehner revised his earlier position, negotiated by President Obama, according to Business Week. Obama would not send the agreements up to Congress without the workers’ aid component.

Each of the trade agreements were voted on separately.  The cochairman of the Congressional Textile Caucus, U.S. Rep. Howard Coble (R-NC), voted for free trade agreements with the nations of Colombia and Panama but against a similar pact with South Korea. Last week, he said that while the agreements with Colombia and Panama will open up new markets for American manufacturers, the Korean trade deal would be devastating to the U.S. textile industry.

But Kingston believes that such agreements are positive for the U.S.  For example, Kingston points to the 2004 ratification of the US-Singapore Free Trade Agreement, where Georgia’s exports to the country increased by 204 percent. And, a similar agreement that passed that same year has allowed Georgia’s exports to Chile to see a 158 percent expansion.

According to the independent, nonpartisan International Trade Commission, the agreements will increase exports to the country more than they will increase imports from them.  For example, the South Korean agreement will increase exports by 30% more than it will increase imports.  The Colombian agreement will increase exports by $600 million more than it will increase imports, Kingston said.

“These free trade agreements will create jobs here at home without costing taxpayers a dime.  At the same time, they will strengthen our strategic allies and help stable, democratic economies grow around the world,” Kingston summarized.

Both Kingston and Barrow voted along party lines on the trade agreements.  Barrow has been in attendance 93% of the time for all votes cast in the House of Representatives this year, but has only voted 71% of the time with the Democratic leadership, according to the Washington Post.  Kingston has been in attendance for 92% of the votes cast in 2011 in the House, and has voted with the Republicans 92% of the time. 

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Oct 12, 2011 - The I-95 Corridor Coalition, the University of Maryland and INRIX announced a 3-year extension and expansion of a program today that significantly improves how state and federal transportation agencies allocate billions of dollars in transportation funds. 

The I-95 Coalition Vehicle Probe Project (VPP), first operational in 2008, uses crowd-sourced traffic data and advanced analytics techniques to turn billions of data points into insights that are transforming the manner in which member states build, manage and measure their road networks.  The project now provides INRIX real-time and historical traffic information for more than 20,000 miles of roads across 10 states along the I-95 corridor. 

"By expanding the program, we expect to achieve even greater gains from smarter investment in our transportation networks and help our members provide improved service to travelers," said George Schoener, executive director, I-95 Corridor Coalition.  "The significance of the project to our member agencies is very clear, with all 10 states investing some level of their own resources in the project, in some cases committed out to 2014."

Key elements of the project's expansion over the next 3 years include:

Massive Coverage Expansion.  The project coverage increases from 5,000+ miles of road coverage in 8 states to more than 20,000 centerline miles in 10 states.  

In addition to complete freeway coverage, North Carolina is investing in coverage across their entire road network gaining access to more than 15,000 miles of highways, interstates, arterials and secondary roads of INRIX real-time and historical traffic information statewide – the first state to standardize on INRIX data – in addition to data on I-95.     

Complete I-95 coverage across Georgia, Florida, Pennsylvania and Virginia including interstates around Savannah, most South Florida limited access roads and all freeways and arterials in Virginia's Hampton Roads area are included.

INRIX data for highway-to-highway interchanges in urban areas offers agencies insight into real-time traffic conditions in areas previously blind to traffic operations.  Many complicated urban area interchanges are now available for viewing.

The expansion permits expansion of the numerous services offered by the Coalition's members and relied on by hundreds of thousands of drivers everyday including:

- I95travelinfo.net. Covering more than 8,000 centerline miles, the free site is designed to assist the millions of multi-state travelers in the I-95 Corridor by providing real-time traffic information and travel times for key destinations across state lines, complimenting in-state 511 services.

- 511 phone and web services in New Jersey, Pennsylvania, Maryland, North Carolina, South Carolina and Florida utilize VPP data to provide services. Georgia is not participating.

- Travel Times on Dynamic Messages are driven by VPP data in Maryland, Virginia, and South Carolina.

Through a complete, precise view of traffic conditions across their road network, the Vehicle Probe Project not only helps target investment in roads and transit in the most critical areas but delivers improved traffic operations at reduced cost.  According to North Carolina DOT where previous approaches to gathering traffic data had a life cycle cost of nearly $50,000 per mile, INRIX vehicle probe data has been proven to deliver more coverage at about 25 percent of the per mile life cycle cost.(1)"