Posts for June, 2012
Last year, the Social Security Administration paid out $736 billion in benefits and had a budget of $748 billion. This means that the SSA consumed $12 billion in the administration of the social security program.
The assets of this agency includes a headquarters in Woodlawn Maryland, 10 regional offices, 8 processing centers, approximately 1500 field offices, and 37 Teleservice Centers. As of 2010[update], about 93,000 people were employed by the SSA.
The combined spending for all social insurance programs constitutes 37% of government expenditure.
Why does the SSA need to be this massive? A large portion of the SSA is in place to deal with fraud and corruption. The SSA hires thousands of investigators to look into abuses. Computer programs are being written to find doctors, health care facilities and billing offices who double bill. Agencies within SSA are formed to watch other SSA agencies. Despite the best intentions of the SSA, the fraud and corruption continues to grow exponentially.
Medicaid is also administers a large bureaucracy to monitor fraud. Unlike Medicare, which is solely a federal program, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive matching funds and grants. Some 43 million Americans were enrolled in 2004 (19.7 million of them children) at a total cost to the federal government of $295 billion. This does not include the state government costs.
Medicaid payments currently assist nearly 60 percent of all nursing home residents and about 37 percent of all childbirths in the United States. The federal government pays on average 57 percent of Medicaid expenses.
Illinois has one of the most expansive Medicaid programs in the country, with annual state and federal spending of $15 billion. That compares to a state budget of $33 billion. In the Land of Lincoln, you can qualify for Medicaid if your income is under 200 percent of the federal poverty level—$44,700 for a family of four. Children qualify at 300 percent of FPL. One out of every five Illinoisans is on Medicaid, including one-third of all Illinois kids.
Illinois wanted more proof of residency than the current requirement that calls for little more than writing down an address, officials said. The new Illinois law also asked for a month’s worth of pay stubs instead of just one paycheck to show income eligibility. That requirement, officials said, was aimed at lessening the chance that a person could become eligible simply by using a particularly small paycheck to make his overall income look smaller than it is.
The federal government denied the Illinois plans because states are not allowed to put in place procedures that are more restrictive than they were on March 23, 2010, the day Democratic President Barack Obama signed the sweeping federal Affordable Care Act.
As a result, Illinois is buckling under the load of new Medicaid recipients.
Illinois is not alone. New York and California are looking for ways to get more control of the program to reduce the potential for fraud. Within the last 2 years, CMS (Center for Medicare and Medicaid Services) started several ‘monitoring’ programs. CERT, PERM (Payment Error rate Measurement), QEP (Qualified Entity Program), RAP (Recovery Audit Program) and Data Analysis Support and Tracking. The primary function of these programs is to track fraud. The administration and staffing of these programs is upwards of $750 million per year.
This story explains the problem.
“From Channel 2 in Buffalo, New York, comes the story of Scott Graham, a man with sickle-cell anemia that causes him stabbing pain. Graham doesn't have a job, insurance or car. So, when he feels bad, he doesn't call a cab. He calls 911 to have an ambulance drive him to the hospital. A 2 On Your Side investigation found that from January 2006 to May of 2011, Rural Metro Ambulance picked him up 603 times. Medicaid picked up the tab for each ride, costing taxpayers at least $118,158. How does the federal government explain this kind of waste in the federal health system? Apparently, the bureaucrats were more interested in finding out who blew the whistle: 2 On Your Side contacted Medicaid to have them look into the number of times Graham used an ambulance. Medicaid appeared more interested in how we got the information, rather than how much it cost taxpayers to pick him up.
Scott Graham would never have used an ambulance 603 times if he were paying for it. But since it is no cost to him, it is of no concern to him. But the conduct of Mr. Graham pales in comparison to the conduct of Medicaid. Medicaid not only condones this behavior and defends this behavior; they intend to punish those who have uncovered this grievous sin. Cost control does not appear to be anywhere on the radar.
Medicaid fraud and abuse costs $60 billion each year nationwide. But Medicaid provides services to a small percentage of citizens. If Medicaid had served a larger percentage of citizens, it would have bankrupted the state of New York, which now teeters at the brink.”
When a sizable portion of the Medicaid and Social Security recipients are determined to abuse the privileges of a well-intended program, it destroys the possibility that future generations will even have access to those privileges. This amounts to taking advantage of short-term gains to the detriment of future solvency.
In 2010 the Chinese government made a bold prediction of selling 500,000 electric vehicles per year by 2015. Now, at the half-way point in the schedule, the Chinese manufacturers have only sold 500 EVs this year. With added incentives and an increase in the amount of EV re-charging stations, 2000 EVs appear to be the new target.
In a recent Associated Press article, the Chinese Premier Wen Jiabao acknowledges that progress is slow and the EV is not the car that they had envisioned in 2010. The Chinese do not think that the EV is ready for the market.
US EV sales have not fared well, either. Sales of the Chevy Volt have been slow. Nissan sold 370 Leafs in April, 579 in March, and 478 in February. A123 Systems, an EV battery maker that was granted $249 million in funding from the Department of Energy, posted a first-quarter net loss of $125 million and is said to be struggling.
"There's a general view that, if you throw money at it, you can do whatever you want," David Cole, chairman emeritus of the Center for Automotive Research, told Bloomberg news. "But this technology isn't at that point yet...and may never be." Cole and many other engineers in the auto industry have repeatedly told us that hybrids and plug-in hybrids are still needed to serve as a bridge to the electric car, which will not be ready for prime time for many years. Even then, Cole has said that plug-in hybrids, such as the Volt, will need to bring their MSRPs down by about 40 percent before they can be really competitive.
I suspect that if you canvassed engineers around the auto industry, you'd find that most agree with the Chinese belief that the EV is not ready for the market.
The battery is an expensive, inefficient, impractical method of delivering power to move a vehicle. An improvement in manufacturing may reduce the cost slightly, but it still is not a worthwhile product.
The worst news is that the money to develop the technology is drying up. Bloomberg News reported recently that venture capitalists are hesitant to lend support for EV-based efforts. "The only thing that would cause America to migrate towards the all electric cars is to lose the economic trade war with China and have it imposed on us," a venture capitalist told Bloomberg.
Money had flowed into battery and EV technology only because the Federal government made it attractive to do so. Once the incentives started drying up, so did the venture capital. This technology will not and can not stand on its own.
Looking at numbers for the Chevy Volt:
- Typical re-charge: (power from 120 V AC socket @ 12 V peak is 13.38 kWh per 40 miles)
- Chemical conversion efficiency: 0.845 of the pack theoretical capacity but that includes the charging loss.
- Power consumption: 335W/mi @ 40 MPH
- Total vehicle weight with batteries: 3781 lbs
- Battery pack: 16 kWh theoretical capacity
- Battery power cost: $540.54 Battery & support cost per mile of range
- Vehicle cost: Volt Base retail price: $39,145 (MSRP)
- Comparative gasoline powered car: Chevy Cruze: $16,800 - $23,190 (MSRP)
- Toyota’s Bill Reinert claims: “Toyota's view is that the all-electric range adds $500/mile to the overall cost of the vehicle.”
- All electric range: 40 miles; listed (Motor Trend had averaged 35 miles per recharge)
This is another case of the Federal government throwing $billions into a black hole called the EV. This is also another case of the engineering community not standing up and stating with conviction that this is not a worthwhile endeavor. They were beholden to the Federal cash. The phrase commonly heard, “If we don’t take this $250 million for battery development, someone else will.” Thus, with cowardice and lack of morals the conditions were set for the US to lurch closer towards bankruptcy.
In 2009, the Justice Department launched a program under the guise of gathering intelligence on the Mexican drug cartels. The claim was that guns (about 2500 AK47s) would be run into Mexico and then the guns would be tracked to find out where they end up.
According to the NY Times, “ATF’s Phoenix office began Fast and Furious, in which agents monitored but did not disrupt the sale of guns from American stores to suspected “straw purchasers,” people who obtain guns for criminal organizations. The goal was to track the guns to a major drug cartel.”
When American Border Patrol agent, Brian A. Terry, was killed by one of the ‘Fast and Furious’ guns in Arizona in 2010, an investigation was launched into the program.
The investigation uncovered a trail of mismanagement and dubious motives. First, the guns that the ATF allowed into Mexico were never tracked. No tracking mechanism was even put into place. An NRA spokesman claims that the ‘Fast and Furious’ program was never intended as a program to track drug cartel, otherwise the guns would have been tracked. Instead he claims that this program is about introducing a weapons ban. The NRA points to an interview of Mexican President Felipe Calderon by CNN in 2010 regarding the shooting of agent Brian Terry. In the interview President Calderon used the opportunity to call for a ban on assault weapons. According to the NRA, this call for an assault weapons ban was right on cue.
The second reason why it is believed that ‘Fast and Furious’ was not designed to track the cartel is that this type of program is taken directly from the book, “Rules for Radicals’, by Saul Alinsky. Alinsky promotes the idea of dis-arming the public. But under ordinary circumstances, the public will not willingly give up their arms. Chaos must be part of the equation. Alinsky calls for the creation of carefully crafted chaos. The public will then come to government, clamoring for a solution. The solution will, of course, be the re-interpretation of the second amendment. Obama, being a disciple of Alinsky, hasn’t strayed too far from the manual.
The third reason the NRA believes that ‘Fast and Furious’ is a covert second amendment altering plan is that Mexican cartels are not a high enough priority to risk this type of program. In 2005, the ATF under the Bush administration proposed a program called, ‘Wide Receiver’ which was a small scale gun tracking operation into Mexico. These guns were equipped with RFID devices for satellite tracking. The program was intended to be a sting operation to catch the smugglers and straw purchasers. But the program was shut down shortly after it was launched. The few guns that got out were all retrieved. The Justice department believed that it was too high of a risk to be warranted.
The fourth reason that the investigators believe ‘fast and furious’ is really about gun control is that some of the DOJ documents list it as a motive. Frederick Hill, congressional investigator, said, "Emails from officials who worked on Fast and Furious clearly show that they wanted to use aspects of the operation to justify new restrictions on gun sales." Hill provided several documents on the subject from Fast and Furious officials to Fox News and other outlets.
CBS online news made a similar claim, “Documents obtained by CBS News show that the Bureau of Alcohol Tobacco, Firearms and Explosives (ATF) discussed using their covert operation "Fast and Furious" to argue for controversial new rules about gun sales.”
In the ideal world, the investigation would be lasted 5 minutes. Once the congressional office asked for documents relating to this program, Eric Holder should have handed over the documents and stated that the program was a failure and that it was cancelled. Unfortunately, he obstructed the investigation. The obstruction only served to widen the scope and scrutiny of the program. When Holder did produce documents, they were either blank or contained vast blacked out sections.
As the Nixon administration so aptly demonstrated; the cover up is worse than the crime. The ‘fast and furious’ program may not have had a criminal element to it. Not even Daryl Issa believes that there was a criminal element; only extremely bad judgment. But now that Obama has declared executive privilege, the specter is certainly raised that there may be more to this program than what we know.
When Nixon used executive privilege to cover his spying activity at the Watergate Hotel, most of the Republican broke ranks with him. A bi-partisan congress found Nixon in contempt of court and were ready to impeach before he resigned.
Most Democratic leaders are standing by Obama. Nancy Pelosi claims that the fast and furious investigation actually deals with voter suppression. When asked about the investigation, her response was, “I am not in favor of voter suppression. I’m telling you – this is connected.” Other Democrats claim that this is just political theater and an election year gimmick.
However, 31 congressional Democrats (including Ron Kind of Wisconsin) have broken ranks and submitted an open letter to the DOJ:
"Reports of the tactics used in this operation are extremely troubling. The ATF allegedly encouraged gun store owners to sell thousands of firearms to customers whom store employees considered suspicious. Our concerns were heightened with news that one of the firearms sold may have been used in the murder of a Border Patrol agent. These allegations call into question the judgment of the agents involved. It is equally troubling that the Department of Justice has delayed action and withheld information from Congressional inquiries."
So far the DOJ response has been unusual. Assistant attorney general, Ronald Weich resigned his position and provided statements to the media and Eric Holden has camped out in Denmark. The DOJ then retracted the statements made by Weich, with Holder saying that Weich did not know the information he had provided was inaccurate. Then, the DOJ formally withdrew the Weich denial and acknowledged that Fast and Furious was “fundamentally flawed.”
The big question is why did Obama declare executive privilege. Who is he trying to protect? Is there more to ‘Fast and Furious’ than they have been claiming? Is it an attempt to run out the clock on the elections?
By declaring executive privilege Obama has jumped from the frying pan into the fire.
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