Energy and Water Development FY 2023

House Appropriations: Energy and Water Development, May 27, 2022

House Appropriations: Energy and Water Development, May 7, 2021

FY 2023

I propose we ELIMINATE ALL FUNDING for designing intelligent cars and developing charging stations and better batteries. Enough batteries have caught fire and enough automated cars have crashed into trees or humans to know that it is time to try something else. There are better modalities and they are available now.

Research funds can instead focus on the development of automated cars with central control (rather than its own AI) and energy distribution (rather than being hampered by economically damaging battery development). This  is old and proven technology, i.e., electric trains and buses.

We can pilot this now, in cooperation with the Departments of Energy, Commerce and Transportation, automobile manufacturers, utility companies and eventually selected local governments. 

The same consortia that fund the project can be the backbone for implementing it. Individuals could own cars, while some would be for hire (with monitoring, but not drivers). Debit cards or a link to checking accounts would pay for the car itself (either to rent or own), the roadway and the use of energy and computer services. 

Prices for accessing the road network would vary based on congestion and vehicles could be taken to a public transportation hub (which might be located at their children’s school), with the vehicle returning home empty or going to the next fare. If congestion is low, it may be affordable to drive to work. If it is high, prices for public transit and commuting would be adjusted accordingly.

Energy infrastructure to power the system and facilitate communication would also carry energy and data services, so add xFinity and Cox to the consortium. This also gives us the incentive to improve the grid.  We only need willingness to do this. The technology is already there.

Committee Reports and the Budget Process Video

Pilot projects, grants to improve the grid, water development and anything administered out of a regional office (or supporting it - such as telecommunications) could be classified regionally. Research grants would as well. Other items, including those involving production of nuclear fuel, would be counted outside regional estimates.

FY 2022

In 2007, I was employed as a contract administrator at the Department of Energy. During this time, a new energy bill was signed. Soon after, fusion research was cut. This was not our finest moment. After I left that office, Solyndra happened, largely because the Head of the Headquarters Service unit could not say not to the White House. He did not stay in that job.

Fusion is a game changer and should be funded on a crash basis before we have to turn out the lights to avoid treading water. Helium-3 is promising and there is even some noise about cold fusion on a larger scale. Energy companies like how cheap coal is and how much cheaper and more popular natural gas is. 

Utilities (and even coal producers) need to be offered a way to hedge their bets. To move fusion, set up a public-private partnership to sink in more money in exchange for the right of first use. Any practical use of fusion will be big-industry. It was never going to be any other way. Funds should be increased for fusion now, with a promise of ever greater funding once industrial partnerships are created.

One use for such cheap power is a new transportation system. We can pilot this now, in cooperation with the Departments of Commerce and Transportation, automobile manufacturers, utility companies and eventually selected local governments. I described the project in my CJS testimony. 

To best utilize clean energy (even natural automated cars with central control (rather than their own AI) and energy distribution (rather than being hampered by economically damaging battery development). The latter is old technology, i.e., electric trains and buses. 

The same consortia that fund the project can be the backbone for implementing it. Individuals could own cars, while some would be for hire (with monitoring, but not drivers). Debit cards or a link to checking accounts would pay for the car itself (either to rent or own), the roadway and the use of energy and computer services. 

Prices would vary based on congestion and vehicles could be taken to a public transportation hub (which might be located at their children’s school), with the vehicle returning home empty or going to the next fare. If congestion is low, it may be affordable to drive to work. If it is high, prices for public transit and commuting would be adjusted accordingly.

Energy infrastructure to power the system and facilitate communication would also carry energy and data services, so add xFinity and Cox to the consortium.

This also gives us the incentive to improve the grid and to redesign highways with driverless cars that won’t crash into trees and explode.

We only need willingness to do this. The technology is already there.

2023 Video

Attachment - GDP Prediction Model FY2023

Using data from 2017 through the 2022 budget as passed (or nearing passage)

The model predicts that for every percent of deficit less net interest as a percentage of GDP there will be 0.394% growth in the next year, with a 2.6% growth rate if the deficit equals net interest. This model explains 39.2% of the variation.

Raw Data

Agriculture, Rural Development, FDA FY 2023

House Appropriations Agriculture, Rural Development, FDA FY 2023, May 31, 2022

House Appropriations Agriculture, Rural Development, FDA FY 2022, June 1, 2021

FY 2023

This testimony on SNAP was also provided to Labor, HHS, Education. It concerns my personal welfare as an SSDI beneficiary, as well as for retirees. The need for an immediate COLA for Social Security recipients is obvious and it would save money in the short and long runs, as would increasing the minimum wage and thereby increasing both funding and the annual COLA for benefits due to increased inflation because of such an increase.

I found out last week that I am eligible for Food Stamps, so I applied. My usual benefit is now $20 per month. It had been $14 when I first received SSDI. I did not bother to use the benefits. When the pandemic increase in benefits to $250 was enacted in Maryland, I did not collect the dots on my personal eligibility. I am no longer scraping by. Those retirees and the disabled who have not known that the new benefit applied to them are still hungry. Social Security needs to let them know to apply in the short run (or Members should do so in a franked correspondence). In the long-run - which may be in months - likely during the coming fiscal year - COLA rules must be changed so that the average retiree is no longer eligible for SNAP. That they are is scandalous. It is also fiscally stupid.

Applying for benefits is not easy. Because I have an MPA, it was not hard for me. For others, it is daunting. It is also not cost efficient for every eligible retiree or disability beneficiary to do so when benefits can simply be increased by increasing the minimum wage and rebasing benefits. Until the latter is accomplished, waiting for seniors and the disabled to apply is penny-wise and pound foolish. This will also vastly decrease workloads at the state and local levels. Even and especially in Red States.

LET ME SHOUT THAT SNAP MONEY IS FEDERAL, SO THAT PROVIDING MORE MONEY TO RETIREES, THE DISABLED (AS WELL AS STIPENDS TO STUDENTS IN ESL, GED, APPRENTICESHIP AND ASSOCIATES DEGREE PROGRAMS) WOULD ALLOW HUGE REDUCTIONS IN SNAP SPENDING, AS WOULD A HIGHER CHILD TAX CREDIT - ADJUSTED TO MEDIAN INCOME LEVELS.

Last year, I recommended that the FDA should both self-support with fees and licenses (which would also fund NIH and NSF research grants). NIH should also retain ownership of orphan drugs, with their distribution funded by contract to  big Pharma. I have not changed my mind and the latest round of advertising from PhARMA shows that the topic is still current.

Last year, I suggested that the Foreign Agricultural Service work more for overseas farmers and less for domestic agriculture and thus be transferred to the Agency for International Development. I stand by the prior but doubt that the former will occur. In this case, please increase the FAS to provide technical assistance on setting up land grant universities to attract their best farmers rather than sending them here on a path to H-1B status and eventual citizenship. Such schools should include how to set up both commodities futures operations and English and American style land ownership (both with technical assistance from FAS).

Committee Reports and the Budget Process Video

The vast majority of USDA activities can be attributed to the state and region in which they are performed, including SNAP, packers and stockyards, food safety, animal and plant health, soil conservation, school nutrition and extension services. Headquarters services, the Agricultural Research Service and FDA activities would not be assigned to a region because they serve all regions.

Explanatory material would address any imbalances in spending (for example, that the South and Midwest have higher expenditures in packing and stockyards.

FY 2022

On the Agricultural Research Service, undo damage of the last 4 years and give bonuses for both reemployment, moving and battle pay (which could be a government-wide benefit)..

The FDA should both self-support with fees and fund research with licenses for using innovations funded by the National Institutes of Health and the National Science Foundation. There is no justification for big Pharma to grow wealthy based on government funded science. The United States should retain the rights to license the production of orphan drugs, letting contracts rather than encouraging entrepreneurship. The prices for recouping private investment is simply too high, which drives up both insurance and drug costs for the public. If there was ever justification for public action, this is it.

The Foreign Agricultural Service is another matter. It is hardly slanderous to note that some of its activities are counter-productive when food is delivered just prior to harvest, thus reducing the price paid to local farmers. The extent to which this occurs is economic warfare. American farmers receive plenty of subsidies without activities that hurt the ability of developing nations to feed themselves. It would be better to send nothing than to continue such sabotage, even if it is unintentional. For this reason, the administration should be transferred to the Agency for International Development. 

Any food distribution should go to overseas farmers, not to governments or food processors. Additionally, processed foods should not be delivered at all, especially not those foods which have made this nation obese. If anything, subsidies which are paid to American agriculture that contribute to our ill-health should be scaled down and eventually eliminated.

This brings us to Supplemental Nutrition Assistance Program funding. For some people, it is a lifeline, not subsistence.  Individuals without children, though not the intended beneficiaries, are greatly helped. With the advent of higher refundable child tax credits, families will need less assistance. Higher minimum wages should also be enacted (which is the job of other committees). Until then, benefits must go up and stay up for a longer period of time. 

Diets for the disabled and senior citizens, as well as current program participants, are heavier on carbohydrate than is healthy. COVID-19 related inflation (with the economy deliberately idled while cash benefits are provided, as is necessary) is making people hungry, especially those of us who cannot work. The lack of cash benefits within SNAP make buying such essentials as bathroom tissue difficult, leading some to sell their cards at 50 cents on the dollar.

I understand that SNAP was cut so that people who left TANF could not simply shift benefits to SNAP. However, everyone is not eligible, nor do they need TANF. I already possess a Master of Public Administration degree, yet am unable to work. While SSDI provides some assistance, neither SSDI nor OASI are adequate.

There is a toxic ideology in some circles that hunger is an incentive for self-improvement or work. This is decidedly not true. Give me more money and I might consider seeking an online doctorate. I certainly cannot do anything of the kind on current benefits, nor am I in any position to obtain student loans for this purpose. I would never be able to pay them back in any possible career resulting from further education. This does not mean that I should spend the last week (or two) of every month emptying my refrigerator and cupboards. They should not be bare at any time. While increasing SSDI benefits is the job of the Ways and Means and Finance Committees, having access to Food Stamps, especially those which provide an adequate supplement, are necessary for the vast majority of retirees at current benefit levels. Double the appropriation and that will not be so.

VIDEO: https://youtu.be/5nSb5nql-H0

Financial Services and General Government FY 2023

House Appropriations Financial Services and General Government, May 30, 2022 

House Appropriations: Financial Services and General Government, May 21, 2021

1. Add funds to the Securities and Exchange Commission and direction in the General Provisions section of the appropriation to investigate the extent to which Mr. Mulvaney’s tenure as director of the Consumer Financial Protection Authority led to the current increase in the cost of oil futures contracts - and with it the current inflation crisis. As an SSDI recipient, I have skin in this game - which has led me toward applying for and the State of Maryland to grant me (federally funded) Food Stamps.

Comments about inflation, crypto and the upcoming recession can be found in our attachment Depression 2022, The video is here.  This section ends with "Who wants to bet on where the latest pool of junk is hiding?"

The Dodd-Frank Act provides for liquidity when crashes, such as the upcoming disaster, occur. However, neither the law nor the Federal Reserve provide any relief to the renters, homeowners and credit card customers whose debts are being purchased by the Federal Reserve and remarketed. 

In 2009, home values plummeted. Even borrowers (such as my family) who did everything right (except buying at the top of the market), found themselves unable to sell our homes. Bankruptcy and divorce followed. Job loss in the 2011 debt deal did not help matters either. Had the Federal Reserve or the Virginia Housing Development Agency marked these properties to market, what can only be called an Economic Depression would not have occurred.  

When the Fed marks bonds to market, M3 is reduced. The money vanishes in the same way it was created, with a keystroke. This also deflates the financial markets. Experience has shown that simply throwing money out of the window of the Central Banks did nothing to improve the economy. Forgiving debt would have.

Let us not repeat (or rather continue to repeat) the bad practices that left the economy in the doldrums. During the pandemic, the Federal Reserve has purchased bad paper, but without benefit to those whose debts are held in those bonds.

This time around, credit card balances and back rent should be forgiven when the Federal Reserve buys the bonds that hold the debt. Loans could also be written down, which would stop bondholders from benefiting from issuing bonds that should never have been issued in the first place. Renters of both commercial and residential property should be offered the chance to purchase their locations and homes, with assistance from Government Sponsored Enterprises, with their paper replacing the debt paper that has been securitized in Exchange Traded Funds.

ETFs may take a hit, but what was falsely sold as AAA paper would actually become what was sold. Bad landlords, and Glantz demonstrates that Mr. Mnuchin and Mr. Ross truly are bad landlords, degrade properties so that the bonds that were issued for them to cash out are nowhere near the value at issue.

In 2009, the United States aided and abetted those who created the crisis. We are currently repeating the mistake. When the inevitable crisis occurs again, doing the right thing will also be the right medicine for the economy.

I mention this issue here so that and General Provisions for this industry include these actions and because part of any bailout will require appropriated funds. In 2008, the bill passed with the promise that borrowers would be helped. Mr. Paulson lied. Let us act truthfully this time around. 

Fiscal Year 2021

The Center’s major legislative focus is tax reform, which seeks to end the need to file taxes except for all but the wealthiest households. To do this, income from capital gains and income must be split out for the sake of privacy from employers, who may look askance at portfolios that are none of their business. We also suggest ending the exemption for mutual funds. I believe this is the natural evolution of bipartisan tax reform and it is preferable to any wealth tax.

It is not too early for the Securities and Exchange Commission, this Subcommittee, the Financial Services Committee, the Ways and Means Committee and the Office of Tax Policy to examine how such a plan might be implemented. Here are the details to begin the analysis.

Asset Value-Added Tax (A-VAT). A replacement for capital gains taxes, dividend taxes, and the estate tax. It will apply to asset sales, dividend distributions, exercised options, rental income, inherited and gifted assets and the profits from short sales. Tax payments for option exercises and inherited assets will be reset, with prior tax payments for that asset eliminated so that the seller gets no benefit from them. In this perspective, it is the owner’s increase in value that is taxed.  

As with any sale of liquid or real assets, sales to a qualified broad-based Employee Stock Ownership Plan will be tax free. These taxes will fund the same spending items as income or S-VAT surtaxes. This tax will end Tax Gap issues owed by high income individuals. A 26% rate is between the GOP 24% rate (including ACA-SM and Pease surtaxes)  and the Democratic 28% rate. It’s time to quit playing football with tax rates to attract side bets.

Taxes on salaries can be collected by employers without having to file because taxes on capital income and gains would be funded separately. Rental and capital gains on real property would be collected by states and capital gains and income from financial assets would be collected by the federal government, with funds remitted by brokers or trading platforms directly to the Securities and Exchange Commission. Our proposed rate is 26%.

The biggest tax shelter is the use of money market funds to accumulate capital gains and income without taxation. This practice must end if salary surtaxes no longer include non-salaried income. 75% of such funds are held by the top 10% of households as measured by the 2019 Survey of Consumer Finance by the Federal Reserve.. I suspect the other 20% are held by high income retirees. The working class will not be harmed. 

This ratio affirms what Pareto found, except his ration was 80% of wealth held by 20% of asset holders. Clearly, things have gotten worse for the 80th to 89.9th percentile. If you apply the Pareto rule to higher levels of income, and with Berkshire Hathaway there is no reason not to, the top 1450 households hold roughly 30% of all wealth in mutual funds. This ratio also applies to bond holdings, but this is a topic for another day.

We have left a loophole on Asset Value Added Taxes that some will be able to fly a 757 through, which is trading stock overseas to avoid taxation. The only way out of this is an internationally negotiated asset VAT rate, or at least the same range. This ends the need for a minimum tax on corporate income (note that corporate income taxes will be discontinued under this proposal).

There are further details on other consumption and salary surtaxes which can be found in most of our comments to the Revenue Committees.

Video https://youtu.be/FcdMypQU3KI

Homeland Security FY2023

House Appropriations: Homeland Security FY 2023, May 26, 2022

House Appropriations: Homeland Security FY 2022, June 11, 2021

FY 2023

Progress toward mitigating climate change is met with resistance at every turn. There is an industry denying its severity and cause and it is well funded. It is time for those who fund the opposition, but at the same time benefit the most from mitigation, have some skin in the game. This can be accomplished with a simple cut in the FEMA budget. 

Cap flood insurance so that people with expensive seaside homes must bear the cost of their opposition. This will force them to pay attention and require that they pay cash for these properties, as private insurance will not cover flood insurance. With huge national debt levels (owed largely by high-end taxpayers), it is time to end a subsidy that solely benefits the wealthy. Flood insurance as a whole would be retained for the middle and working class, but only so much. This also lowers the cost of beach vacations for the rest of us.

FY 2022 and 2023

The manner of appropriations must adapt to the next crisis, and with climate change, there may be many of these. Requirements in excess of normal allocations cannot wait for the political process. When federal disasters have state-wide or multi-state impacts, state and local governments cannot wait for grandstanding in the name of deficit reduction to run its course. A separate No-Year Supplemental should be enacted, including the recently created system to reimburse states for lost revenue, to prevent the events of the last nine months from recurring.

The crisis at the border must not be allowed to continue, nor the insanity of the last administration be allowed to ever recur again. Were it not for the ineptitude of the previous Secretary of State, I would suggest that Customs and Border Protection be transferred to the Department of State so that it can be more seamlessly integrated into our overall foreign policy. Such a move would also lead to a cultural change in the Border Patrol, both at home and abroad. Establishing Homeland Security was meant to end siloing. This reorganization has simply put it into the wrong silo. While an appropriation is not the place to direct a comprehensive government reorganization, it is the place to study it. Therefore, money should be appropriated to solicit a grant to study the culture of CBP, including the possible impacts of transferring it to the Department of State, including the required changes to congressional committee structure, including the Appropriations Committee.

Any immigration reform must also include border security. The proposal to build a wall was devised to compensate for the prior President’s cognitive deficits. Some form of security is still necessary, both for the safety of migrants who make dangerous river and desert crossings, while preserving the ecology and land use at the border. An active denial system is superior to any wall.

.In 2007, Raytheon was tasked with developing non-lethal active denial technology. Raytheon Company delivered its non-lethal Active Denial System 2 to the U.S. Air Force Aug. 31. Raytheon's Active Denial System was designed to use millimeter wave technology to repel individuals without causing injury. The original contract has long since expired because ground commanders in Afghanistan did not wish to use non-lethal systems. Raytheon has a current One Acquisition Solution for Integrated Services (OASIS) contract vehicle Pool 3 Engineering for Military and Aerospace Equipment and Military Weapons, and Engineering for Naval Architecture (GS00Q14OADU328) Contact Ray Moehler, 571-250-1090. 

This system will go beyond using surveillance technology to dispatch Border Patrol agents to intercept intruders. It is a virtual wall and, when combined with detection systems, can be powered up as needed to repel unlawful immigration without building a physical barrier or requiring that the system be constantly powered up. It's very existence will deter travel outside official entry points. A demonstration project could easily be fielded at some point along the border (without prior announcement of the test) to determine whether the system works as required, including a predicted decline in attempted incursions.  This demonstration should be included in this year’s appropriation.

Immigration reform must also be pursued. The most recent proposals were designed to embarrass the current minority party in the House. Had the proposed legislation been serious, it would not have been so punitive. Had it not been a political stunt, it would have been opposed by progressives. It would have also been costly to implement. CIS could not have easily implemented it. A better option is possible and it would be cost effective as well.

Allow undocumented migrants to apply for the status that fits their circumstances (up to and including permanent residency) without having to meet current lawful status requirements. Once this status is achieved, allow application for naturalization to proceed in the normal course. To quickly manage the workload, empower local boards of election to process cases and order National Agency Background Checks with a processing fee not to exceed $500 per person.

Committee Reports and the Budget Process

Disaster and flood assistance, customs and border patrol, citizenship services, immigration enforcement, indeed most operations, can be identified regionally (excepting headquarters functions and overseas operations).

Explanatory material would address any imbalances in spending (for example, the fact that southwestern, northern and coastal states have the majority of customs service expenses.

FY 2022 

The SARS-CoV-2 pandemic may or may not have been a once in a century event. It was certainly a stress test on our disaster preparedness system. The nation did not do well, particularly the legislative branch. Many of the flaws seen before were magnified this year. In prior days, members and senators would grandstand about bringing money back to their states and districts to reimburse them for the costs of extraordinary disasters. Of late, members have taken to grandstanding about NOT providing disaster assistance. Immediate aid should not have had to wait for congressional authorization or presidential action. 

Such action, when it finally occurs, should not result in federal contracting officers competing with states for equipment and supplies. FEMA leadership was asleep at the wheel and, because of siloing, no one had the initiative or authority to set up a structure where procurement was conducted WITH the states rather than in competition with them. General Provisions in the Appropriation must require that FEMA create such a structure.

Video: https://youtu.be/IYMwsZok3Nw

Labor, HHS, Education Appropriations FY 2023

House Appropriations, Labor, Health and Human Services and Education, May 26, 2023

I will address 

1. an immediate COLA for Social Security beneficiaries and generally higher benefits and, in the meantime, inform them that they are eligible for Food Stamps at the $250 per month pandemic level;
2. including all Social Security and SSDI recipients in Medicaid (Medicare for All) by federalizing Medicaid for Dual Eligibles as Medicare Part E; 
3. options for increased funding for ESL, GED, other adult programs, Community College and other undergraduate education in light of the President's Build Back Better  proposals;
4. making Unemployment Insurance a no-fault program with new funding sources; 
5. study how the Public Option under the Affordable Care Act system would be passed.

1. Please see my comments to the Agriculture FY2023 Appropriation for my Food Stamp Story. Here is the video.

2. The morning of this hearing, I had an interview on an application for Medical Assistance. My application was submitted. I will likely be approved.  In prior years, I had not applied because my income was too high. The federal poverty line has caught me. Because my benefits are in line with most Social Security beneficiaries, I must believe that it has caught them too. The reality is that Medicare for All has caught up to the vast majority of retirees and the disabled, as M4A is essentially expanding who can receive benefits as a “dual eligible.”

State governments were under financial pressure as a result of the pandemic, especially in the area of healthcare costs, most especially for seniors in nursing homes who are “dual eligibles.” The heart of President Reagan’s New Federalism Proposal was the transfer of state Medicaid expenses to the federal government, largely to fund baby boomers who would become dual eligible with time. Time is now up, or will be shortly. 

Welfare has been reformed, allowing state and federal governments to save money - which was part of the New Federalism bargain that was not accepted when Reagan proposed it. The irony is that federal money was reduced without the second part of the trade-off. Finish the process and create Medicare Part E for low income disabled and retirees. This will put investigation of nursing home conditions into the federal sector. States have done a poor job in enforcement of health and safety standards. It is time to make this a national responsibility.

3. The President’s Build Back Better Proposals included funding human capital needs.  These needs are urgent for not only young people going to college, but everyone who is ill served. from English as a Second Language and up through an Associates Degree. 

We recommended that funding include the freshman and sophomore year at four-year institutions as well. Add this proposal back to the proposed legislation. The Senate Majority needs to stop negotiating with itself, even if that means passing the FY23 appropriation in the next Congress.

Technical training should be covered as well at both public and accredited private schools, including religious schools. In Espinoza v. Montana, prohibitions on funding private schools (Blaine Amendments) were found to be unconstitutional. New (and existing) funding should reflect that fact.

A main problem with current training regimes is that potential students have opportunity costs that are not covered by training. TANF is simply too narrowly tailored and directs too many people to low wage work, especially in the dirtiest jobs in the medical field. The woke among us do not have to look hard for the intrinsic sexism and racism in this scheme.

Payments for tuition, stipends and family support would be funded by employer-paid subtraction value added taxes. Ideally, both state and federal subtraction VAT will be enacted. A federal VAT would be levied to assure that a minimum amount of child tax credit funding is available should states underfund their programs, which some will.

The American Recovery Plan Act required payment of the child tax credit in advance of the annual tax filing. This is appropriate and will change the culture of such credits, which should be for continuing support, not an annual bonus. The IRS managed payments. I submit that, over the long-term, it would be more acceptable to distribute them either through other government subsidies, such as Unemployment Insurance, Disability Insurance, or a training stipend OR through wages. In the latter case, until a subtraction value added tax is in place, the credit would be paid in advance by employers and then deducted from their quarterly tax payment.

4. Unemployment insurance must be less punitive, particularly where younger workers are concerned. In lower wage jobs, the preference is to find potential supervisors (whose compensation is usually subpar as well) and keep a file of infractions to justify firing workers who do not work out. A punitive work environment like that does not exactly make any kind of work attractive. 

In certain circumstances, unemployment compensation should be available on a no-fault basis. Better still, employees should be allowed to voluntarily leave firms with a history of quickly dismissing employees without any penalty. There should be no expendable jobs or workers. 

Current punitive taxes on employers would not be appropriate, so a more general levy, such as employer-paid subtraction VAT (if employers continue to pay former workers and help them find jobs or paid training) or a goods and services tax, likely levied, at least partially, at the federal level, with states providing most of the funding.

Unemployment Insurance would include CTC payments and automattic subsidized health insurance coverage with eligibility in the Public Option under the Affordable Care Act framework.

5.  Developing the Public Option needs to be funded in this budget. Particularly, it should explore the impacts on coverage and cost of automatically enrolling individuals who are denied coverage under pre-existing condition rules. Such rules must be revoked as the price of passing the bill.

Video https://youtu.be/iho38sbZTRo

CBO Outlook FY 2023

HBUD: Congressional Budget Office's Budget and Economic Outlook, May 26, 2022

These comments will address problems in the CBO projections and, more importantly, suggest alternate policies that will be necessary to deal with inflation, a likely mortgage security crisis and ways for the nation to increase economic well-being while also saving costs.

CBO themes

I will start by addressing the main points in the CBO executive summary. The main rubric, debt as a percentage of GDP, is meaningless. The more salient measure is debt as a multiple of income taxes paid. Using this standard shows exactly how unsustainable our current fiscal course is. The first attachment regarding Debt Ownership  as Class Warfare addresses it. The key findings of our research is that the top 10% own the majority of public debt assets and owe the  majority of debt obligations.  The top 1% owe over a third and own more than 40%.

CBO remarks on how revenues are at their highest point in 20 years as a percentage of GDP. The problem is that, over the last 20 years, revenues have been entirely too low - largely because the top marginal rates on income taxes (essentially on wages) and the capital gains and dividend rates have been set too low by statute. 

CBO (and most others) have no real idea on why inflation is essentially out of control. This will cause the Federal Reserve to overcorrect. More importantly, unless tax increases on the wealthy are perceived as inevitable, thus reducing wildly inflated asset prices slowly, a more catastrophic recession is inevitable. See the second attachment for why this is the case. 

In preparation for these comments, I have updated the Center’s model for predicting economic growth based on the prior year’s deficits less net interest as a percentage of GDP. Please see the third attachment for more details. Assuming that the current year results in a net deficit of 3%, the GDP growth rate for FY 2023 will be 3.8%. This prediction assumes that the bottom does not fall out of the economy - which I regard as a heroic assumption.

Inflation and Cryptocurrency

I addressed these topics in my FY 2023 Financial Services Appropriations testimony in items 1 and 2. The video is here. "The world has plenty of available oil...The Department of Labor should also have a part in this investigation and should receive reimbursable funding to do so."

Housing and Commercial Bonds

The inevitable crash has not yet occurred. Again, if there is no oil price crash, mortgage backed securities may not crash in the same way as in 2008. If they do, however, the recovery will be anemic until taxes on the wealthy return to pre-Tax Cut and Jobs Act levels. Failure to let tax rates on the wealthy go up in 2010 slowed the recovery until the 2013 rate increases.  

The other reason the recovery was anemic is that nothing was done for homeowners with underwater mortgages. Waiting for incomes to increase, debt to be paid down or homes to be foreclosed upon (which happened all too frequently - including to my family) broke the promise made in October 2008 when Wall Street was bailed out - but no one else was.

In both of my FY 2022 and FY 2023 Financial Services Appropriations testimony, I addressed this issue. The video is here. See item 3, starting with "When the Fed marks bonds to market...Let us act truthfully this time around." 

Nutrition and Health Care for Seniors and Disabled

Please see testimony and video from the Agriculture Appropriation Testimony for my Food Stamp Story. The video is here.

Please see testimony and video from the Labor, HHS Appropriation testimony for my Dual Eligible story. The video is here.

When Social Security was established, one of its goals was to avoid the perception that receiving benefits was not “going on the dole.” It was expected that individuals would still save for their retirements and would receive pensions as well.

As unions were broken and pension plans for both workers and professionals were replaced with defined contribution plans, this assumption became a joke. Likewise, because most workers and their families cannot make ends meet, the vast majority of retirees have no or little savings to rely on. Those who do have savings, especially those with tax advantages, likely did not need such advantages to begin with. For them, Social Security is simply a backstop. For the rest of us, it is a necessity.

The myth that the Social Security Trust Fund must be solvent is no longer appropriate. The program has been accepted in all sectors as necessary. Now it needs to be made adequate. There are those who resist doing so because providing more support fear idleness among the elderly and the disabled. 

These are the same conservatives who believe (without evidence) that leaving minimum wages and the child tax credit low will encourage workers to seek higher paid jobs. The reality is that such workers have no means to prepare themselves for such advancement. It is almost as if there is a desire by some to guarantee a ready supply of low wage workers for certain industries who employ people who do not look like them (to speak delicately).

America Needs a Raise

Benefits need to go up, with or without higher revenues. As fortune would have it, increasing the minimum wage will allow for higher benefits and will increase long term revenues. In previous comments to the Budget Committee, I addressed how increasing both the minimum wage and the child tax credit at the same time allows setting a minimum wage below $15 per hour, but doing so at a high enough level so that no one will, as Senator Manchin fears, support their families on the child tax credit alone.

Raising the minimum wage, as well as paying it to participants in training and education programs from ESL, to GED, to technical training to working for an associates degree, will increase wages for every worker under the “middle management” level. This is the vast majority of households - or about 80% of those who file income taxes - as well as the many who do not (again, including retirees).

There are many theories on why workers have fallen behind while investors and managers have continued to gain income at the rates occurring before 1971. Many assert that the end of the gold standard was the cause and that going back will fix all things. This is a great theory if one holds gold. 

The reality is that the gold standard was not working. The only alternative, and it is one that could be used today, is to forego currency arbitrage and adopt a worldwide system based on Production Power Parity (a common market basket of goods produced in each national economy).

Many point to tax cuts on the wealthy as the reason workers have fallen behind. Many time series data show that things started to get bad when the Kennedy/Johnson income tax cuts took effect in 1965, with the Reagan tax cuts of 1981 sealing the deal. The 1986 Tax reform set the 1981 cuts in stone. We still use the same basic structure, with changes at the margins.

Many blame the information revolution and the rise of automation for the loss of labor power, along with gutting of union rights (which is now being addressed by the Biden Administration).

All three of these reasons are somewhat true and are certainly interrelated. For example, tax cuts on investors and managers provide an incentive to cut labor costs (and inflation with it). There is one more reason, however, that no one talks about. Math. To wit, when compensation began to diverge, annual raises in both the public and private sector were adjusted by the same percentage. The problem is that price levels overall chase the median income level - which is not uniform.

There is a way out of this, and it can start with government workers, the military and government contractors. End the practice of percentage increases based on current wage and salary levels. Instead, increase wages on an equal dollar basis. Instead of giving everyone a 4% wage increase, give them the same dollar per hour increase. 

Base the wage increase on the percentage change of the median wage in the economy. In time, equality will be restored. To make sure it is, increase tax rates on higher salaries and dividends so that the incentive to cut wages to meet bonus targets goes away. 

One last comment on inflation and taxation. Capital gains can never be indexed to inflation because all changes to asset values, especially among liquid assets, are more dollars chasing the same goods or shares. In other words, if capital gains were adjusted by the rate of inflation, there would be no gains to tax. Doing that is OUT OF THE QUESTION!

Attachment: Debt Ownership as Class Warfare  Video

Attachment: Depression 2022 Video

Attachment: GDP Estimate FY 2023

Members Day - FY2023 Budget

HBUD: Fiscal Year 2023 Budget Priorities: Members' Day, May 17, 2022 

The fluid state of the war in Europe and in our inflationary economy will require changes on the fly, as will the inevitable crash of asset markets - which has already started. I will attach an analysis of the latter. The forces identified in January 2020 are still with us. Last year, money in the system kept it afloat artificially. With that money train stopping, the pressure from overfed asset markets will explode.

The best budget is one which helps working class families, generally the 75% of tax filers whose AGI is under $85,000. Do right by them, and the economy will recover. The next 16%, or those households making up to $250,000, don’t need much help. The top 4% need to start paying much more, especially because they also hold most of the assets backed by the Public Debt. 

Taxes need to be high enough so that we no longer have to borrow from them so we can then roll over the interest we pay to the very same people. Continuing as we have is madness. Please see the attachment on debt ownership for more information.

How to channel more money from the speculation sector into household consumption through government purchases, transfers and salaries - and then to the private economy - is addressed in the attached tax reform plan.  

Switching from taxing capital gains and returns in personal income taxation to an asset value added tax ends subsidies for offsetting income with losses - in essence - subsidizing failure and bad speculation. Just this one change will unshield one trillion dollars in loss write offs - half of which offset high salaried income - over the next 10 years. This is the tax gap no one talks about - or wants us to talk about. Talk about it.

The release of the original draft opinion in Jackson Women’s Health v. Dobbs underlines where more money is needed. If the majority opinion is maintained, women who seek abortion services because they are poor or on the edge of poverty - or who would be impoverished by ending their educations will be forced with an impossible choice - where currently their choice is only difficult. To not increase subsidies for work, child income and childcare now would be the height of cruelty.

Build Back Better is a start - but we need to go Bigger as well as Better.

Job one is not budgetary, but it is the thing that will make the budget work: increase the minimum wage. Doing so, and funding the increase as inflation (and projecting payroll tax revenue increases) takes financial pressure off of young people saving for college or starting their careers, the working poor (which are not words which should exist together in the richest nation on earth), families with children, the retired and the disabled.

Job two is to restore the refundability of the child tax credit, restore it to American Rescue Plan Act levels and then double it again - and then encourage states to add to it in their fiscal systems.

Any member of Congress or the Senate - and especially any Democratic member - who consider themselves pro-life - must be held to account for opposing these provisions. Their belief that adequate family pay is an invitation to idleness is subtravuge for maintaining a pool of low wage workers who have to work on low wage jobs so that their children will not starve.

Job three is to fully fund closing the educational deficits which cause poverty. Individuals without adequate training to compete in a higher wage economy should be paid the minimum wage - which is their OPPORTUNITY COST - to further their education. Anyone going to school from ESL, to GED, to apprenticeship and technical training to earning an Associates Degree - and even juniors and seniors in high school from poorer families - should be paid for class time. If such people have children, their training provider should also distribute child tax credit funds to them with payroll as if they were working. 

Clients in occupational health, partial hospitalization for substance abuse and psychiatric rehabilitation programs should also be paid to attend - including and especially those in Drug Court who need education more than low wage work.

Entry into training and rehabilitation programs should be easy, unlike the almost punitive process for applying for Temporary Assistance for Needy Families or for Food Stamps. These programs would be eliminated in favor of the reforms proposed here. Doing so will free up social welfare eligibility screening so that these resources can be diverted to case management for training participants. This will also save administrative costs at the state and local levels.

The Medicaid program as we know it should also end. It should be replaced with a subsidized public option under the existing Affordable Care Act for poor families and those with pre-existing conditions. 

Medicaid funding for retirees and the disabled who receive Medicare (Dual Eligibles) and all others in long term care through Medicaid should be entirely federal as a new Medicare Part E. Doing so will take financial pressure off of state governments for the foreseeable future - freeing up resources for better educational programs.

Providing for adequate childcare and family medical leave rounds out the list of improvements. These programs are best funded through employer paid taxes, rather than personal income tax, so that the ultimate consumers of worker labor pay the costs that workers now bear to provide these goods and services.

This is obvious. It is not rocket science (the funding of which I covered in my DoD Budget comments).

These reforms MUST be scored as pro-life legislation. Having served on the staff of a major abortion rights organization in the past, I can assure you that no such organization WOULD EVER OPPOSE HIGHER LIVING STANDARDS FOR WOMEN AND THEIR FAMILIES!

The chief obstacle for funding families is not the feminist movement. It is the so-called right to life movement who would rather women be penalized for having abortions than subsidized so that they are not necessary. 

Over the course of many decades, I have had conversations with conservative members of the pro-life community. When push comes to shove, they oppose the measures above because their objections to abortion are more about sexuality than the welfare of children.

Catholic Charities USA, NETWORK and the Catholic Health Association all stand with working and poor women. They must be very publicly leveraged to get the U.S. Conference of Catholic Bishops behind them as well - and to have the bishops insist that these measures be considered must-pass legislation for the computation of pro-life voting records. 

Catholic members of Congress and the President should also lead on this effort. 

Video for these comments

Attachment: Depression 2022 Video

Attachment: Debt Ownership as Class Warfare  Video

Attachment: Tax Reform (video links provided)

Taxpayer Fairness

WM Oversight: Taxpayer Fairness Across the IRS, May 18, 2022

WM Oversight Taxpayer Fairness, October 13, 2020

WM Oversight: IRS Commissioner, November 20, 2020

To start, we must distinguish between fairness and justice. Fairness is having your say. Justice is getting or paying what is due to or for you.

Lower income taxpayers depend on the fairness of the system, rather than individual fairness. It is costly to make one’s case to the IRS when disputes arise. To an extent, they must pay and obey. As long as they can provide information when it is lacking or work out payment arrangements when they do not have funds available, the system is fair. Generally, they do, although currently the unopened mail resulting from the pandemic stretches that fairness, as Chairman Neal noted in August.

Higher income taxpayers have more room to argue, as well as more to argue about. Sometimes their attempts to hide income are too clever by half. If they succeed in beating the system, the result for all of us is both less fair and unjust. A wealth tax, because the elements are both debatable and gameable, compound the problems inherent in current capital gains taxation.

The tax rate on capital gains is seen as unfair because it is lower than the rate for labor. This is technically true, however it is only the richest taxpayers who face a marginal rate problem. For most households, the marginal rate for wages is less than that for capital gains. Higher income workers are, as the saying goes, crying all the way to the bank.

The injustice in the system is baked in by the maldistribution of income in the economy at large. Prior to the Kennedy-Johnson tax cuts, high marginal rates prevented the extraction of economic rent from workers. Any labor cost savings went to the government, so gains in the economy were shared by all. In 1981, the problem got worse and in 1986, higher marginal rates were traded for reduced tax benefits, with corporations taking the hit. The class warfare which began in 1965 with the end of 91% rates was over twenty years later. Labor lost, both organized and otherwise.

Recently, tax rates for corporations and pass-through income were reduced, generally, to capital gains and capital income levels. This is only fair and may or may not be just. The field of battle has narrowed between the parties. The current marginal and capital rates are seeking a center point, as most as if the recent tax law was based on negotiations, even as arguments flared publicly. Of course, that would never happen in Washington. Never, ever.

Compromise on rates makes compromise on form possible. If the Pease and Affordable Care Act provisions are repealed, a rate of 26% is a good stopping point for pass-through, corporate, capital gains and capital income. A single rate also makes conversion from self-reporting to automatic collection through an asset value added tax levied at point of sale or distribution possible. This would be both just and fair, although absolute fairness is absolute unfairness, because there would be little room to argue about what is due and when. 

Ending the machinery of self-reporting also puts an end to the Quixotic campaign to enact a wealth tax. Out of fairness, if the revenue committees do give its proponents and opportunity to testify, it must hear from me as well. It would only be fair. 

Build Back Better Comments from March Testimony.

2020 Only:

Please see our attachment on collecting wealth taxes.

Resolving the issue of capital income collection with an asset VAT also allows a shift to a credit-invoice VAT for general revenue and an employer-paid subtraction for distribution of social benefits, such as the child tax credit, health insurance or care, retirement and education. The object of subtraction VAT systems is to, in general, collect no money while assuring a more just distribution of income to households than the current maze of subsidies and tax credits. 

Higher tier SVAT payments for higher salaries could also be instituted so that only the highest income individuals would file individual returns. Pergovian rates could also be instituted so that higher wage levels are simply not paid outside of the professional sports and entertainment industries. 

The highest salary levels could still be subject to direct filing, provided that a pre-payment option is established. Such an option would essentially be a bond with no return and no repayment at maturation. Annual adjustments would be baked in for changes in expected income. This would be only fair.

As always, more detail on our tax reform plan is provided in an attachment. Some response from committee staff and a possible remote conversation would also be fair.

This raises the final question of generational fairness. Much is made about our ever-increasing national debt. Even though the biggest contributor to the crisis is the rolling over of interest payments into new principle, entitlement spending gets all of the attention. This is most unfair. 

An analysis of who pays and owes the debt and who receives benefits from the debt is included in a second attachment. A wider distribution of this information could end the debate on the debt. It would also result in higher book sales for the detailed analysis, which would also be fair, at least to me. This analysis also ends the debate on who is in what class, at least as far as income and tax payments are concerned.

These analyses rely on the recently released Federal Reserve Survey of Consumer Finance for 2019. Once the IRS data book containing tax year 2018 income is released, our study will be reissued, although not much should change regarding our final results. In the interim, our existing analysis is available and will be provided to the Committee upon request, free of charge, which is more than fair.

IRS Commissioner preface: While it is necessary to get the Commissioner testify, he is no expert on tax policy. The only response he can give is that Congress makes the rules on tax fairness. Published reports indicate that his entire purpose in serving is to obstruct justice regarding the President’s tax returns. The only interesting information he could give is to name names as to who ordered him to not comply with Chairman Neal’s request. In this case, he should be Mirandized before his testimony starts, as he would have to invoke his Fifth Amendment rights in not answering the question.

Attachment - Taxing Absolute Income or Wealth (2020 only)

Attachment- Tax Reform Video links included.

Attachment - Debt Ownership as Class Warfare (2020 only)

Social Security Customer Service

WM Social Security: Strengthening Social Security’s Customer Service, May 17, 2022

Finance: Social Security During COVID: How the Pandemic Hampered Access to Benefits and Strategies for Improving Service Delivery, April 29, 2021

Let me add  (2022) that much of our current price inflation is due to Mr. Mulvaney's deregulation of the NYMEX Oil Futures Floor when he stationed himself as director of the Consumer Financial Protection Authority. The futures market is out of control, and inflation with it. At some point, it will crash, taking the economy with it.

I will allow the scheduled witnesses to deliver the problems and success stories regarding service delivery, which I expect will greatly resemble conditions which occurred at every Driver’s License Renewal office in the nation, although I will draw that parallel. There are more urgent matters, aka, bigger fish to fry, on how Social Security is responding to the Pandemic.

My Driver’s License expired in November 2020. It was disconcerting to need an appointment to get one, but because of the pandemic it was no problem with it expiring in the mean time (of course, I don’t drive anyway, so it was no big deal). Years before, a new license renewal meant almost an hour waiting for my number to be called. When, pre-pandemic I was applying for temporary disability and to get a new card because of a new job, the lines were worse than at the DMV.

This time, there was very little waiting while my number was called to get a license. I imagine that my local Social Security office has done the same things to cope with Covid - at least I hope so. We need to preserve these lessons and create a new normal.

Money will be an issue. We need more Social Security offices and maybe, because they have similar functions, cooperation with the DMV might be in order. It would require cross training citizen service workers, but that just means we would have to pay them more and hire more of them. Just a stray thought. More importantly, building more offices for both DMV and Social Security will take money and it should not require higher driver’s license fees or take away from the pool of money used for benefits. 

Social Security has low administrative costs. It should not have any. The general fund already owes trillions of dollars to the Social Security Trust Fund. Preserve the trust fund a bit more and use general revenues now to fund administration, improvements and more office space. As the pandemic wanes, caution will still be necessary for a while. It is time to build out some infrastructure in both government and leased space.

Now for the bigger fish. In the last 18 months, I can no longer afford big fish. My SSDI was inadequate for food, medicine, clothing and cable. If I owned a vehicle, there is no way I could maintain it or even buy gas. I have an above average benefit, high enough to be ineligible for SNAP or Medicaid. (Update: I and many others may now be able to get SNAP. Not a good thing.) Many are not so lucky, even on a good day. 

In the last few months, days have not been so good. Were it not for stimulus payments, I would have  run out of food as I wrote this and would not have just bought new clothes, from socks and underwear to a jacket I can wear when the Committee finally asks me to testify in person.  While I have wifi, I cannot afford cable and a car is still out of reach.

Let me underline a point. In most months, new underwear is not an option, I rely on free bus rides due to the pandemic and subsidies from Ride On and there is never enough money in that last week before the check comes. When it does arrive, the cupboard is bare.

Bold and underline: food prices are (still) skyrocketing. Part of the problem may be too much money chasing too few goods, but retirees and the disabled find (our)selves between a rock and a hard place. We don’t need stimulus money, we need a COLA.

We don’t need a COLA next year. We are thirsty now - or rather - hungry.

Please address this. Don’t hold hearings, just pass a bill.