The Hollowing Out of Government

Posted on 07 May 2013

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Robert ReichBy Robert Reich

The West Texas chemical and fertilizer plant where at least 15 were killed and more than 200 injured a few weeks ago hadn't been fully inspected by the Occupational Safety and Health Administration since 1985. (A partial inspection in 2011 had resulted in $5,250 in fines.)

OSHA and its state partners have a total of 2,200 inspectors charged with ensuring the safety of more than 8 million workplaces employing 130 million workers. That comes to about one inspector for every 59,000 American workers.

There's no way it can do its job with so few resources, but OSHA has been systematically hollowed out for the years under Republican administrations and congresses that have despised the agency since its inception.

In effect, much of our nation's worker safety laws and rules have been quietly repealed because there aren't enough inspectors to enforce them.

That's been the Republican strategy in general: When they can't directly repeal laws they don't like, they repeal them indirectly by hollowing them out - denying funds to fully implement them, and reducing funds to enforce them.

Consider taxes. Republicans have been unable to round up enough votes to cut taxes on big corporations and the wealthy as much as they'd like, so what do they do? They're hollowing out the IRS. As they cut its enforcement budget - presto! - tax collections decline.

Despite an increasing number of billionaires and multi-millionaires using every tax dodge imaginable - laundering their money through phantom corporations and tax havens (Remember Mitt's tax returns?) - the IRS's budget has been cut by 17 percent since 2002, adjusted for inflation.

To manage the $594.5 million in additional cuts required by the sequester, the agency has announced it will furlough each of its more than 89,000 employees for at least five days this year.

This budget stinginess doesn't save the government money. Quite the opposite. Less IRS enforcement means less revenue. It's been estimated that every dollar invested in the IRS's enforcement, modernization and management system reduces the federal budget deficit by $200, and that furloughing 1,800 IRS "policemen" will cost the Treasury $4.5 billion in lost revenue.

But congressional Republicans aren't interested in more revenue. Their goal is to cut taxes on big corporations and the wealthy.

Representative Charles Boustany, the Louisiana Republican who heads the House subcommittee overseeing the IRS, says the IRS sequester cuts should stay in force. He calls for an overhaul of the tax code instead.

In a similar manner, congressional Republicans and their patrons on Wall Street who opposed the Dodd-Frank financial reform law have been hollowing out the law by making sure agencies charged with implementing it don't have the funds they need to do the job.

As a result, much of Dodd-Frank - including the so-called "Volcker Rule" restrictions on the kind of derivatives trading that got the Street into trouble in the first place - is still on the drawing boards.

Perhaps more than any other law, Republicans hate the Affordable Care Act (Obamacare). Yet despite holding more than 33 votes to repeal it, they still haven't succeeded.

So what do they do? Try to hollow it out. Congressional Republicans have repeatedly denied funding requests to implement Obamacare, leaving Health and Human Services (the agency charged with designing the rules under the Act and enforcing them) so shorthanded it has to delay much of it.

Even before the sequester, the agency was running on the same budget it had before Obamacare was enacted. Now it's lost billions more.

A new insurance marketplace specifically for small business, for example, was supposed to be up and running in January. But officials now say it won't be available until 2015 in the 33 states where the federal government will be running insurance markets known as exchanges.

This is a potentially large blow to Obamacare's political support. A major selling point for the legislation had been providing affordable health insurance to small businesses and their employees.

Yes, and eroding political support is exactly what congressional Republicans want. They fear that Obamacare, once fully implemented, will be too popular to dismantle. So they're out to delay it as long as possible while keeping up a drumbeat about its flaws.

Repealing laws by hollowing them out - failing to fund their enforcement or implementation - works because the public doesn't know it's happening. Enactment of a law attracts attention; de-funding it doesn't.

The strategy also seems to bolster the Republican view that government is incompetent. If government can't do what it's supposed to do - keep workplaces safe, ensure that the rich pay taxes they owe, protect small investors, implement Obamacare - why give it any additional responsibility?

The public doesn't know the real reason why the government isn't doing its job is it's being hollowed out.

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration, and has written thirteen books, including the best sellers Aftershock and The Work of Nations. He is also a founding editor of the American Prospect magazine and chairman of Common Cause, who blogs regularly on national affairs. This article was originally published at L.A. Progressive.

We need less tax. Left wing people like Dr. Reich always want more money, and they never want to make any cuts. The President and other leading Democrats are now saying that the debt is not important. At least they are being honest. Before they half-heartingly said that maybe the debt could be lowered; but, now they say it's not important.

Before any tax is increased, the government (local, state federal) must show the tax payers that the money now being spent is being spent well. Good example-- in CA, everybody says that educatoin needs more money; yet much of what they get is wasted. Only about 55% of the education dollar goes to the classroom.They might be able to prove they need more, if they would agree to cut the "fat." or re-direct the money. Hello, Performance audits.

Both sides are guilty: e.g., the Republicans love to spend money on defense; yet there is a great deal of waste-- The wars themselves in Iraq and Afghanistan. The big news today is that there are still going to be 10,000 US troops in Afghanistan after 2014. Probably the CIA will continue being Santa Claus; it regulary hands over bags of millions of dollars to that crook, Karzai.

Every now and then I read an article which just typifies how the government spends your money.

The social security admistration is "cracking" down on payments to dead americans. Upon investigation social security has saved $100 million dollars on payments to people who were dead. Good, I thought. It turns out that they have decided to investigate payments to 1395 americans between the ages of 111 to 120 who were collecting social security. Shocking it turns out they were fraud. Who'd thought?

First, his argument about inspectors is pretty weak. Afterall, this plant was inspected in 2011. Did that do any good? Apparently not. Inspection from the Fed never works anyway and this is from an engineer who has been in many OSHA and EPA inspections.

Secondly, his argument that cutting funds makes the running of existing programs inefficient is, frankly, stupid. If you have a program that requires that much inspection, maybe you should not have it? For example, the Earned income tax credit has somewhere between 22% to 40% fraud (based on various studies). If you got a program that fraudulent, the way to save money is to discontinue it. We went 200 years without the earned income tax credit, maybe we should be doing that now?

I could go on and on. But, the bottom line is this, the way to save money is to get the government out of programs which really isn't the government's business. Hiring more inspectors is just slapping a band aid on a gaping wound. You don't need band aids, you need to avoid the wound.