In This Issue | 1. The Great Heist
2. The Ethanol Empire
Strikes Back
3. Paul Ryan Sends A
Map
4. Cat to Save Japanese
Rail Line
|
|
 Make a Donation today!
|
| Keeping Free Marketers Current on the Issues  Thanks for your support of Wisconsin Club for Growth!
We hope you enjoy the newsletter. Our goal is to be brief, informative and bit provocative.
We welcome your feedback. Please feel free to contact us anytime by emailing staff@wicfg.com , or come visit us on the worldwide web. Wisconsin Club for Growth Website | Back to top |
The Great Intergovernmental Heist
 In recent years, when Wisconsin's Medicaid program started hemorrhaging cash, Governor Jim Doyle didn't look for ways to make the program more efficient. Nor did he cut costs by eliminating fraud and abuse in the system. Instead, Doyle leaned heavily on a convoluted scheme known as the "Intergovernmental Transfer Program," (IGT) which allows the state go after hundreds of millions of dollars in federal money by over-reporting their health care costs.
The program, which began under the Thompson administration, works like this: a Wisconsin county over-reports their health care expenditures and is reimbursed by the state for those costs. Since the federal government provides a match to the state for health care costs, the feds then reimburse the state for this phony, higher rate of spending.
This caused a significant problem in 2003, when Governor Doyle budgeted $367.5 million in IGT federal funds. Unfortunately, $213 million of that budgeted federal cash never showed up. Basically, Doyle had written an imaginary number into the budget, hoping the money would materialize. When it didn't, Doyle proposed restructuring some state bonding to make up for the shortfall - contributing to the budget deficit the state continues to face.
This week, the Wall Street Journal pointed out something everyone within government already knows - if a private company attempted to pull off a similar scheme, their entire board of directors would end up in jail. In their editorial titled "Medicaid Money Laundering," the WSJ said:
The right word for this is fraud. A corporation caught in this kind of self-dealing - faking payments to extract billions, then laundering the money - would be indicted. In fact, a new industry of contingency-fee consultants has sprung up to help states find and exploit the "ambiguities" in Medicaid's regulatory wasteland. All the feds can do is notice loopholes when they get too expensive and close them, whereupon the cycle starts over. Now Congress wants to extend it until President Bush leaves office. The House passed a bill - 349-62 - but Harry Reid was unable to whisk it through the Senate unnoticed. Wavering GOP Senators are trying to strike a deal with the Bush Administration, which is threatening a veto, mostly with offers to beef up the $25 million allocated to "combat" Medicaid fraud and abuse. Of course, these antifraud troops only fight after state schemes have been paid out. And should the moratorium stick around, states will merely revert to their con artistry, knowing they are no longer being watched.
| Back to top |
The Ethanol Empire Strikes Back
 In order to protect their government-supported industry, ethanol producers last week unveiled a new radio ad meant to convince consumers that the millions of dollars they have spent supporting ethanol hasn’t been a complete waste. Let us quickly re-cap some of the benefits ethanol has wrought on the world economy:
- Corn prices have skyrocketed
- Alternative grain prices have skyrocketed
- Gasoline prices have skyrocketed
- More pollutants are being released into the air given how much dirtier ethanol blends are than unblended gasoline
- Fuel efficiency has declined as ethanol blends get fewer miles per gallon than unblended gasoline
- Meat prices have risen with better cuts less available
- Rainforests are being cleared to make room to grow crops.
And yet, taxpayers are still being asked to subsidize this industry based on its potential. Perhaps we would be better off subsidizing Dippin' Dots, the flash frozen ice cream product that uses liquid nitrogen to lock in flavor. After all, it is the ice cream "of the future," and we'd still be able to get a decent steak.
| Back to top |
Paul Ryan Sends a Map
 Perhaps Miss Teen South Carolina is right - Americans don't have enough maps. Fortunately, Wisconsin Congressman Paul Ryan has sent directions that even Congress should be able to follow.
Ryan's ambitious plan, which he calls "a road map for America's future," deals with the runaway spending in government entitlement programs certain to plague our nation for decades to come.
According to Ryan government, including entitlement programs, will consume nearly 40% of GDP by mid-century, and taxes will have to increase by 90% to keep pace with runaway federal spending.
Ryan's plan would:
- Offer tax credits - $2,500 for individuals and $5,000 for families - to buy health insurance.
- Establish Medicare payments of up to $9,500 to pay for private insurance and create medical savings accounts for out-of-pocket costs.
- Allow workers younger than 55 to invest a third of their Social Security taxes into personal retirement accounts.
- Give taxpayers the choice between using the current income tax code or using a simplified tax system with two rates, 10% on taxable income of up to $100,000 for joint tax filers, 25% for income above that amount.
The dire consequences of doing nothing aren't really in question. We hope Ryan's plan will begin the debate on how to rein in the government entitlement tsunami before it drowns our economy.
Back to top |
Cat to Save Japanese Rail Line
 The Electric Railway Company in Japan recently promoted a nine year old feline named Tama to "Super Station Master" after the cat helped increase passenger numbers on the troubled Kishikawa line by 10 percent. The company paid the flabby tabby a generous bonus made up entirely of cat food.
According the Associated Press, The Kishikawa line had been losing 500 million yen ($4.9 million) a year as passenger numbers fell steadily to as low as about 5,000 a day, or some 1.9 million a year until it placed a uniformed cat at the Kishi station which also began running entirely without workers in 2006 to save costs.
So if commuter rail can't cut it in the enlightened country of Japan , how will South Eastern Wisconsin sustain the proposed KRM line? Why with tax dollars of course, ---$200 million of them for starters. And you can forget about replacing station employees with domesticated animals. Unionized civil servants will keep our empty trains on time and they'll get paid no matter how much money the line loses.
But if KRM ever does need a mascot, we suggest a mole in honor of the South Eastern Regional Transit Authority and the politicians who are trying to push KRM through. Much like moles, they are always interested in getting somewhere, but can't see very far ahead, they prefer to do their work in secret and dive underground when anyone approaches. Back to top |
|
