Government is More Expensive and Less Effective Because of Private Contractors

Here's the thing: government doesn't have to show a profit.  It doesn't answer to rapaciously greedy stockholders.  It's responsible to taxpayers who want good services at a decent price.

Which government can give them, if government hires and pays the workers.

If government gives a contract to a private corporation instead, then it has no control over the workers, no control over the services, and no control over the cost, which skyrockets to cover the corporation's greedhead profit margin.

 

Ed Kilgore at Political Animal:

As you may have heard, the libertarianish Cato Institute has published a new study to provide some documentation for the standard conservative complaint that federal employees have cushy jobs that soak the hard-working taxpayer etc. etc. More specifically, the study concludes that federal workers are paid 78% more (on average, of course) than workers in the private sector. Time to march on Washington and demand lower pay or better yet firings for these parasites, right?

Wrong, argues the University of Maryland’s Donald F. Kettl in a web exclusive at Ten Miles Square today. The numbers are right, Kettle says, but the idea that the pay disparity is the result of higher pay for the same work is exactly wrong. And the reason, ironically, is that privatizing of government jobs as urged over the years by organizations like Cato has hollowed out the federal workforce to where private contractors are doing a lot of the day-to-day work, at a much higher overall cost and with serious consequences for performance as well.

As I explore in my forthcoming book, Escaping Jurassic Government: How to Reclaim Government’s Lost Commitment to Competence (Brookings, 2016), the big movement to contract out federal jobs, led by groups like Cato, has had a huge impact on the federal workforce. From 1960 to the present, the average level of federal employees in the General Schedule has risen from 6.73 in 1960 to 10.33 in 2014. That alone accounts for half the difference in the public-private comparison that Cato found.

And why has the GS level risen? The nature of federal jobs has fundamentally changed. As the federal government contracted out more work, the number of clerical jobs in the federal government shrank 78 percent from 1973 to 2014, and the number of blue-collar jobs fell by 61 percent. It’s almost impossible to find a federal custodian, cafeteria worker, security guard, or mechanic because almost all of those jobs have been contracted out. In fact, at the now-shuttered Department of Energy’s Rocky Flats plant, which once manufactured the plutonium triggers for nuclear weapons, security was higher even than the White House—and the most dangerous stuff on the planet was carefully guarded. By Wackenhut.

Meanwhile, the number of administrative employees has grown 128 percent and professional workers are up 78 percent—all within a workforce that is just 2 percent larger. Fewer feds are providing front-line services. Fewer feds are providing support services. More feds are managing contracts and are performing more high-level technical work.

Between less accountable contractors and over-stretched government employees, rising costs have been accompanied by dangerous reductions in effective oversight:

The big boost in contracting out has led to a vast array of government programs over which the government has only loose control. For example, at the Centers for Medicare and Medicaid Services, which manages some of the federal government’s biggest and most important programs, each employee is responsible, on average, for $144 million in spending. Stop and let that sink in: $144 million, on average, for each employee. This is for a collection of programs that already represents one of the most privatized systems in government. And it’s responsible for big problems, including $75.5 billion in improper payments every year, according to the Government Accountability Office. In fact, one of every eight dollars in the flagship Medicare fee-for-service program is spent improperly.

So keep it up, Cato—and the Republicans who like to quote Cato’s studies and recommendations—and you could intensify this baleful trend towards more contractors doing more expensive work with nobody really having a handle on what’s being done for the money.

Big Coal Stealing Even More of Your Money

It's really easier to just remember that all fossil fuel companies are evil motherfuckers, all corporations are blatant thieves, and all the rich are parasites.

 

Think Progress:

A seemingly low-profile proposal from a little-known natural resources agency in the Department of the Interior (DOI) has attracted a record-breaking 210,000 public comments from taxpayers, who argue that they are not receiving a fair share of revenues from the mining of coal on U.S. public lands.

The public outcry came in response to a proposed rule from DOI’s Office of Natural Resources Revenue that aims to close a regulatory loophole that allows coal companies to avoid paying royalties owed to taxpayers. Critics argue that the proposed rule does not go far enough to guarantee that western states and U.S. taxpayers are receiving a fair value for the coal mined on America’s public lands, due to additional subsidies given to coal companies under the rule.

“We just got done with this Legislature where there were a lot of needs that couldn’t be met,” said Steve Charter, a rancher from north of Billings, Montana told the Billings Gazette. Meanwhile, he said, “since 2008 Montana has lost over $30 million in coal royalties that should have been revenue to the state.”

In January, a report from the Center for American Progress uncovered evidence that coal companies are dodging royalty payments owed to taxpayers by selling coal to their own subsidiary companies and then paying royalties on artificially low prices.

Reviews of the Department of the Interior’s coal program have also found that coal companies are taking advantage of up to $1 billion a year in royalty rate reductions and subsidies for washing and transporting coal.

 

If This Happens, I Will Eat Gov. Beshear's Hat

Total bullshit.  120-county broadband in three years my ass. Motherfucking phone company put fiber-optic lines on my road 14 years ago.  Still no DSL, no broadband, no fucking nothing.

Also: "fees charged to future customers." Everybody who thinks that will be a penny less than the arm and a leg currently charged by satellite and other wireless companies, stand on your head.

Garry Wollenhaupt at the Lane Report:

Imagine downloading an entire movie in just a few seconds, or a business sending massive 3D printing files around the world. That’s the kind of jumpstart Gov. Steve Beshear hopes to provide with the Next Generation Kentucky Information Highway, a plan to extend high-speed broadband service via fiber optic lines to all 120 counties by 2018.

In December 2014, Gov. Steve Beshear and U.S. Rep. Hal Rogers, the Somerset Republican who since the 1980 election has represented most of the commonwealth’s Appalachian region, announced a contract with Australia-based Macquarie Capital to bring high-speed Internet connectivity to the state. The project will include more than 3,000 miles of fiber in all 120 counties, and Eastern Kentucky will be the first priority area.

Rogers and Beshear have spearheaded the Shaping Our Appalachian Region (SOAR) initiative, aimed at improving economic development and public infrastructure in the Appalachian region. Having long endured fewer jobs, lower incomes and lagging infrastructure, Eastern Kentucky in the past few years has lost half the coal mining jobs that were among the best paying to residents there. SOAR’s aim is to move the economic needle broadly upward.

Across the state, most home Internet services are delivered via telephone lines or cable TV connections that don’t qualify as broadband service today – defined now as download speeds of 25 megabits per second rather than the 2010 benchmark of 4Mbps. Businesses in some large cities have fast options for Internet service through telecommunications providers, but at a high cost and not at the level this project will provide.

The project is designed to address the fact that Kentucky ranks 46th in broadband availability, and slow service is still a reality in the 23 percent of the state’s rural areas that do not have access to broadband of any type.

The contract with Macquarie, estimated at $250 million to $350 million depending on how much existing infrastructure is used, will target Eastern Kentucky first for fiber optic installation and connectivity.

The state will support the project with $30 million in state bonds and $15 to $20 million in federal grants it is getting specifically for this job. In the recent omnibus federal budget, the Appalachian Regional Commission was awarded $10 million to improve broadband in central Appalachia. There is no additional cost to taxpayers under the public-private partnership Macquarie Capital has signed has signed on for; it will pay the rest of the costs with the anticipation of obtaining a return from the fees charged to future customers.