Trimming the "debit" column

[JCnOwasso]

Since there will most likely be no adjustment to the "credit" column, do you all see any areas to trim the budget?  I have started emailing idea's to senators from this state and will most likely begin with the representatives, I may move to sending it to other states if I don't get a response from ours.

High dollar/low dollar, let's look at realistic ideas.  Some of you will say that Obamacare will tank this country and the other half will say that the [unfunded] prescription plan passed by Bush is the primary culprit.  Aside from those...

Mine is a overhaul of the VA system.  1) offer a buyout to those who receive compensation for disability.  Pay 15 years of benefits in a lump sum.  The vet and the economy would see an influx of cash and the government would save X dollars over the life of the Vet (in my case, I am 32, if I live until I am 102 I would have received an approximate amount of 1.1 million in benefits, or they could pay me 200k now and be done with it).  This could trickle down to the VA secured home loans and USAA would most likely see a huge influx of cash as well.-- I estimate that buyouts to 175k veterans would cost approximately 12.85billion, but for every year after the 15th, the government would save just under a billion.

2) be done with the VA requirement to be seen every year or two.  They are wasting funds and valuable time that could be spent on vets who don't have health insurance.

[Conan71]

Since there will most likely be no adjustment to the "credit" column, do you all see any areas to trim the budget?  I have started emailing idea's to senators from this state and will most likely begin with the representatives, I may move to sending it to other states if I don't get a response from ours.

High dollar/low dollar, let's look at realistic ideas.  Some of you will say that Obamacare will tank this country and the other half will say that the [unfunded] prescription plan passed by Bush is the primary culprit.  Aside from those...

Mine is a overhaul of the VA system.  1) offer a buyout to those who receive compensation for disability.  Pay 15 years of benefits in a lump sum.  The vet and the economy would see an influx of cash and the government would save X dollars over the life of the Vet (in my case, I am 32, if I live until I am 102 I would have received an approximate amount of 1.1 million in benefits, or they could pay me 200k now and be done with it).  This could trickle down to the VA secured home loans and USAA would most likely see a huge influx of cash as well.-- I estimate that buyouts to 175k veterans would cost approximately 12.85billion, but for every year after the 15th, the government would save just under a billion.

2) be done with the VA requirement to be seen every year or two.  They are wasting funds and valuable time that could be spent on vets who don't have health insurance.

I see your point, but I believe we have an obligation to care for those who served our country and were disabled as a result of that service.  In many cases, people who have no sense of discipline would blow through that $200K within a year or two and then what?  They would simply shift off to SS disability, welfare and food stamps or just go on the streets and live off local social services and be another write-off at the ER every time they get a cold or have constipation.  I fail to see a true savings there unless I'm totally mis-reading your point.

Getting back to the discussion you and I were having about RFQ's: 

When it comes to the VA and other departments, they wind up paying more for goods and services via business incubation initiatives for minority and disadvantaged businesses.  As well, they create such a huge web of paperwork and complications that I'm personally aware of the government getting an up-charge of at least 10 to 15% on some construction projects just to deal with the PITA factor. 

I can also attest to a project which was sub-contracted to us by someone in an incubator program.  His area of expertise was fire sprinklers and alarms, yet they contracted with him for a large scale pressure vessel repair project.  He did not have the qualifications for the work so he contracted with us and he simply billed the government double what we charged him.  What did he supply for the project?  One supervisor to check in on our crew of six men every few hours for the duration of the project which was about three weeks as I recall.

It's hardly an isolated incident.  I totally appreciate trying to give people a hand up in starting a business and job creation, but people are simply numb to the costs of those preference programs.

[JCnOwasso]

Conan, you are correct and part of this buyout is it cannot be for a veteran that is unemployable.  Those guys depend on their checks for month to month expenses.  The Vet would still maintain the ability to be treated for the disability.  The only difference is they don't get that monthly check.  And to respond a bit further, the people who would blow through the 200k are the same people that would blow through there monthly check.  They are still irresponsible, regardless of the amount they are paid.  We can take it a bit further and say that the lump sum will be paid out over 1 year (semi lump sum).  This way you give these guys some time to think about what they are going to spend it on. 

Back to the contracts stuff, I do understand what you are saying, completely.  However, the drive of the Government is to stimulate small business.  Anything that is 150k or less is required to be set aside for small business, and if you have a reasonable expectation that 2 or more small businesses will respond, you can set-aside all the way up to approx 6.5mil.  As for the incubator programs, such as 8(a), those are a pain.  I prefer not to deal with them because of the exact reason you mention.  I want competition to determine I am getting a good deal, I don't want to have to depend on my knowledge of the market.  Additionally, you have many Contracting Officers who are not well trained, not well staffed, or just don't give a damn.  That is where you run into situations like you are talking about.  The CO should have spotted that in negotiations.  They apparently didn't ask for the data.

[Conan71]

Conan, you are correct and part of this buyout is it cannot be for a veteran that is unemployable.  Those guys depend on their checks for month to month expenses.  The Vet would still maintain the ability to be treated for the disability.  The only difference is they don't get that monthly check.  And to respond a bit further, the people who would blow through the 200k are the same people that would blow through there monthly check.  They are still irresponsible, regardless of the amount they are paid.  We can take it a bit further and say that the lump sum will be paid out over 1 year (semi lump sum).  This way you give these guys some time to think about what they are going to spend it on. 

Back to the contracts stuff, I do understand what you are saying, completely.  However, the drive of the Government is to stimulate small business.  Anything that is 150k or less is required to be set aside for small business, and if you have a reasonable expectation that 2 or more small businesses will respond, you can set-aside all the way up to approx 6.5mil.  As for the incubator programs, such as 8(a), those are a pain.  I prefer not to deal with them because of the exact reason you mention.  I want competition to determine I am getting a good deal, I don't want to have to depend on my knowledge of the market.  Additionally, you have many Contracting Officers who are not well trained, not well staffed, or just don't give a damn.  That is where you run into situations like you are talking about.  The CO should have spotted that in negotiations.  They apparently didn't ask for the data.

Ah, something more like a disbursement from an AD&D policy.  Got it and makes good sense.

I was actually asked to increase my sub-contract price to the contractor so he could earn a higher gross.  I refused.  I realize there are a lot of people who work for the government who care about their job.  But I come in contact with so many who just appear to be stroking a check and they really don't care if their actions are or are not costing taxpayers more money.  I see this on all levels including public universities.

There's nothing that aggravates me more than sitting in a meeting at a university with six or seven people, each from different departments ranging from grounds maintenance to accounting trying to justify their existence on the payroll for a simple $20,000 project.  Incompetent in-house engineers are another pet peeve.

But I should digress before my head explodes and I come off as a gubmint hater.  I don't hate government, it just grates on me when I see first hand how much needless waste there is.

[JCnOwasso]

Yeah, my plan doesn't cut off the Vet from treatment.  Just gives them a lumpsum and tells them don't come ask for anymore.  The person could die the next week or live until they are 110, makes no difference.  But I guarantee that if you give a majority of people a "life changing" amount of money (more than they would earn in a year or 5), they would most likely be just a little bit healthier.  I would probably be completely debt free (house cars etc) due to it.  Now not everyone would be in my same position, but you have many people who would be FAR better than if they just merely received their monthly check.  You pay off 150k house in one swipe, you save 150k-200k in interest, which would make up for what you are missing out on by taking the buyout..

I have noticed that people are becoming more protective/defensive about their positions.  As the Gov looks at downsizing or rightsizing, the people who know they are the most vulnerable, become the most vocal about their position.  And let's be honest, while there are a lot of Gov employees who are good at their job and enjoy working for the fed, their are those who only work for the fed because they couldn't cut it on the outside, or they enjoy the structure of the Gov.  I have spent time working for Federal contractors and working for the Fed, I enjoyed both positions, but being in the Gov is much more structured.  A lot of what you see now are federal employees who were going to retire at the end of 2008, but their retirement account took a huge hit during the recession and they now are working a few extra years to build it back up.  The other ones are just people who know they can get a check and pretty much not get canned.    

[AquaMan]

Corps of Engineers might be a good place to start. Friends who have worked there have expressed dismay to me about the waste of resources, the obvious featherbedding and depressingly ridgid management. But hey, its part of the military, maybe thats just sop.

[Gaspar]

Corps of Engineers might be a good place to start. Friends who have worked there have expressed dismay to me about the waste of resources, the obvious featherbedding and depressingly ridgid management. But hey, its part of the military, maybe thats just sop.

That's been suggested several times.  I agree.

Contracting private firms is more efficient, and produces a better quality result. 

[JCnOwasso]

It is extremely unfortunate, we work with the Corp a bit and we have much more freedom than they do.  It IS because they have the DoD to worry about.  The weird thing is, they are the big dollar construction project house for the military.  They award and manage the construction projects that are too large or too involved for the standard military base to get involved with.  

There is a good bit of wasted resources in many Government offices, but at the same time you have many offices that are understaffed because of location or something else.  

They need to start offering the old timers buyouts to take the retirement and leave.  One of the biggest problems I see with the Gov is that it is top heavy.  People who are at the top of rung of their pay grade who make 20% more than a person at the lowest rung of their paygrade.  The person at the lowest rung is probably more motivated and eager to get the job done than the person who has nothing else to obtain and is RIP (retired in place).  40-50% of Government employees are eligble or will be eligble for retirement soon.  Get them out and replace them with a capable person making 20% less and you will see great savings.  Get rid of redundant positions in offices (does an office with 3 or 4 people really need a separate team leader AND supervisor?)

[Red Arrow]

Yeah, my plan doesn't cut off the Vet from treatment.  Just gives them a lumpsum and tells them don't come ask for anymore.  

Present value, future value, uniform series, etc are all tied together by number of payments and interest rate.  What interest rate and number of payments would you propose?

[we vs us]

That's been suggested several times.  I agree.

Contracting private firms is more efficient, and produces a better quality result. 

This is a kneejerk response to anything having to do with the government -- "privatize it!" -- but our recent experiences prove that privatization carries with it a whole different bundle of problems. 

For instance it creates a deeper and wider private market that's completely reliant on government bidding out its services.  Think about the military industrial complex, or how our prison system now relies on a steady stream of inmates (read: cheap labor that isn't subject to the standard protections of labor law) to support the private companies that run them.  Or even on the micro level, some of the native contractors that Conan's been talking about.  In downturns, when the gov (like now) has decided to take cuts of 10% or more per department, that translates into real losses not just for gov employees but also losses to private businesses who bid for those services. A reduction in gov funding will always create market echoes, but we've consciously encouraged a more tightly and expansively woven market around the gov by bidding out services privately.  This is one reason why government feels so "big:" so much of our private business lives now have to do with them, too.

It also encourages the revolving door that we hate so much.  Elected officials are term-limited out and immediately join private lobbying firms, which advocate for their industries for more tax breaks and government money.  Or worse, the functionaries that bobble back and forth between regulatory agencies and the companies  the agencies are there to regulate.  So there's regulatory capture, as we've seen with the Wall Street regulatory bodies, too. 

This isn't to say that I'm against using private contractors for certain government functions, but there're a whole slew of unintended consequences in attendance when we say "privatize it!" And in many ways the unintended consequences act directly against the kind of virtue we think we're creating by overlaying a market framework on gov services. 

 

[JCnOwasso]

Present value, future value, uniform series, etc are all tied together by number of payments and interest rate.  What interest rate and number of payments would you propose?

The payment would be based upon present value, and current adders (married, children, rating etc). Let's say that if you are 30% or below you could receive a 1 payment lump sum.  Above that, you get paid out over 6 months.  70-100%, you have to go through a board to determine if you qualify for the buyout (this group is where the "unemployable" classification comes into play). 

Here is a "for instance"-  Let's say you are receiving $12,000 a year in disability comp.  You would receive a lumpsum payment of $180,000 (6 payments of 30k).  Here is where the benefit is to both the Gov and the Vet.  If you live for 30 years after the proposed buyout date you would have received approx $421k (using 1% cola).  Which sounds great, however look at it this way- You use that amount to make your house payment, and just say that you recently bought your house on a 30 year note @ 4.25%, you are paying an extra 120-150k in interest on a 165k house.  So you would own your house immediately, and would not owe that much interest.  The Gov saves 240k on that vet and you save 150k in interest.   

[Red Arrow]

Here is a "for instance"-  Let's say you are receiving $12,000 a year in disability comp.  You would receive a lumpsum payment of $180,000 (6 payments of 30k). 

The Present Value of a 30 year annuity at $12,000/yr and 5.2% interest compounded annually is $180,337.  That doesn't count any COLA adjustments.  At the 1% rate I presently feel lucky to get on some Credit Union CDs, the present value is $309,692. 

If you have enough debt at rates at or above 5.2% for your example, it would probably be a good idea to take the $180,000.  If you don't have that much debt, you should decline the offer.

[JCnOwasso]

The Present Value of a 30 year annuity at $12,000/yr and 5.2% interest compounded annually is $180,337.  That doesn't count any COLA adjustments.  At the 1% rate I presently feel lucky to get on some Credit Union CDs, the present value is $309,692. 

If you have enough debt at rates at or above 5.2% for your example, it would probably be a good idea to take the $180,000.  If you don't have that much debt, you should decline the offer.

Great information RA