Sequestration hits IRS. To comply with the budget cuts demanded by sequestration, the IRS plans to furlough its entire staff of 89,551 for five days spread out over the next six months. According to an internal memo issued by acting IRS Commissioner Steve Miller, “Everyone is covered by this furlough, and that means everyone from the Acting Commissioner and executives to managers and employees.” On furlough days, all IRS operations except a few IT and security personnel, will shut down. That includes toll-free help and Taxpayer Assistance Centers. When I first heard this news, my first reaction was: Nearly 90,000 people work for the IRS? Really? Oh, and they have a union, the National Treasury Employees Union (NTEU). The president of that union, Colleen Kelley, complained that the sequester will create hardships for some employees. She had no comment about the hardships a massive federal debt was creating for the rest of America.
Scouting secrets. One of the more interesting aspects of the story of the Boy Scouts of America (BSA) and its proposal to change its policy on homosexuals is the extent to which finances are affecting decision-making. The Scouts actually receive relatively few corporate dollars compared to membership fees, program fees, and individual donations. So why are a few politically correct corporations—such as Ernst & Young and its chairman James Turley—able to exert such pressure on the Scouts to make changes? The answer may be that the Scouts lost about $21 million in 2011, the last year for which financial statements are available. The value of its assets fell almost $40 million that year, even though the Dow Jones Industrial Average was up nearly 6 percent in 2011. Also, the Boy Scouts are developing an 11,000-acre property in West Virginia, known as The Summit Bechtel Family National Scout Reserve, that is experiencing what one insider told me was “out of control” cost overruns. Deron Smith, a spokesman for the Boy Scouts, denied that the National Council of the BSA is in financial trouble, calling its current position “strong.” But he admitted, “The National Council’s financial condition for 2012 and the next few years will depend upon several factors. One of those factors lies with the success of the Summit project and managing costs.”
Baucus bows out. U.S. Sen. Max Baucus announced yesterday he would not run for a seventh term. The Montana Democrat’s decision will give Republicans a real chance to pick up a Senate seat, and it highlights a problem for the Democratic Party: They could lose at least a half-dozen seats in the 2014 midterm elections. Fellow Democratic senators who have already announced retirement include Jay Rockefeller of West Virginia, Frank Lautenberg of New Jersey, Tim Johnson of South Dakota, Tom Harkin of Iowa, and Carl Levin of Michigan. Republicans have real chances for a pick-up in every one of those states, and excellent chances in a few of them. Republicans Saxby Chambliss of Georgia and Mike Johanns of Nebraska also have decided not to seek reelection next year, though most observers don’t see the Georgia seat changing parties. Another 25 (or so) seats will be up for reelection, and more than a few of the Democrats face tough fights.
Bailout Bad. More than four years ago, the federal government began bailing out big banks and other financial institutions. The idea sold to us at the time was this: If these “too big to fail” financial institutions failed, they would bring down the entire economy. Lots of people didn’t buy that idea at the time, and now most of us apparently don’t. According to a new Rasmussen survey of “likely U.S. voters,” 56 percent believe the financial industry bailouts were bad for the United States. The national telephone survey also found that only 26 percent think those bailouts were good for the country. Eighteen percent are not sure. Sort of makes you wonder how it happened in the first place. David Stockman is one of those who believe that if we had let one or two of them fail, stronger players would have bought the failed banks’ assets and re-deployed them to more productive means much more quickly than what has happened by propping up the weak players. “The markets have a way of cleansing themselves,” Stockman said. “We interrupted that process, and we’re still paying for it.”