Obama VA Illegally Spending $6 Billion A Year

Veterans Affairs Improperly Spent $6 Billion Annually, Senior Official Says – Washington Post

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The Department of Veterans Affairs has been spending at least $6 billion a year in violation of federal contracting rules to pay for medical care and supplies, wasting taxpayer money and putting veterans at risk, according to an internal memo written by the agency’s senior official for procurement.

In a 35-page document addressed to VA Secretary Robert McDonald, the official accuses other agency leaders of “gross mismanagement” and making a “mockery” of federal acquisition laws that require competitive bidding and proper contracts.

Jan R. Frye, deputy assistant secretary for acquisition and logistics, describes a culture of “lawlessness and chaos” at the Veterans Health Administration, the massive health-care system for 8.7 million veterans.

“Doors are swung wide open for fraud, waste and abuse,” he writes in the March memo, which was obtained by The Washington Post. He adds, “I can state without reservation that VA has and continues to waste millions of dollars by paying excessive prices for goods and services due to breaches of Federal laws.”

Frye describes in detail a series of practices that he says run afoul of federal rules, including the widespread use of purchase cards, which are usually meant as a convenience for minor purchases of up to $3,000, to buy billions of dollars worth of medical supplies without contracts. In one example, he says that up to $1.2 billion in prosthetics were bought using purchase cards without contracts during an 18-month period that ended last year.

He also explains how VA has failed to engage in competitive bidding or sign contracts with outside hospital and health-care providers that offer medical care for veterans that the agency cannot provide, such as specialized tests and surgeries and other procedures. Frye says VA has paid at least $5 billion in such fees, in violation of federal rules that the agency’s own general counsel has said since 2009 must be followed.

Frye alleges further violations in the agency’s purchase of billions of dollars worth of prosthetics and in the acquisition of a wide range of daily medical and surgical supplies. He says many products are bought without the competitive bidding and contracts essential to ensure quality care, effective use of tight dollars and proper government oversight.

“These unlawful acts may potentially result in serious harm or death to America’s veterans,” Frye wrote. “Collectively, I believe they serve to decay the entire VA health-care system.”

VA spokeswoman Victoria Dillon said in a statement that some of the care the agency pays for is not covered by federal acquisition law. She also said that the agency is trying to manage rapid growth in medical care administered by outside providers, with authorizations for outside medical care jumping 46 percent in the first four months of 2015 over the same period last year.

Dillon said VA officials are urging Congress to pass legislation that would allow an “expedited form of purchasing care” for veterans who need to go outside the VA system. She said the bill “would also resolve legal uncertainties that have arisen” regarding the use of purchasing agreements other than those required by federal acquisition regulations.

VA has been under intense pressure to provide adequate care to the surge of veterans returning from the wars in Iraq and Afghanistan, but Frye makes clear in his memo that the agency’s violations of purchasing law have been going on for years and that senior leaders have had many opportunities to revamp their practices.

He discloses his repeated efforts to raise his concerns with other senior officials at the agency but says he was consistently ignored. He also accuses top agency officials of deceiving Congress when they were asked about questionable practices.

VA operates one of the largest health-care systems in the country, spanning 150 hospitals and more than 800 outpatient clinics. The agency has been struggling to serve not only the veterans returning from Iraq and Afghanistan, but also a surge in veterans who served in the 1960s and 1970s.

VA has been rocked since last year by revelations about long wait times for veterans seeking treatment for health issues including cancer and post-traumatic stress disorder. McDonald’s predecessor, Eric K. Shinseki, resigned as VA secretary last year after a coverup of months-long hospital wait times became public, and Congress has given the system $10 billion in new funding to ramp up private medical care.

On Thursday, Frye will have a chance to explain his concerns directly to lawmakers. He is scheduled to testify before the House Veterans’ Affairs Committee about waste and fraud in the purchase card program.

Frye, 64, is a retired Army colonel who has overseen VA’s acquisitions and logistics programs – one of the federal government’s largest – since 2005. In his role as the agency’s senior procurement executive, he is responsible for developing and supervising VA’s practices for acquiring services and supplies, but he is not in charge of making the purchases. A former Army inspector general, he has held senior acquisition positions over 30 years in government.

Some of his concerns were previously flagged by VA’s inspector general, who has reported for years that weak contracting systems put the agency at risk of waste and abuse. Thousands of pharmaceutical purchases were made without competition or contracts in fiscal years 2012 and 2013, often by unqualified employees, investigators found. And according to documents that have not been made public, the inspector general’s office has warned VA repeatedly that its use of purchase cards needs better oversight.

For the most part, Frye does not explain why the rules are so widely flouted. But he suggests, in this discussion of purchase cards, that the reason may be laziness. He calls these payments an “easy button” way of buying things. Frye told McDonald he became aware in 2012 that government purchase cards were being used improperly by VA. About 2,000 cards had been issued to employees who were ordering products and services without contracts, Frye recounts.

He said his concerns grew after learning that a supervisor in New York had recorded more than $50 million in prosthetics purchases in increments of $24,999 – $1 under the charging limit on each card. In a response to a member of Congress who inquired about the purchases, Shinseki had few answers. “No contract files exist” and “there is no evidence of full and open competition,” Shinseki wrote in the letter, a copy of which was obtained by The Post.

Purchase cards, Frye says in his memo, can be a sufficient means of acquiring goods and services for “micro-purchases” up to $3,000. Above that limit, the cards can be used for payment only if there is a certified invoice linked to a properly awarded contract.

Frye’s concerns about payments for outside medical services are rooted in the reality that VA hospitals do not have the resources or specialists to provide all the treatment veterans require, such as obstetrics and joint replacements. For these services, VA normally refers veterans to a list of doctors or labs in their area.

The agency, Frye says, is required to identify providers through a competitive process and contract with them to ensure that the government pays reasonable prices and gets the best value and quality. And contracts help ensure veterans are legally protected if they get poor care or if a medical procedure goes wrong.

But according to Frye’s account, VA spent about $5 billion on outside medical care in both 2013 and 2014 in the absence of contracts, and such practices “extend back many years.” “Based on my inquiry in January 2013, [the Office of the General Counsel] confirmed in writing the fact VHA was violating the law,” Frye says.

Large medical systems similar to VA order many supplies in bulk through a list of approved vendors, identified through a competitive process, to ensure quick delivery for the best price. But VA’s system for these “just-in-time” purchases is deeply flawed, and this is yet another way that the agency wastes money, Frye says.

He writes that there are many types of supplies that are not covered by these arrangements. Instead, they are ordered off the shelf, without competition and for higher prices, from a “shopping list” containing 400,000 items, “indiscriminately and not in accordance” with acquisition laws.

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Thanks Barack… Federal Regulation Cost American Businesses And Consumers $1.88 Trillion In 2014

Report: Cost Of Federal Regulation Reached $1.88 Trillion In 2014 – Washington Free Beacon

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The cost of federal regulation neared $2 trillion in 2014, according to a new report by the Competitive Enterprise Institute (CEI).

Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, a report by Clyde Wayne Crews, CEI’s vice president for policy, also reveals that the U.S. debt now exceeds the size of China’s economy.

“Federal regulation and intervention cost American consumers and businesses an estimated $1.88 trillion in 2014 in lost economic productivity and higher prices,” amounting to roughly $15,000 per household, the report said.

The report found that the federal bureaucracy – made up of 60 agencies, departments, and commissions – has 3,415 regulations in the process of being finalized, meaning that the number of regulations far surpasses the number of laws passed by Congress.

“In 2014, agencies issued 16 new regulations for every law – that’s 3,554 new regulations compared to 224 new laws,” the report said.

CEI, a 501(c)(3) nonprofit, found that the Departments of the Treasury, Commerce, Interior, Health and Human Services (HHS), Transportation (DOT), and the Environmental Protection Agency (EPA) account for 48 percent of all federal regulations.

The EPA issued 539 final rules in the Federal Register last year, up 12.5 percent in five years.

Enforcing regulations alone cost the government $59.5 billion in 2014.

Government regulation has led to a hidden “tax” for Americans, the report said, as businesses pass along compliance costs to consumers.

“Economy-wide regulatory costs amount to an average of $14,976 per household – around 29 percent of an average family budget of $51,100,” the report said. “Although not paid directly by individuals, this ‘cost’ of regulation exceeds the amount an average family spends on health care, food and transportation.”

Aside from passing costs onto consumers, the report said, regulation is a way for the federal government to further agendas without relying on the legislative system.

“Rather than pay directly and book expenses for new initiatives, federal regulations can compel the private sector, as well as state and local governments, to bear the costs of federal initiatives,” the report said.

Regulations hit small businesses the hardest, averaging $11,724 per employee for firms that employ fewer than 50 people in 2012. The overall cost per employee for all companies comes to $9,991.

The cost of regulation has grown so large, according to the report, that if it was a country “it would be the world’s 10th largest economy, ranking behind Russia and ahead of India.”

The regulatory state has been growing for decades. The report notes that 90,836 rules have been issued since 1993.

The Federal Register, the government’s official record for all federal regulations, was
77,687 pages long at the end of 2014, the sixth-highest page count in history.

“Among the six all-time-high Federal Register page counts, five have occurred under President Obama,” CEI said.

The report also noted that the national debt, which currently stands at $18.152 trillion, is now larger than China’s economy. China surpassed the U.S. to become the largest economy in the world last December.

“The national debt topped $18 trillion in December 2014,
the same month the International Monetary Fund calculated China’s economy to
be worth $17.6 trillion in terms of purchasing power parity, making it the world’s largest economy (albeit still significantly lagging the United States on a per capita basis),” CEI said.

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Infernal Revenue Service Wasted $5.6 Billion On Bogus Obama Stimulus Tax Credits

IRS Wasted $5.6B On Bogus Obama Stimulus Tax Credits: Audit – Washington Times

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The IRS doled out more than $5 billion in potentially bogus college aid payments under an Obama stimulus tax credit in 2012, according to a new report Tuesday from the agency’s inspector general that said the administration still doesn’t have a good handle on how to root out erroneous claims.

More than 3.8 million students received more than $5.6 billion in questionable tax credits, the audit found – more than half of those never filed their tuition statement, while others were paid tax credits even though the schools they attended weren’t acceptable institutions.

Still other students claimed the credit for more than four years.

“The IRS still does not have effective processes to identify erroneous claims for education credits,” said J. Russell George, Treasury Inspector General for Tax Administration, who said he’s repeatedly warned the IRS about the problem but “many of the deficiencies TIGTA previously identified still exist.”

Many of the problems, however, lie with Congress, which needs to grant the IRS new powers to check students’ claims against other government databases, Mr. George said.

The tax break at issue is known as the American Opportunity Tax Credit, which was a creation of President Obama’s 2009 stimulus. It was slated to expire in 2010, but Mr. Obama and Congress have extended it through 2017.

The credits are designed to offset the costs of college.

IRS officials said part of the blame for the potential fraud lies with schools and the school year itself, saying that information on students’ attendance comes too late for the agency to be able to check it against returns.

But Debra Holland, IRS’s wage and investment division commissioner, insisted her agency does have “effective processes to identify erroneous claims,” saying they did catch 1.8 million questionable returns and put nearly 9,600 of those cases through a tax exam.

Ms. Holland blamed a lack of money for her agency’s inability to do more, and said they needed to limit their efforts to tax returns that had the highest risk of errors and the best chance of reclaiming money.

The IRS has already moved to add more checks to its system by looking to see who’s claimed the tax credit for more than four nonconsecutive years.

In a statement Tuesday, the IRS said Congress could help the agency out by granting it the power to automatically reject payments to students who claim more than four years of the tax credit. The agency also said Congress could approve new tools to access other government databases to check students’ eligibility for the tax credits, and could speed up the timeframe for filing the tuition forms that the inspector general said were missing in most of the cases it identified.

“Funding limitations have severely hampered our efforts in this and other compliance areas. Since 2010, the IRS budget has been reduced by nearly $1.2 billion and we expect to have 16,000 fewer employees by the end of this fiscal year. We simply do not have enough resources to audit every questionable credit,” the agency said.

The agency also said it believed the estimate of $5.6 billion was “overstated,” though the IRS acknowledged that it should try to do more to cut down on bad payments.

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Obamanomics: Major U.S. Retail Chains Closing 6,000 Stores

Retail Apocalypse: Major Chains Closing 6,000 Stores – WorldNetDaily

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The long feared “retail apocalypse” may be hitting with little or no fanfare if a growing list of store-closing plans by major chains is any indication.

Major U.S. retailers have announced the closing of more than 6,000 stores from coast to coast. The list includes only those retailers that have announced plans to close more than 10 outlets this year and next.

For example, 1,784 Radio Shack stores are vanishing, 400 stores in the Office Depot/Office Max chain by 2016, and 340 Dollar Tree/Family Dollar stores.

The growing list of stores getting shuttered coincides with the decline in discretionary consumer spending over the past six months.

“Expect to see more storefronts closed at malls across the country,” one retail watcher told WND. “It’s getting ugly out there.”

Another factor, the source said, is that Americans’ credit is maxed out – a problem that will impact holiday season sales later this year. Add the demand of rising taxes, housing and health-insurance costs and you’ve got a formula for belt-tightening across the board.

Expected to be hit hardest by the trend are poorer- and lower-middle class neighborhoods. The recent riots in Baltimore are expected to make retailers even more skittish.

See the big list:

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*VIDEO* Ted Cruz: Interview – United States Hispanic Chamber Of Commerce


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U.S. Economy Slows To A Crawl As GDP Grows A Scant 0.2% In First Quarter

U.S. Economic Growth Nearly Stalls Out – Wall Street Journal

The U.S. economy slowed to a crawl at the start of the year as businesses slashed investment, exports tumbled and consumers showed signs of caution, marking a return to the uneven growth that has been a hallmark of the nearly six-year economic expansion.

Gross domestic product, the broadest measure of goods and services produced across the economy, expanded at a 0.2% seasonally adjusted annual rate in the first quarter, the Commerce Department said Wednesday. The economy advanced at a 2.2% pace in the fourth quarter and 5% in the third.

Economists surveyed by The Wall Street Journal had expected growth of 1% in the first three months of this year, though many were braced for a surprise to the downside.

The latest reading on the economy came hours before Federal Reserve officials released their policy statement, in which they said slower growth reflected, in part, “transitory factors.” The Fed gave no new explicit clues on the timing of interest-rate increases, but the slower growth made the timing a bit more uncertain.

The first-quarter figures repeat a common pattern in recent years: one or two strong readings followed by a sharp slowdown. First-quarter GDP growth had averaged 0.6% since 2010 and 2.9% for all other quarters. That has worked out to moderate overall expansion but no growth breakout.

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“This is another quarterly number which confirms the long-term slow-growth thesis, but there are good odds we get a bit of a bounce later in the year from stabilized business spending and the housing markets, which are setting up quite promising,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott, said in a note to clients.

Last year, economists pinned much of the blame for a bad first quarter – GDP shrank 2.1% – on unusually harsh weather. This year, multiple factors appear to be at work, including another bout of blizzards, disruptions at West Coast ports, the stronger dollar’s effect on exports and the impact of cheaper oil.

Better weather, a return to normal at port terminals and steadying investment could boost growth later this year.

“We expect the economy will rebound in [the second quarter] and beyond, similar to last year,” said Michelle Girard, economist at RBS Securities.

But not all the factors behind the slowdown appear temporary. A stronger dollar and cheaper oil could persist, keeping exports and energy-sector investment at bay.

As well, rising inventories kept the U.S. economy out of recession, contributing 0.74 percentage point to GDP in the first quarter. A second-quarter repeat is unlikely.

Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said producers probably will allow inventory positions to run off rather than building them up even more. “This tells us that current-quarter growth is likely to run around 2.5%, not the 4% snapback we had previously been anticipating,” he said.

U.S. households will have to pick up spending to help the economy grow. Wednesday’s report showed consumer spending, which accounts for more than two-thirds of economic output, decelerated to a 1.9% pace in the first quarter, down from 4.4% growth in the fourth quarter.

Rather than using savings from cheaper gasoline to buy more goods and services, Americans have been setting money aside for a rainy day. The personal saving rate at 5.5% in the first quarter was the highest since 2012. The figure was 4.6% in the fourth quarter.

Another key driver of the economy, business spending, also has faltered of late. Nonresidential fixed investment – which reflects spending on software, research and development, equipment and structures – retreated at a 3.4% rate, compared with a 4.7% rise in the fourth quarter.

Energy companies in particular are feeling the effects of cheaper oil. Business investment in structures fell 23.1%, led by a 48.7% contraction for mining sector spending on shafts and wells, Commerce said.

A stronger dollar, meanwhile, has made domestically produced goods more expensive overseas and foreign products cheaper inside the U.S. Combined with disruptions at West Coast ports, trade was constrained. In the first quarter, exports fell at a 7.2% rate, compared with 4.5% growth in the fourth quarter. Imports rose 1.8%, compared with 10.4% in the fourth quarter.

Federal government spending added little to the economy in the first quarter, expanding 0.3%, compared with a 7.3% fall in the fourth quarter.

Real final sales of domestic product, a measure that excludes changes to inventories, shrank at a 0.5% pace, compared with a 2.3% rise in the fourth quarter.

Alongside weak growth in the quarter, prices fell.

The price index for personal consumption expenditures – the Fed’s preferred measure for inflation – declined at a 2% annual rate, well below the central bank’s 2% inflation growth target. Core prices, which exclude volatile food and energy components, were up 0.9%, the lowest level since 2010.

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There’s A Reason Why Customer Service At Obama’s IRS Sucks

Report: IRS Deliberately Cut Its Own Customer Service Budget – Weekly Standard

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If you tried to contact the IRS with a question about your taxes this year, chances are you didn’t get a response. The IRS estimated that it would only answer 17 million of the 49 million calls received this filing season. Taxpayers lucky enough to have the IRS answer their calls waited an average of 34.4 minutes for assistance – nearly double the wait time last year (18.7 minutes).

IRS Commissioner John Koskinen has blamed the IRS’s “abysmal” customer service on congressional budget cuts – funding is down $1.2 billion from its 2010 peak – but a new congressional report points the finger back at the IRS. While congressional funding for the IRS remained flat from 2014 to 2015, the IRS diverted $134 million away from customer service to other activities.

In addition to the $11 billion appropriated by Congress, the IRS takes in more than $400 million in user fees and may allocate that money as it sees fit. In 2014, the IRS allocated $183 million in user fees to its customer service budget, but allocated just $49 million in 2015 – a 76 percent cut.

Commissioner Koskinen will appear before the House Ways and Means Committee this morning, one week after the federal tax filing deadline, and he can expect to be asked why the IRS cut its own customer service budget and continues to spend money on other questionable activities.

The report notes that Koskinen reinstated bonuses weeks after his appointment, has allowed IRS employees to spend roughly 500,000 work hours on union activities, and failed to collect delinquent taxes owed by federal employees. The tax agency has also been strained by Obamacare. According to the report, the IRS has spent “over $1.2 billion on the President’s health care law to date, with a planned expenditure this year of an additional $500 million.”

The IRS’s total annual $11 billion budget is dwarfed by the amount of improper tax payments it makes each year. According to the report, the IRS paid out $17.7 billion in improper Earned Income Tax Credit payments (which are supposed to help poor and low-income individuals) and an additional $6 to $7 billion in improper child tax credit payments.

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