November 30, 2010

Greek-style Austerity Measures

When asked, during his Senate confirmation, why he’d consider going after Social Security to help reduce the National Debt, Bernanke quoted bank robber Willie Sutton. He said, “That’s where the money is.”

Destructive Neoliberal Austerity

November 23, 2010 - Instead of vitally needed stimulus, Washington and European governments dictate austerity.

The pretext of deficit reduction is being used to transfer more wealth to those already with too much, plus the usual canard over the urgency to save national banking systems.

In other words, make ordinary people bear the burden of bailing out banking giants responsible for the severest economic crisis since the Great Depression.
How? The usual IMF solution, involving preservation of capital at the expense of workers — a package including wage and benefit cuts, less social spending, privatization of state resources, mass layoffs, deregulation, lower "onerous" taxes, maintaining corporate debt service, and harsh crackdowns against resisters.

In the 1980s, it was called Reaganomics, trickle down, and Thatcherism. Today it's destructive "shock therapy" called austerity, the same scheme pitting capital against people — disposable workers tossed out for big money's gain.

It's how predatory capitalism works, destructively for so many to enrich an elite few — snake oil peddled as an economic elixir, corrupted politicians and central bankers forcing harmful policies that, in fact, don't work.

Three years of failure showed imposed measures have hurt, not helped, and the longer they continue, the more sickness will spread and deepen, causing imposed poverty. It's why independent experts see long-term depression, rising unemployment, human deprivation, and bigger than ever bonuses for bankers until the inevitable house of cards collapses. Welcome to the new world order, phase two.

In America, the Fed furiously monitized debt. First QE I, now II, likely III and IV coming that could have worked the first time if constructively, not destructively used. An earlier article explained, accessed through the following link:

Swapping credit for toxic assets helps banks, not the economy. However, using it for productive investment works. In her September 8th article titled, "How to Reverse A Deflation: Helicopter Ben Needs to Drop Some Money on Main Street," Ellen Brown explained that:
"Running the government's printing presses to pay its bills has not seriously been tried since the Civil War, when President Lincoln saved the North from a crippling war debt at usurious interest rates by printing greenbacks (US notes, interest free). Other countries, however, have tested and proven this model more recently. They include Germany, which pulled itself out of a massive financial collapse in the early 1930s by printing a form of currency called "MEFO bills," and Australia, New Zealand and Canada, all of which successfully funded public works in the first half of the 20th century simply by advancing the credit of the nation. China, Malaysia, Guernsey, Jersey, India, Argentina, and other countries" also tried it successfully during hard times to revive their economies. The U.S. government could do this too. It could print dollars (or type them into electronic bank accounts) and spend the money on the sorts of local public projects that would put people back to work and get the economy rolling again."
Why not ailing America and European ones today. Central bank money creation (credit) for public projects and other productive investments stimulates economic growth, creates jobs, and turns depression into prosperity — inflation free by keeping credit and productive investment in balance. Whenever and wherever it's been tried, it worked when done right.

Instead, sweeping austerity measures are dictated for America and Europe. Last spring, an EU summit announced a Greece bailout package, dependent on "budgetary discipline" and imposed poverty, the same IMF prescription for Latvia, Iceland, Hungary, Romania, and Ukraine. Now eurozone shock therapy, what economist Michael Hudson calls a:
"neoliberal drastically change the laws and structure of how European society will function for the next generation. If (successful, they'll) break up Europe, destroy the internal market, and render that continent a backwater."
Calling it a "financial coup d'etat," he said "bankers are demanding (and getting governments to) rebuild their loan reserves at labor's expense." Washington's using the same ugly scheme.

Throughout the West, neoliberals are empowered.
"From Brussels to Latvia, (they) aim to shrink their economies (by) roll(ing) back wage levels by 30 percent or more — depression-style levels," making Europe and America banana republics.
In late September, EU countries, led by Germany, increased pressure on member states to cut deficits by lower public spending, Chancellor Angela Merkel, in fact, demanding sanctions on offenders and suspending their voting rights for continued policy breaches. At the same time, corporate taxes have been cut, continuing a burden shift to workers. Since 2000, 12 of the 27 EU countries raised VAT rates, Hungary, Denmark and Sweden now charging 25% for commodity purchases while wages and benefits are being slashed. Some new world.

Across the continent, painful worker hammering continues, Ireland the latest troubled country making headlines. On November 13, Wall Street Journal writers Neil Shah and Marcus Walker wrote: "Ireland Stirs Specter of EU Default," saying:
"Europe's debt crisis is still smoldering (months) after relative calm," showing it deceptively hid big trouble, awaiting its moment to surface. The challenges facing Ireland "show few signs of abating soon," a worrisome contagion affecting Europe's largest economies, leading analysts to wonder what shoe will drop next.
Workers, of course, are most affected, spending cuts and high unemployment taking a punishing toll. More are coming, assuring greater deprivation and added impetus for increased emigration. Monthly, 1,250 students leave Ireland as well as thousands of young workers, seeing no future at home. Those remaining face growing burdens, including homeowners to avoid forclosure. One in eight mortgages is underwater. The worst is yet to come, and similar trouble affects Greece, Italy, Spain, Portugal, Britain, and elsewhere across the continent, yet policy fixes assure worse ahead, not better.

Also in America, planned austerity is the wrong solution for a sick economy, yet bipartisan support and two deficit cutting commissions back it. An earlier article explained, accessed through the following link:

It covered Obama's proposed social spending cuts, while leaving defense, banker bailouts, and other corporate subsidies intact, a prescription from hell promising harder than ever hard times for millions. On November 10, Obama's deficit cutting commission outlined its plan. The above link discussed it, a thinly veiled scheme to serve capital, not people when they most need it.

The Bipartisan Policy Center (BPC) was also mentioned, a lesser known group for the same purpose, its proposal imminent at the time. Now it's out with draconian measures as destructive as Obama's commission — proposing Social Security, Medicare, Medicaid, and other social benefit cuts, harming working households most, the way elitists always cheat ordinary people for themselves.

Co-chaired by former Senator Pete Domenici and Alice Rivlin, former director of the Office of Management and Budget and the Congressional Budget Office, it's called "Restoring America's Future," saying:
America "fac(es) two huge challenges that can only be surmounted" by bipartisan support "to curb the mounting debt (to) reinforce recovery, not impede it."
Typical elitist boilerplate, then proposing punishing measures on working households for greater enrichment for themselves. They include:
  • Indexing Social Security benefits to life expectancy to reduce benefits as longevity increases; in other words, "incentiviz(ing) people to work longer to compensate for lower benefits;

  • Eliminating annual cost of living adjustments (COLAs), justified by claiming inflation is overstated when, in fact, it's higher, especially for retirees facing costly medical expenses;

  • Over the next 38 years, "rais(ing) the amount of wages subject to payroll taxes (now capped at $106,800) to cover 90% of all wages" — suggesting bonuses, capital gains, dividends, and other executive compensation be exempt, for many, the lion's share of their earnings;

  • Instituting a one-year payroll tax holiday for workers and employers, Social Security to get no funding for 12 months to save an estimated $650 billion; supposedly, future general revenue will replenish the shortfall;

  • Cutting Medicare benefits, including by higher Part B premiums (from 25 to 35% of total program costs), co-pays, and fees for outpatients services; also establishing privately owned, lower-cost, health insurance exchanges to be given competitive cost advantages over Medicare — a de facto Trojan horse to replace it eventually, leaving recipients at the mercy of predatory insurers that profit by denying expensive care;

  • By 2018, cutting Medicaid by the amount it grows faster than GDP, providing less care to the indigent, perhaps eventually none;

  • Shielding insurers and drug giants from malpractice lawsuits by making it harder to file them; then capping non-economic and punitive damage awards, suits to be adjudicated in "specialized malpractice courts," that may, in fact, be civilian equivalents of military commissions, used to deny so-called "terrorists" due process and judicial fairness;

  • Instituting a 6.5% national sales tax (called a Debt Reduction Sales Tax — DRST); like European VATs (value added taxes), they'll hit ordinary people hardest and can be incrementally raised anytime to hit harder;

  • Simplifying the tax code to two brackets (15 and 27%), favoring the rich; regressively cutting the top personal and corporate tax rate from 35% to 27%, claiming it "will make the tax system more progressive;"

  • Eliminating home mortgage and most other deductions and credits;

  • Taxing employer provided health insurance to encourage less comprehensive coverage and make healthcare cost more;

  • Freezing non-defense discretionary spending for four years, then capping it according to GDP growth — a prescription to slash social benefits, perhaps eliminating them later;

  • Freezing "discretionary" defense spending for five years, then capping it with GDP growth; doing it, among other ways, by "reforming military health care;" in other words, cutting veterans' (and perhaps active duty forces') health benefits; and

  • Various other schemes hitting working households hardest.
BPC said:
"19 Americans (elitist ones) from across the country, with diverse backgrounds and views, examined a broad range of spending and revenue options for the federal government [see story below]...We believe (their plan) provides a comprehensive, viable path to restore our economy and build a strong America for future generations and for those around the world who look to the United States for leadership and hope."
More boilerplate, disguising a scheme to enrich the few while denying equal opportunity to growing millions, especially the poor, disadvantaged, needy dependents, disabled and retirees, leaving them more than ever on their own and out of luck, the "future America" none of them want or deserve.

Stephen Lendman lives in Chicago and can be reached at Also visit his blog site at and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

Perfect Storm May Be Brewing for Social Security, Medicare Cuts

June 30, 2010

New America Media - Less than a year after cries of “death panels” dominated headlines about town hall meetings on health care reform, a new round of town hall events was held in 19 cities, and 40 smaller get-togethers around the United States, all joined together via a sophisticated online system.

This time the target was the National Debt.

Organized by the respected AmericaSpeaks group, Saturday’s event was blandly titled, “Our Budget, Our Economy.” It attracted 3,500 people in such cities as Portsmouth, N.H, Chicago, Ill., Dallas, Texas and San Jose, Calif.

Although AmericaSpeaks director Carolyn Lukensmeyer called the event “the largest and most diverse town meeting ever held in this country,” critics of the town halls are challenging the group for “stacking the deck” toward reducing the National Debt in part by cutting Social Security and Medicare benefits.

Social Security: Elders Repond to the "Debt Panel" from New America Media on Vimeo.

From Town Halls to Halls of Power

Far from being a mere civic exercise, AmericaSpeaks will bring its town hall report to Washington’s halls of power. The group was invited to present the meetings’ nationally tabulated polling results at today’s meeting of the new National Commission on Fiscal Responsibility and Reform.

Also, Lukensmeyer will present the summary to key congressional committees, such as the Senate Budget Committee and House Ways and Means Committee.

Created by President Obama, with members appointed by the White House and Congress, the bipartisan debt commission includes 18 members of Congress plus a few prominent citizens. If 14 members agree to present a set of recommendations to Congress by their Dec. 1 deadline, chances are strong that the package will become the law of the land.
Editor's Note: One of the "prominent" citizens appointed to the debt commission is Andy Stern, president of the Service Employees International Union, represents 2.2 million healthcare workers, janitors, security officers, public employees, and other hardworking women and men in the United States, Canada, and Puerto Rico. According to the White House press leader: "As both a labor leader and an activist, he is a leading voice and aggressive advocate for practical solutions to achieve economic opportunity and justice for workers. Stern began working as a social service worker and member of SEIU Local 668 in 1973 and rose through the ranks before his election as SEIU president in 1996. He is a graduate of the University of Pennsylvania."

Another presidential appointee is Alice Rivlin, former Vice-Chair of the Federal Reserve, senior fellow in the Economic Studies Program at the establishment think tank, the Brookings Institution, and visiting professor at Georgetown University. According to the White House: "Before returning to Brookings, she served in a variety of senior public policy roles including vice chair of the Federal Reserve Board, director of the White House Office of Management and Budget, chair of the District of Columbia Financial Management Assistance Authority, and founding director of the Congressional Budget Office. She is a graduate of Bryn Mawr College and received her Ph.D. in economics from Harvard University."

Appointees, National Commission on Fiscal Responsibility and Reform:

Presidential Appointments: The President appointed former White House Chief of Staff Erskine Bowles and former Senator Alan Simpson as co-chairs of the Commission. He also appointed to the panel: Andy Stern, President of the Service Employees International Union; Dave Cote, CEO of Honeywell; Alice Rivlin, former Vice-Chair of the Federal Reserve and former Director of the Congressional Budget Office; and Ann Fudge, former CEO of Young and Rubican Brands.

Senate Majority Leader Harry Reid's Appointments: Richard J. Durbin of Illinois; Max Baucus of Montana; and Kent Conrad of North Dakota.

Senate Majority Leader Mitch McConnell's Appointments: Tom Coburn of Oklahoma; Judd Gregg of New Hampshire; and Michael Crapo of Idaho.

Speaker of the House Nancy Pelosi's Appointments: John Spratt, Jr. of South Carolina; Xavier Becerra of California; and Jan Schakowsky of Illinois.

House Minority Leader John Boehner's Appointments: Paul Ryan of Wisconsin; Dave Camp of Michigan; and Jeb Hensarling of Texas.
Critics worry that the debt panel includes too many deficit hawks — both Republicans and Democrats — and that even if they concur on some tax hikes desired by the President, the potential entitlement reductions, such as by raising the age for full Social Security benefits, would inflict disproportionate harm on lower- and middle-income Americans most in need.

Ethnic communities are especially vulnerable to potential reductions. According to the Social Security Administration, for example, in 2008, 62 percent of older Latinos and 54 percent of African American seniors living on their own “relied on Social Security for 90 percent or more of their income.”

Simpson’s “Lesser People” Gaffe

Not helping much to promote civil discourse has been the debt commission’s inflammatory co-chair, former Sen. Alan Simpson, R-Wyo. Two weeks ago he said in a video that the commission is considering benefit reductions and other measures to help “the lesser people.”

Simpson’s “lesser people” gaffe — only a week after the chairman of BP remarked that the oil giant cares for the “small people” — was only his latest incendiary remark. The former senator, age 78, recently derided seniors as “greedy geezers,” who disagree with proposed cuts in social supports.

In the “lesser people” interview, Simpson repeated the false statement that the Social Security’s trust fund is nothing but a pile of worthless “IOUs,” even though he agreed in the interview that the program’s trust fund is backed by “the full faith and credit of the United States government.”

What’s more, the commission’s Democratic co-chair, Erskine Bowles, who was President Clinton’s chief of staff and is a current board member of Morgan Stanley, recently told the North Carolina Bankers' Association that if the debt panel doesn't “mess with Medicare, Medicaid and Social Security ... America is going to be a second-rate power.”

The debt panel’s heavy emphasis on spending cuts in the federal budget has prompted numerous progressive economists and experts to call on it to balance any recommended program reductions by showing the human impact — how many people cuts would affect and in what ways.

Alan Simpson: Cutting Social Security Benefits to “Take Care of the Lesser People in Society” (Transcript of the Video)

Perfect Storm for Cuts

Saturday’s AmericaSpeaks program received major funding from the controversial Peter G. Peterson Foundation. Although the foundation claims to have no say in the town hall sessions, it drew accusations from liberal critics that it influenced the content of program background materials to guide participants too strongly toward reductions in social programs.

Peterson, a Wall Street power, who was Commerce Secretary under President Richard Nixon, has aggressively militated against social-insurance programs for over three decades.

Compounding the worries of Social Security advocates that a perfect storm is brewing that could tear at America’s safety net program are international pressures on the United States from this week’s G-20 summit in Toronto.

Progressives are concerned that G-20 pressure to cut U.S. deficit spending will give the “Administration and Congress the cover they need to embrace the Commission's austerity measures,” said Maya Rockeymoore, president of Global Policy solutions and former research director of the Congressional Black Caucus Foundation.

While global finance seems remote and eye-glazing to most people who would be affected by cuts in Social Security and Medicare, conservative leaders in Germany, England and other nations are calling on the United States to slash its projected debt and secure its long-term position in global markets.

Rockeymoore notes that Social Security is not only the nation’s most successful anti-poverty program for elders, widows, children and people too disabled to work, but it is a completely separate program from the U.S. budget, and now boasts a very healthy $2.6 trillion surplus that guarantees paying its retirement and family benefits for decades to come.

Also, even conservative economists agree that cutting Medicare alone will not solve its long-range budget woes. Huge federal deficit costs stem from largely uncontrolled health care inflation that is unique to the United States among advanced economies. Health care reform passed this year does little to reign in escalating health care spending.

AmericaSpeaks Offered Limited Options

In a YouTube posting, one of Saturday’s AmericaSpeaks participants, a woman who identified herself only as Robin of Bucks Country, Penn., echoed others in saying that AmericaSpeaks provided participants with a limited set of federal budget areas and instructed them to cut $1.2 trillion in spending by the year 2025. “Our table refused,” she said.

Roger Hickey of Campaign for America's Future reported that during Saturday’s town hall meeting, AmericaSpeaks head Carolyn Lukensmeyer “had to acknowledge a rebellion in the ranks. People were demanding to have the option of voting for ‘single-payer’ [health care] reform, instead of cutting Medicare and Medicaid.” She eventually relented and announced “a complicated process of including the single-payer alternative as a write-in vote, he said.

After the final vote, though, Hickey joined other progressives in cautious optimism.
“Despite a very biased and manipulated set of options presented to participants,” he said, some winning policy choices preferred by the participants turned out to be “pretty progressive.”
For example, AmericaSpeaks town hall groups voted to increase the amount of earnings that can be subject to Social Security tax among more affluent Americans. They also want to raise tax rates on corporate income and for those earning more than $1 million. And Saturday’s voters called for reducing defense spending by 10 to 15 percent, as well as for creating a carbon and securities-transaction tax.

However, they also favored cutting Medicare, reducing non-defense spending (transportation, education and so on), and raising Social Security’s full retirement age to 69.

Barbara Burt, executive director of the Frances Perkins Center, named for the original architect of Social Security, was among multiple observers who worried that raising Social Security’s full retirement age would unfairly burden vulnerable Americans, while doing nothing to increase the national debt.
“There's no reason why Social Security should even be considered in this discussion, as it is a pay-as-you-go program by law, and thus has no impact on the deficit,” she said.
Still, as the debt panel’s Republicans and blue-dog Democrats close in on social entitlement programs, the stale joke uttered by Federal Reserve Chairman Ben Bernanke may resound with little laughter.

When asked, during his Senate confirmation a few months ago, why he’d consider going after Social Security to help reduce the National Debt, Bernanke quoted bank robber Willie Sutton. He said,
“That’s where the money is.”
See: The Final Red Herring - The Threatened Bankruptcy of Social Security

Second Group of Deficit Hawks Calls for Regressive National Sales Tax

November 17, 2010

Huffington Post - The nation and its workers remain in grave economic distress, but it's a bull market for alarmist Washington insiders coming up with draconian solutions to projected fiscal problems that might or might not arise years from now.

A second group came out with a deficit reduction plan Wednesday, exactly a week after the two chairmen of President Obama's fiscal commission floated their controversial draft recommendation. (A third group also has some advice as well.)

This latest group hails from the Bipartisan Policy Center, and its signature proposal may end up being a whopping 6.5 percent national "Deficit Reduction Sales Tax" -- just the sort of thing that is devastating to people who live on a budget while not really mattering so much to the rich.

In its quest to control health care costs, the group also recommends significant increases in Medicare premiums in the short term. And after 2018, Medicare beneficiaries would either be forced to pay out of pocket for any and all cost increases more than one percent greater than the growth rate of the economy -- or they would be invited to leave the government program entirely and find private insurance instead. That would no longer be Medicare as we know it -- or as future retirees expect it.

The group's next most major recommendation for cutting healthcare spending is the imposition of an excise tax on the manufacture and importation of beverages sweetened with sugar or high-fructose corn syrup.

Like the plan from presidential commission chairmen Erskine Bowles and Alan Simpson, this one also would significantly reduce Social Security benefits for most retirees. It doesn't technically call for an increase in the retirement age, like Bowles-Simpson does, but it accomplishes essentially the same thing under another name.

This plan would "index the benefit formula for increases in life expectancy" starting in 2023. In both cases, the net result would be lower monthly benefits. It would also dramatically reduce benefits by changing the calculation of cost-of-living adjustments, and by chopping checks for top quarter of beneficiaries.

Meanwhile, much like Bowles-Simpson, it would actually lower income tax rates for the rich (albeit while removing hugely lucrative deductions). There would be two individual income tax rates, 15 percent and 27 percent, instead of the current six rates that range up to 35 percent. The corporate rate would drop to 27 percent from 35 percent. Capital gains would be taxed at a higher rate, as ordinary income.

Almost all deductions would be wiped away, including the deduction for employee-paid health insurance. The mortgage interest, charitable donation and retirement savings deductions would be replaced with a capped 15 percent credit.

And unlike the most dramatic of the tax options put forth by Bowles-Simpson, this one would not eliminate the earned income tax credit or the child care tax credit, two crucial boons to low earning families.

But the latest proposal is in some ways even more regressive and cowardly than the earlier one, most notably in its imposition of the sales tax and its cloaking of what would be staggering cuts in government programs under the guise of freezes and caps to be enforced by automatic triggers. Discretionary government spending would be frozen at 2011 levels, ostensibly saving $2.1 trillion by 2020.

In the plan's one acknowledgment of the current jobless recovery, the group endorses a one-year payroll tax holiday. Allowing both employees and employers to keep the 6.2 percent Social Security tax they would otherwise pay on salaries would put more money in employees' pockets and, by removing what is essentially a tax on employment, would create 2.5 to 7 million new jobs over two years, according to the group's report.

Former Republican Senator Pete Domenici -- who co-chaired the panel along with former Federal Reserve Vice Chairman Alice Rivlin -- introduced the report on Wednesday using cataclysmic rhetoric.

"We confront a quiet killer that is eating away at the foundation of America," Domenici said -- twice, in fact, just to make sure reporters got it all down. "Every part of government must share in this sacrifice so this quiet killer will not eat us alive before we have a chance to fix what is our doing," he said.

In a Washington Post op-ed this morning, the duo described theirs as "a bold, comprehensive plan." Rivlin insisted that the end result of all the tax changes would result in a system that is "slightly more progressive," as well as "definitely simpler and pro growth." But Dean Baker, the co-director of the progressive Center for Economic and Policy Research, told HuffPost Wednesday that for the super-rich, what matters most is the tax rate.

"My best guess is that the vast majority of these people come out way ahead," he said.
And Baker took issue with the whole thrust of the report.
"It's silly and misleading because the deficit problem, contrary to what they say, is a healthcare problem."
His group's healthcare budget deficit calculator allows you to see that if U.S. healthcare costs were comparable to those in other countries, there would not be a deficit problem.

But the new report offers no solutions there.

"They don't propose reducing healthcare costs, they propose reducing what the government pays for healthcare. And it's really a fundamental dishonesty," Baker said.

The plan also doesn't consider any sort of Wall Street financial speculation tax, or financial transaction tax.

Baker said he also doesn't get either report's focus on cutting tax rates for the rich.

"I'm just amazed that here we have this 'huge deficit problem' and all they seem to be able to think about is how to reduce tax rates," he said.

All three of these deficit-reduction plans are the product of a particular class of Washington policymakers who consider it a sign of their seriousness that they worry about imaginary problems rather than real ones.

Perhaps, with federal borrowing costs at their lowest levels ever, what we need are not more deficit commissions, but a growth commission or a jobs commission.

UPDATE at 2:19 PM ET:

"Neither plan recognizes that America needs recovery and prosperity, not austerity," Tamara Draut, a vice president at Demos, a progressive policy group, said in a statement about the Domenici-Rivlin and Bowles-Simpson plans. "Growing the economy again through public investment is the fastest, fairest way to address our fiscal challenges.

"Of the many fiscal policy proposals offered thus far, only one -- Rep. Schakowsky's Nov. 16 plan -- has asked the core question that will determine the extent of American greatness in the 21st century: what will it take to grow and secure the middle class?"

UPDATE at 5:42 PM ET

Deficit hawks everywhere are celebrating!

A (not very bipartisan) press release just issued by the Bipartisan Policy Center summarizes the praise its plan has received from the Chamber of Commerce, the Concord Coalition, the Committee for a Responsible Budget and the Peter G. Peterson Foundation.

President Obama at the White House with the chairman of his fiscal commission, Alan K. Simpson, left.


Tiny House Movement Thrives Amid Real Estate Bust

November 29, 2010

Associated Press – As Americans downsize in the aftermath of a colossal real estate bust, at least one tiny corner of the housing market appears to be thriving.

To save money or simplify their lives, a small but growing number of Americans are buying or building homes that could fit inside many people's living rooms, according to entrepreneurs in the small house industry.

Some put these wheeled homes in their backyards to use as offices, studios or extra bedrooms. Others use them as mobile vacation homes they can park in the woods. But the most intrepid of the tiny house owners live in them full-time, paring down their possessions and often living off the grid.

"It's very un-American in the sense that living small means consuming less," said Jay Shafer, 46, co-founder of the Small House Society, sitting on the porch of his wooden cabin in California wine country. "Living in a small house like this really entails knowing what you need to be happy and getting rid of everything else."

Shafer, author of "The Small House Book," built the 89-square-foot house himself a decade ago and lived in it full-time until his son was born last year. Inside a space the size of an ice cream truck, he has a kitchen with gas stove and sink, bathroom with shower, two-seater porch, bedroom loft and a "great room" where he can work and entertain — as long as he doesn't invite more than a couple guests.

He and his family now live in relatively sprawling 500-square foot home next to the tiny one.

Shafer, co-owner of the Tumbleweed Tiny House Company, designs and builds miniature homes with a minimalist style that prizes quality over quantity and makes sure no cubic inch goes to waste. Most can be hooked up to public utilities. The houses, which pack a range of amenities in spaces smaller than some people's closets, are sold for $40,000 to $50,000 ready-made, but cost half as much if you build it yourself.

Tumbleweed's business has grown significantly since the housing crisis began, Shafer said. He now sells about 50 blueprints, which cost $400 to $1,000 each, a year, up from 10 five years ago. The eight workshops he teaches around the country each year attract 40 participants on average, he said.

"People's reasons for living small vary a lot, but there seems to be a common thread of sustainability," Shafer said. "A lot of people don't want to use many more resources or put out more emissions than they have to."

Compared to trailers, these little houses are built with higher-quality materials, better insulation and eye-catching design. But they still have wheels that make them portable — and allow owners to get around housing regulations for stationary homes.

Since the housing crisis and recession began, interest in tiny homes has grown dramatically among young people and retiring Baby Boomers, said Kent Griswold, who runs the Tiny House Blog, which attracts 5,000 to 7,000 visitors a day.

"In the last couple years, the idea's really taken off," Griswold said. "There's been a huge interest in people downsizing and there are a lot of young people who don't want to be tied down with a huge mortgage and want to build their own space."

Gregory Johnson, who co-founded the Small House Society with Shafer, said the online community now has about 1,800 subscribers, up from about 300 five years ago. Most of them live in their small houses full-time and swap tips on living simple and small.

Johnson, 46, who works as a computer consultant at the University of Iowa, said dozens of companies specializing small houses have popped up around the country over the past few years.

Before he got married, Johnson lived for six years in a small cabin he built himself and he wrote a book called "Put Your Life on a Diet: Lessons Learned from Living in 140 Square Feet."

"You start to peel away the things that are unnecessary," said Johnson, who now lives in a studio apartment with his wife. "It helps you define your priorities with regard to your material things."

Northern California's Sonoma County has become a mini-mecca for the tiny house industry, with an assortment of new businesses launching over the last few years.

Stephen Marshall, 63, worked as a building contractor for three decades before the real estate market tanked three years ago. That's when he jumped into the tiny house business, starting Petaluma-based Little House On The Trailer.

His company builds and sells small houses that can serve as stand-alone homes equipped with bathrooms and kitchens, and others he calls "A Room of One's Own" that can be used as a home office or extra bedroom. Many of his customers are looking for extra space to accommodate an aging parent or adult children who are returning home, he said.

He said his small houses, which sell for $20,000 to $50,000, are much cheaper than building a home addition and can be resold when the extra space is no longer needed. His company has sold 16 houses this year and aims to sell 20 next year.

"The business is growing as the public becomes aware of this possibility," Marshall said. "A lot of families are moving in with one another. A lot of young people can't afford to move out. There's just a lot of economic pressure to find an alternative way to provide for people's housing needs."

Climate Change Scientists Call for WWII-type Rationing in the Developed World

Rationing in Our Future?

November 29, 2010

Red Dirt Report - On a recent visit to England, an evening in the hotel room found me flipping channels. To say much of British television is awful would be an understatement. However, one program caught my attention — the BBC reality program Turn Back Time: The High Street.

The premise of the program is that a group of shopkeepers and their families on High Street in the historic English market town of Shepton Mallet, Somerset, are instructed to run their businesses — grocer, butcher, blacksmith, etc. — as they would have under the circumstances of their particular time in history.

In the episode I watched the time period was World War II, when times were hard for many Britons and citizens had to make do with whatever they happened to have or could afford. It was also a time of austerity, as the Shepton Mallet families soon discover.

Air raids, food shortages and annoyed customers were common throughout the program. The grocer even offered certain customers black market goods, undermining the "community spirit" approach that developed during those times of hardship, woe and want.

The program struck me, I suppose, because of all the talk these days of austerity, of "sacrifice" and such. British newspapers like The Independent were noting that the climate summit in Cancun, Mexico, is incredibly important, but that most nations won't do enough to save the smaller, poorer nations that will be adversely affected by so-called climate change.

And in today's edition of The Daily Telegraph (article above), it notes that a professor named Kevin Anderson is actually calling for a "halt (to) economic growth in the rich world over the next 20 years." It continues, noting that:
"(T)his would mean a drastic change in lifestyles for many people in countries like Britain as everyone will have to buy less 'carbon intensive' goods and services such as long-haul flights and fuel-hungry cars."
But the part that really caught my attention in regards to Prof. Anderson's insane rantings about austerity was this:
"(Anderson) said politicians should consider a rationing system similar to the one introduced during the 'last time of crisis' in the 1930s and 40s."
Nineteen thirties and forties, eh? Just as BBC viewers witnessed on the Turn Back Time program. Coincidence?

Said Anderson in the Telegraph:
"The Second World War and the concept of rationing is something we need to seriously consider if we are to address the scale do the problem we face."
Now, Prof. Anderson reassures readers that he doesn't expect people to "go back to living in caves," but we do need to wear sweaters more often, rather than turning up the heat in your home." It's starting to feel like the 1970's all over again, isn't it?

As Steve Watson, writing an article for, noted:
A group called the Royal Society, an "ultra-elitist environmental group," wants the first world to stave off alleged rising global temperatures by adhering "to a system of rationing." This Royal Society group is part of a the global-warming cult that wants drastic cuts in CO2 emissions, even it means folks have to endure austerity and rationing at levels never before seen in modern times.
Meanwhile, greenie globalist do-gooders like U2's Bono and Al Gore are jetting around the world, wagging their fingers and telling people to reduce their "carbon footprint" while they live well, and preach down to everyone for driving an SUV or using certain sorts of light bulbs. As someone who caught U2's performance in 2009 in Norman, Okla., as part of the 360 Degrees Tour, the set was enormous and as Andrew Bolt of Melbourne, Australia's Herald Sun newspaper noted:
"U2's 360 Degrees Tour, the most expensive rock spectacle ever, is here. The tour, with a daily running cost of $850,000, arrived on six 747 jets ..."
And back to my trip to the UK — there was a lot of grumbling about the serious financial challenges facing Ireland and the fact that Britain will have to help them out financially. Yeah, the European Union finance ministers have approved the bailout of Ireland, and the Irish people are mad and protesting, just as they are in Greece and other European countries.

If a country like Ireland can fall so quickly, what lies ahead for Britain and America, for that matter?

While in the United Kingdom, young protesters — students, mostly — were occupying buildings, like Oxford's Radcliffe Camera, or in London, smashing police vans or causing low-level mayhem, protesting the planned cuts in education funding and higher student fees. While walking the streets of Oxford this past week, it was clear that the students were not happy about these recent developments, some holding signs, much as their parents — and even grandparents — had in the 1960's and 70's. One British columnist called these students part of "Generation Scared," where these younger people won't enjoy what their older siblings, parents and grandparents got to enjoy before everything started going to hell, as it were.

Will we have to revert to the kind of rationing and austere conditions that the WWII generation faced?

Is this all an engineered collapse that will bring about some sort of dystopian nightmare on a global scale?

Between the recent TSA protests in the U.S., student uprisings in Britain, collapsing economies, the war-like footing on the Korean peninsula, and an increasingly smug China and Russia, the "grand chessboard," as the globalists like to say, is looking pretty active and more uncertain. Of course, most of us are the "pawns," and we all know what usually happens to the pawns in the game of chess.

Cancun Climate Change Summit: Scientists Call for WWII-type Rationing in the Developed World

Global warming is now such a serious threat to mankind that climate change experts are saying that "the Second World War and the concept of rationing (in rich countries) is something we need to seriously consider if we are to address the scale of the problem we face" to bring down carbon emissions.

November 29, 2010

Daily Telegraph - In a series of papers published by the Royal Society, physicists and chemists from some of world’s most respected scientific institutions, including Oxford University and the Met Office, agreed that current plans to tackle global warming are not enough.

Unless emissions are reduced dramatically in the next ten years the world is set to see temperatures rise by more than 4C (7.2F) by as early as the 2060s, causing floods, droughts and mass migration.

As the world meets in Cancun, Mexico for the latest round of United Nations talks on climate change, the influential academics called for much tougher measures to cut carbon emissions.

In one paper Professor Kevin Anderson, Director of the Tyndall Centre for Climate Change Research, said the only way to reduce global emissions enough, while allowing the poor nations to continue to grow, is to halt economic growth in the rich world over the next twenty years.

This would mean a drastic change in lifestyles for many people in countries like Britain, as everyone will have to buy less ‘carbon intensive’ goods and services such as long haul flights and fuel hungry cars.

Prof Anderson admitted it “would not be easy” to persuade people to reduce their consumption of goods. He said politicians should consider a rationing system similar to the one introduced during the last “time of crisis” in the 1930s and 40s.

This could mean a limit on electricity so people are forced to turn the heating down, turn off the lights, and replace old electrical goods like huge fridges with more efficient models. Food that has travelled from abroad may be limited as well as goods that require a lot of energy to manufacture.
“The Second World War and the concept of rationing is something we need to seriously consider if we are to address the scale of the problem we face,” he said.
Prof Anderson insisted that halting growth in the rich world does not necessarily mean a recession or a worse lifestyle, it just means making adjustments in everyday life such as using public transport and wearing a sweater rather than turning on the heating.
“I am not saying we have to go back to living in caves,” he said. “Our emissions were a lot less ten years ago and we got by ok then.”
The last round of talks in Copenhagen last year ended in a weak political accord to keep temperature rise below the dangerous tipping point of 2C(3.6F). This time 194 countries are meeting again to try and make the deal legally binding and agree to targets on cutting emissions. At the moment, efforts are focused on trying to get countries to cut emissions by 50 per cent by 2050 relative to 1990 levels.

But Dr Myles Allen, of Oxford University’s Department of Physics, said this might not be enough. He said that if emissions do not come down quick enough even a slight change in temperature will be too rapid for ecosystems to keep up. Also, by measuring emissions relative to a particular baseline, rather than putting a limit on the total amount that can ever be pumped into the atmosphere, there is a danger that the limit is exceeded.
“Peak warming is determined by the total amount of carbon dioxide we release into the atmosphere, not the rate we release it in any given year,’ he said. “Dangerous climate change, however, also depends on how fast the planet is warming up, not just how hot it gets, and the maximum rate of warming does depend on the maximum emission rate. It’s not just how much we emit, but how fast we do so.”

How to Create Trillions of Dollars Out of Hot Air (Excerpt)

March 2010 - ... Let’s take a look under the covers of the Carbon Credit Trading scam.
  1. Firstly, there is considerable doubt amongst scientists that there is global warming at all. Many scientists in fact think that the earth is actually cooling. As one climatologist said, "it is anybody’s guess. Next year might be warmer, or it might be cooler. In ten years time, there is just as much chance that the earth will be warmer, as that it will be cooler. We simply do not know." This is the most sensible thing I have heard so far about global warming.

  2. Secondly, even if there were global warming, there is no real proof that it is caused by carbon emissions. There have been times in the past when there was many, many times the quantity of CO2 in the atmosphere compared to today, and the earth was cooler, not warmer. In fact there is considerable evidence that increased volume of CO2 is a consequence of global warming, not the cause. The most plausible explanation for global warming is that it is caused by the activity of the sun, and there is much empirical and scientific evidence to support this.

  3. Thirdly, even if there were global warming, and even if it was caused by carbon emissions, Carbon Credit Trading will do nothing to help either reduce the emissions, or to help save the planet. Rich companies and countries can still put as much CO2 into the atmosphere as they like (even increase it) as long as they can pay for the privilege. Rich countries will buy the right to pollute the earth from developing countries who cannot afford (Africa for example) to pollute the earth as much. This is whole idea is absolute lunacy ...
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Google & YouTube Ban Alex Jones

Google & YouTube Ban Alex Jones

November 30, 2010 and have been blocked from its search results, effectively censoring their content from wide web coverage. Only smaller sites that re-post the content have appeared in Google searches since early November.

In a separate matter, TheAlexJonesChannel on YouTube has learned that it will be either frozen or blocked from uploading new content for several weeks following a “Community Guidelines” violation decision. According to YouTube’s support team, users from its site flagged a video on the channel that contained controversial video of the Apache helicopter “collateral murder” that occurred in Iraq in 2007 and was released by Wikileaks. When TheAlexJonesChannel attempted to challenge the removal of this video via YouTube’s counter-notification form, it was subsequently told that the account would be disabled and new content blocked (apparently due to the challenge, as no other strikes exist on the account).

The graphic content in the video– which documents real events the Pentagon never wanted released– has been posted by hundreds of other channels on YouTube, including major media outlets like CBS News and Russia Today without being flagged or removed, yet TheAlexJonesChannel has been told that its posting of a smaller portion of this incident is offensive or otherwise against its community guidelines. This appears to be double standard as even the age-verification barrier set-up for some of the postings was not offered for TheAlexJonesChannel version; it was simple deleted by user demand and YouTube mandate.

It is evident that the system revels in any chance to dampen the loud voice that Alex Jones, and its supporters have raised on the Internet, effectively challenging the status quo and mainstream media spin on major news and events. With the easy passage of the web censorship bill, it is further clear that what is happening now to and Alex Jones will soon happen to anyone without a politically-correct message, particularly when that message is capable of resonating throughout large parts of the globe.

It is up to supporters and lovers of freedom to challenge censorship and oppression on the web, because only resistance can slow the attempts to curtail free speech and expression online. As Frederick Douglass said, “Find out just what the people will submit to and you’ve found out the exact amount of injustice and wrong which will be imposed upon them; and these will continue until they are resisted with either words or blows or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress.” This will be prove to be more true than ever in the age of the Internet.

Notice from YouTube's copyright support that will be blocked from uploading any videos for two weeks, following a community guidelines strike against the widely distributed controversial Wikileaks video of the 2007 Apache helicopter incident in Iraq.
Notice from YouTube’s copyright support that will be blocked from uploading any videos for two weeks, following a community guidelines strike against the widely distributed controversial Wikileaks video of the 2007 Apache helicopter incident in Iraq.

IBM, Microsoft, Google, Verizon

Google Earth 6: Here’s What’s New

November 29, 2010

Mashable - Google has announced the release of Google Earth 6. The latest version is available today for Windows, OS X and Linux.

The update includes:

  • Integrated Street View - The Google Maps Street View experience is now fully integrated into Google Earth. Pegman (the little guy that represents your Street View position) is now docked alongside the Google Earth navigation controls, where he launches Street View just like he does in Google Maps. The difference here is that you can go from orbiting the earth to standing in front of your childhood home. It may be a little disorienting.

  • 3D Trees - While Google Earth has supported 3D buildings for some time, trees were only recently added to liven up the environments. The addition allows those using walking navigations to take direct paths and — as the video illustrates — not walk into trees. It also keeps the landscape from looking like a desolate wasteland.

  • Better Historical Imagery - Historical imagery allows users to look at map views of times like Warsaw in 1935, London in 1945 and Port-au-Prince Haiti before and after the January earthquake. The feature was first added in Google Earth 5, but it wasn't always clear when and where it was available. In Google Earth 6, the date of the oldest imagery will appear in the status bar at the bottom of the screen.

  • All in all, Google Earth 6 is more of a refinement than an outright overhaul, but if you're a fan of Google Earth, you're going to want to grab the new version stat. If you've never used the service, maybe this video demonstration will change your mind:

November 29, 2010

We the People Are Behaving Like a Herd of Sheep, Silently Letting the Feds Strip Us of Our God-given Rights and Liberty

Such a Well Behaved Herd of Sheep

TSA thanks you for allowing them to violate your rights and to assault you

November 24, 2010

Marti Oakley (PPJ Gazette) - If ever there was an indicator of just how apathetic and well trained the American public truly is, it must be this situation with TSA. Like a herd of bedraggled sheep, thousands of you forfeited your 4th and 5th amendment rights and allowed the government to irradiate you and view your virtually naked body, or allowed yourself to be subjected to an enhanced pat-down…nothing short of a sexual encounter. And for what?

This is a training and conditioning exercise you fools! This has nothing to do with making us safer, national security or protecting America. It has nothing to do with making your flight safer. It has everything to do with conditioning you to accept a full body assault as long as the persons doing it are wearing a government badge. You are being trained to submit and comply.

Did any of the claimed terrorists come from America? No.

Are any potential terrorists afraid of TSA and Homeland Security or any of the rights-robbing laws passed by the jackass’s in the District of Criminals? No.

Did any of those laws apply to terrorists? NO! They applied to US citizens.

We have a border that is wide open and anyone and everyone from far away places such as Uganda, China, North Korea, and even Afghanistan have crossed that border at will, without any trouble, and millions of people from Mexico, El Salvador, Ecuador, and various and sundry other South American country’s have also entered, and Homeland Security has absolutely no plans to secure that border or to deport any of those individuals caught here illegally. With this in mind……how concerned do you think Homeland Security is about terrorism or terrorists?

Who is it Homeland Security views as terrorists? YOU.

For all of you who claim, “I don’t mind….they are just trying to keep us safe”….may you be the first to be loaded on a truck to the FEMA camps. As submissive and compliant as you are, most likely you will drive yourself there. And don’t forget to get your fake flu pandemic vaccine on the way! In fact…take mine! And just for good measure, why don’t you present yourself to the nearest Fusion Center and have yourself facially imprinted, have your iris scanned and your finger prints taken so that when you walk down the street all those spy cameras that are being installed in every city, can identify you and record where you were and what you were doing.

How damn stupid are you people going to get?

Thanks to all of you compliant jerk-offs out there, there are now plans afoot in several locations to install these porno scanners in the entry to courthouses, train terminals, subways or virtually any location that people might opt to use for travel. Thanks to you mindless sheeple, we will all now be subjected to this invasion of our persons. And why? Because you might be a domestic terrorist if you opt out! After all, so many others compliantly obeyed and allowed this invasion of their person to go on unchallenged. So, if you are objecting to these rights violations and don’t want to be sexually assaulted by some pervert with a TSA badge, that must mean you are a domestic terrorist.

I have news for all of you: The domestic terrorist in this situation is the guy/gal with the TSA badge on.

Of course the plans to install the porno scanners in the subways, train stations, courthouse, and wherever else they are going to appear, is not just a sudden event. This was the plan all along. Homeland Security, the agency charged with defending the government from you, has just taken a giant step forward in exposing itself as the police state agency that it was created to be.

One thing this episode has shown us is, there are far more perverts out there than we ever imagined. What kind of moral or decent human being would take employment that not only violates the Constitutional rights of those being assaulted, but also physically assaults them in a manner that would otherwise be a criminal act? Who knowingly takes employment that would encompass the groping of the private and genital areas of not only adults, but also children? And then smiles and tells you it was to “keep you safe.” How sick is that?

It just goes to prove what I have maintained for years; you can take an ordinary everyday, individual…your neighbor, family member, friend…..and slap a government badge on them and they suddenly become a psychopath with no morals, no ethics and no sense of decency. We see it in state level agencies where agents knowingly violate rights, and perform acts of aggression against members of their own communities, and we see it here again in these federal level agents.

Where I once believed it was a situation comprised of those who worked for government vs. those who didn’t, I now believe it is more those who work for government and those who blindly comply with government vs. the rest of us.

We are being maneuvered into a full police state. Thanks to all of you who complied with this police state action, the rest of us will pay the price. You forfeited your rights — just so you wouldn’t be inconvenienced — and forfeited everyone else’s at the same time. Why? Because standing up for what is right might have delayed you?

TSA-Screening Expands To Tampa Bus Station; Promises More

Homeland Security and Transportation Security Administration Now List People As Domestic Extremists

November 29, 2010

Unbalanced Passions - It does not surprise me that the Obama Administration responds to the backlash against the unconstitutional (the violation of the fourth amendment) TSA screening measures by blacklisting air travelers who object to the over-reaching intrusive searches at the airports. They are trying to send a chilling warning not to protest the TSA groping and body scanners that have the public in an uproar.

Will they add the protesters to a list where they cannot buy a new car, apply for employment, or do business. Will people be put on a list that will make life hard to function because the government has blackballed people who objected to the abusive TSA.

These secretive lists shows the abusive executive branch bypassing the courts and due process and blacklisting their political enemies and opposition. Is this the emperor striking back against the American people whom he wants to subjugate? He wants us to conform to his tyrannical world view.

Will there be a second wave of people pushing back against an imperial executive branch when we cannot grow our own food and might not be able to buy from the local supermarket because Homeland security has blackballed those who dare speak out against this President.

We must not allow this to chill us from standing up for our rights. We should not have to make the decision between protesting the government and keeping the powers-that-be happy so that our kids will be fed and a roof will be over our heads. We should not have to stay silent to get along.

The consequences of inaction are far more severe than the price of standing up and being free. Use them or lose them. We are not domestic extremists. We just want to be left alone.

Reduce the Size and Power of the Feds

Freedom and initiative are being replaced by ever higher taxation, regulation and centralization of power in Washington. Our economy is now stagnant and our standard of living is declining. Each year government takes a bigger share of our earnings, employs more and more of our people, enacts more rules that strangle our economy, and controls more and more of our lives. In the enjoyment of plenty, have Americans lost the memory of freedom? When citizens are willing to sacrifice their liberty for security, they will have neither liberty nor security and will soon find themselves living under tyranny. [Ellen Sauerbrey, The Spark That Has Triggered Rebellion, American Thinker, September 13, 2009]

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. - Justice Litle, Is America’s Economic Recovery on the Whole Based on a Rotten Sham?, Daily Markets, April 20, 2010

The federal government does not create a traditional sellable product and thus produces no revenue outside of what it collects from taxpayers. As of 2008, the average federal salary was $79,197, compared with $49,935 for the average private sector employee. In other words, the average federal bureaucrat makes almost twice as much as the average working taxpayer. Add the value of benefits like health care and pensions, and the gap grows even bigger. The average federal employee’s benefits add $40,785 to his annual total compensation, whereas the average working taxpayer’s benefits increase his total compensation by only $9,974. In other words, federal workers are paid on average salaries that are twice as generous as those in the private sector, and they receive benefits that are four times greater. - Brandon Greife, The Public Sector Weight Around Taxpayers’ Necks,, May 4, 2010

Federal Workers Get 2-Year Pay Freeze Except for Military

November 29, 2010 - Barack Obama says he’s going to freeze all federal workers’ pay for two years, so maybe they will get an idea of what it’s like to have a private-sector job in America, where all wages outside of Wall Street and Silicon Valley have been frozen since the Recession began way back in 2008.

But one very special group of federal workers won’t see any pay freeze at all: Military brass! Those uniformed heroes who work for America’s Permanent War Machine will continue to enjoy all the nice raises and benefits they’ve come to expect while doing whatever it is the Pentagon does with basically all of the nation’s tax money.

Of course, the Americans who get blown up and shot to pieces in our myriad imperial wars still face pretty lousy pay, endless re-deployments, and families abandoned to the vagaries of apartment life on or near the bases. And life as a veteran is still fairly terrible for many who come back from the wars with physical or mental injuries. But at least the brass will continue to be richly rewarded for …. uh, losing wars everywhere and ruining America and inspiring nothing more than Xmas Tree bomb attempts (with the FBI’s help, as far as the “bomb part”).

Citing Deficit, Obama to Freeze Federal Worker Pay But Not 'Step Increases' or 'Bonuses'

November 29, 2010

Associated Press – President Barack Obama announced a pay freeze for two million federal employees Monday and warned the American public that the move is the first of many difficult decisions that must be made to slash the nation's mounting deficits.
"The hard truth is that getting this deficit under control is going to require some broad sacrifice, and that sacrifice must be shared by the employees of the federal government," Obama said.
The two-year freeze would apply to all civilian federal employees, including those working at the Department of Defense, but would not affect military personnel. The freeze, which requires congressional approval, is expected to save more than $5 billion in savings over two years, $28 billion over five years and more than $60 billion over 10 years, White House officials said.

[Related: Salaries of the Obama White House]

Congress is not covered by Obama's order, but lawmakers voted last April to freeze their pay, with the House and Senate opting to forgo an automatic $1,600 annual cost-of-living increase. House members and senators now are paid $174,000 a year. Their last pay increase was $4,700 a year at beginning of 2009.

The president's pay of $400,000 a year was fixed by Congress in January 2001. It has not changed since then.

While Obama said the federal employee salary freeze was necessary to put the nation on sound fiscal footing, he also said that he didn't reach the decision lightly.
"This is not just a line item on a federal ledger," he said. "These are people's lives."
The savings from the pay freeze make only a small dent in the nation's $1 trillion-plus budget deficit. But with voters voicing their anger over Washington's spending during the midterm elections, even a symbolic gesture would show the White House got the message.

Obama and bipartisan congressional leaders will meet at the White House Tuesday for the first time since Republicans gained control of the House and increased their strength in the Senate during the midterm elections. Obama said he hopes the move to freeze federal pay sets a serious tone for the meetings.
"We're going to have to budge on some deeply held positions, and compromise for the good of the country," Obama said.
California Rep. Darrell Issa, the top Republican on the House Oversight Committee, said that while the pay freeze was "long overdue," the president and congressional leaders should take additional steps to reduce spending, including imposing a federal hiring freeze of non-security employees.

The co-chairmen of Obama's bipartisan deficit commission have proposed a three-year freeze in pay for most federal employees as part of its plan to reduce the nation's growing deficit. The commission's proposal also suggested cuts to Social Security benefits and higher taxes for millions of Americans to stem the flood of red ink that they say threatens the nation's very future. The popular child tax credit and mortgage interest deduction also would be eliminated.

The commission's final report is due to be released later this week.

Shortly after taking office in January 2009, Obama froze salaries of top White House aides. He proposed extending that freeze to political appointees across the government in last year's budget, and also eliminated bonuses for political appointees.

The pay freeze would not affect bonuses or step increases for federal employees.

John Gage, president of the 600,000-member American Federation of Government Employees, called the decision "a slap at working people."
"Working people's wages are not the issue with this deficit or what is going on in our country," Gage said. "To symbolically hit at federal employees I think is just wrong."
Gage said the White House was using federal workers as scapegoats for the nation's deficit problems. He said the move would not really save as much as the White House claims because federal employees often get just a fraction of projected raises. Federal workers received a 1.9 percent pay increase this year.

See: My Big Fat Government Paycheck
See: The U.S. Government's Hidden Workforce
See: Obama, Bought and Paid for By Big Labor and Big Business, Brings Chicago, the Most Corrupt City in America, to Washington in the Form of Big Government

Federal Workers' Sacrifice Would Help U.S. Debt, Deficit Panel Says

November 10, 2010

Washington Post - Federal employees would play a major role in reducing the nation's debt and deficit under a set of draft proposals released Wednesday by the co-chairs of President Obama's deficit commission.

Former Clinton White House chief of staff Erskine Bowles and former senator Alan K. Simpson (R-Wyo.) called on Americans to make sacrifices to "make America strong for the long haul."

Federal workers would face a freeze on "federal salaries, bonuses, and other compensation at non-Defense agencies for three years," saving $15.1 billion. Pentagon civilians would take the same hit, for a $5.3 billion savings.

The federal workforce would be cut by 10 percent, about 200,000 people, by hiring only two workers for every three who leave federal service. That would save $13.2 billion.

The response from the National Treasury Employees Union was swift.
"If enacted, the proposals in the draft report offered by the co-chairs of the White House deficit reduction commission would have an unfair and disproportionate impact on the federal employee and retiree community," said NTEU President Colleen M. Kelley.

"This is a very heavy load to seek to place on this workforce, both present and past, and there are better ways to spread the responsibility for addressing the nation's deficit issues," Kelley added. "The overall impact of the proposals would be to stretch agency personnel beyond their ability to provide the services Americans want, need and expect."
The National Active and Retired Federal Employees Association sent a notice to its members Wednesday night on the effect of the proposals.
"Most important to federal employees and retirees," the association said, is a proposal to "achieve mandatory savings from civil service retirement" by recalculating retirement payments and requiring higher contributions for pension benefits and health insurance premiums.
The draft plan also says $5.4 billion can be saved in Pentagon contracts by doubling the cuts already planned by Secretary Robert M. Gates. Eliminating 250,000 domestic-agency contractors would save $18.4 billion. And a three-year freeze at 2011 levels on noncombat military pay, an area Congress has been reluctant to touch, would save $9.2 billion.

In 2009, U.S. Paid $400 Million in Bonuses to Federal Employees (About 65% of Federal Workforce)

June 14, 2010

Big Government - The Obama Administration handed out more than $400 million in awards to federal employees last year, up by more than $80 million from the prior year, according to new government data.

The biggest winners were air traffic controllers and top managers in Washington, a review of fiscal year 2009 salary reports from the U.S. Office of Personnel Management showed.

OPM’s data, obtained by the Asbury Park Press through a freedom of information request, account for 1.3 million employees, or about 65 percent of the federal civilian work force.

The $408 million given in awards excludes the departments of Defense and Treasury, security agencies such as the CIA and FBI, the White House, Congress and various independent commissions and agencies, such as the U.S. Postal Service.

The defense department paid $92.1 million in awards in 2008, the latest year available. Awards were given to 100,000 of its 687,000 employees.

2009 Bonus Bonanza for Federal Workers

June 16, 2010

Washington Examiner - President Obama, shown surrounded by White House aides, instituted a pay freeze for top aides. He’s done little to control government pay beyond this symbolic gesture.

Under the Obama administration, the government is doing such a good job that it's decided to reward itself. Last year, Uncle Sam paid out $408 million in bonuses to 1.3 million federal workers, according to the Asbury Park Press, which obtained the information through a Freedom of Information Act request. That's about $80 million more than the previous year. About one in four federal workers received a bonus, and awards ranged from $25 to, in the case of one lucky State Department worker, $94,500.

That $408 million figure only counts bonuses that were handed out to about 65 percent of the federal work force. The FOI request didn't cover awards handed out by the Defense and Treasury departments, security agencies, the White House, Congress and various other federal agencies and commissions. In 2008, the last year information was available, the Department of Defense alone handed out $92 million in bonuses to its 687,000 employees.

Federal bonuses are being doled out liberally, even as federal salaries are exploding. From December 2007 through June 2009, the number of federal workers earning six figures increased from 14 to 19 percent. In 2008, average federal compensation, including pay and benefits, was $119,982 -- considerably more than the $59,909 average in the private sector, according to the Commerce Department's Bureau of Economic Analysis. In the midst of a brutal economic downturn that saw millions of jobs lost and unemployment soar above 10 percent, the Office of Personnel Management data shows the federal workforce actually added nearly 100,000 jobs from December 2008 to December 2009.

In theory, introduction of bonuses and pay-for-performance measures in the federal workforce was a positive reform. However, this boom in federal bonuses suggests an "all carrot and no stick" approach to federal performance. For bureaucrats, job security is a non-issue, and they already earn twice as much as an average American just for showing up to work.

Shortly after he assumed office last year, Obama instituted a pay freeze for top White House Aides earning more than $100,000, saying this would "restore that faith in government without which we cannot deliver the changes we were sent here to make." The president made it clear that he knows egregious federal salaries are a problem, yet he's done little beyond this symbolic gesture to address the problem. Actually doing something to rein in the runaway federal bureaucracy would be change taxpayers can believe in.

Feds Gave Employees 127,000 Cash Bonuses

May 28, 2009

Robert O'Harrow (Washington Post) - Ever since we first heard about the FDA's plan to buy gift cards to "incent" hard working employees to keep them, well, working hard, we wanted to know more.

You may recall that the FDA deal involved the purchase of 160 "employee incentive gift cards" worth $250 each. The contract was worth $41,030. (Yes, when you do the math, it appears that the contractor got about $6.44 for each card delivered.)

We learned from the acting FDA administrator that about 15 percent of all agency employees received a gift card last year. Acting FDA Commissioner Joshua Sharfstein knew that because he himself said he was trying to find more detail about the program, which he suspended pending a review.

Now the Office of Personnel Management is adding some new -- incomplete but compelling -- details about the gift cards and other forms of informal employee bonuses, including cash payments.

It seems that OPM keeps no data about the gift cards or other kinds of bonuses. That's interesting to us.

But they do have information about cash bonuses, also known vividly as on-the-spot awards. According to the OPM data, federal agencies gave out 127,030 cash awards in the year that ended in October.

We'll repeat that: Federal managers gave out up to $250 in cash to employees 127,030 times in fiscal 2008. That's potentially worth up to $32 million in tax dollars.

So. We'd like to note that our curiosity about all this is growing. How are these bonuses handled? Who decides who deserves the money? What's the process for keeping track of it? Is it fair? Does it work? Do some employees get multiple bonus cards or cash payments?

It's worth repeating that we know many people in the federal government are not paid enough for all the good work they do. At the same time, we believe that money minus oversight equals mischief.

This isn't by any means big money, but it offers an unusual peek into the federal system.

Most Federal Workers Get Cash Bonuses

Awards Range from $100 to $25,000

May 17, 2004

Washington Post - Under civil service law, federal agencies can hand out cash awards or additional time off to reward employees for good annual performance or contributions on specific projects. The law allows for multiple awards throughout the year, and all civil servants are eligible.

Three agencies -- the National Science Foundation, the Department of Energy and the General Services Administration -- each gave bonuses to more than 90 percent of their General Schedule employees.

At the National Science Foundation, Joseph Burt, the director of human resources, said the high number reflects "a high-performing staff across the board." He said the awards vary greatly, ranging from as little as $200 to more than $6,000.
"[People] recognize that if they do a good job -- do their jobs, if you will -- that they are going to likely get some bonus," Burt said. But, he added, "people know that the payouts are much larger for top performers. So there continues to be an incentive ... to perform at a higher level."