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SENIORS 2009
MICHIGAN 7 WEEKS SENIORS CHARITY 2009 CTCs Dont Cost Political Capital.................................................................................................................................................66 Free Market Unpopular (Congress)............................................................................................................................................67 Free Market Popular....................................................................................................................................................................68 Free Market Popular (Republicans) ...........................................................................................................................................69 Urban Homesteads CP 1NC........................................................................................................................................................70 Health Care Tax Credit 1NC.......................................................................................................................................................71 Health Care Tax Credit 2NC [1/2]..............................................................................................................................................72 Health Care Tax Credit 2NC [2/2]..............................................................................................................................................73 Government-based Health Care Fail/CP Key to Solve..................................................................................................................74 Current Health Care Fails [1/2]......................................................................................................................................................75 Current Health Care Fails [2/2]......................................................................................................................................................76 AT: Problems with CP Mechanism/Defense of Mechanisms........................................................................................................77 AT: Medicaid/Focus on Uninsured Key........................................................................................................................................78 AT: Perm Do Both.........................................................................................................................................................................79 AT: Universal v. Targeted Care.....................................................................................................................................................80 Coercion Net Benefit...................................................................................................................................................................81 Pro Bono Tax Credit 1NC..........................................................................................................................................................82 Pro Bono Tax Credit 2NC...........................................................................................................................................................83 AT: Perm do both...........................................................................................................................................................................84 AT: Ending mandatory pro bono work bad...................................................................................................................................85 Coercion Net Benefit...................................................................................................................................................................86 Education Tax Credits CP 1NC..................................................................................................................................................87 Solvency: General..........................................................................................................................................................................88 Solvency: Competition...................................................................................................................................................................89 Solvency: Lessens Government Interference.................................................................................................................................90 Solvency: Avoids Legal Challenges, Regulations.........................................................................................................................91 Solvency: Donations Help Low-Income Families ........................................................................................................................92 Solvency: Donations Help Low Income Families.........................................................................................................................93 Solvency: Public Popularity...........................................................................................................................................................94 Spending Net Benefit..................................................................................................................................................................95 Postal Service Privatization CP 1NC..........................................................................................................................................96 2NC Solvency Cheaper/More Effective......................................................................................................................................97 Coercion Net Benefit...................................................................................................................................................................98 Microfinancing 1NC......................................................................................................................................................................99 Microfinancing Solvency 2NC [1/3]............................................................................................................................................100 Microfinancing Solvency 2NC [2/3]............................................................................................................................................101 Microfinancing Solvency 2NC [3/3]............................................................................................................................................102 Coercion NB.................................................................................................................................................................................103 Contracts CP 1NC.....................................................................................................................................................................104 Contracts Solvency 2NC...........................................................................................................................................................105 Maximus Solvency 2NC...........................................................................................................................................................106 Maximus Solvency Health Care................................................................................................................................................107 Maximus Solvency Child Care.................................................................................................................................................108 Maximus Solvency Immigrants................................................................................................................................................109 Contracting Better for the Free Market........................................................................................................................................110 AT: Contracts Link to Coercion...................................................................................................................................................111 AT: Contracts Link to Politics.....................................................................................................................................................112 Big Government Good Economy..............................................................................................................................................113 Aff Free Market Doesnt Solve.................................................................................................................................................115 Aff Government Key to Solve Poverty.....................................................................................................................................116 Aff Privatization Bad................................................................................................................................................................117 Aff AT: Government + Charity ...............................................................................................................................................118 Aff Tax Credit Doesnt Solve [1/2]..........................................................................................................................................119 Aff Tax Credit Doesnt Solve [2/2]..........................................................................................................................................120 Aff Tax Credits ARE Welfare...................................................................................................................................................121 Aff CTCs destroy welfare.........................................................................................................................................................122 Aff CTCs Corruption...........................................................................................................................................................123 Aff CTCs kill Tax Code ...........................................................................................................................................................124 Misael, Kevin, Matthew, Jack, Anna, Kurt, Grace, Nadia, Nick 2
MICHIGAN 7 WEEKS SENIORS CHARITY 2009 Aff CTCsFed Abandoning Impoverished.............................................................................................................................125 Aff CTCs Exclude Legal Services, Voter Education................................................................................................................126 Aff Health Care Tax Credits Fail [1/2].....................................................................................................................................127 Aff Health Care Tax Credits Fail [2/2].....................................................................................................................................128 Aff Health Care CP Links to Politics........................................................................................................................................129 Aff AT: Urban Homesteader CP...............................................................................................................................................130 Aff AT: Postal Service CP........................................................................................................................................................131 Aff AT: Microfinancing............................................................................................................................................................132 Aff AT: Pro Bono Tax Credits..................................................................................................................................................133 Aff - AT: Education Tax Credits.................................................................................................................................................134 Aff: AT Microfinancing...............................................................................................................................................................135 Aff AT: Maximus [1/3].............................................................................................................................................................136 Aff AT: Maximus [2/3].............................................................................................................................................................137 Aff AT: Maximus [3/3].............................................................................................................................................................138 Aff AT: Contracts.....................................................................................................................................................................139 Aff Contracts/Maximus Link to Politics...................................................................................................................................140
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Common explanations for the inefficiencies of public production focus on the political pressure exerted by interest groups who benefit from the current state of affairs and the inflexibility and limited vision of federal agencies. To be sure, the federal government has recently indicated its support for public private partnerships and its interest in congestion pricing experiments that could lead to improvements in efficiency. However, my view is that more significant institutional change in the form of privatizing public facilities and services will be necessary to dramatically improve efficiency and spur growth. Increasing concerns about the waste associated with public financing of vital social services is motivating interest in whether the private sector could do a better job than the public sector is currently doing to finance and offer these services. In theory, privatization would enable private firms to operate in a competitive environment without bureaucratic controls and political pressures. Private firms would have a financial incentive to reduce existing inefficiencies, introduce innovative services, and respond to users preferences . Government intervention in social services fails- rigorous rules, paralysis, and government dole delay implementationonly by opening the sphere to free market rules will people take the initiative and solve Abram 06 [Ted, qualifications in first sentences of card, The Government Programs are Doomed to Fail, Feb 5,
http://www.institute.sk/article.php?975]
A: From 1974 to 1990 I was a trial court judge, handling everything from traffic tickets to murder and complex civil litigation. Since 1990 I have been working on implementing The Full Employment Program in Oregon and many other states. From 1990 to 2000 Chuck Hobbs, the former Domestic Policy advisor to President Reagan, was my partner in politically enacting The Full Employment Program. We traveled to nearly all the states, and we extensively discussed the rise of the welfare state. Chuck was brilliant and knowledgeable in the history of welfare in America. I had a unique prospective on the political thought and culture of America. From
that background I began a study of comparative governments and the functions of government. I realized that government programs, though well intentioned, are doomed to fail. First, government programs are guided by rules and regulations. Second, ultimately, institutional paralysis dominates. That is, the preservation of the government institution is more important than the mission. Finally, less fortunate humans become trapped by the government dole. I strongly believe that government programs will eventually fail in attempting to assist people in financial or moral need. Government programs, by legislation and rule, classifies groups of people in need, and government distributes remedies to the groups according to prescribed government rule. Group classification induces an acceptance of inferiority and culture of dependence by the people that government intends to assist. To the contrary, each person is unique. Only people helping people - family, friends and neighbors - can devote the time, energy and love to assist and encourage another human being in need. Family, friends, and neighbors will respond to the needs of people in need. Because of the obvious failure of the welfare state, we are seeing the return of people and organizations helping their fellow citizens. Empirically, the government fails at enforcing social service measures- resulting in legal measures against the aff George and Wilding 84 [Victor and Paul, social scientists, The Impact of Social Policy, published by Routledge, page 16,
http://books.google.com/books? id=NK89AAAAIAAJ&pg=PA16&lpg=PA16&dq=government+policies+social+services+fail&source=bl&ots=7tJQdwifl3&sig=eGMhB7wSKPmwXGRW9 Q7NlNxmp_Y&hl=en&ei=KwRASrKkItmM_AaBmdHdAQ&sa=X&oi=book_result&ct=result&resnum=8]
Standards set by the central government have been of two different types during the period covered by this study.
First, there have been statutory minimum levels of provision the physical conditions of houses, hospitals, old peoples homes, etc which have to be observed by government departments or by local authorities.
Failure to observe such standards can result in legal action against the defaulting authority. Second, there have been government guidelines of various kinds which government departments or local authorities ought to take into account when planning their services. Such guidelines have normally been targets which should be reached by a certain year in the future. Failure to achieve such targets cannot result in legal intervention but it can, depending on the governments priorities, mean government pressure on local authorities . The discussion that follows provides numerous instances of these two types of government standards. It also shows that the difference between minimum standards and guidelines is more important in theory than in practice. Governments have persistently failed to enforce minimum standards, even in services provided directly by government departments, let alone local authorities or other bodies . Complexities around federal policies deter investment and turn case Midgley and Livermore 08 [James and Michelle, both have PhD in social sciences, The Handbook of Social Policy, 2nd edition,
http://books.google.com/books?id=C5NxKCcf6N4C&pg=PA12&lpg=PA12&dq=government+policies+%22social+services %22+fail&source=bl&ots=IuSXjHmy2m&sig=UvOw4rGyfpLF5NU13f3vT3YH2bo&hl=en&ei=PQhASvCJO4X0_AbAjaDdAQ&sa=X&oi=book_result&ct =result&resnum=10]
Although, at first, it may appear that social policies can be readily understood by reading the statutes or studying the way the different social services operate, clearly, both the formulation and implementation of policy are complicated. In addition, government policies may have complex effects. Although the legislation that enshrines policies may have clearly stated goals, it may also have hidden or Misael, Kevin, Matthew, Jack, Anna, Kurt, Grace, Nadia, Nick 4
MICHIGAN 7 WEEKS SENIORS CHARITY 2009 unstated goals. Social policies and programs as well may have unintended consequences, may fail to achieve their goals, and may even have contradictory goals and effects.
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without the incentives of the welfare state , fewer people would be poor. For one thing, there would probably be far fewer children born into poverty . The availability of welfare leads to an increase in
out-of-wedlock births, and giving birth out of wedlock leads to poverty. If welfare were eliminated, the number of out-ofwedlock births would almost certainly decline. How much is a matter of conjecture. Some social scientists suggest as little as 15 to 20 percent; others say as much as 50 percent. Whatever the number, it would be smaller. In addition, some poor women who did still bear children out of wedlock would put the children up for adoption. The civil society should encourage that by eliminating the present regulatory and bureaucratic barriers to adoption. Other unmarried women who gave birth would not be able to afford to live independently; they would choose to live with their families or with their boyfriends. Some might even
Poor people would also be more likely to go to work , starting to climb the ladder that will lead out of poverty . A General Accounting Office report on women
choose to marry the fathers of their children.
who lost their welfare benefits after the Reagan administration tightened eligibility requirements in 1981 found that, on average, the women increased the number of hours they worked and their hourly wage and had a significantly higher overall earned income. Two years after losing their eligibility, a significant minority of the women (43 percent in Boston, for example) had incomes as high as or higher than they did while receiving benefits. Similarly, in 1991 Michigan abolished its General Assistance program, which provided cash assistance for poor adults without children. Two years later, a survey for the University of Michigan found that 36.7 percent of those people were working in the month before the survey. Of those with at least a high school education, 45.6 percent were working. Two-thirds of former General Assistance recipients, regardless of
It is important to recognize that job opportunities do exist for individuals willing to accept them . That can be seen in the experience of
education, had held a job at some point during the two years before the survey. unskilled immigrants who enter this country with disadvantages at least as significant as those of welfare recipients. Many have less schooling than the average welfare recipient and many cannot even speak English. Yet the vast majority find jobs, and most eventually prosper. Of course, it may be necessary for people to move where the jobs are. In some ways, the availability of welfare disrupts normal labor migration patterns by allowing people to remain in areas with low employment. If welfare had been in place at the beginning of the century, the great migration of black sharecroppers and farm workers from southern farms to northern factories would never have taken place.
People forced to rely on themselves will find a variety of ways to get out of poverty . Richard Vedder and Lowell Gallaway of Ohio University examined
the movement of poor individuals out of poverty. They found that 18.3 percent of poor people receiving welfare moved out of poverty within one year. However, 45 percent of poor people who did not receive welfare were able to escape poverty. Even many liberals understand that without welfare many poor people would find other options. As Gary Burtless of the Brookings Institution says, "My guess is that if welfare recipients realize their benefits are going to stop . . . it will cause them to search much, much harder for alternatives." Of course, many people will still need help. As the Bible says, "The poor always you will
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There is no resolve about poverty and Social Services across America-the dramatization of our government has made the educated person to indulge in the truth of our depressed nation. American people are not foolish-nor oblivious to what is happening to our economy, and
are very concerned with the lack of effort to correct these pressing issues.
We may possibly need to modify our present Government standards, maybe the working class should march to Washington DC to bolster and voice all of our unsolved rights. Our predecessors were not afraid or intimidated by our government; everything that was
done was inspired by unconscious courage that displayed a rare mix of bravery and honor. The demographics of poverty and despair are wide felt throughout the nation.
As a nation-we should defy anything that subjects us to conformity, never should we get complacent in your living arrangement-our rights are indelible. There are certain rights we need to stand and battle for, many US citizens are wary of our government policies at hand-traces of our past history politics have subjected us to falsehood and ecological inequality.
In closing-Angrily we face the sun, our heartbeats are unclothed-raging upon the successive predator-we need not defy the day of becoming, our citizenship bears the burden of our actions and defiance in the face of diversity.
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through taxation can alleviate mass poverty . And so it is that despite massive amounts of spending by governments, poverty remains at a high rate in the United States. Or perhaps it is better said that public-sector welfare and other aid programs are causing poverty since the poor become dependent on handouts instead of looking for work or starting a business . (See Charles Johnsons article on page 12 to understand why the poor have trouble starting businesses.) Government officials who spend so much of other peoples money have weak incentives to see that it is spent well . Indeed, the so-called war on poverty has been no more effective than the war on drugs and probably less so than the war in Iraq. Perhaps a better response to poverty would be to reduce the reliance on governments. The slack could be made up by elements of civil society, such as private charities, that are more effective than welfare programs in serving the poor. As it is, 85 million American households give a total of $250 billion to charities each year. Interestingly, private Americans gave more to the victims of the Asian tsunami than the federal government did. Giving is not limited to the very rich. The working poor give as large a percentage of their incomes as do the rich and a lot more than does the American middle class. Were it not for so many public policies that undermine private giving, this amount would almost certainly be larger. For example, private foundations face punitive regulation, and government subsidies to nonprofits crowd out charity. On the one hand, subsidies reduce the incentive for those groups to seek voluntary contributions , and on the other they reduce the incentive for individuals to donate since they already gave at the office when taxes were withheld from their paychecks . Moreover, many policies reduce disposable incomes of major donors . It is important to know what lies behind the data on the extent of poverty and giving in America . It is wrong to think that Americans are shirking their obligations to needy neighbors or that the U.S. government should do more.
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The best way to recover the role of private charity is through a charity tax credit, implemented initially at the state level. Its aim is simple: to give citizens greater control over their tax dollars by allowing them to claim a credit against their personal income-tax liability for contributions made to charitable organizations that assist the poor. The ideal plan is a charity tax credit that is budget-neutral--that is, one in which public spending is reduced by the same amount credited to taxpayers. This would ensure that resources are transferred from ineffective government programs to private charities that successfully reclaim lives. Such a credit would help to revive volunteerism and a sense of civic responsibility in American society by reminding people that providing for the poor is the responsibility, not of government, but of individuals in their local communities. The credit would also have a beneficial impact on private charity. By encouraging greater reliance on individual contributions, it would stimulate a "market" in charitable giving. This would strengthen groups that help the poor effectively while eliminating or reforming those that do not. Beyond its practical benefits, a charity tax credit would address what is perhaps the fundamental weakness of the conservative movement: its inability to articulate a vision of society that speaks to the sense of moral obligation people feel for the less fortunate. The goal is not simply a warmed-over version of the statist forms of "compassion" favored by liberals. Rather, the credit would help address the needs of the poor in a way that is consistent with the ideal of limited government and with the American tradition of active reliance upon the institutions of civil society . Another advantage of a charity tax credit is that it will target assistance to those most directly affected by welfare reform. So far, caseload reduction has primarily involved those recipients easiest to employ. The real test will come over the next several years as work deadlines and lifetime limits on assistance kick in for the rest. If substantial suffering results, pressure will build to abandon these policies. A charity tax credit will help prevent this outcome and allow us to implement welfare reform as it was originally conceived.
shifting responsibility and resources from the welfare state to privately funded, local charities.
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hangs in the balance. The unyielding truth is that, even as the ethos of anti-politics becomes more compelling and
even fashionable in the United States, it is the vagaries of political power that will continue to decide the fate of human societies. This last point demands further elaboration. The shrinkage of politics hardly means that
corporate colonization will be less of a reality , that social hierarchies will somehow disappear, or that gigantic state and military structures will lose their hold over people's lives. Far from it: the space abdicated by a broad citizenry, well-informed and ready to participate at many levels, can in fact be filled by authoritarian and reactionary elites an
already familiar dynamic in many lesserdeveloped countries. The fragmentation and chaos of a Hobbesian world, not very far removed from the rampant individualism, social Darwinism, and civic violence that have been so much a part of the American landscape, could be the prelude to a powerful Leviathan designed to impose order in the face of disunity and atomized retreat. In this way the eclipse of politics might set the stage for a reassertion of politics in more
virulent guise
or it might help further rationalize the existing power structure. In either case, the state would likely become what Hobbes anticipated: the embodiment of those universal, collective interests that had vanished from civil society.75
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message about the value of civil society and the role of government . Choosing to raise taxes while
reducing charitable deductions for high-income earners indicates that the President thinks government can best determine how to dis tribute people's money. In their influential book To Empower People, Peter Berger and the late Richard John
Neuhaus describe the importance of "mediating institutions" to a healthy democratic society. Such institutions include the family, churches, and nonprofit organizations, which stand between citizens and the large institutions of public life .[12] Mediating institutions are essential for generating and maintaining the operative values of American society . They are also well equipped to provide a helping hand to people in the context of face-to-face
Misael, Kevin, Matthew, Jack, Anna, Kurt, Grace, Nadia, Nick 12
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relationships. They have intimate knowledge of those in need, and they understand social problems in up-close-andpersonal ways. Driven by deep convictions and compassion , such organizations can provide loving forms of assistance and care that government programs cannot offer , and often for less money. Smaller and more flexible than most government bureaucracies, local church congregations and charities can also spawn creative social innovations that benefit those in need. Berger and Neuhaus argue that public policy should "cease and desist from damaging mediating structures."[13] More than that, public policy should protect mediating institutions and , where possible without co-opting them , empower them in their efforts to promote the common good. The tax plan in President Obama's budget blue print runs counter to the basic philosophy under lying
these propositions. The President's proposal conveys the belief that government can decide bet ter than individuals how their dollars should be spent. It also implies that the state should assume responsibility for people's needs even at the expense of vital mediating institutions. Ultimately, it communicates the notion that America is better off with expansive and intrusive government than it is with limited government.
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suggest crowding out, there are also several potential reasons why government spending may crowd in private contributions (see Brooks 2000a). The first reason is that some government grants are in the form of matching funds, so every dollar of voluntary donations is matched by a government contribution of one dollar . This effectively lowers the price of charitable giving.
Second, some donors may interpret a government grant to a charity as proof of quality or reputability. Here a certain charity may be viewed by donors as high quality since it receives government funding and is thus worthy of donation.
Cointegration and grander causality tests prove the crowd out link Garrett, 09 Research Division of the Federal Reserve Bank of St. Louis **Department of Economics at St. Marys College of Maryland (Thomas A. and Russell M., Government growth and private contributions to charity, http://research.stlouisfed.org/wp/2007/2007-012.pdf, //MDP)
This paper examined the short-run and long-run relationship between various categories of government spending and charitable contributions over the period 1965 to 2003, a period marked by rapid growth in federal and state government
Cointegration tests revealed that a significant long-run and negative relationship does indeed exist between charitable giving and government spending , most notably total giving and education giving. The relationship is less than one-for-one, thus suggesting partial crowding out. Granger causality tests revealed increases in state and local government welfare and education spending do reduce charitable giving to these respective categories . To summarize the results, we find limited evidence of crowding-out. Historically, state and local government revenue
spending.
to higher education has accounted for roughly 30 percent of higher education revenues whereas federal government revenues to higher education hasaccounted for about 14 percent (see Digest of Education Statistics 2006, Table 335).
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expenditures rose steadily in the United States until 1932, and declined steadily thereafter as government welfare spending rose. An article in the National Tax Journal that same year found that cuts in government spending resulted in increased interest in private contributions. Thus it is entirely possible that reducing government welfare spending through a tax credit for charitable giving might result in an increase in total spending on the needy. Private-sector charities are too small to handle the huge number of welfare recipients. The charity tax credit would create a dynamic welfare system in which taxpayers assess
each charitys record of meeting the needs of the poor. To the extent that taxpayers direct tax dollars to private-sector charities, those organizations would have the funds to grow and meet the needs of more people. The wealthy prefer to help those closest to them, so the poor living in the inner cities or other places far from the wealthy would receive very little help. Extensive research done on this issue--such as Charles T. Clotfelters Who Benefits from the Nonprofit Sector?--found that there is no evidence that wealthier people give disproportionately to organizations that are closer to or primarily benefit upper-income families. Furthermore, the premise of this criticism is that only wealthy people would get a tax credit. However, since the tax credit would be extended to everyone who pays taxes, many lower and middle-income working families who live near poor communities in need of help would be able to participate. In addition, private-sector charities seeking to inform people about their missions would reach out to groups such as schools and churches whose membership often encompasses a wide range of incomes. Fraud would increase under a decentralized system. Its hard to imagine fraud thriving any more than under the old federal-state system. However, we could put safeguards into place. For example, existing IRS regulations governing nonprofit organizations prohibit the misuse of a charitable organization for personal or financial gain--and the charity tax credit would relax none of those restrictions. But the key to eliminating welfare fraud is to give individuals rather than bureaucrats an incentive to police the system by determining which charities provide the best value for their money. If lifting the poor out of poverty is the goal, then government welfare programs have been a colossal failure. According to the Congressional Research Service, this country has spent more than $5 trillion on public welfare programs since 1960, yet the poor as a percentage of the total population has slightly increased, to about 15 percent. It is time to give private-sector charities a chance by giving taxpayers a choice. The charity tax credit would give them the ability to fund those charities they think are
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Private charity demands that donors become directly involved. Former Yale political science professor James Payne notes how little citizen involvement there is in government charity: We know now that in most cases of government policy making, decisions are not made according to the democratic ideal of control by ordinary citizens . Policy is made by elites, through special interest politics, bureaucratic pressures, and legislative manipulations. Insiders decide what happens, shaping the outcome according to their own preferences and their political pull . The citizens are simply bystanders. Private charity, in contrast, is based on "having individuals vote with their own time, money, and energy." There is no compassion in spending someone else's money-the aid realize that he must work to live up to the expectations of those helping him out." even for a good cause. True compassion means giving of yourself. As historian Gertrude Himmelfarb puts it, "Compassion is a moral sentiment, not a political principle."
Welfare allows individuals to escape their obligation to be truly charitable. As Robert Thompson of the University of Pennsylvania said a century ago, government charity is a "rough contrivance to lift from the social conscience a burden that should not be either lifted or lightened in that way ." Civil Society That is the essence of the civil society . When George
Washington warned that "government is not reason, it is not eloquence--it is force," he was making an important distinction.
Government relies on force and coercion to achieve its objectives , including charity. In contrast, the civil society relies on persuasion--reason and eloquence--to motivate voluntary giving. In the civil society people give because they are committed to helping , because they believe in what they are doing. Thus private charity is ennobling of everyone involved , both those who give and those who receive. Government welfare is ennobling of no one . Alexis de Tocqueville recognized that 150 years ago. Calling for the abolition of public relief , Tocqueville lauded private charity for establishing a "moral tie" between giver and receiver. In contrast, impersonal government relief destroys any sense of morality. The donor (read taxpayer) resents his involuntary contribution, while the recipient feels no gratitude for what he receives and inevitably believes that what he receives is insufficient.
Robust private charity is essential to civil society De Vous, 03 Public Policy Manager of the Acton Institute (Phillip W., What Gives? The Possibilities of Private Charity, ttp://www.acton.org/commentary/commentary_144.php, //MDP)
Recognizing and incentivizing the power of private charity is absolutely essential in encouraging civil society solutions to our nation's social ills . Back in April, one step in this direction was
the passage of the CARE Act in the United States Senate. The positive--though paltry--measures proposed in this legislation would accomplish a great deal in bolstering charitable giving through the use of tax incentives. The Senate legislation allows non-itemizing taxpayers to take deductions for donations to charity and would allow older Americans to take a deduction for charitable gifts made from their retirement accounts. Currently, the measure is stalled in the House of Representatives over a controversial provision that would force charitable foundations to spend more of their assets on an annual basis. Given the
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enthusiasm that the House leadership has shown in the past for incentivizing the funding entities of civil society, it remains unclear why they would needlessly attempt to micromanage an important source of private sector charity. Congressional intransigence on this matter could lead to harmful effects for philanthropy in 2003. Despite more than two years
of
negative economic news, American charitable giving is at record levels, consisting of more than 2% of the gross domestic product of the United States . It is now time for leaders at all levels to reject the selfishness thesis that permits only the paltriest incentives for private charity. Adopting a pro-growth agenda for private charity will ensure, even in bad economic times, that individual generosity will remain a growing and vibrant sector of the U.S. economy .
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welfare can never be reformed enough to eliminate its destructiveness and perverse incentives. Rather than waste more timeand more liveson further tinkering, we should end government welfare once and for all. That step alone would reduce poverty in America. Fewer children would be born to poor single mothers unable to care for them. More poor people would find the road out of poverty through work and education .
Charities are key to civic empowerment by demanding donors become directly involved, which is key to the democratic ideal Tanner, 03 Senior Fellow at the Cato Institute (Michael, The Poverty of Welfare: Helping Others in Civil Society, p. 10-11)
Private efforts have been much more successful than the federal government's failed attempt at charity. America is the most generous nation on earth. Americans already contribute more than $212 billion annually to charity . 33 In fact, more than 85 percent of all adult Americans make some charitable contribution each year . 34 In addition, about half of all American adults perform volunteer work; more than 15.5 billion hours were worked in 2000 . 35 Putting a dollar value to that volunteer work would add another $239 billion in charity . 36 Volunteer work and cash donations combined bring American charitable contributions to more than $450 billion per year, not including the countless dollars and time given informally to family members, neighbors, and others outside the formal charity system .
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private charity requires a different attitude on the part of both recipients and donors. For recipients, private charity is not an entitlement but a gift carrying reciprocal obligations. As Father Robert Sirico of the Acton Institute says: An impersonal check given without any
expectations for responsible behavior leads to a damaged sense of self-worth. The beauty of local [private charitable] efforts to help the needy is that . . . they make the individual receiving the aid realize that he must work to
live up to the expectations of those helping him out . 47 Private charity demands that donors become directly involved. Former Yale University political science professor James Payne notes how little citizen involvement there is in government charity : We know now that in most cases of government policy making, decisions are not made according to the democratic ideal of control by ordinary citizens. Policy is made by elites, through special interest politics, bureaucratic pressures, and legislative
manipulations. Insiders decide what happens shaping the outcome according to their own preferences and their political pull.
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impersonal government relief destroys any sense of morality. The donor (read taxpayer) resents his involuntary contribution, while the recipient feels no gratitude for what he receives and inevitably believes that what he receives is insufficient. 53
Inducing Charity would galvanize future American civic responsibility and giving Barwick 98 (Peter S. Barwick, research associate at the Commonwealth Foundation, a public-policy research institute in Harrisburg, Pennsylvania, and the author of "Let Charity Begin at Home," a study of the charity tax credit.et al. Charity Tax Credits and Debits <http://www.hoover.org/publications/policyreview/3566647.html )
The best way to recover the role of private charity is through a charity tax credit, implemented initially at the state level. Its aim is simple: to give citizens greater control over their tax dollars by allowing them to claim a credit against their personal income-tax liability for contributions made to charitable organizations that assist the poor . The ideal plan is a charity tax credit
that is budget-neutral--that is, one in which public spending is reduced by the same amount credited to taxpayers. This would ensure that resources are transferred from ineffective government programs to private charities that successfully reclaim lives. Such a credit would help to revive volunteerism and a sense of civic responsibility in American society by reminding
people that providing for the poor is the responsibility, not of government, but of individuals in their local communities. The credit would also have a beneficial impact on private charity. By encouraging greater reliance on individual contributions, it Misael, Kevin, Matthew, Jack, Anna, Kurt, Grace, Nadia, Nick 20
MICHIGAN 7 WEEKS SENIORS CHARITY 2009 would stimulate a "market" in charitable giving. This would strengthen groups that help the poor effectively while eliminating or reforming those that do not.
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disproportionately from more advantaged groupsto be well-educated and well-heeled and to be White and male. In consequence, the voice of the people as expressed through participation comes from a limited and unrepresentative set of citizens. The democratic ideal may be equal consideration for the needs and preferences of all, but the reality of participation is quite different. This book is about political participation in the United States. It is about whose voice
is heard. And it is about the process that amplifies the voice of some citizens and mutes the voice of others by differentially endowing citizens with the motivation and capacity to be active, and with access to the recruitment networks through which requests for participation are channeled. Voice and Equality provides a comprehensive account of the participatory process in the United States.>
Racism risks extinction Barndt, 91 Pastor and Co-director of Crossroads Ministry working to dismantle racism (Joseph, Dismantling Racism: The Continuing Challenge to White America 155-6, //MDP)
To study racism is to study walls. We have looked at barriers and fences, restraints and limitations, ghettos and prisons. The prison of racism confines us all, people of color and white people alike. It shackles the victimizer as well as the victim. The walls forcibly keep people of color and white people separate from each other; in our separate prisons we are all prevented from achieving the human potential that God intends for us. The limitations imposed on people of color by poverty,
the effects of uncontrolled power, privilege, and greed, which are the marks of our white prison, will inevitably destroy us as well. But we have also seen that the walls of racism can be dismantled. We are not condemned to an inexorable fate, but are offered the vision and the possibility of freedom . Brick by brick, stone by stone, the prison of individual, institutional, and cul tural racism can be destroyed. You and I are urgently called to join the efforts of those who know it is time to tear down, once and for all, the walls of racism. The danger point of self-destruction seems to be drawing ever more near . The results of centuries of national and worldwide conquest and colonialism, of military buildups and violent aggres sion, of overconsumption and environmental destruction may be reaching a point of no return . A small and predominantly white minority of the global population derives its power and privilege from the sufferings of the vast majority of peoples of color. For the sake of the world and ourselves, we dare not allow it to continue .
subservience, and powerlessness are cruel, inhuman, and unjust;
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Tyranny risks incalculable death VanDeMark, 01 United States Naval Academy (Brain, November 578 Annals 186 l/n//MDP)
"The chief business of twentieth-century philosophy," wrote R. G. Colling-wood, "is to reckon with twentieth-century history." And what a bloody century it was--almost beyond imagination. The flower of a generation of European youth was wasted in the muddy trenches of Flanders during World War I. British and American bombing of Germany and Japanese cities during World War II led to the death of hundreds of thousands of noncombatants. The victims of Stalin's tyranny
numbered in the millions. The number of Mao's victims was greater. And Pol Pot killed a higher proportion of his own population than either Stalin or Mao . More recently, there was the terrible bloodbath in Rwanda. Yet even after taking stock of all of these brutalities, to ponder Hitler's campaign of genocide against the Jews of Europe is to look into the very
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heart of darkness. No explanation or apology is needed for giving the unprecedented inhumanity of the twentieth century a central place in recent history.
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about the nature and extent of civic engagement in the United States has impacted the debate on the proper role of higher education in a democracy . Higher education institutions, as transmitters of essential elements of the dominant culture, struggle with the development of mechanisms to socialize the next generation about democratic values. A national debate has emerged on the higher
education response to this perceived need for revitalizing constructive democratic engagement, building civil society, and increasing citizen participation in government at all levels. Colleges and universities have responded with
a number of civic engagement initiatives, including university-community partnerships, empirical studies of political engagement, community-based (collaborative) research, and the development of new (or expanded) service-learning programs (Jacoby 2003).
Democracy prevents extinction Diamond, 95 Senior Fellow Hoover Institute (Larry, Promoting Democracy in the 1990s p. 6, //MDP)
in the coming years and decades. In the nationalist aggression tears at the stability of Europe and could easily spread. The flow of illegal drugs intensifies through increasingly powerful international crime syndicates that have made common cause with authoritarian regimes and have utterly corrupted the institutions of tenuous, democratic ones. Nuclear, chemical, and biological weapons continue to proliferate . The very source of life on Earth, the global ecosystem, appears increasingly endangered . Most of these new and unconventional threats to security are associated with or aggravated by the weakness or absence of democracy, with its provisions for legality, accountability, popular sovereignty, and openness.
This hardly exhausts the lists of threats to our security and well-being former Yugoslavia
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problems, including those posed by "external" organizations . This literature has its origins in the
classical thought of Tocqueville ([1835] 1862), Durkheim ([1933] 1984) and the early Chicago school, as well as the recent writings of Dahl (1971), Key (1984), Bollen (1980), and especially Etzioni (1996) and Putnam (1993, 2000). According to these scholars, local institutions such as churches, associations, and so-called "third places" (barber shops, cafes, and other sites of informal public life) create community solidarity and serve as forums for civic engagement . In turn,
these institutions help root actors to places and enhance the local quality of life. Consistent with this logic, several studies document how residents and business leaders become integrated in communities through their participation in churches and volunteer associations (for a review of these studies, see Cassel 1999). Others report that in communities with more social capital, rates of poverty, unemployment, and crime tend to be lowe r (Tolbert, Lyson & Irwin 1998; Sampson &
Groves 1989; see also Green & Haines 2001). That civic engagement might mitigate the harmful social effects of absentee managed plants has been examined by Lyson and his colleagues. They find that in agriculture dependent counties dominated by absentee managed farms, community welfare is higher when residents are civically engaged (Lyson, Torres & Welsh 2001). In another study, they find that in counties with many absentee managed plants, rates of poverty and infant mortality are lower where civic engagement is high (Young & Lyson 1993). Going one step further, some scholars suggest
that civic engagement may also influence environmental outcomes . Mesch and Manor (1998), for example, argue that residents and business leaders develop an emotional bond with their neighborhood's physical environment as they invest more of themselves in local institutions. Scholars also document how civically engaged residents succeed in preserving their neighborhoods' physical
beauty (Mesch 1996; Molotch, Freudenberg & Paulsen 2000) and can persuade businesses to contribute to local environmental projects (Sklar & Ames 1983). [End Page 194] Particularly relevant to our study, scholars at the World Bank have begun exploring how civic engagement affects the emissions of individual facilities (Hartman, Huq
contend that in developing countries, where formal regulation (e.g., uniform air quality standards, mandated pollution technologies) tends to be weak or nonexistent, informal regulation exercised by communities (e.g., public appeals, protests) may strongly influence corporate environmental performance . They speculate that civic engagement may also influence certain types of corporate pollution in the U.S. that are largely unregulated, such as toxins released by manufacturer s.3 In short, a growing body of research suggests that communities can improve the environmental performance of manufacturing plants by reducing the social distance between themselves and plants. According to this work, unless plants develop social ties to their host communities, they are unlikely to participate in public conversations about local environmental priorities. However, where there are numerous institutional settings that allow residents and plant managers to meet and develop a common appreciation of place, plants are more likely to participate in public conversations about the environment and curb their emissions.
& Wheeler 1997; Pargul & Wheeler 1995; Pargal et al. 2002). They
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AIDS will spread globally and cause extinction Muchiri, 2k (Michael, Staff Member at Ministry of Education in Nairobi, Will Annan finally put out Africas fires? Jakarta Post, March 6, l/n)
The executive director of UNAIDS, Peter Piot, estimated that Africa would annually need between $ 1 billion to $ 3 billion to combat the disease, but currently receives only $ 160 million a year in official assistance. World Bank President James Wolfensohn lamented that Africa was losing teachers faster than they could be replaced, and that AIDS was now more
Statistics show that AIDS is the leading killer in subSaharan Africa, surpassing people killed in warfare. In 1998, 200,000 people died from armed conflicts compared to 2.2 million from AIDS . Some 33.6 million people have HIV around the world, 70 percent of them in Africa, thereby robbing countries of their most productive members and decimating entire villages . About 13 million of the 16 million people who have
effective than war in destabilizing African countries. died of AIDS are in Africa, according to the UN. What barometer is used to proclaim a holocaust if this number is not a sure measure?
There is no doubt that AIDS is the most serious threat to humankind, more serious than hurricanes, earthquakes, economic crises, capital crashes or floods . It has no cure yet. We are watching a whole continent degenerate into ghostly skeletons that finally succumb to a most excruciating, dehumanizing death . Gore said that his new initiative, if approved by the U.S. Congress,
would bring U.S. contributions to fighting AIDS and other infectious diseases to $ 325 million. Does this mean that the UN Security Council and the U.S. in particular have at last decided to remember Africa? Suddenly, AIDS was seen as threat to world peace, and Gore would ask the congress to set up millions of dollars on this case. The hope is that Gore does not intend to make political capital out of this by painting the usually disagreeable Republican-controlled Congress as the bad guy and hope the buck stops on the whole of current and future U.S. governments' conscience. Maybe there is nothing left to salvage in Africa after all and this talk is about the African-American vote in November's U.S. presidential vote. Although the UN and the Security Council cannot solve all African problems, the AIDS challenge is a fundamental one in that it threatens to wipe out
The challenge is not one of a single continent alone because Africa cannot be quarantined. The trouble is that AIDS has no cure -- and thus even the West has stakes in the AIDS challenge. Once sub-Saharan Africa is wiped out, it shall not be long before another continent is on the brink of extinction. Sure as death, Africa's time has run out, signaling the beginning of the end of the black race and maybe the human race.
man.
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The recent dramatic decline in the nations welfare rolls is attributable in large part to the practical and psychological impact of reforms intended to create a more "conservative" welfare bureaucracy : expanded work requirements, eligibility restrictions, and a lifetime limit on benefits. These long-needed reforms are changing the culture of welfare from one of entitlement to one of reciprocity and individual responsibility. Its time to take the next step. Conservatives should use the momentum generated by recent successes to move toward the ultimate goal of reform: shifting responsibility and resources from the welfare state to privately funded, local charities. The best way to recover the role of private charity is through a charity tax credit, implemented initially at the state level. Its aim is simple: to give citizens greater control over their tax dollars by allowing them to claim a credit against their personal income-tax liability for contributions made to charitable organizations that assist the poor. The ideal plan is a charity tax credit that is budget-neutral--that is, one in which public spending is reduced by the same amount credited to taxpayers. This would ensure that resources are transferred from ineffective government programs to private charities that successfully reclaim lives. Such a credit would help to revive volunteerism and a sense of civic responsibility in American society by reminding people that providing for the poor is the responsibility, not of government, but of individuals in their local communities. The credit would also have a beneficial impact on private charity. By encouraging greater reliance on individual contributions, it would stimulate a "market" in charitable giving. This would strengthen groups that help the poor effectively while eliminating or reforming those that do not.
Counterplan results in less coercive action than the plan as an interim measure and solves poverty better than the affirmative Tanner 3 [Michael, Senior Fellow at the Cato Institute, The Poverty of Welfare: Helping Others in Civil Society, QuestiaSchool]
Another option is a proposal, supported by the National Center for Policy Analysis and others, to provide all taxpayers with a dollarfor-dollar tax credit for private charitable contributions. This would be a tax credit, not a tax deduction. That is to say, if an individual gave one dollar to charity, she could reduce her tax liability by one dollar. Since current federal welfare spending is equal to approximately 41 percent of personal income tax revenue (for all meanstested programs), the amount of the credit could be capped at 41 percent of total tax liability. 93 The Massachusetts-based Beacon Hill Institute estimates that this could generate as much as $125 billion per year in additional giving. 94 President Bush has discussed allowing married couples to claim a credit for up to half of the first $1,000 of their charitable contributions; single taxpayers could claim up to half of the first $500 of charitable contributions. In theory, the credit would be only for increased or new charitable contributions, although establishing a baseline for such determinations would appear to be difficult. 95 These approaches are not perfect of course. At their heart, they remain a coercive mechanism for financing charity. Still, they would give individuals greater control over where their charitable dollars go and put day-to-day operation of charity in private hands. Unlike direct government funding of private charitable organizations (see Chapter 6), the funds would not come with strings or government control that could undermine the effectiveness or character of the charity. Nor would the government be in the position of deciding which charities are worthy of funding. Individuals would be contributing their own funds to the charity of theirnot the government's choice. Government policy would simply be providing them with an incentive to do so. As an interim measure, this would certainly be preferable to the current welfare system.8
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government funding--is not found in any other charity tax credit plan. Together, these criteria ensure that the credit does not become a cash cow for advocacy groups on the Left.
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The
lack of charitable giving may not be a market failure at all . In addition, it is unclear that interdependent utility functions are as rampant as some theorists suggest . Moreover, even if the collective consumption characteristics of charity did lead to a reduction in charitable giving because of interdependent utility functions , the undersupply of charitable giving would not be economically inefficient in the sense of misallocating resources . More importantly, private charity and redistribution are more robust in the sense of finding ways to align the incentives of potential donors and the poor . In doing so, free markets help to foster sympathy for the less well-off and a culture of approbation for those who help them . Government intervention, on the other hand, transforms a private, voluntary transaction into a public obligation. This places a strong presumption in favor of laissez-faire. Ultimately, the difference between those who want government involved in charity and redistribution and those opposed comes down to a belief in the individuals ability to help himself and his fellow man. Just because some people are different than others is not , ipso facto, an argument for paternalism, but, rather, an argument for leaving people alone. Efforts to force people to contribute to anti-poverty programs takes away from the richness and general culture of society and inhibits trial, error, and learning. Those in favor of government involvement in poverty alleviation are guilty of making the perfect the enemy of the good . This attitude regards almost all government intervention as desirable and sees many areas where more government involvement could improve market outcomes . But, it suffers from the same problem that all arguments for big government encounter: it assumes other people the expertsare outside above the economic order. The experts are said to be better at deciding for everyone whats best. By trying to make their values (or, to be more precise, the values of the rational actor) the values everyone should live by , they are failing to recognize the beauty of millions of people pursuing their own interests according to their own values . Government as a corrective to market failures is an inferior solution to alleviating poverty problems when compared to the private sector . The crowding out of a whole range of private charitable organizationsmost of which were quite effective at dealing with free riders and deviant behavioris one of the greatest, and largely unaddressed, costs of big government. In the absence of government, we do not and cannot know what specific mechanisms might arise to deal with the free rider, but we do have some historical experiences where mutual aid arrangements worked quite well (Beito 2000; Chalupnek and Dvorak 2007; Friedman 1962, 190-91).
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our paper finds market failure arguments to be an insufficient justification for government intervention. Private charity and redistribution respects autonomy and is more robust in creating incentives for people to help the poor . In America today, classical liberals and conservatives are alarmed by the runaway level of government involvement in our lives, interventions affect and complicate nearly every facet of our lives and impose tremendous explicit and implicit costs. The sheer number and complexity of the rules governing our behavior seems to be at an all-time high, and the rapid increase of government interventions in our everyday lives in order to make them better off deserves explanation. Alternative opinions about the overall scale and
economics, scope of government intervention depend, of course, on ones more general theoretical understanding of the welfare state. Analysis of the current state of poverty alleviation programs in America cannot be separated from ones general model of the welfare state. We take as our point of departure Thomas Sowells discussion of the welfare state (2003, B7). According to Sowell, The welfare state is not really about the welfare of the masses. It is about the egos of the elites. Like Sowell, we think
government intervention hampers peoples lives and increases in intervention beget more intervention. Our main purpose is to critically examine one argument for government intervention into the market
for charitable giving to the poor. Historically, the economic justification for government involvement in programs for the poor was based on public goods theory. In his classic book, Capitalism and Freedom, Milton Friedman (1962, 191) discussed the public goods justification for poverty alleviation when he wrote, I am distressed by the sight of poverty; I am benefited by its alleviation; but I am benefited equally whether I or someone else pays for its exclusion.
Close linkage between the donation and outcome makes charity preferable Beaulier and Hal, 08 Department Chair and Assistant Professor of Economics, Stetson School of Business and Economics, Mercer University (Scott and Joshua C., Collective Consumption Externalities and Charitable Giving, New Perspectives on Political Economy, Volume 4, Number 1, pp. 23-40, //MDP)
The self-reinforcing cycle where people give because they seek the approbation of their fellow citizens is instead replaced by representative democracy, where resources are often transferred to the middle class in the name of helping the poor. While giving for purely altruistic reasons might be nice to contemplate, we do not live in such a world and charities must appeal to self-interest as well as altruism in order to get donations. If it were possible to compare the transfers to the
poor under a completely private system of charity versus a more public system, a completely private system would be superior because of closer link between donation and outcome. Even if many United Way fundraisers are organized by real estate agents and owners of car dealerships because it is good for business (Hartford 2006), a less than ideal arrangement is superior to a world where people have no incentive to become involved in private charity at all.12 Even if people gave out of entirely altruistic reasons and had interdependent utility functions, however, government intervention is not warranted because there is no misallocation of resources.13 The collective consumption externality pointed out by Hochman and Rodgers (1969) is a pecuniary
externality, which does not lead to market failure (Holcombe and Sobel 2000). In fact, pecuniary externalities are necessary for competitive markets. To understand why pecuniary externalities do not lead to economic inefficiency, it is important to better understand the distinction between pecuniary and technological externalities.
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to being better able to target individual needs , private charities are much better able to target assistance to those who really need help . Because eligibility requirements for government welfare programs are arbitrary and cannot be changed to fit individual circumstances, many people in genuine need do not receive assistance , while benefits often go to people who do not really need them. More than 40 percent of all families living below the poverty level receive no government assistance . Yet more than half of the families receiving means-tested benefits are not poor. Thus, a student may receive food stamps, while a homeless man with no mailing address goes without. Private charities are not bound by such bureaucratic restrictions. Private charity also has a better record of actually delivering aid to recipients . Surprisingly little of the money being spent on federal and state social welfare programs actually reaches recipients. In 1965, 70 cents of every dollar spent by the government to fight poverty went directly to poor peopl e. Today, 70 cents of every dollar goes, not to poor people, but to government bureaucrats and others who serve the poor . Few private charities have the bureaucratic overhead and in
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charity tax credit would address what is perhaps the fundamental weakness of the conservative movement: its inability to articulate a vision of society that speaks to the sense of moral obligation people feel for the less fortunate. The goal is not simply a warmed-over version of the statist forms of "compassion" favored by liberals. Rather, the credit would help address the needs of the poor in a way that is consistent with the ideal of limited government and with the American tradition of active reliance upon the institutions of civil society. Another advantage of a charity tax credit is that it will target assistance to those most directly affected by welfare reform. So far, caseload reduction has primarily involved those recipients easiest to employ. The real test will come over the next several years as work deadlines and lifetime limits on assistance kick in for the rest. If substantial suffering results, pressure will build to abandon these policies. A charity tax credit will help prevent this outcome and allow us to implement welfare reform as it was originally conceived. CTC removes government dependency and is a prerequisite to welfare system success Barwick 98 [Peter, contributor to the Policy Review journal, research associate at the Commonwealth Foundation, a public-policy research institute in
Harrisburg, Pennsylvania, and the author of "Let Charity Begin at Home," a study of the charity tax credit Charity Tax Credits--and Debits, Jan and Feb edition, http://www.hoover.org/publications/policyreview/3566647.html]
A charity tax credit supplies this transitional mechanism. Such a credit would nurture a private-sector alternative to the government welfare system. As people come to recognize the efficacy of this alternative, they would be able to accept the idea of further reducing the direct government role in welfare. Eventually, the credit itself could be phased out, so long as the revenue used to pay for it is returned to taxpayers.
Consider the impact of individual retirement accounts (IRAs) on the debate over privatizing Social Security. Thirty years ago, conservatives such as Barry Goldwater who even suggested the possibility of Social Security privatization were laughed out of the room. But now that we have practical experience with the advantages of privately investing for retirement, support for the idea is growing. Conservatives should not delude themselves that the welfare problem has been solved. They should instead propel reform to the next stage by advancing the fundamental issue of the debate: the need to recover the role of private charity.
Seventy years ago, Americans thought of private charity as the primary social safety net. To the extent that government had a role in assisting the poor, it was a provider of last resort, at the local level. A charity tax credit offers a way to recover this arrangement and the understanding it reflects. Without progress toward this larger goal, welfare reform cannot be considered a true success.
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along avenues that truly raise the poor to a productive place in our society. The history of mans climb from savagery to a civilized status would indicate that the truest, surest, and most efficient method of aiding a poor man is along the lines of freechoice inducements. When a poor man sees that work will provide more material reward than idleness on a government dole,
With private charity dispen-sing funds to the poor , the nation would avoid the stultifying vice of idleness providing more gain than derived from common labor . Thus, private charity would accomplish more for the poor than government charity . And with private charity directing the dispersing of funds , there is a far greater likelihood of these monies treating the causes of poverty than simply treating the symptoms . Therefore, the writer believes there is an estimable case for the general adoption of private charity in place of public charity.
he will choose work.
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While the poor are caught increasingly by foreclosure, eviction and food-stamp fights for their daily bread, deficit-bedeviled statehouses across the country are cutting support for legal services or dropping the programs outright. Creative funding that taps lawyers' escrow accounts has evaporated because it is tied to the Fed's fading interest rate . Local governments, charities and pro bono law firms are similarly tight-pursed. Scores of legal aid societies are cutting their staffs just as requests for help are booming, according to The Times's Erik Eckholm. Bar associations continue to help, and even in these tough times probably could do more. But federal funding is the ultimate hope
in a dire situation. In 2008, Congress chipped in $350 million for the nonprofit Legal Services Corporation, which then distributed the money throughout the country.
Given the tough times -- underfunded programs and ever more desperate clients -- more money is needed. Congress still has the
opportunity to renew the regular appropriation in a coming omnibus budget bill, but it must bolster that with extra support for the program.
NOTE: You should specify in text, based on the card, what the CTC can do
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administrations. She served as North Carolina's first female Senator from 2003 to 2009. She is a member of the Republican Party and former chair of the National Republican Senatorial Committee, Floor Statement of Senator Elizabeth Dole on National Hunger Awareness Day, June 5, 2007, http://en.wikisource.org/wiki/Floor_Statement_of_Senator_Elizabeth_Dole_on_National_Hunger_Awareness_Day ) Today is the Sixth National Hunger Awareness Day a day to reflect on the fact that in this nation alone more than 35 million people are experiencing hunger or are at risk for hunger. It is also a day to recognize the tremendous efforts of individuals who graciously give their time and resources to help those in need.
Hunger is far too prevalent, but I think Washington Post columnist David Broder hit the nail on the head when he wrote: America has some problems that defy solution. This one does not. It just needs caring people and a caring government, working together. I agree, the battle to end hunger in our country is a campaign that cannot be won in months or even a few years but it is a victory within reach. And I am motivated to do what I can to make a positive difference in this fight against hunger both in the United States and beyond our borders. In America the land of prosperity and plenty some people have the misconception that hunger plagues only far-away, undeveloped nations. The reality is that hunger is a silent enemy lurking within one in 10 U.S. households. In my home state of North
Carolina alone, nearly one million of our 8.8 million residents are struggling with food security issues. In recent years, oncethriving North Carolina towns have been economically crippled by the shuttering of textile mills and furniture factories. People have lost their jobs and sometimes their ability to put food on the table. I know this scenario is not unique to North Carolina, as many American manufacturing jobs have moved overseas. While many folks are finding new employment, these days a steady income doesnt necessarily provide for three square meals a day. To help struggling families and individuals, our nation is blessed to have many faith-based and other non-profit service organizations that work to fight hunger. Over the last year, I have toured a number of these organizations in my home state such as MANNA FoodBank in Asheville, Second Harvest Food Bank of Metrolina in Charlotte, and Meals on Wheels of Senior Services in Winston-Salem. I also have visited the DC Central Kitchen here in Washington just a few blocks from the Capitol. At each of these organizations, I am inspired by the dedicated staff and volunteers who have such a passion for helping others. Another hunger relief organization that I hold in the highest regard is the Society of St. Andrew, which gleans produce from farms, and then packages, processes and transports excess food to feed hungry people across the country. When I think of gleaning, I often think of Ruth in the Old Testament. Her story takes place during a famine in Bethlehem, and Ruth gleaned so that her family could eat. In Biblical times, farmers were encouraged to leave crops in their fields for the poor and for travelers. Its a practice we should be utilizing much more extensively today considering that in this country, 27 percent of all the food produced annually is lost at the retail, consumer and food service levels. This means we are wasting about 3,044 pounds of good food every second! The Society of St. Andrew recently passed a milestone saving and distributing a total of 500 million pounds of food since 1983! This translates into more than 1.5 billion servings! Already this year, the organization has provided more than 5.5 million pounds of produce. Amazingly, it only costs about 2 cents a serving to glean and deliver this food to those in need. And all of this work is done by the hands of tens of thousands of volunteers and a very small staff. Ive gleaned in North Carolina fields with my friends at the Society of St. Andrew, and they are truly a remarkable group. Like any humanitarian endeavor, the gleaning system works because of cooperative efforts. Private organizations and individuals are doing a great job but with very limited resources. One of the single largest concerns for gleaners is transportation how to actually get food to those in
need. To help address this problem, I am proud to reintroduce today the Hunger Relief Trucking Tax Credit Act, which would change the tax code to give transportation companies tax incentives for volunteering trucks to transfer gleaned food. Specifically, my bill would create a 25-cent tax credit for each mile that food is transported for hunger relief efforts by a donated truck and driver. This bill would provide a little extra encouragement for trucking companies to donate space in their vehicles to help more food reach more hungry people. I am grateful to my colleagues, Senators Lincoln, Burr, Durbin, Vitter
and Allard, for joining this effort, and I welcome the support of relief organizations like the Society of St. Andrew, the American Trucking Association and Americas Second Harvest. In addition, Senators Lautenberg, Lincoln and I plan to
soon reintroduce the Food Employment Empowerment and Development Program Act, or the FEED Act. The idea behind this legislation is simple: combine food rescue with job training, thus teaching unemployed and homeless adults the skills needed to work in the food service industry. With support from the FEED Act, community kitchens will receive much-needed resources to help collect rescued food and provide two million meals each year to the hungry. Successful FEED Act-type programs already exist. For example, in Charlotte, North Carolina, the Community Culinary School recruits students from social
service agencies, homeless shelters, halfway houses and work release programs. And just around the corner from here, 25 students recently began training in the DC Central Kitchens 68th culinary job training class. This is a model program, which began in 1990, and it is always a great privilege to visit the Kitchen and meet with the individuals who have faced adversity
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but are now on track for a career in the food service industry. We also must do more to help Americas 12 million hungry children get on the right track. As a result of hunger, these children have higher levels of chronic illness, depression and behavior problems. This is a travesty that can and must be prevented, and school feeding programs
provide a critical means to this end. The National School Lunch Program feeds 30 million children in more than 100,000 schools each day. While reduced price meals are available to students whose family income is below 130 percent of the poverty level, state and local school board members have informed me that many families struggle to even pay this fee. In too many cases, this is creating an
insurmountable barrier to participation. Thats why I am a strong supporter of eliminating the reduced price fee for these families and harmonizing the free income guideline with the WIC income guideline, which is 185 percent of poverty. In 2004, we succeeded in having a five-state pilot program authorized, and since then, a number of colleagues have joined me in urging funding for the program.
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NOTE: You should specify in text, based on the card, what the CTC can do
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strings and the regulations that accompany them might allow greater opportunity for innovations in service delivery.
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percent of the gift if the gift goes to state-approved organizations for two years. Smith said that element is important. "We couldn't afford to make that kind of contribution," he said. He said the trick is to fill out the application early in the state's fiscal year, which begins July 1. The program is so popular, Smith said, that it fills up quickly. When the program first started, Smith Village made a smaller donation to Junior Achievement. In this fiscal year, a total of $30 million in tax credits was authorized for scholarships for students attending both public and private schools. It also allows for giving to education programs in public schools. According to the state Web site, the tax credits can be applied to the corporate income tax, capital stock franchise tax, bank and trust company shares tax, title insurance company shares tax, insurance premiums tax or mutual thrift institutions tax. Two months ago, Smith Village Home Furnishings sent checks totaling $10,000 to three local
organizations: $4,000 to Junior Achievement of South Central Pennsylvania; $3,000 to the York County Library System; and $3,000 to the Susan P. Byrnes Health Education Center. Lyn Buckler-Bergdoll, president of Junior Achievement of South Central Pennsylvania, said about 20 companies have given to her organization because of the tax credit. "Junior Achievement is funded through contributions and fund-raising," said Buckler-Bergdoll. "Some schools do make contributions, but they only pay for about one-fifth of the cost." Katie Herrington of the Susan P. Byrnes Health Education Center said the money is used to help schools bring some 60,000 students to programs there. She said "quite a few" businesses have taken advantage of the tax credit. Most of the contributors have been donors all along, and the credit has enabled them to increase their gifts. "It's a
win-win for everyone," Smith said. "It's great for them (the charitable organizations) and good for us that we can help some local organizations."
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Senior Fellow at the Center for Public Justice in Washington, D.C. (Stanley W., Notre Dame Journal of Law, Ethics & Public Policy, Dont Look to Us: The Negative Responses of the Churches to Welfare Reform 1997, lexis) In Washington, two distinct strategies have been proposed to make government more supportive of the anti-poverty efforts of religious and community groups. The most publicized plan is the "Project for American Renewal" proposed by Sen. Dan Coats (R-Indiana). Launched in September 1995 at a Capitol Hill press conference by Sen. Coats and William Bennett (of The Book of Virtues), the initiative consists of more than a dozen separate proposals designed to promote the renewal of civil society by putting government influence and resources on the side of "private and religious institutions that shape, direct, and reclaim individual lives." n6 At a press conference in June, 1996, Rep. John Kasich (R-Ohio) joined Sen. Coats as co-sponsor of the Project's "Phase II," a campaign in both chambers for enactment of the bills. The "centerpiece and symbol" of the Project, says Coats, is a federal charity tax credit, a dollar-for-dollar reduction in federal income taxes of up to $ 500 ($ 1000 for joint filers), to match [*671] donations to qualified charities. Eligible charities are defined narrowly: they must be able to demonstrate that their "predominant activity" is the provision of anti-poverty services to poor persons and families; they must devote at least seventy percent of their expenditures to direct anti-poverty services; and in calculating that service ratio, they may not count as service to the poor any expenditures to influence policy making or to provide legal assistance. n7 On the other hand, church ministries and religious charities, if they are organized as tax-exempt nonprofit organizations, are eligible to participate. Indeed, Coats seeks in particular to undergird religious charities, for they "not only feed the body but touch the soul," n8 and he has featured them in his hearings on the effectiveness of non-governmental social-service providers. n9 Coats conceives his federal charity tax credit to be a way for government to support such organizations without either hobbling them with red tape or "offending the first amendment." n10 In his conception, the tax credit is not a substitute for the social safety net, but rather a way to supplement it and make it more effective by increasing the resources of religious and private charities. n11 A second strategy for expanding the anti-poverty role of those charities has been championed in Congress by Sen. John Ashcroft (RMissouri). He originally introduced his "charitable choice" plan to direct a portion of federal welfare funds to charities in his own bill to transform the AFDC program. When the Republican leadership's welfare bills were put into play in 1995, Ashcroft was able to get the charitable choice provision included. Charitable choice was accepted by Congress at the end of 1995 as part of the Republican welfare reform legislation (H.R. 4), although the legislation was vetoed by the President in January, 1996. However, Ashcroft's idea was retained when Congress took up welfare reform again in the summer of 1996, and it became [*672] the law of the land when President Clinton signed the federal welfare reform bill on August 22, 1996.
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AT: Free-Riding
Free-riding does not occur the economic argument of independent utility functions proves Beaulier and Hal, 08 Department Chair and Assistant Professor of Economics, Stetson School of Business and Economics, Mercer University (Scott and Joshua C., Collective Consumption Externalities and Charitable Giving, New Perspectives on Political Economy, Volume 4, Number 1, pp. 23-40, //MDP)
Friedmans claim was picked up by others.2 Shortly after Friedman, Hochman and Rodgers (1969) claimed that private charity and transfers were underprovided in a free market because of people free-riding on the donations of others. At the core of their argument was the notion that people have interdependent utility functions, i.e., the utility of person A is dependent in part on the utility of person B. In this paper, we question whether charity will be underprovided in a free market because of free-riding on others donations. We first look at the overall role interdependent utility functions play in a persons decision to give. Most charitable giving seems to occur because of the direct benefits received by the
donor. To the extent people do have interdependent utility functions , interdependence does not seem to matter on the margin since most attempts to solicit donations do not appeal to the welfare of those helped by the additional donation . Private motivations for giving significantly reduce the argument for government intervention because private charity will reduce or eliminate the gap between the market failure level of charity and redistribution and the socially optimal level of charity and redistribution . Second, even if interdependent utility functions exist and free-riding occur s, the resulting outcome is not inefficient because no resources are misallocated. Interdependent utility functions generate pecuniary externalities, which do not misallocate resources. The ideal condition, where no free-riding occurs, is analogous to a market environment with no competition . Just as an absence of competition would not be good for competitive markets , an absence of pecuniary externalities in charitable consumption would not be good because much of the innovation in charitable fund-raising flows from the pecuniary externality associated with charitable giving.
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even if bureaucrats and politicians had the necessary information about external costs , they lack the proper incentives to be correcting for market failures (Shleifer and Vishny 1998).5 Over time, policymakers in Washington have ignored the criticisms of market failure theory and latched on to the academic writings of market failure theorists . The new literature on market failure theory helped politicians justify interventions , and it undoubtedly affected the general publics attitude towards government . As Lord Keynes (1936, 383) put it: the ideas of economists
and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Hayek (1960 [1949], 371) concurred with Keynes, when he wrote, [intellectuals] have probably never exercised so great an influence as they do todayby shaping public opinion. For both Keynes and Hayek, the views of the intellectual come to shape the political landscape in an extremely watered down fashion. When policymakers latch onto an academic idea , errors often occur. Many
of the ideas selected by policymakers are not the best ideas or the right ones, but, rather the ideas progressive intellectuals and policymakers stand behind . Market failure theory is one such idea. It is hard to imagine there ever being a time where a majority of economists supported widespread interventions to correct for market failure . Yet, market failure arguments gained traction because they provided intellectual support for a variety of government interventions. The implicit assumption of the market failure literature is that with enough regulation, all problems can be solved. By constantly passing new laws and massaging our fear to be free, politicians supply the false sense that government is solving market failures. Like Demsetz (1969), we think market failure theory suffers from the nirvana fallacy. In its simplest form, the nirvana fallacy is a comparison of real markets with perfect government. When it comes to charity and redistribution , the public good characteristics of charity makes it prone to free-riding behavior . The mere possibility of public good characteristics in charity is then taken as sufficient proof of the need for government intervention. But, government interventions are determined by fallible men and women with their own biases and agendas. : (1) evaluate a market failure argument on its own terms (i.e., is it really a market in the sense of misallocating resources ), and (2) compare the robustness of markets and government in addressing the failure in the short and long run . Comparing the robustness of markets over the short and long run is important because government could be more efficient in mitigating the short-run effects of a market failure but crowd out the evolution of decentralized institutional mechanisms , which would be superior in the long run .
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AT: No Donations
This argument has a political bias people give astronomical amounts to private charity this assumes all their warrants. De Vous, 03 Public Policy Manager of the Acton Institute (Phillip W., What Gives? The Possibilities of Private Charity, ttp://www.acton.org/commentary/commentary_144.php, //MDP)
With red ink predicted as far as the eye can see due to soaring state and federal budget deficits and with overall economic recovery still a hope to be realized, there is one area of the economy that is thriving despite all
predictions to the contrary --private charity. According to Giving U.S.A.'s annual report, published by the American Association of Fundraising Counsel (AAFRC), Americans gave an estimated $240.92 billion to charity in 2002. Even more surprising, Giving U.S.A. reports that, in a year that was
very hard on the corporate bottom line, charitable contributions by corporations and corporate foundations came in at $12.19 billion, an 8.8% increase over the previous year. The fact that charitable giving remains so high even
while economic growth is so low runs counter to the arguments of many who advocate statist models of charity. Given the disparity between the dire predictions of self-interested stinginess employed by welfare state advocates and the truly expansive nature of American generosity, one is led to inquire: What gives? Contrary to the agitations of many on the political left, America is a generous nation, and as a matter of fact, the most generous nation in the world. While it is true that American culture is often overly materialistic, there is also a deep current of altruism that pervades the American character. Leo P. Arnoult, chairman of the AAFRC Trust sums up this spirit: ( Charitable) giving did hold its own in spite of reports of great difficulty in fundraising . Giving is still pervasive and broad, perhaps because our culture treats all philanthropic activity , even the widow's mite, respectfully. It is this culture of respect for philanthropic activity , which is the concrete realization of people's desire to assist in addressing legitimate charitable needs , that motivates the vast majority of charitable giving, Obviously, this remains true even when the bottom line is much diminished due to economic circumstances . This reality undermines the selfishness thesis that underwrites much welfare state advocac y. Most welfare state advocates have a low estimation of the potential of altruism , generally preferring schemes of income redistribution over individual charity in meeting the needs of people . Given the pervasive and resilient character of American charitable giving, the present high levels of charitable giving point out the wisdom of further realizing in policy those incentives that would increase the ability of private charity to meet the needs of the common good. A policy agenda that recognizes the power of private charity could go far in strengthening the culture of respect for philanthropic activity that characterizes the citizenry of this nation .
Even if thats true- CTC allows them to grow enough to solve Matthews 98 [Merill, vice president of domestic policy for the National Center for Policy Analysis, a nonpartisan, nonprofit public-policy research
institute based in Dallas, Charity Tax Credits--and Debits, Jan/Feb edition, http://www.hoover.org/publications/policyreview/3566647.html]
Private-sector charities are too small to handle the huge number of welfare recipients.
The charity tax credit would create a dynamic welfare system in which taxpayers assess each charitys record of meeting the needs of the poor. To the extent that taxpayers direct tax dollars to private-sector charities, those organizations would have the funds to grow and meet the needs of more people.
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AT: No Donations
There are a lot of reasons people donate to charities their motivations are extremely complex Beaulier and Hal, 08 Department Chair and Assistant Professor of Economics, Stetson School of Business and Economics, Mercer University (Scott and Joshua C., Collective Consumption Externalities and Charitable Giving, New Perspectives on Political Economy, Volume 4, Number 1, pp. 23-40, //MDP)
One of the primary economic arguments for the public provision of charity is that it the supply of charitable activities will be underprovided in a free market because charitable giving has the properties of a collective consumption good . Technically speaking, collective consumption
goods are those for which a many people can simultaneously consume the good without reducing the amount available for consumption.6 National defense is the classical example of a collective consumption good. An increase in a countrys population increases the number of people consuming national defense without reducing any other citizens consumption. The incentive to free ride increases with collective consumption goods, such as national defense, because people can enjoy the benefits of national defense without contributing to it. If we make a few simplifying assumptions about a persons willingness to pay for collective goods, government interventions, such as compulsory taxation, can improve upon the voluntary outcome.
People donate time and money to charitable organizations for many reasons. Some donate for personal edification while others donate because they care about the increased utility of those helped through an organizations programs . When a persons utility depends on the utility of others, they said to have interdependent utility functions . Charitable donations increase the
utility of people with interdependent utility functions because when we know the recipients of charity are better off, we are made better off. If donors have interdependent utility functions, charitable giving is a collective consumption good where all potential donors benefit when someone gives to charity. If I am a potential donor whose utility depends on the utility of the African poor, my utility increases when The Bill and Melinda Gates Foundation donates $47 million to help treat tropical diseases plaguing Africas poor (Dugger 2006). Just as in the case of national defense, people can enjoy the warm glow from knowing the poor are being made better off without having to contribute. According to Hochman and Rodgers (1969), some people will free ride on the charitable donations of others, which means the supply of charitable giving in a free market will be underprovided. Maximizing utility, they argue, requires government intervention to ensure the optimal level of transfers is made to the poor (Holcombe and Sobel 2000). The possibility of an insufficient supply of giving has led to government
There are many problems with this argument. At the most basic level, what if people do not have interdependent utility functions? Or to put it another way, why dont all donors free ride? Many people obtain personal pleasure in giving even though they cannot observer the effect of their actions on the welfare of the recipients (Arrow 1972). While Arrows formulation of donor motivation is surely not true for all donors (Rose-Ackerman 1982), a considerable amount of donor motivation for giving does not appear to be about the welfare of the recipient . Donors appear to care about the warm glow associated with charitable giving, and benefit from the wealth signal they send when they giv e (Glazer and Konrad 1996). When we look at the way in
programs that aim to increase giving, such as the charitable deduction (Hochman and Rodgers 1977).
which charities solicit donations, they are clearly not appealing to donors altruistic motives. Development officials do not rely primarily on stories regarding the charitys work to raise money. While the charitable works are always part of the marketing
actions of development officials point towards donors being motivated by the approbation flowing from giving or the signaling value of a donation. One manifestation of the signaling motivation is in naming rights, where a new facility or program is named after a donor. Or charities provide different tiers of giving, with the choicest of status gifts being given to the highest donors (e.g., gold circle members receive regular updates from the president and monthly donor receptions). The warm glow is also a powerful motivator . Donors not only want to see the poor better off, but they want to feel good about having been part of the effort. Andreoni (1990) quotes the Red Cross using the slogan Feel good about yourself Give blood! Donors appear to be motivated by many reminders of their charitable deeds , either for internal reasons or because of external approbation of their effort s. Spreading charitable giving around instead of focusing on the one cause a person feels best about is more evidence against the altruistic giving explanation .8 McGranahan (2000) examines seventeenth-century English wills and finds more bequests left to the poor when the
campaign, the
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deceased had fewer immediate family and friends . Even in death, people appear to be more concerned with how they are perceived by others . In economic models where preferences are modeled as
being purely altruistic, public giving reduces private giving dollar-for-dollar: if all you care about is the welfare of the recipient, government financed transfers will cause you to reduce your voluntary donation by the amount of the forced transfer. Yet field tests fail to find considerable crowding out of private charitable donations (Clotfelter 1985; Kingma 1989; Ribar and Wilhelm 2002).9 The fact that there is not complete crowding out suggests that donations to private charities are often motivated by factors other than the welfare of the recipient.10 If for example, you also care about the warm glow you receive from donating to help the poor, you are not going to stop doing so because the government is now taxing you to provide charity.11 We are
not making a normative claim about peoples motivations for giving . Rather, we are arguing against the idea that people are primarily motivated by altruistic concerns . We do not believe giving for purely altruistic reasons has any moral superiority over other kinds of giving. Adam Smith (1759 [1790], section III.I.6) said it best in The Theory of Moral Sentiments when he wrote, To be
amiable and to be meritorious; that is, to deserve love and to deserve reward, are the great characters of virtue; and to be odious and punishable, of vice. But all these characters have an immediate reference to the sentiments of others. Virtue is not said to be amiable, or to be meritorious, because it is the object of its own love, or of its own gratitude; but because it excites those sentiments in other men.
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If people were able to direct their tax dollars to private charities, they would scale back their overall commitment to aiding the poor. In fact, just the opposite would likely occur. Most economists recognize what is called the "crowding out" effect: When government spending increases, private spending declines. In a 1984 article in the Journal of Political Economy, Russell Roberts found that private relief expenditures rose steadily in the United States until 1932, and declined steadily thereafter as government welfare spending rose. An article in the National Tax Journal that same year found that cuts in government spending resulted in increased interest in private contributions. Thus it is entirely possible that reducing government welfare spending through a tax credit for charitable giving might result in an increase in total spending on the needy.
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Extensive research done on this issue--such as Charles T. Clotfelters Who Benefits from the Nonprofit Sector?--found that there is no evidence that wealthier people give disproportionately to organizations that are closer to or primarily benefit upper-income families. Furthermore, the premise of this criticism is that only wealthy people would get a tax credit. However, since the tax credit would be extended to everyone who pays taxes, many lower and middle-income working families who live near poor communities in need of help would be able to participate. In addition, private-sector charities seeking to inform people about their missions would reach out to groups such as schools and churches whose membership often encompasses a wide range of incomes.
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AT: Fraud
Turn- the CTC gives individuals an incentive to watch for fraudulent operations Matthews 98 [Merill, vice president of domestic policy for the National Center for Policy Analysis, a nonpartisan, nonprofit public-policy research
institute based in Dallas, Charity Tax Credits--and Debits, Jan/Feb edition, http://www.hoover.org/publications/policyreview/3566647.html]
Fraud would increase under a decentralized system.
Its hard to imagine fraud thriving any more than under the old federal-state system. However, we could put safeguards into place. For example, existing IRS regulations governing nonprofit organizations prohibit the misuse of a charitable organization for personal or financial gain--and the charity tax credit would relax none of those restrictions. But the key to eliminating welfare fraud is to give individuals rather than bureaucrats an incentive to police the system by determining which charities provide the best value for their money.
If lifting the poor out of poverty is the goal, then government welfare programs have been a colossal failure. According to the Congressional Research Service, this country has spent more than $5 trillion on public welfare programs since 1960, yet the poor as a percentage of the total population has slightly increased, to about 15 percent.
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conservatives dislike the charity tax credit because they believe that, by restricting eligible contributions to groups that provide direct assistance to the poor, it implicitly accepts a "liberal" definition of charity as a dependency-inducing handout. These critics argue that establishing such a credit will simply replace government handouts to the poor with private-sector charity that operates on the same model. In their view, public officials should stay out of the business of trying to define charity and
concentrate instead on creating the conditions under which the poor can escape poverty.
It is true that many private-sector charities have been compromised by a handout mentality. But this argument overlooks the ability of individual citizens to make discerning choices in their charitable giving and to create new forms of assistance that promote self-sufficiency. Such a position is at odds with conservative philosophy, which trusts the common-sense judgment of ordinary citizens. It is also challenged by the existence of the many charities that promote self-sufficiency while providing assistance to the poor.
A good example of such a group is Bridge of Hope, a Christian nonprofit based in eastern Pennsylvania that helps single mothers formerly on welfare achieve financial independence through employment. The program works by linking each participant with a "mentoring group" of 8 to 12 volunteers from a local church. The members of this group provide an indispensable network of support for the single mother and her children as she achieves self-sufficiency. Although relatively small, Bridge of Hope has been remarkably successful. Since it first began working with single mothers in 1989, more than two-thirds of the women it has helped have retained permanent housing and full-time employment. Over the past three years, the success rate has averaged more than 80 percent. We dont know how many groups like Bridge of Hope exist in the private charitable sector. Whatever the number, it is certainly not enough. However, this
is not an argument against the charity tax credit but for it, since a credit would help to spur the formation of more such groups, and would raise the profile of those that already exist. The credit envisioned here is specifically designed to promote these ends, in two ways. First, it adopts a broad definition of assistance, thereby making room for creative efforts to help the poor, such as microlending to encourage entrepreneurship. Second, by requiring qualifying groups to limit their advocacy and their dependence on government funding, it effectively excludes those groups most likely to adopt the handout mentality.
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In a document outlining his 2010 budget plans, the president proposes to limit the tax rate for itemized deductions at 28 percent for families making more than $250,000. That would reduce by as much as 20 percent the amount wealthy taxpayers could reduce their federal tax payments for charitable donations. Under the current system, taxpayers who are in the 33 percent or 35 percent tax brackets use that rate to claim deductions.
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Under this proposal, the banker in the example cited above would still receive a higher subsidy rate on his or her home purchase and charitable donations than the teacher, but the advantage would shrink from 20 cents on the dollar (35 minus 15) to 13 cents on
the dollar (28 minus 15). The tax treatment of itemized deductions would still be inequitable and inefficient, but less so.
Despite its merit, the proposal has generated considerable political opposition, in part because of overblown claims about its impact on charitable giving. Research about the effects of tax incentives on donations suggests that the proposal would reduce total charitable giving by a little less than 2 percent .[5]
Significant political opposition to CTCs Eisenberg, 99currently a Senior Fellow at the Georgetown University's Public Policy Institute. Prior to his coming to Georgetown in January 1999, he served for 23 years as Executive Director of the Center for Community Change, a national technical assistance and advocacy organization working with low income and minority organizations and constituencies throughout the country. (Pablo, Can a Charity Tax Credit Help the Poor? July, 1999-August, 1999, The American Prospect, lexis)
Substantial political opposition to the measure would also come from many other nonprofits that have either lost money in recent years or are currently struggling to make their budgets. Arts and culture groups, educational institutions, recreation groups, and main-stream health organizations are among those that would mobilize support against the charity tax credit. Many of these organizations do expend a portion of their funds on antipoverty activities, even though these are not a major part of their overall effort. If antipoverty groups had most-favored status, other nonprofits might reduce their work with low-income people on the grounds that it was more expensive for them to undertake it.
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Liberal Congress proves- companies know theyll have an easier time securing funds for charitable organizations
Washington Examiner 6/26/09 [How the Left's charitable activists manipulate grants,
http://www.washingtonexaminer.com/opinion/columns/david-freddoso/David-Freddoso-on-how-the-Left-49172157.html]
Previously, The Examiner reported how the liberal NCRP and its directors have been both subtly and overtly threatening new federal regulations that would force foundations to give half their money to a narrow set of causes, and with few strings attached. The simplest explanation is that left-wing non-profits, hungry for more foundation money, see an opportunity for a liberal Congress to help their cause. But NCRP's stated reason deserves attention as well. NOTE- NCRP = National Council for Responsible Philanthropy, a charitable organization
CTCs will be supported by both sides of the aisle- liberals like supporting charity and conservatives like reducing the size of government Edlin, 5Professor of economics and law at the University of California at Berkeley, and a Research Associate at the National Bureau of Economic Research. He is coauthor with P. Areeda and L. Kaplow of the leading antitrust casebook. He was formerly the senior economist covering regulation, antitrust, and industrial organization at the President's Council of Economic Advisers, and has taught or held research positions at Yale, Stanford, and Columbia. Ph.D., J.D, Stanford, 1993; A.B., Princeton, 1998. (Aaron S, The Choose-your-Charity Tax: A Way to Incentivize Greater Giving, 2005, The Economists Voice, Vol 2, Issue 3, Article 3 < http://works.bepress.com/aaron_edlin/41/>)
The Choose-your-Charity Tax ought to garner bipartisan support. Liberals should like the tax, because it will route more money to their favorite causes. And conservatives should like it because it moots the problem they often raise: that big government bureaucracies are often ineffective and inefficient at dealing with problems. Conservatives favor private, not public solutionsand have long said that private charity is more efficient than higher taxes. In this case, they get the best of both worlds: The matching advantage of the tax system that I described above, and the ability to greatly amplify the thousand points of light that they see in private charities.
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Beyond its practical benefits, a charity tax credit would address what is perhaps the fundamental weakness of the
conservative movement: its inability to articulate a vision of society that speaks to the sense of moral obligation people feel for the less fortunate. The goal is not simply a warmed-over version of the statist forms of "compassion" favored by liberals. Rather, the credit would help address the needs of the poor in a way that is consistent with the ideal of limited government and with the American tradition of active reliance upon the institutions of civil society. Another advantage of a charity tax credit is that it will target assistance to those most directly affected by welfare reform. So far, caseload
reduction has primarily involved those recipients easiest to employ. The real test will come over the next several years as work deadlines and lifetime limits on assistance kick in for the rest. If substantial suffering results, pressure will build to abandon these policies. A charity tax credit will help prevent this outcome and allow us to implement welfare reform as it was originally conceived. The purpose of the credit is not to create a token supplement to the welfare bureaucracy, but to begin shifting both resources and responsibility for assisting the poor from government to private-sector charity. To that end, a charity tax credit should reduce public spending--including spending on welfare programs--by a dollar for every dollar credited to taxpayers under the program . Conservatives would adore a CTCit would drastically remove the federal government from solving societys harms Eisenberg, 99currently a Senior Fellow at the Georgetown University's Public Policy Institute. Prior to his coming to Georgetown in January 1999, he served for 23 years as Executive Director of the Center for Community Change, a national technical assistance and advocacy organization working with low income and minority organizations and constituencies throughout the country. (Pablo, Can a Charity Tax Credit Help the Poor? July, 1999-August, 1999, The American Prospect, lexis)
Conservatives in Congress and elsewhere would like to see the federal government out of the poverty business, its role taken over by churches, nonprofits, and philanthropic institutions. A charity tax credit would accelerate such a transition. So would other tax credits and further domestic budget cuts.
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http://www.ncpa.org/commentaries/an-answer-to-critics-of-mixing-faith-charity-tax-dollars> )
When taxpayers donated to a qualified charity, they would be permitted to claim a credit on their federal income tax returns. Ideally, each dollar donated would reduce a taxpayer's tax liability by one dollar. The loss of revenue from the tax credits would be offset by reductions in block grants or matching fund payments to the states in which the taxpayers reside. All the decisions would be made by individuals, not by government. And for that reason, taxpayer choice has none of the problems left- and right-wing critics are currently complaining about. We have a long tradition of allowing individuals to deduct contributions to religious institutions. Taxpayer choice would continue that tradition, allowing taxpayers to support those organizations they believe are the most effective. There would be no tax credit for donations to churches. There would be credits for donations to relief services organized by churches. But no one would have to subsidize someone else's religious views - either directly or indirectly.
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(AFP), which released its 110th Congress Scorecard today. The Scorecard is based on 18 roll call votes in the House and 17 roll call votes in the Senate that include votes against tax hikes, in favor of fiscal discipline, against undue regulation, and for free trade. The full scorecard is available online at www.AmericansforProsperity.org. CLICK HERE. Citizens who want to know whether their federal legislators made the grade on taxpayer issues can consult our Key Vote Scorecard, which grades
on average, lawmakers voted more often in favor of big-government special interests than with taxpayers interests. Our scorecard is a useful tool for citizens to see how their individual lawmakers stack up, and where there is need for improvement. AFP identified 18 key Senate votes and 17 key House votes that would have a significant positive or negative impact on the growth of government .
lawmakers on their efforts to restrain the growth of government, said AFP President Tim Phillips. Unfortunately,
Among those were votes on misguided proposals to eliminate the secret ballot in union organizing elections, expand the State Childrens Health Insurance Program, implement a cap-and-trade regulatory regime, and hike taxes on domestic oil producers. On the flip side, AFP also scored votes on proposals to implement earmark reform measures, permanently repeal the death tax, and preserve the 2001 and 2003 tax cuts.
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Support for free markets does not equal support for a purely laissez faire approach, however. Voters are evenly divided over the need for more government regulation of big business: 46% support the idea, and 43% are opposed. In December, 52% favored more regulation, and only 35% were opposed. (Want a free daily e-mail update? Sign up now. If it's in the news, it's in our polls.) Rasmussen Reports updates also available on Twitter. The 77% support for free markets provides an interesting contrast to another recent survey which found that just 53% prefer capitalism over socialism. It appears that many people make a significant distinction between capitalism and a free market economy. Free
markets are seen in a better light than capitalism because of the recent behavior by Americas largest corporations , notes
Scott Rasmussen, founder and publisher of Rasmussen Reports. Its hard for people to embrace a system that lets big business keep profits in good times and then asks for taxpayer bailouts when times are tough. If thats the way capitalism is perceived, it should be no surprise that people prefer free markets . Seventy percent (70%) of voters believe that big business and big government are generally on the same team working against the interests of consumers and investors. A plurality of voters (46%) say that small businesses benefit more from free markets than big business. Thirty-five percent (35%) hold the opposite view. Most Democrats think big businesses benefit more from free markets, while most Republicans and unaffiliated voters say small businesses are more likely to benefit. By a 62% to 23% margin, voters also believe that small businesses are hurt more by regulations than big business. This finding is likely driven by public understanding of the way Congress works. Earlier surveys found that 68% say most business leaders contribute to political campaigns primarily because the government can do so much to help or hurt their business. Other data shows that 59% of American adults believe that when members of Congress meet with regulators and other government officials, they do so to help their friends and hurt their political opponents. In a solid display of agreement across party lines, a majority of
most Americans still think that the federal bailouts were a bad idea. But Americas Political Class holds an entirely different view. A number of
Democrats, Republicans and unaffiliateds share this view. Looking back, same time,
indicators suggest some growing short-term optimism about the economy along with a decline in long-term optimism. At the
there is a growing concern that the government may do too much in responding to the nations economic crunch. The image of corporate CEOs has hit rock bottom as they are viewed less favorably
than members of Congress. Small business owners are viewed in a very positive light.
Big government policies are publically unpopular Toomey, 08 President of the Club for Growth (Patrick J., Swing Voters Not for Big Government, Accessed Via Google, http://reddauphin.com/5/Swing_Voters_Not_for_Big_Government, //MDP)
they should not mistake their victory for a big-government mandate. The evidence tells a very different story . A poll commissioned by the Club for Growth in 12 swing congressional districts over the past weekend shows that the voters who made the difference in this election still prefer less government -- lower taxes, less spending and less regulation -- to Sen. Obama's economic liberalism. Turns out, Americans didn't vote for Mr. Obama and Democratic congressional
Barack Obama and congressional Democrats won big on Tuesday night, but candidates because they support their redistributionist agenda, but because they are fed up with the Republican politicians in office. This was a classic "throw the bums out" election, rather than an embrace of the policy views of those who will replace them.
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Americans still favor fewer government services and lower taxes compared with 28% who favor more government services and higher taxes . "Big government conservatism" was a nice think-tank
proposition; it merely lacks support from actual voters.
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government housing codes impose detailed requirements on the size , architecture, and building materials for new permanent housing , as well as on specialized and extremely expensive contract work for electricity, plumbing, and other luxuries, they effectively obstruct or destroy most efforts to create transitional , intermediate, or informal sorts of shelter that cost less than rented space in government-approved housing projects , but provide more safety and comfort than living on the street .
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Current health care ensures dependency and distorts the market terminally turns solvency for people in the health care system Blevins, 97 (Susan A, President of the Institute for Health Freedom, Restoring Health Freedom: The Case for Universal Tax
Credit for Health Insurance Policy Analysis, http://www.cato.org/pubs/pas/pa-290es.html) Nobel laureate economist Milton Friedman explains that the current tax law affects the cost and choice of health care benefits in two ways: (1) It leads workers to rely on employers, rather than themselves, to finance and manage health care. (2) It leads workers to take a larger fraction of total compensation in the form of health care. Friedman concludes, If the tax exemption [for health insurance] were removed, employees could bargain with their employers for higher take-home pay in lieu of health care, and provide for their own health care, either by dealing directly with health care providers or through purchasing health insurance.22 The current tax law also encourages workers to join HMOs. In cases in which employers offer insurance only through an HMO,23 workers are forced to choose the HMO or forgo the tax exclusion for health insurance altogether.24 Thus, most people accept the health insurance plans offered by their employers, even if that means joining an HMO. Scott Holleran, executive director of Americans for Free Choice in Medicine, notes, Government virtually created managed care in the form of HMOs and encourages them through a tax code that forces Americans to get their health insurance through their employer. Don't blame the market for what the government has done to our system. The free market didn't create HMOs; government did.25 The growth in HMOs did not occur in the free market; it was spawned by federal legislation in 1973.26 Backed by the Nixon administration and Sen. Edward Kennedy (D-Mass.), the HMO legislation required employers to offer workers the option of joining an HMO.27 The number of Americans enrolled in HMOs grew Page 9 from 6 million in 1976 to more than 46 million in 1995.28 Today, some 70 percent of private employees are enrolled in some form of managed care.29 Keep in mind that employers often determine the price a worker pays for health insurance, so employers can set prices that encourage workers to join HMOs. The true demand for HMOs remains unknown, given that the federal tax law and HMO legislation have distorted the market.
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Tax credit-based systems are key to personal choice only a free market can avoid this profound violation of personal choice and conscience Nina Owcharenko is a Senior Policy Analyst for health care at The Heritage Foundation's Center for Health Policy Studies, Health Care Tax Credits: Designing an Alternative to Employer-Based Coverage, Heritage Foundation, November 8, 2005
Second, todays employer-based system limits personal choice. Workers must depend on their employers to select a plan and a plan design to meet their personal health care needs. Employers attempt to offer their employees health plans that will satisfy the diverse needs of their workforce. In large firms, a choice of plans is common practice. The situation, however, is very different with small firms. Today, 81 percent of small firms those with from three to 199 employeesoffer just one plan.[12] Ultimately, this one-size-fits-all approach does not and cannot accommodate diverse individual needs or preferences for coverage. Employers often do the best they can, but in order to control rising costs, they secure contracts with insurers or managed care companies that micromanage benefits, medical treatments, proce dures, or access to specialists. The result: employee dissatisfaction and more labormanage ment disputes. The bitter congressional Patients Bill of Rights debate in the late 1990s exposed the high level of patient and physician frustration with managed care arrangements that limited access on the basis of third-party determinations of medical neces sity. Also evident was great dissatisfaction with health plan choices made by employers relative to HMO gatekeepers or restrictive provider networks. Curiously, instead of doing the right thing and taking steps to expand patient choice and ownership of medical plans and procedures, the major congressional bills passed by the House and Senate would have added new avenues of litigation to the health care system, combined with a massive new layer of costly federal regulation of private health plans, driving the costs of health care even higher and pricing even more families out of the health care market. [13] Beyond the issue of access to medical treatments and procedures, there is the increasingly important issue of the ethical conflict involved in forcing individuals and families to pay for certain medical treatments and procedures that they may consider objectionable. For example, a worker and his family may have a serious moral objection to paying for abortions through their insurance premiums, but the employers health plan may include abortion in its standard coverage. Conversely, a worker may feel it is his or her right to purchase coverage for abortion or other procedures, but the employer may refuse to cover these procedures. Forcing Americans to pay through premiums for certain procedures they find morally objectionable or unethical is a profound violation of personal choice and conscience. With advances in biomedical research, such as the growth of medical treatments based on embryonic stem cell research, reproductive cloning, or genetic manipulation, Americans ethical and moral dilemmas will only become more pronounced as health coverage based on the fruits of this rapidly advancing research for medical treat ments expands.[14]
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Advanceability is key allows recipients to claim credit up-front, ensuring insurability for low-income individuals Nina Owcharenko is a Senior Policy Analyst for health care at The Heritage Foundation's Center for Health Policy Studies, Health Care Tax Credits: Designing an Alternative to Employer-Based Coverage, Heritage Foundation, November 8, 2005
Advanceable. An advanceable tax credit would allow individual credit recipients to claim the credit up front when insurance premiums are due rather than wait until the end of the year for reimbursement. This would ensure that the subsidy is available for application in a timely fashiona particularly desirable feature for low-income individuals who may have limited disposable resources, which the credit is intended to relieve.
Assignability is key allows effective outreach and a strong participation rate Nina Owcharenko is a Senior Policy Analyst for health care at The Heritage Foundation's Center for Health Policy Studies, Health Care Tax Credits: Designing an Alternative to Employer-Based Coverage, Heritage Foundation, November 8, 2005
Assignable. An assignable tax credit would be forwarded directly and automatically to the insurer of the tax credit recipients choice, leaving only the balance, if any, to be billed to the recipient.[28] This is a key feature advanced by the Bush Administration in its health care tax credit proposal. Congress might wish to add another feature to encourage a stronger participation rate: a system of automatic enrollment through the place of work, or through some other entity, to qualify individuals for the credit. This could also facilitate the provision of plan information from a menu of available coverage options.[29] It is imperative that the basic design features make the process of applying and receiving that tax credit as simple as possible. In a recent analysis of an existing tax credit, the Trade Adjustment Assistance (TAA) tax credit, Economic and Social Research Institute policy analyst Stan Dorn and his co-authors conclude, among other things, that the tax credit process must have effective outreach and be consumer friendly.[30]
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Medicaid fails fraud, waste, and over-bureaucratic regulation New York Times, At Clinic, Hurdles to Clear Before Medicaid Care, October 17, 2005
The program - which consumes more than one-third of the state budget - is vulnerable to fraud and abuse by unscrupulous providers, wasting billions of dollars annually, experts and government officials say. But New York does less than other states to police payments to hospitals, nursing homes and ambulette companies, or to prosecute the guilty. And yet, life at Morris Heights makes clear how keenly New York scrutinizes ordinary patients trying to get into Medicaid, in the name of ensuring that ineligible people cannot slip through. "We do a better job than we'd do if we didn't have all of these requirements in place," said Dennis P. Whalen, executive deputy commissioner of the State Department of Health. But experts say that kind of cheating is a small part of Medicaid fraud. The problem, says Elisabeth Benjamin, former chief of health law at the Legal Aid Society, is that "the state looks at each applicant as a potential criminal." Yet the typical people striving to enroll in Medicaid are poor children and their mothers, clients who cost relatively little to cover. Children and able-bodied adults - mostly women - are about three-quarters of New York's Medicaid patients but account for about one-quarter of the expenses. Those costs pale next to what the state spends caring for disabled and elderly patients, who account for more than 70 percent of the spending - partly because New York spends far more than other states on services like nursing homes, home care and hospitals, while scrimping on the most basic form of care, doctor visits. Devoting more effort to screening ordinary patients than to examining providers "is pretty ludicrous," said Robert Goldberg, a senior fellow at the Manhattan Institute, a conservative group critical of Medicaid. "Where they're looking isn't where the major money is, or where the major fraud is."
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Focusing on all individuals, regardless of insurance status, is crucial for successful health care multiple warrants Nina Owcharenko is a Senior Policy Analyst for health care at The Heritage Foundation's Center for Health Policy Studies, Health Care Tax Credits: Designing an Alternative to Employer-Based Coverage, Heritage Foundation, November 8, 2005
It is certainly reasonable to argue that in the current fiscal situation, it is most urgent to help the currently uninsured. Not only do these individuals have no consistent medical protection, whether from catastrophic health emergencies or other problems, but they also are a drain on existing taxpayer-funded, uncompensated care. However, it can also be argued that a tax credit focused only on the uninsured is unfair and raises serious unintended consequences and equity issues. Limiting a credit only to the currently uninsured ignores those similarly situated individuals who take responsibility and purchase coverage on their own without preferential tax treatment. Furthermore, it also could encourage those with existing coverage to drop it, creating a gap in coverage, in order to qualify for the credit. Recommendation. It is far more preferable to treat all individuals equitably and not further segment eligibility based on existing coverage. Such an approach would avoid the conflict of penalizing individuals who sacrifice to obtain coverage while rewarding those who do not. Finally, focusing solely on the uninsured does not address the core failures of the current health care system; all it does is provide a stopgap to those who fall through the cracks.
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Tax-funded health care is coercive mandatory charity only actual charitable tax credits solve Brian T. Schwartz, Ph.D. in Electrical Engineering from the University of Colorado, Graduate Science and Technology
Policy Fellow at the National Academy of Sciences, Eliminating the Charitable Tax Deduction: 3 Letters, Denver Post, March 30, 2009 Joel Steins commentary against tax-deductible charitable donations is penny-wise but pound-foolish. By favoring some types of spending and punishing others, the tax deduction indeed violates our freedom to spend our earnings as we please. He suggests that the increased tax revenue from eliminating the deduction could help pay for health care. But compared to the tax deduction, this is a much worse violation of our freedoms. Tax-funded health care is mandatory charity. Unlike voluntary charities, government charities need not compete for and earn your donations. The penalty for tax evasion effectively encourages your donations. If Mr. Stein wants more fairness toward charities, hed support allowing taxpayers to opt out of funding entitlement programs by donating to charities of their choice. For example, if you donate $100 to a low-income medical-care charity, Medicaid loses that funding and you pay $100 less in taxes.
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All things considered, it is somewhat taxing (no pun intended) to contemplate a sequence of events in which offering a pro bono tax credit would not in some way enhance lawyers' participation in pro bono activities. Undeniably, increasing lawyers' participation in pro bono activities would benefit society as a whole. At the same time, a pro bono tax credit would offer the legal profession some needed relief in its efforts to provide legal services to all those in need, including those otherwise unable to financially obtain such services. Thus, the adoption of a pro bono tax credit would result in a rarely experienced "win-win" situation for society and the legal profession.
Tax credit will mean 50 hours a week for lawyers, Jason M. Thiemann, Candidate for Juris Doctor, Hamline University School of Law, Hamline Journal of Public Law & Policy, Spring, 2005, 26 Hamline J. Pub. L. & Pol'y 331
A pro bono tax credit is by no means an end all to the enhancement [*383] of pro bono participation, but it could provide a positive first step towards achieving the ABA's aspirational goals. It seems inconceivable that a pro bono tax credit would fail to enhance pro bono participation in some respect, although the degree of such enhancement remains debatable. Nonetheless, any measure that could shift the legal profession closer to collectively achieving the ABA's aspirational goal of at least fifty hours of pro bono service rendered would undoubtedly be a momentous first step. Thus, this is the primary justification for adopting a pro bono tax credit.
Empirical solvency in the context of poverty policy legal credits effectively use pro bono services Jason M. Thiemann, Candidate for Juris Doctor, Hamline University School of Law, Hamline Journal of Public Law & Policy, Spring, 2005, 26 Hamline J. Pub. L. & Pol'y 331
B. Income Tax Relief Measures Generally speaking, there are a number of tax credits currently available in the Internal Revenue Code. n204 These credits typically fall into four general classifications: "credits for certain taxes, credits for activities that benefit disadvantaged or low-income people, credits for activities that benefit the environment," and "credits for certain [*373] other investments." n205 Historically, the government has permitted the use of tax credits, as well as other tax incentives, as a means of achieving specific societal ends that would otherwise go unsatisfied without some form of governmental enticement. n206 Accordingly, tax credits by in large are designed for the benefit of either disadvantaged groups within society or the betterment of society as a whole. One of the more exemplary tax credits currently available is the Earned Income Credit (EIC), which is a tax credit designed for the benefit of low-income wage earners. n207 The basic function of EIC is to reward low-income working individuals by permitting these workers to recoup a portion of their income taxes withheld [*374] during the taxable year. n208 By allowing this type of legislative grace, EIC recipients are better equipped to provide for their families, improve their living conditions, invest in education, and even establish family savings plans. n209 In sum, the EIC promotes and encourages individuals to work, even though they may be earning meager incomes; it makes work worthwhile for low-income wage earners. n210 More importantly, by enticing individuals to actively participate in the workforce, the EIC "lifts nearly five million people out of poverty every year." n211 Accordingly, the EIC is widely recognized as a time-honored instrument that controls welfare by rewarding working individuals, thereby strengthening impoverished economies. n212 In addition to tax credits, various other tax incentives are available that promote and encourage participation in targeted activities. n213 One such noteworthy tax incentive, arguably more akin to a tax credit aimed at enhancing lawyers' participation in pro bono activities than those previously mentioned, is the recently enacted Teacher Tax Relief Act of 2002. n214 Analogous to a pro [*375] bono tax credit, the Teacher Tax Relief Act was implemented with the principal intent of serving the interests of a particular group, namely school children, rather than for the benefit of the individual actually receiving the tax benefit. In compliance with this Act, teachers are allowed to deduct the expenses for classroom supplies they personally purchase out-ofpocket for their classes. n215 The basis for allowing the deduction lies in improving educational standards by providing some relief for teachers who expend significant amounts of money to equip classrooms and enhance school programs, not on the individual teacher's financial wherewithal. n216 Like all forms of tax relief, however, certain [*376] requirements must be satisfied before the deduction will be allowed, and there are limitations on the expenditure amounts that can be deducted. n217 Though the Teacher Tax Relief Act is not a tax credit per se, similar policy considerations and rationales are implicated in the Act as those implicated in a pro bono tax credit. Therefore, the Teacher Tax Relief Act should be utilized as an ideal model for the establishment of a pro bono tax credit. Misael, Kevin, Matthew, Jack, Anna, Kurt, Grace, Nadia, Nick 83
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Mandatory pro bono work fails - lawyers wont follow the laws and only three states will report Jason M. Thiemann, Candidate for Juris Doctor, Hamline University School of Law, Hamline Journal of Public Law & Policy, Spring, 2005, 26 Hamline J. Pub. L. & Pol'y 331
Despite the ABA's continued efforts to enhance pro bono participation, the disparity between "pro bono aspirations and [*344] practices" persists. n67 Unfortunately, a variety of factors have seemingly foreclosed the ABA's ability to accumulate comprehensive data regarding pro bono participation. n68 The most significant factor is that only three states currently require their lawyers to report on their pro bono activities. n69 Moreover, liberal interpretations of pro bono services have resulted in the collection of distorted data regarding the extent of genuine pro bono efforts. n70 Finally, the inclusion of uncompensated legal services within the ambit of pro bono services, when compensation for such services was initially expected, has also limited efforts aimed at collecting comprehensive, accurate data. n71 Without this information, both the ABA and individual state bars have difficulty assessing the status of pro bono participation. As mentioned in the Introduction, however , the little information that is available indicates that an average lawyer provides "less than half an hour a week" and less than "fifty cents a day" engaged in pro bono activities. n72 Furthermore, less than twenty percent of the lawyers who do provide pro bono legal services are providing these services to indigents. n73
Mandatory pro bono work fails small firms cant provide services, which means legal services are inadequate Jason M. Thiemann, Candidate for Juris Doctor, Hamline University School of Law, Hamline Journal of Public Law & Policy, Spring, 2005, 26 Hamline J. Pub. L. & Pol'y 331
In spite of widespread lack of information on pro bono participation, the general rule appears to be "the bigger the firm, the greater the level of pro bono activity." n74 Though small firms and solo-practitioners have played an important role in providing pro bono services, it is the bigger firms that shoulder the burden of endorsing pro bono as a professional obligation. n75 Big firms possess many of the resources needed for pro bono activities that smaller firms simply cannot match, including the ability to furnish an abundance of lawyers, more easily absorb the cost, and organize and manage broader comprehensive efforts. n76 Despite the numerous advantages big firms enjoy, it is the legal profession as a whole which has the obligation to provide pro bono legal services to the poor, and small firm participation remains an important piece in providing these legal service needs. n77
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Solvency: General
Tax Credits for Education would give low-income families a way to send their children to better schools by providing a dollar-for-dollar reduction in taxes owed Reed, 2president emeritus of the Mackinac Center for Public Policy
(Lawrence W., Education Reform, School Choice, and Tax Credits April 18, 2002, The Mackinac Center for Public Policy < http://www.mackinac.org/article.aspx?ID=4191> ) Tax credits are designed to provide parents with tax relief linked to expenses incurred when they select a school other than the government-assigned one for their children. That typically means a private school, but tax credits can also apply to expenses charged by a public school that accepts a student from outside its regular jurisdiction. The credit is usually a dollar-for-dollar reduction in taxes owed (whereas a tax deduction is merely a reduction in taxable income). Tax credits are typically applied against only state and/or federal income taxes, but property tax credits have been proposed as well. Tax credits might be allowed for any or all out-of-pocket educational expenses incurred by an individual, from tuition to textbooks to transportation to extracurricular fees-though tuition is the most common expense allowed in practice.Tax credits don't represent a claim by anyone on someone else's wallet. You don't get the credit if you don't pay tuition or if you don't pay taxes. A credit on your taxes represents your own money, period. And credits can be extended not only to parents paying educational expenses but to other citizens or even companies that contribute to scholarship funds that assist children in getting access to the school of their choice, public or private.Under a traditional credit plan, only a parent who pays private educational expenses for his child and who has a tax liability greater than the amount of the allowable credit will qualify. The problem with a traditional tax credit is that low-income parents who don't have the money to pay for a private school or have little or no tax liability will be left out in the cold. That deficiency could be remedied partially by making the credit "refundable," meaning the credit could result in a refund check from the government if your tax liability is low. Another very promising form of tax credit is possible and now getting much attention across the country. My organization, the Mackinac Center for Public Policy, is nationally known for pioneering it and showing how it would work as applied to a particular state as early as 1996. We were the first to give it the name, "Universal Tuition Tax Credit" or "Universal Education Tax Credit," and the first to design such a plan for an entire state-Michigan.
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Solvency: Competition
Education Tax Credits steadily take the government out of a familys choice, in turn, increasing competition, encouraging business support, and generating educational freedom Reed, 2president emeritus of the Mackinac Center for Public Policy
(Lawrence W., Ideas and ConsequencesSchool Choice via the Universal Tax Credit April 18, 2002, The Mackinac Center for Public Policy http://www.thefreemanonline.org/columns/ideas-and-consequences-school-choice-via-theuniversal-tax-credit/ ) School choicethe general concept that parents should have much more freedom and responsibility for their childrens education than they have nowis an idea that has captured the imagination and support of legions of freedom-loving Americans. Where the rubber hits the road, however, is how to achieve it. When all parents understand that a truly free society means that it is their responsibility to take care of their childrens education, not that of everyone else in general or agents of the government in particular, well have the best of all worlds. Freedom will be greatly enhanced, and the competitive market will do for schools what it has done for everything from cheeseburgers to computersproduce high quality at a good price. Complete separation of school and state will put parents back in the saddle and liberate schools and teachers from incessant meddling by politicians. Separation is the ideal, the goal we should all hope for and work toward. But since no one has the power to snap his fingers and make it happen tonight, some means for
moving in the right direction as quickly as possible, consistent with liberty, is required. Would vouchers get us there? Tax-funded vouchers are simply direct payments from the government to individuals to enable them to purchase a particular good or servicein this case, educationin the open market. Those payments can be in the form of checks that the beneficiaries deposit in their bank accounts and draw on to pay for the vouchered item. Or they can be coupons that beneficiaries give to private providers of the vouchered item; the providers then redeem them for cash from the government. Its abundantly evident that the opposition has succeeded in stigmatizing vouchers to the point where the V-word is shunned even by proponents. A significant number of private schools that might be eligible for vouchers dont want to touch them with a ten-foot pole because they understand that government shackles inevitably follow government shekels. Fortunately, there is a superior option that is not only more in line with the principles of liberty,
. Tax credits are designed to provide parents with tax relief linked to expenses incurred when they send their children to nongovernment schools. The credit is usually a dollar-for-dollar reduction in income or property taxes, unlike a tax deduction, which merely reduces taxable income. Proponents of educational tax credits prefer them to vouchers on the grounds that they entail less government regulation of private schools and less risk of entanglement between church (through religious schools) and state because of their indirect nature. Unlike vouchers, credits do not transfer money from the state to schools or taxpayers. Indeed, because vouchers are funded out of taxpayer money, some citizens will always argue that Some of my money will be going to send your
but is more politically viable as well. That option is tax credits child to a school I dont like. They will want government to regulate how, when, and where their tax money can be used. The legislators who appropriate it and the bureaucracy that dispenses it will be more than
Tax credits dont represent a claim by anyone on someone elses wallet. You dont get the credit if you dont pay tuition or if you dont pay taxes. A credit on your taxes represents your own money, period. School Stamps Heres another way to see this crucial difference: Vouchers are food stamps for education, a mechanism for the forcible redistribution of wealth from many citizens to some citizens. Tax credits are mechanisms for fairness, an accounting device that permits people to keep at least some of their own money they would otherwise pay for the government school they are not using. Some prefer vouchers to tax credits because, they argue, we should not use the tax system as a social-engineering tool. But a tax credit for education is fundamentally different from a tax credit for solar panels or electric cars or any other politically correct gimmick du jour: Not only is education mandatory, but taxes to pay for it are too, a sad fact thats not likely to change soon. A tax credit designed to get you, say, to buy a solar panel is not the same as one that refunds some
happy to oblige. With private schools dependent on voucher revenue, few will be able to wean themselves away when regulation becomes invasive. of what the government charges you for something you dont want to buy anyway. Most people are instinctively sympathetic to the element of fairness in a tax credit. What about parents who have little or no tax liability? The universal tax credit, which the Mackinac Center for Public Policy first proposed in 1996, allows any taxpayerindividual or corporate, parent or grandparent, neighbor or friendto qualify for a
. Would tax credits be sufficient to encourage businesses to contribute to scholarship funds? After explaining the concept, Ive asked CEOs all over Michigan this question: Suppose you had a choice. You could send a million dollars in taxes to government for the politicians to spend. Or you could send that million to one or more scholarship funds to help children who might be your future employees get a good education. Which would you do? Ive never met one who preferred option number one. Any school-choice plan should start with the recognition that
dollar-for-dollar credit by contributing to the education of anyones child. It envisions private scholarships financed with tax-credit money private schools are not the problem we face today. They are an important part of the solution. We must not bargain away their independence to get choice even if its in the form of a universal tax credit. We must not burden them with new government mandates cloaked in the guise of accountability. Private schools are already accountableunlike the governments schools, they have customers who can take a walk.
Some libertarians oppose a universal tax-credit plan because they see it as a halfway measure that doesnt immediately remove government from education. However, it would allow people to opt out of the government school system and use their money to buy education in the marketplace instead. True, it doesnt eliminate the government system for those who still want it, but it will do more to promote an array of flourishing, affordable, and attractive private options than any other politically viable plan afoot. In time, that will make it easier to convince almost everybody that separating school from state represents a bright future for all children.
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ETCs are separate from government spending, the courts prove Coulson, 4 director of Catos Center for Educational Freedom.
(Andrew, Vouchers vs. Tax-Credits: Legal and Political Comparison of Optimal Programs, April 30, 2004. The Mackinac Center for Public Policy, < http://www.mackinac.org/article.aspx?ID=6540> ) The issue was also raised in two separate Illinois Circuit Court cases, both challenging that states 1999 tax credit law. In each case, the courts rejected the argument that tax credits are legally equivalent to government spending. Even scholars skeptical of market education as a whole generally acknowledge this difference. Two researchers writing for the predominantly anti-market Center for the Study of Privatization in Education at Columbia Universitys Teachers College concluded that ETCs [Education Tax Credits] because they are not government funds are less likely to face legal barriers compared to reforms such as educational vouchers.[80]
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The public enthusiastically approved the venture. Congress, however, was sputtering and the Postal Department was howling - all of Washington was enraged . How dare Spooner fo this?; How dare he so openly flout the Constitution? Government postal revenues took a nose dive while "The American Letter Mail Company" went merrily on its way picking up the postal business everywhere. Washington lawmakers had no intention of sitting still for any "that Spooner's shenanigans." The midnight oil burned as attorneys pored over their books. Soon, the suits against Spooner and his cohorts began. Railroad heads were given full warning that government mails would be removed unless space and passage were refused to private letter carriers . It was "round one" for the government when an agent of Spooner's company was found guilty and fined for transporting letters in
for sale at the post offices in pamphlet form." a railroad car over a postroad of the United States. The "round two" went to Spooner when a U.S. District Judge advised a jury that owners of conveyances were not liable under law if, unknown to the owners, a letter carrier brought mail aboard a train of steamboat. The "not guilty" verdict was sustained by the U.S. Circuit Court which expressed doubt that the U.S. had the right to monopolize the transportation of mail. This was tantamount to a commendation of Spooner's theories. For the postal officials it was a low blow and they sought further legal means to put an end to Spooner and his trouble-making company. More court reversals followed. Finally, the Postmaster General felt he had to bow to the issues and went before Congress to plead for the authority to lower postal rates. In March, 1845, a reduction of postal rates was approved and put into effect that July. Letters weighing less than a half ounce could be sent any distance under 300 miles for five cents. Even the rates for newspapers were reevaluated and changed so they could be mailed without charge within a 30-mile radius. Spooner, feeling that his efforts and his company were doing a great deal of good for the citizens of the land, wasn't through fighting. His counteraction caused
In 1851, Congress again lowered rates and simultaneously enacted a law to protect the government's monopoly on the distribution of mail. Whereas threats of jail had not fazed or dampened Spooner's zeal in the fight, the latter move by Congress forced him into defeat .
even greater consternation to his opponents - he lowered his rates. So the battle of law and loopholes continued.
The federal postal service only exists because of massive government subsidization Alston 07, Wilton. Principal Research Scientist at Battelle Memorial Institute. What Would Happen If the Post Office Had
Competition? http://www.lewrockwell.com/alston/alston21.html Digging a little deeper provides the truth: the USPS is subsidized. One need only refer to the 2005 annual report to get some illustrative numbers. A line item showing as "U.S. government appropriations received" lists an amount of $503 million. The 2003 annual report shows a similar line item with a similar heading. That line item lists an amount of $762 million. Call me a nitpicker, but those listings both sound suspiciously like, well, government appropriations, A.K.A. taxpayer investment, to me. Looking further into the 2005 annual report we
find this. "We commenced operations on July 1, 1971, in accordance with the provisions of the Postal Reorganization Act (the Act). The equity that the U.S. government held in the former Post Office Department became our initial capital. We valued the assets of the former Post Office Department at original cost less accumulated depreciation. The initial transfer of assets, including property, equipment and cash, totaled
even without the (apparently) semi-annual infusions of "government appropriations" the USPS received something like $3 billion in "start-up" capital. That is about as far from "no taxpayer support" as one can get ! Additionally, these are economic benefits that private companies such as FedEx, UPS, and DHL do not receive and they are still kicking the Post Office's butt in the realm where the USPS is not protected by fiat. (Have you seen the FedEx boxes placed outside the USPS recently?) Clearly the USPS benefits from government subsidy, no matter what they choose to call it. Now back to the question at hand: how might things be different with competition?
$1.7 billion. Subsequent cash contributions and transfers of assets between 1972 and 1982 totaled approximately $1.3 billion, resulting in total government contributions of approximately $3 billion." So
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Microfinancing 1NC
The Minority Business Development Agency should establish a Microfinance Institution for Native Americans. MBDA can solve coordinates with Native American development centers and solves poverty Minority Business Development Agency The Basics of MBDA, 2006 http://www.mbda.gov/?
section_id=2&bucket_id=643&content_id=3143&well=entire_page Who are we? The Minority Business Development Agency (MBDA) is part of the U.S. Department of Commerce. MBDA is the only federal agency created specifically to foster the establishment and growth of minority-owned businesses in America. MBDA is an entrepreneurially focused and innovative organization committed to wealth creation in minority communities. The Agency's mission is to actively promote the growth and competitiveness of large, medium and small minority business enterprises (MBEs). MBDA actively coordinates and leverages public and private-sector resources that facilitate strategic alliances in support of its mission. The vision is to function as an entrepreneurial organization serving entrepreneurs. The mission is to enhance the growth and expansion of minority business enterprises. How Does MBDA Help Minority Businesses? MBDA provides funding for a network of Minority Business Development Centers (MBDCs), Native American Business Development Centers (NABDCs), and Business Resource Centers (BRCs) located throughout the Nation. The Centers provide minority entrepreneurs with one-on-one assistance in writing business plans, marketing, management and technical assistance and financial planning to assure adequate financing for business ventures. The Centers are staffed by business specialists who have the knowledge and practical experience needed to run successful and profitable businesses.
Microfinancing is a cost-neutral lending institution to induce actual work and provide economic self-determination without help from the federal government R. H. Tipton III, Third-year student, University of Oklahoma College of Law, American Indian Law Review, 2004 / 2005,
29 Am. Indian L. Rev. 173 Many of the obstacles addressed in this comment may be overcome. We must recognize the unused human capital present on the reservations and amongst the tribes and develop it into the unique, sustainable businesses they have the potential to become. Further, each tribe has unique characteristics and specialties that add to the overall richness of the American Indian tradition and if there is a system - an institution - with the resources available to help guide these ambitious individuals, then each one will be able to overcome Group Three status. This will allow them to move into more sustainable and autonomous economic growth, which will afford them even more outside opportunity (with the federal government or more Group One or Two focused institutions). This will also improve the quality of life by bringing these individuals out of poverty status and into a working class status with a brighter future. The lessons learned from successful MFIs both abroad and domestically are vital to the success of the TMFI. In order to make a better life for these microentrepreneurs, the TMFIs must be cognizant of the corollary services that are necessary to cultivate sustainable businesses. TMFIs must provide the requisite lending as well as business, legal, accounting and insurance advice. These services are imperative in allowing the individuals to reduce their risk and will provide them with added incentive to make a more gratifying, self-sustaining life for themselves and their families. Although a TMFI will not completely solve the social and economic deficiencies facing tribes today, it has the potential to be a strong force in bringing about real change in the financial status of many individuals. If the [*192] leaders of each tribe embrace this bottom-up approach, the lives of the economically challenged can and will be changed forever.
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Studies prove microfinancing solves poverty R. H. Tipton III, Third-year student, University of Oklahoma College of Law, American Indian Law Review, 2004 / 2005,
29 Am. Indian L. Rev. 173 3. Microlending's Impact on Economic Development These forms of microlending have focused on economically challenged individuals, which corporate lending institutions would not normally serve. n50 This emphasis on the "little people" has had an enormous impact on their lives and on the economy as a whole. A recent study by the Aspen Institute's SELP - Self-Employment Learning Project, shows that of the microenterprises that were surveyed over a five year period, 53% had moved out of the poverty range. Additionally, 57% were still economically viable and sustainable after five years n51 - and as such are competitive with the estimated 60%-70% survival rate of SBA small businesses. n52 The average household income had risen by more than $ 8000 and the average household assets had also increased by approximately $ 15,000 over the five year period. n53
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Microfinancing can work for Native Americans microlending can start small businesses across Indian Countries we already do it in the rest of the world William J. Clinton, former President of the United States, FDCH Political Transcripts, August 6, 1998, DELIVERS
REMARKS ON IMPROVING THE ECONOMIES OF NATIVE AMERICAN COMMUNITIES, l/n The directive calls on several agencies to coordinate and strengthen our existing Native American economic development initiatives. And I might say, in particular, I think microcredit institutions have a terrific potential to do even more than some of you have already done for the last several years in Indian country. The community development financial institutions that we have established in this country in the last few years have played an important role in providing credit to people who otherwise could not get it to start small businesses or to expand small businesses. I have asked the Congress for a significant expansion in the Community Development Financial Institutions Act. I believe in my microlending. The United States, last year, through our aid programs, financed two million small loans in developing nations around the world. Think how much good we could do if we could finance two million small loans in developing communities in the United States of America.
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Coercion NB
Microfinancing institutions are cost-neutral gain revenue back from interest rates and capital is infused from willing tribe members who want to lend tiny loans back to their reservation MBDA only sets up the institution to make this possible R. H. Tipton III, Third-year student, University of Oklahoma College of Law, American Indian Law Review, 2004 / 2005,
29 Am. Indian L. Rev. 173 To date, research indicates only one tribe that has seen the vision of the potential impact microfinance could have on their reservation. Having noted that, the proposed Tribal Microfinance Institution (TMFI) in many ways embodies the spirit of the Cherokee Nation Micro-Enterprise Development Program. There are, however, significant differences which make the proposed TMFI more focused on Group Three entrepreneurs rather than on Group Two or better. Also, the proposed model is more of a full service MFI rather than just a microlending institution. This is in order to facilitate success amongst the microentrepreneurs by providing the necessary resources for success. A. Mission Statement As with any focused business enterprise, the purpose of the TMFI should be embodied in a mission statement. This mission statement should focus on the economic and social development of the Group Three members of the tribe. It should create an effort to affect the lives of the poorest of the tribe in a positive, feasible way. The goal of the TMFI is not profit maximization, but rather it is patterned after the Grameen Bank and is focused on empowering the individuals in their community. n75 So long as the tribal leaders keep this social consciousness throughout the duration of the program, the needs of the lowest class will be met in an efficient and effective way. Having said this, the mission of the TMFI should identify the target audience (the Group Three microentrepreneur) and should direct the institution to make all policy and technical decisions with this focus in mind. [*187] B. Initial Funding The technical discussion of the TMFI must start with the issue of funding. With all of the recent developments in tribal economics on the macro level, it is safe to assume that a majority of the tribes have sufficient funding to be able to enact a TMFI. n76 It is encouraging to see the many economic pursuits being met with a fruitful bounty; however, it is imperative to not forget about microentrepreneurs, who may further increase this advancement. The bottom line is that tribes should be able to funnel sufficient amounts of money into a TMFI in order to foster both the economic and social developments that will naturally flow from this institution.
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Contracts CP 1NC
Government contracts with service providers solve and gain the benefits of the free market
Guo 04 [Baorong, GWB School of Social Work in the Washington University at St. Louis, The Commercialization of Social Services: Toward an
Understanding of Nonprofits in Relation to Government and For-profits, July 14, http://www.istr.org/conferences/toronto/workingpapers/guo.baorong.pdf]
According to this welfare capitalism theory, the
market mechanism is deemed overwhelmingly powerful and subsumes all institutions into capitalism including nonprofits. With the apparent triumph of capitalism worldwide, market forces are being widely celebrated (Dees, 1998, p.56). Welfare and capitalismthe two parallel institutions in the pasttend to be absorbed into an integrated process of capitalistic production (Gilbert, 1983). The welfare reform in 1996 marked an even further step 11 towards welfare capitalism because government is more likely to award contracts to for-profit service providers. It is recognized that the new tolerance of for-profits undoubtedly reflects an increasingly conservative political climate that values the power of markets and the profit motive to create efficiency (Ryan, 1999, p.130). Since economic institutions are conventionally and presently the best representation of capitalism, by differentiating the economic market and the social market, Gilbert (1983) was able to recognize the distinct function of welfare institutions from that of economic institutions. The commercialization of social services precisely reflects the third phase of the development of welfare capitalism. The encroachment of for-profits is not only a feature of the commercial trend in social services but also a signal of the commercialization of the social market (welfare system).
Contracts are the only way for Maximus to survive-- theyll accept almost any terms
Sanger 03 [Mary, professor of Urban Policy Analysis and Management at the Robert J. Milano Graduate School of Management and Urban Policy, New
School University, and a nonresident senior fellow at the Brookings Institutions Center for Public Service, The Welfare Marketplace: Privatization and Welfare Reform, June, http://books.google.com/books?id=3f17oFQCJQC&pg=PA91&lpg=PA91&dq=maximus+services+food+stamps&source=bl&ots=H8dkcuinpf&sig=Rld96cwrQkrGye_RIkE0kHpH0lA&hl=en&ei=1SJBSu _qEofKM9OvgM0I&sa=X&oi=book_result&ct=result&resnum=6]
The welfare-to-work market for the two largest players, MAXIMUS and Lockheed Martin IMS, have
been on a steady slope, but there is evidence that their efforts may be reaching a plateau. Few new markets remain where either could continue its recent rates of growth. MAXIMUS in particular has articulated a growth strategy that emphasizes a focus on large volume to achieve economies of scale. This market strategy is reflected in its success in bidding on and winning contracts that average $3.7 million a contract year.
Looking toward future markets, Holly Payne of MAXIMUS observed, As far as other cities, Philidelphia maybe, Chicago might grow, but really the cities that we have now are what we are concentrating on.
organizations. Indeed, they moved into the welfare market opportunistically, leveraging their expenses in large, technologically sophisticated social services. Both MAXIMUS and Lockheed Martin IMS have already begun to assess the opportunities for growth in other social service areas. MAXIMUS seems the most optimistic about the growth of the market, in which it sees as a $23.9 billion industry to administer state-operated programs such as Medicaid, Childrens Health Insurance, Food Stamps, TANF, Child Support Enforcement, Supplemental Security Income, and other general assistance and social services. Of these contracts, David Mastran of MAXIMUS predicted that $12 billion to $15 billion is possible for privatization. In order to move into these new service areas, MAXIMUS has been busy acquiring an assortment of twelve different firms. It has continued to acquire companies to help bolster its
consulting and government operations groups by providing specialized skills in everything from integration of school records to technology to track child-support payments. With an annula growth rate of 23 percent from 1997 to 2001and more than $487.2 milion in revenues (56 percent of which derives from government operations group), it is not difficult to discern the reason for David Mastrans optimism. Mastran joked the MAXIMUS would become the fourth column of government: executive, legislative, judicial, and MAXIMUS.
Given the recent slowdown in growth of contracts for outsourcing as the current recession endures (even as the size of caseloads has resulted in larger revenues under existing contracts), growth estimates may need to be revised downwards . Even so, 2001s 18.6 percent increase in revenues indicates
continued strength in all areas of the companys work.
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a contract
with private companies in order to enable the companies to provide public services in lieu of government .
Forms of Privatization There are several forms of privatization. Here, four representative forms of privatization are discussed based on the Savas clarification: contracting out, voucher, franchising, and sale. Contracting Out
Governments can delegate authority of a public service to a company via a competitive bid during a limited period. Through contracting out, governments can provide better services with less cost because of competitive bids between private companies.
Some state governments are using contracting-out strategy in order to stimulate public employees. Public employees can see that their jobs may be privatized unless performances of
When a government contracts out a service with a company, it should pay much attention to whether the company can sustain good quality of service after the service is contracted out. And governments should check whether the company persistently holds to its responsibility to the citizens. Most of all, governments should provide fair conditions for many private companies that are participating in a competitive bid.
their organizations are satisfactory.
A one-size-fits-all national plan fails- Congress should instead incentivize private companies Eckels 07 [Robert, former county judge in Texas, BEFORE THE SENATE COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL
AFFAIRS AD HOC SUBCOMMITTEE ON DISASTER RECOVERY, "OPEN ARMS: ANALYZING THE ROLE AND NEEDS OF HOST COMMUNITIES IN THE WAKE OF MAJOR DISASTERS AND CATASTROPHES, Dec 3, http://hsgac.senate.gov/public/_files/EckelsStatement.pdf]
The State of Texas issues thousands of Lone Star Cards for food stamps and state social service benefits . States, too, could manage this operation more effectively than the federal government. Congress should encourage states and communities to include the private sector in their disaster response planning. Congress should encourage regional private sector contracts and not force states and local communities into a once-size-fits all national plan.
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Relying entirely on government contracts for its revenue, Maximus places a great deal of emphasis on establishing relationships with past and present local and state government officials. The 1999 Annual report notes that: since state and local government administrators are subject to changing legislative and political mandates, the company has developed strong relationships with experienced political consultants who inform and advise the company with respect to strategic marketing opportunities and legislative initiatives (Ibid., p. 4). Its growth strategy includes recruiting top government management professionals and middle level consultants with a network of political contacts to leverage the companys client relationships (Ibid., p. 4). Focusing on government contracts shows promise of being an increasingly lucrative endeavor. The 1998 Annual Report states that:
The Company believes that providing program management and consulting services to government agencies represents a significant market opportunity. Federal state and local government agencies in the United States spend more than $250 billion annually on the health and human services programs to
which the company makes its services, including Medicaid, Food Stamps, Temporary Assistance to Needy Families, Child Support Enforcement, Supplemental Security Income, General Assistance, Child Care and Child Welfare. The state operated programs
alone cost an estimated $21.0 billion annually to administer (Maximus, 1998, p. 1).
Maximus empirically solves a wide range of social services and is highly effective at welfare programs
Business Wire 08 [MAXIMUS Awarded $8.1 Million Welfare-to-Work Contract by Los Angeles County, May 19,
http://www.allbusiness.com/government/government-bodies-offices-regional/10510748-1.html]
Under the Los Angeles Greater Avenues to Independence (LA GAIN) program, MAXIMUS County Department of Public Social Services regions. MAXIMUS
provides welfare case management services in two of the seven services address barriers to self-sufficiency and assist program participants in securing and maintaining long term employment at a living wage. To that end, the project offers a variety of services to prepare jobseekers to enter the workforce successfully , including remedial and vocational education, life skills training, and English as a Second Language courses. Special services for mental health, substance abuse, victims of domestic violence, homeless housing location assistance, and family support programs are also offered . LA GAIN program
participants also receive transportation and child care assistance. "MAXIMUS has been working to improve the lives of thousands of Angelenos in the LA GAIN program since 2000 and is pleased to have received this contract extension," said Richard Montoni, CEO of MAXIMUS. "Like our welfare to work efforts in neighboring Orange and San Diego Counties and other jurisdictions in the U.S. and abroad,
MAXIMUS is focused on the success of individuals and families in achieving self-sufficiency." MAXIMUS currently operates similar welfare-to-work programs in six other states including Alaska, Arizona, the District of Columbia, Hawaii, and, Wisconsin, as well as Australia and Israel. In the United States, through its welfare-to-work efforts, MAXIMUS has helped improve the lives of more than 375,000 people making the transition into the workforce . Government has limited capabilities- only firms like Maximus can effectively administer social programs Atkinson 03 [Robert D. Atkinson is the vice president of the Progressive Policy Institute and director of PPIs Technology & New Economy Project. He is
the author of the New Economy Index series which looks at the impact of the New Economy on the U.S., state, and metropolitan economies, Network Government for the Digital Age, May 1, http://www.ppionline.org/documents/NetGov_0503.pdf]
The role of non-federal actors has grown significantly in the last 30 years. States have gained administrative capabilities to run largescale and complex
programs. Nonprofit organizations of all kinds whose mission is to address social problems, from hunger to education to environmental protection, have sprung up throughout the country. The
private sector has become a more important partner in change on many fronts, including welfare-to-work (e.g., the for-profit company Maximus runs welfareto work programs for a number of states), transportation (e.g., companies institute telecommuting
policies to reduce travel), and environmental protection. Citizens are centralto more policy areas, whether they participate in civic environmental activities, volunteer to help build homes for the poor, or empower themselves through new tools on the Internet. Individuals increasingly act like Tofflers prosumers, collaborating in the production of goods and services, whether theyre placing online orders, providing feedback on product design, or paying bills automatically online. The same trend is beginning to emerge in government, where Web-enabled citizens increasingly co-produce government services. Federal
agencies are now often such a small part of the overall system, they cannot affect change on the needed scale if they act alone. In this new environment with many more actors involved, the operative governance model is not closed agencies carrying out their missions in isolation, it is networks. This is not to say that bureaucracy is ill-suited to all tasksroutine tasks like depositing social security payments in recipients accounts is something a large organization is well suited to do, although with electronic deposit, computers can do most of the work. When tasks are routine and the environment is predictable, bureaucratic organizations can do the job, especially if they are effectively managed. However, in a world in which problems are complex, multi-faceted, and rapidly changing, and where information is dispersed, traditional bureaucratic government cannot adequately handle complex situations of discontinuous change . As three leading analysts of reinventing government argue, Centralized bureaucratic government is unable unilaterally to control the complexities and pluralistic diversity which are fundamental characteristics of modern societies. 19 Clearly, bureaucratic government cannot reclaim the position it held in the old economy as the central governing steering authority. Misael, Kevin, Matthew, Jack, Anna, Kurt, Grace, Nadia, Nick 106
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Although many are concerned about the quality of services MAXIMUS will provide clients, Ms. Ruff, the projects manager, points out that the enrollment brokers contract establishes some very ambitious goals meant to ensure high standards. For example, she explains that the enrollment brokers contract requires it in the first year to help at least 85 percent of its clients choose a health plan rather than being assigned one; the rate must be 90 percent in the second year, and 95 percent in the third year. If the organization does not achieve
these goals, the state is entitled to terminate the contract.
In addition to these expectations, MAXIMUS must adhere to some other very strict guidelines and quality assurance measures: For example, the enrollment broker must answer 100 percent of calls it receives by the fourth ring, enrollment counselors may have no more than two calls each in the phone queue at any time, and counselors must spend sufficient time on each call to ensure that the recipient is given adequate information. Furthermore, the enrollment broker must ensure that its clients have adequate access to its services . For example, clients must be able to
communicate with MAXIMUSs counselors via mail and telephone, and the organization must make community presentations and conduct walk-in sessions and home visits.
Not only will the state be monitoring how well the enrollment broker performs each of these duties, there will be customersatisfaction surveys and the state will monitor use of MAXIMUSs complaint and grievance process .
Conclusion
Despite the challenges that MAXIMUS faces, the state stands behind its decision to privatize the enrollment broker process. "With enrollment counseling services in place, persons with Medicaid coverage will be able to make objective, informed decisions on the managed care options available to them and choose a plan that best fits their family needs ," concludes Ms. Isaacs. Ms. Garcia adds, "Health plans are encouraged by . . . the [move] to managed care. The enrollment of the Medicaid population [in such a program] will contribute to a healthier population."
Michigan proves Maximus is effective- high standards and quality enforcement- our evidence takes into account its criticisms state oversight allows for an extra safety net for its standards
Baragar 97 [Lisa, Consultant for Public Policy at PSC (Public Service Consultants), MAXIMUS: Michigans Medicaid Enrollment Broker, September,
http://www.pscinc.com/documents/PSR/HPB/1997/0997.cfm]
Although many are concerned about the quality of services MAXIMUS will provide clients, Ms. Ruff, the projects manager, points out that the enrollment brokers contract establishes some very ambitious goals meant to ensure high standards. For example, she explains that the enrollment brokers contract requires it in the first year to help at least 85 percent of its clients choose a health plan rather than being assigned one; the rate must be 90 percent in the second year, and 95 percent in the third year. If the organization does not achieve
these goals, the state is entitled to terminate the contract.
In addition to these expectations, MAXIMUS must adhere to some other very strict guidelines and quality assurance measures: For example, the enrollment broker must answer 100 percent of calls it receives by the fourth ring, enrollment counselors may have no more than two calls each in the phone queue at any time, and counselors must spend sufficient time on each call to ensure that the recipient is given adequate information. Furthermore, the enrollment broker must ensure that its clients have adequate access to its services . For example, clients must be able to
communicate with MAXIMUSs counselors via mail and telephone, and the organization must make community presentations and conduct walk-in sessions and home visits.
Not only will the state be monitoring how well the enrollment broker performs each of these duties, there will be customersatisfaction surveys and the state will monitor use of MAXIMUSs complaint and grievance process .
Conclusion
Despite the challenges that MAXIMUS faces, the state stands behind its decision to privatize the enrollment broker process. "With enrollment counseling services in place, persons with Medicaid coverage will be able to make objective, informed decisions on the managed care options available to them and choose a plan that best fits their family needs ," concludes Ms. Isaacs. Ms. Garcia adds, "Health plans are encouraged by . . . the [move] to managed care. The enrollment of the Medicaid population [in such a program] will contribute to a healthier population."
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ir.net/phoenix.zhtml?c=88279&p=irol-newsArticle&t=Regular&id=140847&]
May 2, McLean, VA (NYSE:MMS) -- MAXIMUS
announces the strategic acquisition of Technology Management Resources (TMR), a key provider of child support operations and system consulting services to state and local governments. TMR was purchased from SCB Computer
Technologies, Inc. Nebraska-based TMR will join MAXIMUS with 125 professionals located in their headquarters in Omaha and client sites across the nation. Revenues for TMR this fiscal year are projected to be $9.9 million. The merger will be accretive to MAXIMUS earnings in 2000.
TMR currently provides child support collections services in 17 states. TMR has specialized in the application of new technologies to enhance child support collections programs. The firm has software for locating absent parents through credit bureau systems; systems for employers to report new hires statewide to identify absent parents who change jobs; web-based technology for custodial parents to query databases on the status of child support payments; a web-based product for intercepting insurance settlements to delinquent absent parents; and tools for assisting in the development of large-scale child support systems. "TMR is a strong addition to our existing child support business and provides us with several new web-enabled services, " declared David Mastran, President and CEO of MAXIMUS. "TMRs Child Support Lien Network (CSLN), will be a valuable internet solution for all states confronting their mounting delinquent child support caseload. Further, TMRs web-based product that complements interactive voice response units by providing on-line payment and case profile information will revolutionize access to child support information, and help MAXIMUS provide better service in the process." Tom Ruffino, President of TMR, echoed Mastrans enthusiasm saying, "Joining MAXIMUS gives us the opportunity to significantly expand our reach into other states. Our systems consulting practice should blossom when aligned with the strong system qualifications of MAXIMUS. We are excited to be part of such a successful team."
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Another barrier to serving limited English speakers is the fact that in each of the three sites, welfare recipients English proficiency was rarely systematically assessed. In Los Angeles, recipients are tested for English proficiency as part of a vocational assessment only after they fail to find a job through the countys three-week Job Club (intensive job search) program. Only after this vocational assessment can recipients be referred to ESL. Though the county does not routinely assess English language proficiency it does test recipients for literacy in their native languagebut only for English and Spanish speakers. Those with low literacy scores are sent to a combination of part-time Job Club and adult basic education classes. The lack of a systematic assessment of English language ability and a parallel Job Club and ESL program were two key issues raised in an Office of Civil Rights complaint lodged by advocates . The largest employment services contractor in New York City, the for-profit firm Maximus, acknowledged the benefits of mandatory language assessments. The contractor cited the citys failure to provide these assessments and subsequent service referrals as the main barrier they faced in meeting the required work placement figures under their mammoth city contract (Lipton 2000). Specifically, Maximus noted that they simply could not place the large number of limited English speakers into jobs without additional language training.
Houston also lacks a formal language assessment process for welfare recipients. Instead, caseworkers determine a recipients initial time limit for assistance (12, 24, or 36 months) based on their work readiness, which accounts for past work history and education, but not English proficiency. Although
language does not factor into these assessments, administrators reported that most immigrants are assigned longer time limits because they have lower education levels. Immigrants with higher education levels, including many refugees, receive shorter time limits regardless of their English skills. The failure of our study sites to conduct systematic English language assessments reinforces the notion that limited English speakers have not been considered a special or hard-to-serve TANF population that requires additional consideration in program design.
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The growth of contracting has been fueled by the move toward a less restrictive free-market-based economy. By opening up public services to market competition, advocates of contracting stress that there is potential for saving money and improving service quality. However, contracting sometimes departs from the competitive free-market model if there is no rigorous bidding. Instead, government agencies and private for-profit contractors develop over time long-term relationships governed by their own specific norms and expectations. These relationships could influence the delivery of services and the way contracting is measured. Contracts generate market competition for profit Smith and Ingram 97 [Steven, University of Washington President, Helen, Professor Emerita in Planning, Policy, and Design and Political Science,
and former Drew, Chace and Erin Warmington Chair in the Social Ecology, Institutions and Policies for Democracy: A Discussion Paper, http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1121&context=csd]
Contracting for public services with private nonprofit and forprofit service providers is another form of the market model. By contracting for service, it is hoped that the costs can be lowered and quality improved by creating competition among service providers for public contracts and grants. Contracts form the backbone of privatization- the private sector has found ways to sidestep most government enforcement mechanism, diminishing the impact of contracts on the free market Hamowy 08 [Ronald, fellow @ CATO Institute, The Encyclopedia of Libertarianism, page 524, http://books.google.com/books?
id=yxNgXs3TkJYC&pg=PA524&lpg=PA524&dq=free+market+government+contracts+capitalist&source=bl&ots=8QVtb-Ly_S&sig=t3AeYGYR64PAeokmX2PB7coYww&hl=en&ei=TlZCSt_lIIrwMt3YhcEH&sa=X&oi=book_result&ct=result&resnum=1]
Most people believe that a market economy requires that governments enforce private contracts. Although some people may recognize that simple face-to-face trades are possible without external enforcement, most people argue that government enforcement is necessary when contracts are complicated, include commitments over time, or involve large groups. In many real-world situations, however, enforcement
of contracts by public courts is too costly government courts are not perfect, after all or impossible, inasmuch as government courts often lack jurisdiction across political
The private sector, in contrast, has found numerous ways to promote contractual performance even when government enforcement is absent. From the discipline of continuous dealings in small groups, to reputation mechanisms or more formal private tribunals for large groups, numerous devices have emerged that have made possible contractual performance independent of government. Recognizing that private parties can overcome the potential problem of contractual performance brings into question whether government enforcement of contracts is necessary.
boundaries or the desire to enforce contracts in sectors not sanctioned by law. This topic is of growing interest to libertarians.
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In 2008, spending on government contracts accounted for more than $500 billion of the federal budget, twice the amount that was spent in
2001. 2/ Mr. Obama has ordered the Director of the Office of Management and Budget to collaborate with the Secretary of Defense, the Administrator of the National Aeronautics and Space Administration, the Administrator of General Services, the
Director of the Office of Personnel Management and other agency heads to develop a plan to repair what Mr. Obama referred to at his March 4 press conference as the broken system of government contracting. Mr. Obamas plan calls for reform and increased regulation in three areas: 1) award of government contracts; 2) management of government contracts; and 3) outsourcing of inherently governmental services. Federal Acquisition Regulation Part 6.101 requires government contracting officers to promote and provide for full and open competition in soliciting offers and awarding Government Contracts. Full and open competition enhances the governments ability to negotiate price and generally results in more fixed-price contracts. In recent years, however, there has been a significant increase in the number of contracts awarded without full and open competition. That has led to an increase in the
number of cost-reimbursable contracts in which the final contract price is indefinite and the risk of cost overruns is significant. Since 2000, federal spending obligations under costreimbursable contracts have nearly doubled from $71 billion to $135 billion annually. 3/ To reverse this trend, Mr. Obama reiterated the policy that agencies should not engage in non-competitive contracts except in limited circumstances and declared a preference for fixed-price contracts. Mr. Obama instructed the agency heads to promulgate rules and regulations that will maximize the use of full and open competition and that will provide appropriate oversight for all noncompetitive contracts. Mr. Obama also directed the agency heads to develop rules that will increase and improve the oversight and management of private contractors. A GAO study of 95 major defense acquisition projects last year found cost overruns of 26 percent, totaling $295 billion. 4/ Mr. Obama believes that with increased oversight, including a process for ongoing review to identify wasteful and inefficient contracts, such cost overruns will be significantly reduced. Finally, Mr. Obama
wants to eliminate the outsourcing of services that are inherently governmental activities. The premise is that taxpayers will receive more value for their tax dollars when government agencies actually perform services within their area of responsibility. But, Mr. Obama has not defined what constitutes an inherently governmental service. Instead, he acknowledged that the line between what is
inherently a governmental service versus one that is not, and thus appropriate for private competition, is a blurry one. Therefore, he called on the government agencies to specifically identify when governmental outsourcing for services is and is not appropriate. 5/
3. The Counterplan results in citizen backlash against taxes- solving the link to coercion Smith and Ingram 97 [Steven, University of Washington President, Helen, Professor Emerita in Planning, Policy, and Design and Political Science,
and former Drew, Chace and Erin Warmington Chair in the Social Ecology, Institutions and Policies for Democracy: A Discussion Paper, http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1121&context=csd]
Further, the
greater use of private organizations for the delivery of public services makes the connection between government and the citizen more indirect. Many citizens may perceive that government is less relevant and important in their lives, even if government is directly supporting many of their local community organizations through grants, contracts and subsidies. The potential implications for citizenship and the place of government in society are profound. If government is not given credit for worthy projects even when it supports them, then citizens will turn more and more to private solutions and be less likely to support the taxes necessary to fund government operations. The result may be a longterm decline in government capacity which might reinforce negative perceptions of government performance . At the same time, inequalities in
citizen participation and access to services might become more severe.
The perm wouldnt solve this- the magnitude of our link and impact proves that any coercive control must be rejectedthe affs knee-jerk reaction to government control of the market is still present under the permutation
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promised to cut out fraud, waste and abuse from government contracts, and Congress is on board with the President's program. Last week, Congress delivered and President Obama signed the Fraud Enforcement and Recovery Act of 2009 (FERA). This new law includes important changes to the federal False Claims Act that will make it easier for whistleblowers and their attorneys to file qui tam lawsuits against government contractors--and their subcontractors. 3. Welfare privatization doesnt cost political capital- lobbyists and multiple examples prove Dunlea 99 [Mark, contributor at Covert Action Quarterly, a news media outlet, The Poverty Profiteers Privatize Welfare, March 25,
http://mediafilter.org/caq/CAQ59.PrivateWelfare.html]
Welfare reform is only the latest manifestation of a major trend toward the privatization of formerly public functions. Elected officials of both
major parties are rushing to outsource everything from social security, to trash collection, to dispensing fines for delinquent parking tickets, to fire, ambulance, and policing services. Private prisons now house almost 80,000 people.
This drive to privatize gained political currency as "big government" replaced big corporations as public enemy number one. The US has always had strong populist movements, but historically they targeted the powers of robber barons and corporations.
However, one of the legacies of Barry Goldwater's failed presidential election besides paving the way for Ronald Reagan was to enable conservatives to redirect anger away from corporations and onto government. With ever-increasing corporate ownership of the media, it may be a long time before corporations replace government as the focus of populist enmity.
Big business, which has benefited mightily from the shrinking of government, has not been a passive bystander. Unlike welfare moms, corporations have the resources to lobby legislators and to feed the campaign coffers that are the way to many a politician's vote. The pattern of their buying influence and shaping legislation is well documented. A few years ago, for example, an
advocate on welfare issues for the Hunger Action Network of New York state was startled when she ran into lobbyists for Shea & Gould at the state legislature. The powerful New York law firm was pushing for the expansion of fingerprinting of welfare participants.
4. Blackwater proves Congress can be shielded from controversy in contracts Yeoman 03 [Barry, staff writer at Mother Jones Journalism, Soldiers of Good Fortune, May/June edition,
http://www.motherjones.com/politics/2003/05/soldiers-good-fortune]
The men listen attentively. They know that Torres, a Navy vet, honed his skills during nine years in the service, performing search-and-rescue operations and providing nuclearweapons security. But Torres no longer works for the military. These days he is an employee of Blackwater USA, a private company that contracts with the U.S. armed forces to train soldiers and guard government buildings around the world. Every day, the Navy sends chartered buses full of trainees from Naval Station Norfolk to the company's 5,200-acre facility in Moyock, North Carolina. Last fall, Blackwater California each year in
signed a $35.7 million contract with the Pentagon to train more than 10,000 sailors from Virginia, Texas, and "force protection." Other contracts are so secret, says Blackwater president Gary Jackson, that he can't tell one federal agency about the business he's doing with another.
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America's presidential candidates and their parties would help the economy more by acknowledging that big government is a fact of life - and indeed is necessary to a healthy economy. Rather than harm the economy, the evidence shows that government spending , when done well, contributes critically to economic growth. Americans rely on the government for the free primary and high schools that educate the workforce. The government subsidizes college education and has built the immense transportation infrastructure that moves goods across the country and gets people to work. Federal, state, and local government have been essential to the nation's health, building clean-water systems and developing vaccines that have eliminated or minimized diseases like diphtheria, tuberculosis, and polio. The government can waste money, too. But the national rhetoric about the economy needs to stop focusing on how to shrink the government, and start focusing on how best to use it. Contrary to the romantic claims about the nation's laissez-faire past, American history is a story of government intervening, time and again, to support growth.
government, as Senator McCain and to some degree Senator Obama are doing,
Early America created a national bank to maintain its finances and currency, critical to a smooth-functioning modern economy, at the instigation of Alexander Hamilton, George Washington's treasury secretary. Under Thomas Jefferson, well-known for his laissez-faire sympathies, America bought the Louisiana territories in what amounted to a large federal spending program. He thus provided cheap land to farmers at federally controlled low prices, enabling them to feed themselves and the nation, but also soon to produce surpluses to feed Britain as well, adding to America's wealth. State and local government were also vital contributors to growth. New York State issued bonds to finance most of the Erie Canal, opened in 1825. Other states followed suit with canals of their own, creating an efficient transportation network essential to commercial development before the Civil War.
Led by Massachusetts, the states built free and mandatory primary schools based on property and other local taxes, producing a literate and able work force . After the Civil War, the federal government donated tens of thousands of acres of land to states with the express purpose of starting new technical universities, which helped launch the University of California at Berkeley, the Massachusetts Institute of Technology, and Cornell University, among others. These research centers contributed vitally to American agriculture and manufacturing. The federal government financed much of the railroad development of the second half of the 1800s through massive provisions of land . The tens of thousands of miles of railroad created the nationwide marketplace that made possible America's first industrial revolution. Similarly, in the 20th century, the federal government built roads , dams, bridges, and, after World War II, the interstate highway system, which were the building blocks for the huge commercial growth of postwar America . It invested in research and development through the Defense Department, accounting for most of such spending in the nation in the decades after World War II. America sent its returning GIs to college , again raising the educational level of its workforce, and provided low-interest loans for their children to go to college as well . It aggressively subsidized medical research and educatio n. Throughout the 1950s and 1960s, taxes rose as a proportion of GDP, and the economy only grew more rapidly. Family income doubled in two decades, adjusted for inflation, even as more new social programs were funded . This was, in fact, true of all the developed nations of the West .
But a new wave of thinking began to arise in the 1970s as America became mired in high rates of inflation and unemployment. The economic guru of the time was the Nobel laureate Milton Friedman, the nation's leading advocate of laissez-faire economics. Friedman, whose mentors included the Austrian economist F.A. Hayek, author of "The Road to Serfdom," had been arguing since the early 1950s that big government led to economic inefficiencies and slower rates of growth. For decades, the strong economy proved him wrong. But by the 1970s, America longed for an explanation of its predicament, and Friedman and his followers provided a simple and convincing answer. Some of his followers, like Robert Lucas, another Nobel laureate from the University of Chicago, and Robert Barro at Harvard, held still more extreme antigovernment views, arguing that any and all government interference was at best neutral and at worst harmful. Voters began to rebel against taxes, starting in 1978, when California overwhelmingly passed Proposition 13, sharply reducing property taxes. Reagan swept into office on the promise of tax cuts and reducing government, and what followed were the boom years of the 1980s. To conservatives of the time, it seemed strong proof that the arguments of Friedman and his followers were
there is also a strong case that they were wrong . In 1992, President Bill Clinton succeeded in passing legislation to raise the income tax rate on higher income Americans .
correct. But
Harvard's Feldstein, who had served as Reagan's chief economic adviser, claimed that the tax increase would reduce the incentives to work and therefore the incomes of the wealthy.
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. Nancy L. Stokey, of the University of Chicago, and Sergio Rebelo, of Northwestern University, looked closely at the period between 1913 - when the United States first adopted an income tax -
tier of Americans, in fact, made more money. A look at tax history suggests that this should have been no surprise
and 1942. In that period, the federal bite from income taxes rose from 2 to 15 percent of GDP. Discounting the data for business cycles, including the sharp downturns during the Great Depression, they found that the rate of growth remained consistently strong and positive over the years, despite ever-higher tax rates. In recent years, the underpinnings of antitax economics have been further questioned by a number of mainstream scholars. Economists like Robert Barro produced studies claiming that high taxes reduced growth. Feldstein similarly produced studies to show that high taxes undermined incentives to invest. But when Lindert, Slemrod, and many others took a closer look at the statistical methods, the results turned out to be fragile at best. Barro's early analysis, for example, was undermined by a handful of economists who found that if they simply added some new causal factors that Barro had left out, the conclusions evaporated. Even Friedman's key assertions about the relationship of the money supply to GDP were ultimately discredited, and have been discarded by the Federal Reserve. (Some of the contemporary antitax economists do acknowledge there are gaps in their analyses, but believe they will yet be proved correct.) Today, despite the long legacy of Reagan and the antitax economists, taxes paid in America are not lower than they once were. Americans pay less in income taxes than they once did, but a lot more in Social Security taxes. The overall tax bite is about the same, and government spending, despite the Reagan rhetoric, is still 20 percent or so of GDP. Even without a real tax cut, the economy has grown steadily - although it has never again reached the levels attained in the high-tax 1960s. Some countries provide strong counterexamples to antitax economics - nations with high taxes and generous levels of social spending where wages, productivity, and GDP are also high. A classic example is Norway, with very high tax rates, a generous welfare state, and productivity levels that exceed America's. Even Sweden, with the most luxurious of all welfare states, has been growing solidly again since its economic downturn in the early 1990s. None of this is to say that government is automatically beneficial for the economy. An objective look at the data does not suggest that big government itself always produces faster growth. Just raising taxes, of course, won't increase rates of growth. And no doubt, at some point, government can get too big. The question is how well the tax money is spent. America has almost given up on cultivating new manufacturing industries by, for example, investing in transportation infrastructure or alternative energy policies. Developing new roads, bridges, water systems, improved airports, and new energy technologies creates jobs at home, not overseas. America seems paralyzed about reforming its healthcare system, which if left as is will cost the nation 20 percent of its GDP, up from the current 16 percent, in only a few years. That will come to more than another half a trillion dollars a year. And despite the rise of the two-worker family, there is no high-quality national pre-K program in America. Such a program, we now know from
to a nation steeped in antigovernment economics, the idea that government cannot be of help - or that taxes are not worth paying - is now seriously jeopardizing its future. There is no rich nation in the world today , including America, that has grown wealthy without significant government involvement . And there will be no rich nation in the future that can stay wealthy without robust government , either.
contemporary research, could add substantially to prosperity by creating a still more productive workforce. The list is not complete. But
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Government, the Business Roundtable and others take up the old argument that emphasise personal failure and a welfare system that has encouraged and contributed to this personal failure. It is an argument that says any support is too much. The solution proposed is a remotivation of the individual; the rediscovery of family suggests a sort of personal conversion type approach. The people who propound this view are the same group who have benefited and done well out of the reform process. The last few years have seen dependency on the welfare system, as an evil to be
targeted. The Welfare to Wellbeing Strategy of the Department of Social Welfare typifies the approach. Political parties representing the more affluent of the community have also propounded these policies.
I would question however the rigour of the data on which this policy is built. It would seem to me that this approach is often not based on research that clearly shows a link between dependency and the social problems we face, but rather is an adherence to the currently popular doctrines of individualism and economic rationalism. Philosophies that are the flavour of the time throughout the western
world.
It would be naive not to accept that any welfare system leads to some dependency. That is seen every day in every welfare agency. Similarly it is obvious that the nature of the human condition is that we are sometimes responsible for the failures that occur to us. Building however your whole social policy and system as though the personal failure of individuals alone is the cause of the problem is naive in the extreme.
If the community sector is right and poverty caused by structural maladjustments in the economic and social structure is the cause of the social timebomb then the solutions required are more than actions to motivate individuals but collective actions to put in place policies and structures that addresses the imbalance.
Only strict government intervention can enable the poor to obtain the social rights they deserve Bidstrup 07 [Scott, speech major @ Ricks College, Free Market Fundamentalism: Friedman, Pinochet and the "Chilean Miracle", Sept 22,
http://www.bidstrup.com/economics.htm]
Cutting, and eliminating when possible, expenditure for social services. Again, in
the name of reducing government interference in the market, it was not necessary for government to involve itself in social welfare programs. To explain the obvious sufferinng that results, it is therefore claimed that when the poor suffer, it is due to their own laziness that they do not better themselves. That the accumulation of money was equivalent to the accumulation of power, with its attendant distortion of the functionings of the market, was not a concern. That this led inevitably to the disempowerment of the poor was not a concern - the poor were blamed for their condition by claiming their "inferiority" or "bad decisions." Social justice was a non-issue. Incentives to private companies fail- no accountability Financial Times 03 [Americans deluded by free-market rhetoric?, May 24, http://www.pnhp.org/news/2003/may/americans_deluded_by.php]
Maine has tried to act like a big HMO, winning bulk-purchase rates for the last corner of American society that lacks them. The plan is very much in the US style of regulatory welfare. Through
the tax code and the Federal Register, private interests are given incentives or directives that amount to offers one cannot refuse. Maine has ascertained that there is spare profit in drug companies that it would rather use for consumer purposes than for product development. So it is essentially shifting private sector money out of research and into welfare. Americans still do not realise that the prescription-drug controversy, like discussions of national health policy everywhere, is at root an argument over terms of rationing. One enthusiast even calls Maine Rx a no-cost reform. Thats wrong. It is a hocus-pocus way of levying a tax on business to fund social services - minus the democratic accountability of a welfare programme. The vast sums that are moved this way never get recorded in the budget ledger, permitting Americans to delude themselves that they are less socialist and more independent than their European cousins.
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credit is no magic replacement for governments own anti-poverty role. Families in deep crisis need more than dollars and bureaucratic services, to be sure; they need assistance that is, in Marvin Olaskys words, "challenging, personal, and spiritual." A government that wants an effective welfare effort must find ways to expand nongovernmental and personal forms of assistance.
By offering a credit on taxes owed, government can stimulate taxpayer giving to anti-poverty groups and encourage greater citizen engagement with the needy. Because the governments support is indirect, there is little danger that it will turn the groups into simple vendors of government services or encroach on their moral or religious character. At the same time, because the credit is targeted to donations for anti-poverty action, government ensures that lower tax revenues and reduced social spending are offset by increased service by nongovernmental assistance programs.
Nevertheless, the charity tax credit is problematic in both its details and its overall design. Typical proposals define eligible charities narrowly as groups directly assisting the poor, so that increased giving will go to the needy and not to the orchestra or someones alma mater. But this risks reducing the anti-poverty fight to emergency help at the expense of long-term, transformative programs. Similarly, the proposals typically ban legal and political action by eligible charities so that they cannot lobby for more welfare spending. However, sometimes what the poor really need is a courtroom advocate against a shoddy business or an unjust landlord. Or they may need political action to sweep away laws and regulations that hamper entrepreneurial activity or to change the structure of the education system.
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ADVOCATES OF THE FREE MARKET assume that the public interest will be automatically served if each individual follows his or her economic self-interest. It hasn't worked out that way for the poor and the vulnerable. Private companies have increasingly taken over the social services. In business to make a profit, they prefer to serve clients who will help them do that, which leads to "creaming" the clientele. The people whom private organizations find too difficult or intractable are left for the government to serve directly, if they are served at all. Social services (e.g., foster care and adoption, counseling, rehabilitation, private charity), have long been dominated by the non-profit sector. Private charity began before public charity, most often under the auspices of religious groups or religious-minded
individuals. Catholic Charities, the Federation of Protestant Welfare Organizations, United Jewish Appeal-Federation and the Salvation Army, for example, are large providers of private charity. However, voluntary
agencies are not really "private" any more because much of their funding comes from federal, state, and local governments in public-private partnership arrangements. Nonprofit agencies have, in effect, become "paid agents" of the government
to an extent that no one in the 19th century would have dreamed possible. They have increased their contracting with both state and federal governments since the 1980s. Nonprofit agencies are no longer exclusively concerned with the poor; in fact, they have increasingly disengaged from the poor. A study by the Urban Institute in the 1980s showed that over half of nonprofit human service agencies had few or no poor clients and only 27 percent had mostly poor clients. Research
shows that charity benefits the relatively advantaged rather than disadvantaged groups, well-established organizations rather than new, grassroots activities, community organizing, issue advocacy, or controversial public policy initiatives. Social and class elites are overrepresented on boards and have disproportionate power over priorities, though there is more risk taking with younger diverse board membership.47
Turn- privatization monopolies collapsing the market and decreasing the potential for success
Mandell 02 [Betty, welfare rights activist since the 1960s, co-edits Survival News, written by and about poor people. She is a member of the New Politics
editorial board, The Privatization of Everything, Summer, http://www.wpunj.edu/~newpol/issue33/bmande33.htm]
The complexities, uncertainties, and ambiguities of imperfect information, inadequate distribution of existing information, barriers to market entry, and product differentiation are all assumed to be either nonexistent or trivial." 23 This model is labeled a "Pareto optimum" after Vilfredo Pareto, who claimed to follow the teachings of Adam Smith. It implies that
not only will a competitive market society enhance material wealth, but that as each individual acts in pursuit of his or her own gain, everyone is in fact helping to create the optimal possible amount of material satisfaction for everyone else in society."24 This market model has nothing to say about the fairness of any Pareto optimal outcome. The Nobel Prize winning economist Amartya Sen commented, "A society or an economy can be Pareto optimal and still be perfectly disgusting."25
The problem with this model, according to Sclar, is that the barriers to market entry for additional sellers are often high and purchasers often don't have access to good information on which to base their decisions to buy. The real economy is not a level playing field, but a "mountainous terrain that includes several high peaks from which well- endowed corporate and individual warriors swoop down to seize targets of opportunity."26 There is some real competition, mostly between small businesses, but the tendency is to try to monopolize the market in order to maximize profits. Small businesses generally don't have the capital to handle large contracts over a long period of time.
There is another reason, in addition to Sclar's, disproving the idea that privatization follows the Pareto principle. Privatization begins with getting government money. How is the Pareto principle followed when prisoners are forced to be in private prisons? And how is the Pareto principle followed when the government gives private corporations money to build and run those prisons? There (government money) destroys that.
is no buyer and seller. And since private schools depend on government money in the form of vouchers, there is no free enterprise commerce. If someone starts a private school and competes with public schools on an equal basis, that is free market competition, but the use of vouchers
Even if the government is inefficient- privatization is comparatively worse [this is especially true for contracting]
Mandell 02 [Betty, welfare rights activist since the 1960s, co-edits Survival News, written by and about poor people. She is a member of the New Politics
editorial board, The Privatization of Everything, Summer, http://www.wpunj.edu/~newpol/issue33/bmande33.htm]
IT IS TRUE THAT PUBLIC OPERATIONS are sometimes inefficient. Public bureaucracies, "like sedentary people, tend to accumulate fat around the middle."39 They often collect more middle level managers than they need, some of who are political appointees. Sclar points out that the solution to this is not privatization; the solution is reorganization of the public service. Use of the spot market may lead to more efficiency and cost savings, but the picture is different when complex contracting is involved. There is no evidence that private corporations manage complex services more efficiently than governments. In fact, private corporations often hire managers from the public sector to manage their contracts. The substantive experience of the public managers is crucial to effective service delivery.
The British rail service is a good example of how privatization can break down partly because of the complexity of contracting and supervising the contract. Amid promises of greater efficiency, reliability, and returns from corporate taxes, the British railway was sold to Railtrack, a private corporation. The system was broken up into more than 100 separate businesses, some of which subcontracted parts of their responsibilities. By October 2000, there were two major collisions, caused by faulty signals, which killed a total of 38 people, while a third crash caused by a broken rail, killed another four. Last year, the number of train cancellations rose to 165,000, nearly three times the 1999 level. In October 2001, the government placed Railtrack in "administration" -- in effect, bankrupting it.40
The private corporations cut costs by firing workers, which caused problems ranging from cancellations due to few drivers being available to dangerous unstaffed stations. Maintenance companies cut their staff by about a third. Government subsidies to the railways were about three times higher than
before privatization. Public opinion polls show large majorities in favor of renationalizing the whole system.
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professor at George Mason University (Walter, Capitalism Magazine, Charity is no function of the federal government, September 21, 2005 < http://www.capmag.com/article.asp?ID=4412> ) Last week, President Bush promised the nation that the federal government will pay for most of the costs of repairing hurricane-ravaged New Orleans, adding, "There is no way to imagine America without New Orleans, and this great city will rise again." There's no question that New Orleans and her sister Gulf Coast cities have been struck with a major disaster, but should our constitution become a part of the disaster? You say, "What do you mean, Williams?" Let's look at it. In February 1887, President Grover Cleveland, upon vetoing a bill appropriating money to aid drought-stricken farmers in Texas, said, "I find no warrant for such an appropriation in the Constitution, and I do not believe that the power and the duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit." President Cleveland added, "The friendliness and charity of our countrymen can always be relied upon to relieve their fellow citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood." President Cleveland vetoed hundreds of congressional spending measures during his two-term presidency, often saying, "I can find no warrant for such an appropriation in the Constitution." But Cleveland wasn't the only president who failed to see charity as a function of the federal government. In 1854, after vetoing a popular appropriation to assist the mentally ill, President Franklin Pierce said, "I cannot find any authority in the Constitution for public charity." To approve such spending, argued Pierce, "would be contrary to the letter and the spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded." In 1796, Rep. William Giles of Virginia condemned a relief measure for fire victims, saying that Congress didn't have a right to "attend to what generosity and humanity require, but to what the Constitution and their duty require." A couple of years earlier, James Madison, the father of our constitution, irate over a $15,000 congressional appropriation to assist some French refugees, said, "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents." Here's my question: Were the nation's founders, and some of their successors, callous and indifferent to human tragedy? Or, were they stupid and couldn't find the passages in the Constitution that authorized spending "on the objects of benevolence"? Some people might say, "Aha! They forgot about the Constitution's general welfare clause!" Here's what James Madison said: "With respect to the two words 'general welfare,' I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators." Thomas Jefferson explained, "Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated." In 1828, South Carolina Sen. William Drayton said, "If Congress can determine what constitutes the general welfare and can appropriate money for its advancement, where is the limitation to carrying into execution whatever can be effected by money?" Don't get me wrong about this. I'm not being too critical of President Bush or any other politician. There's such a broad ignorance or contempt for constitutional principles among the American people that any politician who bore truth faith and allegiance to the Constitution would commit political suicide.
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difficult task ahead was to recover the lost wisdom of true charity. Since then, conservatives have tended to distort this robust idea into another theme that is more comfortable but false: Government welfare is largely bad and private sector charity is largely good. This is simply untrue. Although there are a few sound conservative organizations helping the poor, the bulk of nonprofit private charities serving them are more liberal and more permissive than their counterparts in government. Any criticism I have ever written about government welfare applies doubly to nonprofit charity. It is thus the most retrograde and corrupt part of the welfare system that the advocates of a charity tax credit are proposing to expand. Peter Barwick suggests a trade-off: Government welfare spending will be reduced and money re-channeled through the tax code to the private nonprofit philanthropy. In reality, it will not work that way. The philanthropies he seeks to subsidize are nearly unanimous in their claim that the United States must spend more on the poor. If a charity tax credit is created, it will not replace government welfare, but will merely be added on top of the vast existing welfare system that already absorbs 5 percent of GNP. CTC is hampered by political bureaucracy Rector 98 [Robert, senior policy analyst for welfare and family issues at The Heritage Foundation, Charity Tax Credits--and Debits, Jan/Feb edition,
http://www.hoover.org/publications/policyreview/3566647.html]
Moreover, public-sector
welfare has one important advantage over private charity: Government funds are rarely used to intervene in the political process. Not so for private philanthropy. Indeed, most liberal and moderate charities believe that the noblest deed they can perform on behalf of the poor is to lobby for greater government welfare spending and expanded state power. In a
recent hearing in the House of Representatives, the chief lobbyist of Catholic Charities stated that, in the view of her organization, the best charity activity was voter registration!
Whenever similar charity tax bills have been introduced in Washington, the entire philanthropic industry has been mobilized to remove any ban on advocacy. As a result, most bills like this one deliberately include policy research and advocacy as a "service to the poor" worthy of subsidy.
Barwick does propose a ban on the use of tax-subsidized charity funds for policy advocacy. But this ban is an illusion and has no chance of survival in the long term.
Barwicks plan creates the opposite effect- CTC destroys any opportunity of investment while decreasing democratic participation in government Rector 98 [Robert, senior policy analyst for welfare and family issues at The Heritage Foundation, Charity Tax Credits--and Debits, Jan/Feb edition,
http://www.hoover.org/publications/policyreview/3566647.html]
Barwick says he wants to create a marketplace for charity permitting individuals to choose where their monies go. In fact, he does neither. His proposal is narrow and corrupt because he mimics the core premises of the War on Poverty. His idea of "charity" bows in obeisance to the liberal icons of guilt, victim worship, envy, and indulgence. It is divorced from true benevolence. To mention one example among a thousand: he would subsidize hospice care for the indigent terminally ill, but not donations for medical research to cure diseases. This is a very bad idea. If we wish to strengthen civil society, reduce government, and combat moral deconstruction, we should consider enhanced tax relief for all philanthropic giving, not merely the narrow leftish aid to the "poor" envisioned by Barwick . Such an alternative would foster
true benevolence, rather than a stale repeat of the War on Poverty. To the extent speech and advocacy were funded, all ideas would be treated equally and public discourse would not be biased toward the Left.
CTC increases government involvement in the everyday activites of the programs- the exact kind of control their net benefits seem to critique Arnett 98 [Grace-Marie, formerly the executive director of the National Commission on Economic Growth and Tax Reform, is the president of the
Galen Institute, a not-for-profit tax and health policy research organization based in Alexandria, Charity Tax Credits--and Debits, Jan/Feb edition, http://www.hoover.org/publications/policyreview/3566647.html]
Who can argue that a tax credit for charitable contributions isnt worthwhile? Of the thousands of twists and turns in federal and state tax codes, one that promotes charitable giving to encourage civil society should be at the top of the list. But there are costs and trade-offs, and it is important that they be visible during
the debate. The advocates of hundreds if not thousands of worthwhile causes can and do make passionate and convincing cases for special tax favors to benefit their constituents. But
whenever a social cause is steered through the maze of the tax code, the donor, the recipient, and the beneficiary are subject to government intrusion to assure compliance. Further, any tax deduction or credit must be assessed with an eye toward its impact on the overall tax rate.
Just looking at the criteria that Peter Barwick has listed for eligibility for a charity tax credit suggests the complexity of the proposal: Under his plan, charities must prove that 75 percent of their budgets go to direct assistance for low-income individuals and that no more than 5 percent of the charities budget is spent on political activities.
Government bureaucrats would have to write detailed regulations to define what "direct assistance" means, charities would be required to provide volumes of paperwork to assure they are in compliance, and government agents would be free to scrutinize records detailing how the staff and volunteers of the charity spend their time and money . Misael, Kevin, Matthew, Jack, Anna, Kurt, Grace, Nadia, Nick 119
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deductions and partial tax credits like the Pennsylvania proposal are much more likely to be used by those with higher incomes. It only makes sense: Those with higher incomes have more money left over, after providing for their housing, food, transportation, and clothing, to give discretionary income to charity. They can afford to spend money to save money on taxes. People at the lower end of the income-tax scale, on the other hand, are often least able to take advantage of tax preferences. A much higher percentage of their income--sometimes all of it--is consumed just to meet living expenses. They are limited in their ability to spend money on
something that government encourages in order to save money in taxes. Those who can afford to spend money on the tax credit can lower their effective tax rate; those who cant are stuck. These
loopholes create the perception that the rich are able to game the tax code, thus engendering resentment between the rich and the poor and hatred of the tax code.
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director of entitlement and budget policy for the Institute for Policy Innovation. He served in President Reagan's White House Office of Policy Development, and as associate deputy attorney general under the President George H.W. Bush. (Peter, The Wall Street Journal, Obamas Tax Plan is Really a Welfare Plan, August 19, 2008. < http://online.wsj.com/article/SB121910303529751345.html >) Barack Obama's tax plan is the opposite of supply-side economics. He proposes to raise marginal rates for just about every federal tax. He also proposes a raft of tax credits that taxpayers can receive if they engage in various government-specified activities. Moreover, the tax credits would mostly go to those who pay little or nothing in federal income taxes. His trick is to make the tax credits "refundable." Thus, if the tax credit is for $1,000, but the taxpayer would otherwise only pay $200 in taxes, the government would write a check to the taxpayer for $800. If the taxpayer pays nothing in federal income taxes, the government would pay him the whole $1,000. Such credits are not tax cuts. Indeed, they should be called The New Tax Welfare. In effect, Mr. Obama is proposing to create or expand a slew of government spending programs that are disguised as tax credits. The spending on these programs is then subtracted from the total tax burden, in order to make the claim that his tax plan is a net tax cut overall. On the tax side of the ledger, the details released by his campaign last week confirm what a President Obama has in mind for our most productive citizens. The top individual income tax rate, for example, would be increased by 13%, to 39.6%; the next-highest rate would be raised to 36%. The top rates on capital gains and dividends would rise by a third, to 20% The Social Security payroll tax would be raised between 16% to 32% for families making over $250,000 a year. This means that the real returns these people get from their lifetime payments into the retirement program will be driven below 0%, according to my own previous research, which was published by the Cato Institute and elsewhere. Mr. Obama also wants a permanent federal estate tax, with a top rate of 45%; his health-insurance plan includes a new payroll tax on employers; and he also contemplates several increases in the corporate income tax, including a new so-called windfall profits tax on oil companies. Then there is the spending side of the ledger. Mr. Obama proposes a fully refundable Making Work Pay Tax Credit, which would have the government pay out $500 to each worker and $1,000 to couples -- reminiscent of George McGovern's 1972 election proposal for the government to send a $1,000 check to everyone. His American Opportunity Tax Credit would provide a $4,000, fully refundable tax credit for college tuition expenses. His Mortgage Interest Tax Credit would provide a 10% credit -- refundable -- to offset mortgage interest payments for lower- and middle-income families. His Health Care Tax Credits, which the campaign says "will ensure that health insurance is available and affordable for all families," include "a new refundable 50 percent health tax credit on employee premiums paid by employers." Currently existing tax credits would also become spending programs in the Obama tax program. The Savers Credit would be made fully refundable, and would be expanded, according to the campaign, "to match 50% of the first $1,000 of savings for families that earn under $75,000." The Child and Dependent Care Tax Credit would be made refundable and expanded to allow "low-income families to receive up to a 50 percent credit on the first $6,000 of child care expenses." The Earned Income Tax Credit is already refundable. Mr. Obama would expand it to "increase the number of working parents eligible for EITC benefits, increase the benefits available to noncustodial parents who fulfill their child support obligations, increase benefits for families with three or more children, and reduce the EITC marriage penalty, which hurts low-income families." In short, welfare spending is to be increased by paying more money out to low-income income tax filers. The latest Congressional Budget Office data shows the bottom 40% of income earners already pays no income taxes. Indeed, they receive a net payment from the federal income tax system -- meaning from the taxpayers -- equal to 3.8% of all federal income taxes, because of the refundable tax credits under current law. The middle 20% of income earners, the true middle class, pays 4.4% of federal income taxes. Overall, the bottom 60% of income earners pay less than 1% of federal income taxes on net. When "tax credits" primarily go to this group in the form of checks from the government (rather than a reduction in their tax burden) it is simply an abuse of the language to call the spending a tax cut. Consequently, to say, as the campaign does say, that the candidate's tax plan is a tax cut on net -- and that it would limit taxes to 18.2% of GDP -- is grossly misleading. The Obama tax plan would sharply increase real taxes. It also would come nowhere near to paying for the massive increases in federal spending he has proposed, including the spending that is disguised in the form of refundable tax credits.
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Health care tax credits dont solve cost or quality Washington Post, January 26, 1992, Health Tax Credits? A Sickly Idea; Here's a Plan That Won't Do Anything to Make
the System Work, Robert Ray is co-chairman of the National Leadership Coalition for Health Care Reform and president of Blue Cross and Blue Shield of Iowa, former Governor of Iowa, lexis Now consider how a tax credit would measure up against these needs. A tax credit would not slow health spending; in fact, it would in- crease it by pumping more money into the system. To control costs, and stop cost-shifting to business, we need to set a spending target and develop a fair fee schedule to keep total system costs at or below that level. That's the process used for hospital reimbursement under Medicare -- and it works. Nor would a tax credit improve quality. For that we need to do more and better research on alternative treatments and technologies -- and to develop practice guidelines, so that care providers have the best information available on how to help patients.
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Double-bind: either a tax credit plan targets everyone, losing revenue, or targets a limited group, terminating insurance. Employer-based strategy key to solve. Washington Post, January 26, 1992, Health Tax Credits? A Sickly Idea; Here's a Plan That Won't Do Anything to Make
the System Work, Robert Ray is co-chairman of the National Leadership Coalition for Health Care Reform and president of Blue Cross and Blue Shield of Iowa, former Governor of Iowa, lexis The second dilemma for a tax credit plan has to do with targeting. If a tax credit is available to all taxpayers (or at least to those with incomes below a ceiling), much of the revenue lost because of the credit will go to people who already pay for part or all of their own insurance. On the other hand, if a credit is limited to those who do not have health coverage, some employers will be induced to terminate their employees' coverage and keep the savings. This would obviously drive up the cost of the tax credit. What's more, it could have the perverse effect of actually reducing insurance coverage if the credit were too modest to allow many people to buy adequate insurance. Any plan that offers a government-subsidized alternative to direct employer insurance creates some incentive for companies to opt out of providing coverage, but with a tax credit, companies could save all their current costs. It has recently been suggested that an employer-based strategy -- such as the one included in the reforms proposed by the National Leadership Coalition for Health Care Reform, which I co-chair -- would also displace workers from private insurance. That is a misconception. Employers would either purchase insurance directly for workers or help finance coverage indirectly -by enrolling employees in private insurance under public sponsorship and paying a payroll tax. Either way, employees and their families would be privately insured -- and all would have coverage.
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Turn Microfinancing reduces cash flow to the very poor and only works for those above the poverty line The Discomfort Zone, Microfinance Misses its Mark, August 23, 2007, http://www.planetd.org/2007/08/23/microfinance-misses-its-mark/
The Reality of Microfinance The problems Karnani cites are well known, and were pointed out years ago by Thomas Dichter, among others. People take microfinances poverty alleviating characteristics as fact - so much so that nobody has really studied the phenomenon. Those that have, says Karnani, find the impact on poverty is not as unambiguous - and he quotes several studies: One of the most comprehensive studies reaches a surprising conclusion: Microloans are more beneficial to borrowers living above the poverty line than to borrowers living below the poverty line. This is because clients with more income are willing to take the risks, such as investing in new technologies, that will most likely increase income flows. Poor borrowers, on the other hand, tend to take out conservative loans that protect their subsistence, and rarely invest in new technology, fixed capital, or the hiring of labor. Microloans sometimes even reduce cash flow to the poorest of the poor, observes Vijay Mahajan, the chief executive of Basix, an Indian rural finance institution. He concludes that microcredit seems to do more harm than good to the poorest. The failure of microfinance to bring people out of poverty should not be surprising, except to those deafened by its hoopla. People below the poverty line simply do not have the skills, vision, creativity, and persistence to be entrepreneurial. Even in developed countries with high levels of education and access to financial services, about 90 percent of the labor force is employees, not entrepreneurs. Indeed, Thomas Dichter made a similar point, pointing out: The microcredit paradox is that the poorest people can do little productive with the credit, and the ones who can do the most with it are those who dont really need microcredit, but larger amounts with different (often longer) credit terms.
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Pro bono tax credits wont solve wont close gap between ALL legal needs, just the actual defense Jason M. Thiemann, Candidate for Juris Doctor, Hamline University School of Law, Hamline Journal of Public Law & Policy, Spring, 2005, 26 Hamline J. Pub. L. & Pol'y 331
Finally, the ultimate effect a pro bono tax credit would have on closing the gap between pro bono services rendered and the remaining unmet legal needs of the poor is also a concern. If a large portion of the population continued to have legal needs that go unmet, then has the implementation of a pro bono tax credit positively enhanced pro bono participation or has it simply established a ceiling on the amount of pro bono service that the legal profession will render? In determining the effectiveness of a pro bono tax credit, the ultimate question should concern the impact the pro bono tax credit engendered on lawyers' participation in pro bono activities; has the pro bono tax credit enhanced pro bono participation?
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Aff: AT Microfinancing
Microfinancing can not be the sole instrument for poverty reduction not everyone is an entrepreneur Bangladesh proves Emerging Markets Datafile, THE INDEPENDENT, January 15, 1999, Microcredit alone wont reduce poverty
Microcredit programs should not be the sole instrument for poverty reducton in Bangladeish though they can raise living standards, particularly of women and their households here, said a recent study of the World Bank. The new study "Fighting Poverty with Microcredit : Experience in Bangladesh" assesses for the first time the cost-effectiveness of microcredit programs as instrumental for poverty reduction based on the experience of the Grameen Bank which pioneered microfinance and two other major microcredit programs - the Bangladesh Rural Advancement Committee (BRAC) and the Rural Development Project (BRDB) 12 (RD-12). "Microcredit has tremendous potential as an instrument for poverty reduction. But complementary efforts such as literacy promotion and training are necessary to help those who lack the skills to make credit work for them," said Shahidur Rahman Khandker, Senior Economist in the World Bank's Poverty Reduction and Economic Management Network and main author of the Study, at a press briefing at World Bank country office in the city yesterday. He said that microcredit opened windows to self-employment and was effective only for those poor people who had entrepreneurship. To reach the poorest of the poor, other targeted programs, such as wage employment schemes, were needed for those who could not make productive use of microcredit, Shahidur Rahman added. Based on an extensive household survey and program-level data, the study found that microcredit programs were more cost-effective than formal finance in providing financial services to poor rural clients and were also more cost-effective than some other types of anti-poverty programs.
Turn Microfinancing reduces cash flow to the very poor and only works for those above the poverty line The Discomfort Zone, Microfinance Misses its Mark, August 23, 2007, http://www.planetd.org/2007/08/23/microfinance-misses-its-mark/
The Reality of Microfinance The problems Karnani cites are well known, and were pointed out years ago by Thomas Dichter, among others. People take microfinances poverty alleviating characteristics as fact - so much so that nobody has really studied the phenomenon. Those that have, says Karnani, find the impact on poverty is not as unambiguous - and he quotes several studies: One of the most comprehensive studies reaches a surprising conclusion: Microloans are more beneficial to borrowers living above the poverty line than to borrowers living below the poverty line. This is because clients with more income are willing to take the risks, such as investing in new technologies, that will most likely increase income flows. Poor borrowers, on the other hand, tend to take out conservative loans that protect their subsistence, and rarely invest in new technology, fixed capital, or the hiring of labor. Microloans sometimes even reduce cash flow to the poorest of the poor, observes Vijay Mahajan, the chief executive of Basix, an Indian rural finance institution. He concludes that microcredit seems to do more harm than good to the poorest. The failure of microfinance to bring people out of poverty should not be surprising, except to those deafened by its hoopla. People below the poverty line simply do not have the skills, vision, creativity, and persistence to be entrepreneurial. Even in developed countries with high levels of education and access to financial services, about 90 percent of the labor force is employees, not entrepreneurs. Indeed, Thomas Dichter made a similar point, pointing out: The microcredit paradox is that the poorest people can do little productive with the credit, and the ones who can do the most with it are those who dont really need microcredit, but larger amounts with different (often longer) credit terms.
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Maximus went public in 1997. In the following year the company came under fire in Connecticut for a $12.8 million contract that was supposed to put a shine on a state program that pays for child care for working welfare recipients. But within months Maximus found its operations in the kind of disarray it usually takes government years to achieve, says the Leader. More than half of the 17,000 bills submitted by childcare providers were over 30 days late in being paid. Daycare centers were confronted with decisions about turning away children, and parents trying to contact the company encountered telephone-system collapse. Under pressure to perform, the company shifted into crisis mode, adding more staff as founder Mastran was forced to take the reins and provide on-site crisis control. 25 In terms of service here, theyve been abysmal, says Rick Melita, a spokesperson for the Connecticut State Employees Association. They underbid, overpromised and they didnt deliver.26
Companies like Maximus are inefficient, waste money, corrupted, and limit out successful government involvement- this makes it impossible to solve
American Federation of State, County and Municipal Employees no date [public service union, Sample Speech Against
Privatization, http://www.afscme.org/issues/1519.cfm]
Another cost and quality disaster for a jurisdiction contracting with Lockheed Martin came in Florida, where the company and another firm, Maximus, were granted contracts to streamline child support data and make collections. The two firms were paid $4.5 million for their services, while they only managed to collect $207,000. Most of the payments to the firms came from variable fees, ranging from $50 to $300, for closing
cases, which frequently meant simply correcting files or deciding that many "deadbeat parents" could not pay for whatever reason. While the states real interest was actual support collections, the firms had insisted on case closing fees, arguably to cover their operating costs. When great difficulties in making collections became apparent, the firms focused even more on the closing fees. Moreover, the
firms tried to use the states own databases to close cases en masse, then billed at the maximum level. Even with these fees, which one state staffer called "freebies," both firms terminated their contracts early, saying they couldnt make profit on the project their real concern from the start. Another problem with contracting out government services is the potential for conflicts of interest, influence-peddling, and outright corruption. In Washington, D.C., for example, the FBI began investigating allegations that former high-level city employees who had gone to work for Lockheed
Martin IMS had structured the citys parking-meter contract so that Lockheed would have an advantage. An unsuccessful bidder filed a complaint, after which Lockheed forged a partnership with that bidder to get the contract. The allegations of impropriety went unresolved. There have also been conflict-of-interest problems in Los Angeles, where another parking-meter contract was controversial because of contributions the company made to officials, in New York City, where the company was barred from parking contracts because of alleged bribes and kickbacks, and in Texas, where a number of former state officials went to work for Lockheed, prompting some to wonder if the Texas welfare reform privatization project wasnt "wired for Lockheed Martin." The
"revolving door" phenomenon puts the fairness of privatization in doubt. Even in the best of all possible worlds, if everyone involved is honest and above board, it is impossible for companies like Lockheed Martin to ignore the profit motive literally putting the interests of shareholders before those of the public. Also, even in so-called "good" contracts, government entities lose much of their capacity to perform work and serve citizens. If there are problems with a contract, and citizens seek some kind of redress, the government is reduced to being essentially a middleman, going to the vendor and hoping the vendor will fix the problem.
There are literally dozens of other examples of Lockheed Martin IMSs problems with social services contracts, as well as problems with the parent companys defense-related lines of business. (IMS is a subsidiary of Lockheed Martin.) Many of these cases are summarized in a report AFSCME has produced, covering the miscues and failures of Lockheed and other vendors. I believe these
cases are really sounding warning alarms about the problems overall with contracting out government services, particularly complex and vitally important functions like social services . As Ive indicated in my brief comments, privatization has frequently failed to show improvements in costs or quality; in fact, it has often proven to be costly, ineffective, or downright corrupt. Companies like Lockheed Martin are better at, and more concerned with, producing profits and looking out for their own interests than in helping society achieve its goals.
admitted to "improperly spending" a half million dollars each in projects in other states, parties, promotional schemes, meals and concerts.
"Neither corporation was prosecuted for felony welfare fraud. Nor did Tommy Thompson, then governor of Wisconsin, terminate their lucrative W2 contracts."45
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Eugene Kane wonders how a large sophisticated company like Maximus with welfare reform contracts in more than two dozen states could have made so many glaring mistakes. Maximus was one of five agencies hired to help create a welfare reform system here that ended up being so confusing and poorly run that in little more than three years, loads of frustrated poor people opted out of the system. Cutting poor families off the dole proved so successful, W-2
enjoyed a huge surplus of funds, mainly because the program was drastically over-budgeted in the first place. Kane recognizes that Wisconsin has a welfare reform system that operates just like a business a poorly run business.29 While the Wisconsin situation was unfolding, Maximus was also under siege in New York. In March 2000, according to the Mason City Iowa Globe-Gazette, New
York City comptroller Alan Hevesi refused to certify $104 million in welfare-towork contracts with Maximus, charging that the award by Mayor Rudolph Giulianis administration raised the appearance of corruption, favoritism and cronyism. Hevesi concluded that the company was given an unfair head start in preparing its bid.30 In April, a New York State Supreme Court justice blocked the contract because of compelling evidence that the contracting process has been corrupted . In late October, a state appellate court overturned the decision blocking the contract. A
beleaguered Maximus spokesperson termed this victory a vindication.31
top of the companys financial shenanigans, 16 formal gender or racial discrimination complaints have been filed with the Milwaukee office of the Equal Employment Opportunity Commission, against Maximus or one of its subsidiaries. In additionas many as a dozen internal grievances were filed with the companys human resources office related to unfair promotion practices.34 Linda Garcia is an organizer with 9to5, a national nonprofit grassroots organization working to empower women through securing economic justice. Garcia has observed the activities of Maximus first-hand from the front lines in Milwaukee. The public has not been served well by privatization, she says. The standards of accountability and monitoring have been practically non-existent. Were not seeing decent services provided to the community or a decrease in poverty or homelessness . Garcia, who has been working on behalf of the women involved in the discrimination suit against Maximus, believes discriminatory practices may be widespread at Maximus MaxStaff entity, which seems to be funneling women to low-paying jobs in order to quickly receive the bonus staff gets for placements.35
Maximus rarely pleases its clients and doesnt even get around to helping a majority
Owitz 01 [Bill, contributor @ the Applied Research Center, PR O S P E C T I N G AM O N G T H E PO O R: WELFARE P R I VATIZ AT I O N, May,
http://www.arc.org/pdf/296bpdf.pdf]
Catherine Brown-Swain is a volunteer with the Association for Children for Enforcement of Support (ACES) in Colorado Springs, Colorado. A former caseworker with the District Attorneys office, Brown-Swain recently served on a fiveperson committee evaluating proposals to manage child support services for the county. For the past five years Maximus has held the contract. Now, however, despite its re-bid, as of the contracts end on December 31, 2000, Maximus is no longer a player in El Paso County. In the three years that ACES has been around, weve
fielded over 3,000 complaints from people dependent on Maximus services, Brown-Swain says. That comes out to about one complaint for every seven clients. Most of these complaints concern clients being treated with disrespect when they try to access services. Equally important, many clients just do not have their cases worked. 21
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the scenes, the Maximus program was soon in disarray. W-2 was built on the theory of "full engagement ": 40 hours of many clients waited months for assignments. Others ignored their assignments and got paid anyway. Six months after the program's start, Steve Perales, the second in charge, warned that "virtually no referrals are being made to the CSJ unit," the one that assigns community service jobs. While 1,100 clients were supposed to have assignments, just 507 had gotten them, and "only about 88 are actually participating." That is, in the country's most famous work program, only 8 percent of the clients were working. "What they were doing, I don't know," George Leutermann, the head of the program, later told
weekly activity, of which 30 would involve actual work. Yet me. "They were doing nothing." One reason was the shortage of caseworkers. Under state rules, each "Financial and Employment Planner," or Fep, was supposed to manage no more than 55 clients. Some Maximus Feps had more than twice as many. Ten months after the program's launch, the state took its first quantitative look at the agencies' performance. The audit, called a 740RC report, was of interest not only as a mid-term report card, but also because it hinted at the criteria the state would use for contract renewal the following year. With Maximus using the Milwaukee program as a national exhibit, a failure to keep the contract would wreck the business plan. All
the Milwaukee agencies performed poorly on the report, but Maximus did especially badly: 67 percent of its clients had no work assignments. Railing about "our dismal performance," Leutermann wrote a memo blaming subordinates for "a major setback" that "portends continued problems." But after months of
refusing, he also agreed to hire more caseworkers.
Reject their counterplan- studies and past experiences show that Maximus explicitly refuses to help the poor and engage in discriminatory, morally repugnant activities Casa Maria Worker 05 [catholic organization, news comment based on recent interactions with W-2 companies, An Opening Letter to Governor
Doyle, January, http://www.geocities.com/casa_maria_worker/jan_05news.html]
Instead of slashing W-2 funds, we need to be holding W-2 agencies like Maximus, UMOS and OIC accountable to a higher standard than what is currently in place. Recently, Casa Maria and the Welfare Warriors met with the CEOs of Maximus and UMOS, two of Milwaukees W-2 agencies. What we came face to face with was their lack of concern for the poor. Maximus representatives even went so far as to refuse to answer questions or post anything in their agency regarding the rights of people on W-2.
Another Milwaukee W-2 agency, OIC, has been dragging its feet on having a meeting with us. Not surprisingly, OIC is Milwaukees worst W-2 agency.
According to a study by the University of Chicago and the University of Wisconsin-Madison, all of Milwaukees W-2 agencies, OIC, Maximus and UMOS, are failing in their mission to help people out of poverty and into jobs. Compared to all other W-2 agencies in
Milwaukee County, people who receive W-2 at OIC earn the least amount of money while on W-2 and after they leave. This report also revealed that Blacks, Latin@s are dealt with in a harsher manner than white clients in the same situations in Milwaukees W-2 agencies. Your cuts in W-2 will directly harm people of color, the poor, and the homeless. Proverbs 29:7 reads, The righteous care about justice for the poor, but the wicked have no such concern. God does not condone the thievery of funds from people facing homelessness by politicians searching for votes and W-2 agencies greedy for tax dollars. People facing homelessness in Milwaukee need real support and education, not cutbacks and corruption. Community If you see the poor oppressed in a district, and justice and rights denied, do not be surprised at such things; for one official is eyed by a higher one, and over them both are others higher still. Ecclesiastes 5:8 The people of the land practice extortion and commit robbery; they oppress the poor and needy and mistreat the alien, denying them justice. Ezekiel 22:29 Interesting Facts about Milwaukees W-2 agencies OIC 1 OIC gave $500,000 to recalled Senator Gary George shortly before Senator George pushed for them to obtain a larger W-2 caseload. OICs former President, Carl Gee, could get up to 5 years in prison for the scandal. 1 On September 22nd, the Division of Workforce Solutions told OIC they have 10 days to fix problems ranging from refusing payment to subcontractors to denying literacy, job training and GED classes to clients in their program. They did not comply and their caseload was partially cut. The Casa Maria Catholic Worker
1 Five of OICs top administrators make over $100,000 a year while poor families continue to get services cut through their W2 program. William Clay, the CEO of OIC, has had his salary double in the past 8 years.
Maximus 1 Maximus 1 Maximus
illegally spent million of your tax dollars to secure contracts in other states . has been sued for race and sex discrimination by at least 20 of their own workers . 1While protesting outside of Maximus, we have experienced many discriminatory comments by Maximus caseworkers, such as being called lesbians.
1 National Director, Stephen Goldsmith, used to be Vice President of Lockheed Martin, a top weapons manufacturer for unjust wars.
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regulations for determin- ing the services to be provided, and the obligation for monitoring the providers, rested with bureaucracies at each level of the government - federal, state, and local. The same basic structure continues today. In recent years there has been rising concern among privatization experts in the U.S. re- garding the dynamics associated with contracting for social services. The general point is made that although spending on services has risen dramatically, the U.S.
poverty rate has changed little during the last 25 years - with variations seemingly dependent far more on the ebb and flow of the national economy than on the expansion or contraction of social ser- vice programs. It is also noted that the U.S. currently spends about $150 billion on anti-pov- erty programs for about 30 million poor Americans, or $20,000 per year in income support and services for each family of four below the poverty line. If the money had simply been given to each family, rather than fannelled through the social service system, the income of that family of four would be more than $5,OW above the poverty line. Yet
poverty persists. The reason this spending on services has not substantially improved the condition of the poor is that the growth of contracting since the 1960s has led to the development of a huge professional social service industry. 11is, industry "crowds out" less costly alternatives, dis- torts the traditional mission of America's nonprofit organizations, and uses political pres- sure to expand programs that enrich the industry itself rather than serve the best interests of the poor. Government Requirements. 11is, happened, paradoxically, because the government sought to
use the contracting process to assure the highest quality, professional services for the poor. To achieve this worthy goal, the government generally made the allocation of grants dependent on an organization indicating a real need for services and showing that it had a qualified staff to provide the services. But such
apparently reasonable conditions have had a profound effect on the delivery of social services in the U.S. Most important, once-in- dependent and community-based social service organizations have become creatures of the government . By 1980, according to Lester Salamon and Alan
Abramson of the Urban Insti- tute in Washington, D.C., some 58 percent of the revenues of America's nonprofit social ser- vice organizations was coming from the governinent.1 Salamon and Abramson note, as have other scholars, that this close relationship with government has caused most groups to alter their activities to comply with the funding requirements of government programs. In addition, the Urban Institute scholars explain, the
regulations accompanying contracts has led nonprofit organizations to professionalize their staff, shedding many "un- credentialled" volunteers and replacing them with paid and "credentialled" professional service providers. Thus the net effect in many instances is that the government now pays for services that were once provided by volunteers or by organizations funded by voluntary con- tributions - the antithesis of privatization. Were this professionalization of social services to have produced better services it might be said to be good value for money expended. But there are many reasons to conclude that services may have, on the whole, fallen in quality while rising rapidly in cost. Erecting Barriers. One reason is that. the professional private social service providers are not passive in the process of drawing up regulations to determine who
is qualified to pro- vide services. Like most professions and guilds, social service providers have a financial in- terest in convincing the public that they alone are capable of delivering a service, and that lower cost, "unqualified" alternatives are unsuitable. To reduce even the possibility that nonprofessionals might be selected, professional organizations press the government at all levels to erect licensing barriers against their competitors. As sociologists Peter Berger and Richard Neuhaus expl Through organizations and lobbies,
The end result is that the trend toward professional monopoly operates in tandem with the trend toward professional monopoly over social services. Ile connection between such monopoly control and the actual quality of services delivered is doubtful indeed . 2 Moreover, this pattern has a disturbing effect on the population supposedly being served. For one thing, community institutions that once bound low-income neighborhoods together become pushed aside by professional groups with few real links to the community. This weakens the fabric of the neighborhood, making it more likely that poverty and blight will spread. For another, the financial incentive of the professionals is to
professionals increasingly persuade the state to legislate standards and certifications that hit voluntary organizations hard, especially those given to employing volunteers. convince people that they need services and that these cannot be provided from within the community itsel@ and then to lobby the government for more money for professional groups to deliver these "es- sential" services. The
result is that low-income people are persuaded that they are unable to function independently and are persuaded instead to become increasingly dependent on government-funded services for their daily existence. Worse still, the professional social service industry and its academic offshoots have be- come the primary source of research to indicate the alleged need for services and by which to evaluate the services provided . The political process relies heavily on this
research to de- sign programs. The thrust of this industry-generated research is predictably monotonous: there are always more problems that need to be solved than were ever imagined; if pro- grams have failed it is because more money is needed; and the only way to solve a problem is to contract with a professional organization.
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Beneath the battles over the arcana of public contracting and placement rates lies a deep, divisive question: Should private, forprofit corporations continue to have a role in welfare reform? "This is the kind of work that should never be contracted out," said Tanya Akel, an analyst with the Service Employees International Union, Local 660, which represents many county workers. "This money that is meant to make people self-sufficient should not be going to stockholders." Maximus officials disagree. They point to what they say is a proven record in many states of helping more than 100,000 people find jobs after years on the welfare rolls
and of running other government programs ranging from child support to enlisting people in Medicaid. County documents predict that the contract with Maximus would save the county $4 million annually. "Maximus has built its history around helping these populations and working directly with them and changing lives," said company spokeswoman Rachael Rowland. "We're really proud we've changed the lives of more than 2 million people because of work we're doing."
Both sides--the unions and Maximus--are distributing press kits with newspaper clippings either praising or criticizing the rapidly growing company, which a former federal official founded in his basement in 1975 and which now has more than 4,000 employees.
Maximus' literature highlights the government experience of its employees--not just founder and Chief Executive David Mastran but also the local contract manager in Los Angeles, a former manager in the county welfare office.
The board is believed to be split over awarding the contract. Democratic Supervisors Yvonne Brathwaite Burke and Gloria Molina have previously
expressed opposition to the idea. Supervisors Mike Antonovich and Don Knabe, both Republicans, have backed it, as has Democrat Zev Yaroslavsky, who represents most of the Valley. In defending his position, Antonovich took aim at the unions' stand: "The unions would rather keep people on welfare so they have people to watch over, and I believe we ought to empower people on welfare with training and skills."
Unions and activists have for months been pushing Yaroslavsky, normally a friend of organized labor, to kill the deal. In an
interview last week, Yaroslavsky would not reveal how he plans to vote today, saying the specifics of the deal will determine his decision. "Everybody's
got an ax to grind and we need to strip that away," Yaroslavsky said. "It's not so much a philosophical question as a management question."
Maximus is under the most scrutiny and is in the core of a political firestorm
Answers.com 09 [no specific date given, http://www.answers.com/topic/maximus-inc] The company's Milwaukee operation led to even more bad press in New York City in 2000 when the city comptroller, Alan Hevesi, questioned a $104 million welfare-to-work contract, renewable for an additional $104 million, that MAXIMUS had been awarded without going through the formal bidding process. Because New York City Mayor Rudolph Giuliani championed the contracts and was running for the U.S. Senate, a situation further complicated by Hevesi's own apparent ambition to seek the mayoralty, MAXIMUS suddenly found itself in the middle of a political imbroglio and under the microscope of the national media. What the press revealed about MAXIMUS, on almost a daily basis, was nothing less than a public relations nightmare.
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