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Federal Spending by the Numbers, 2014: Government Spending Trends in Graphics, Tables, and Key Points (Including 51 Examples of Government Waste)

December 19, 2014 Comments off

Federal Spending by the Numbers, 2014: Government Spending Trends in Graphics, Tables, and Key Points (Including 51 Examples of Government Waste)
Source: Heritage Foundation

In 2014, federal spending reached $3.5 trillion and the deficit was $486 billion. Compared with trillion-dollar deficits following the Great Recession, this presents a small and temporary improvement in the nation’s fiscal situation. However, this minor improvement does not mean that government can stop cutting back on spending. As the figures and graphics in this report show, that would be the wrong conclusion to draw.

The national debt will still reach nearly $18 trillion this year and it already exceeds 100 percent of gross domestic product (GDP). Publicly held debt (that is, debt borrowed in credit markets, excluding Social Security’s trust fund), is alarmingly high at three-quarters of GDP. Without further spending reforms, rising debt threatens to impede growth, harm Americans’ economic opportunities, and even threaten the nation’s security.

Deficits fell in 2014 because President Obama and Congress raised taxes on all working Americans, the economy saw some improvement which helped to bring in more revenue, extended unemployment benefits were allowed to expire, and spending cuts from sequestration and spending caps under the Budget Control Act of 2011 took effect.

Congress should not take this short-term and modest deficit improvement as a signal to grow complacent about reining in exploding spending. Existing spending cuts and tax increases will not prevent deficits from rising next year, and before the end of the decade exceeding $1 trillion again. Driving this is federal spending, which is projected to grow by 66 percent by 2024.

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Beyond Hypothetical: How FCC Internet Regulation Would Hurt Consumers

December 12, 2014 Comments off

Beyond Hypothetical: How FCC Internet Regulation Would Hurt Consumers (PDF)
Source: The Heritage Foundation

Key Points

+ The Federal Communications Commission (FCC) attempted to institute Internet regulations in 2007 and 2010, but the courts invalidated both efforts. Since then, proponents of “net neutrality” rules have been pushing for even more comprehensive FCC regulation.

+ Despite claims of possible abuses, actual abuse of market power by Internet service providers has been vanishingly rare. Any provider that does abuse its position will be constrained by competitors or by existing antitrust laws.

+ Most of the practices that have been identified by regulation supporters as activities that should be prohibited are, in fact, beneficial to consumers or are conducted by challengers in the marketplace, not by established, dominant players.

+ FCC regulation of Internet access would not protect consumers or ensure “neutrality.” New rules would only distort the Internet marketplace and inhibit the innovation and investment that has made the Internet the dynamic economic force it is today.

Continuing Federal Cyber Breaches Warn Against Cybersecurity Regulation

October 29, 2014 Comments off

Continuing Federal Cyber Breaches Warn Against Cybersecurity Regulation
Source: Heritage Foundation

Recent high-profile private-sector hacks have once again put a spotlight on the issue of cybersecurity. This is a serious problem that requires legislation to improve the United States’ cybersecurity posture, but the U.S. should not reflexively adopt government regulation of cyberspace as a solution. There are concerns that such a response would not be cost-effective and would have an adverse effect on innovation. It could also potentially create a mindset of compliance rather than of security. Additionally, the government’s own cybersecurity track record raises questions about the effectiveness of government cyber regulations.

The following is a list of federal government cybersecurity breaches and failures, most of which occurred during 2013 and 2014. This list is part of a continuing series published by Heritage that serves as a long-term compilation of open-source data about federal cybersecurity breaches dating back to 2004.

This list is in no way complete: Some hacks might not be reported or are classified, and others have yet to be realized. In September 2014, Robert Anderson, executive assistant director of the Criminal, Cyber, Response, and Services Branch of the FBI told the Senate Homeland Security Committee that if a federal department believes it hasn’t been hacked, it is likely that they are simply unaware of the hack. When Senator Coburn asked for a list of all the government hacks the panelists were aware of, he acknowledged that they may have to be discussed in a closed Senate hearing. Furthermore, the list below does not include the large number of private-sector failures. Nevertheless, the seriousness and number of known U.S. government cybersecurity failures undercut the argument for a government-led regulatory approach to cybersecurity.

Cyber Attacks on U.S. Companies in 2014

October 29, 2014 Comments off

Cyber Attacks on U.S. Companies in 2014
Source: Heritage Foundation

The spate of recent data breaches at big-name companies such as JPMorgan Chase, Home Depot, and Target raises questions about the effectiveness of the private sector’s information security. According to FBI Director James Comey, “There are two kinds of big companies in the United States. There are those who’ve been hacked…and those who don’t know they’ve been hacked.”

A recent survey by the Ponemon Institute showed the average cost of cyber crime for U.S. retail stores more than doubled from 2013 to an annual average of $8.6 million per company in 2014. The annual average cost per company of successful cyber attacks increased to $20.8 million in financial services, $14.5 million in the technology sector, and $12.7 million in communications industries.

This paper lists known cyber attacks on private U.S. companies since the beginning of 2014. (A companion paper discussed cyber breaches in the federal government.) By its very nature, a list of this sort is incomplete. The scope of many attacks is not fully known. For example, in July, the U.S. Computer Emergency Readiness Team issued an advisory that more than 1,000 U.S. businesses have been affected by the Backoff malware, which targets point-of-sale (POS) systems used by most retail industries. These attacks targeted administrative and customer data and, in some cases, financial data.

This list includes only cyber attacks that have been made known to the public. Most companies encounter multiple cyber attacks every day, many unknown to the public and many unknown to the companies themselves.

The data breaches below are listed chronologically by month of public notice.

Amnesty Cost to Taxpayers: $6.3 Trillion

May 22, 2014 Comments off

Amnesty Cost to Taxpayers: $6.3 Trillion
Source: Heritage Foundation

Granting amnesty to an estimated 11 million unlawful immigrants will cost taxpayers at least $6.3 trillion, according to a new report by Heritage Foundation scholar Robert Rector. The highly anticipated report, released today, becomes available as a Senate committee is set to mark up a “comprehensive immigration reform” bill May 9.

10 Guiding Principles for Agriculture Policy: A Free-Market Vision

May 14, 2014 Comments off

10 Guiding Principles for Agriculture Policy: A Free-Market Vision
Source: Heritage Foundation

Agriculture has changed dramatically over the past 80 years, yet farm and commodity programs are Depression-era relics that are grounded in central-planning philosophies. Even some policymakers who claim to be strong proponents of free markets and limited government tend to forget these core beliefs when it comes to these programs.

Agriculture policy is not just limited to these traditional farm and commodity programs that limit choice, stifle innovation, drive up consumer prices, and cost taxpayers billions of dollars a year. It also includes food safety, international trade, environmental policy and property rights, research and innovation, and general issues applicable to all sectors of the economy, such as labor policy.

There are alternatives to agriculture beyond the status quo of central planning and subsidies. The same free-market solutions that have allowed this nation to flourish are just as applicable to agriculture as they are to other sectors of the economy. The following are 10 guiding principles for agriculture policy.

Boosting Economic Mobility Through Prize-Linked Savings

July 23, 2013 Comments off

Boosting Economic Mobility Through Prize-Linked Savings
Source: Heritage Foundation

The savings rate in America has been in decline for three decades, with roughly one-third of households having no savings at all. Analyses of economic mobility explore why some people are successful in moving up the economic ladder during their lifetime while others are not. While there is much debate about the degree of opportunity in America, there is general agreement that there seem to be significant obstacles facing Americans who start out in households at the bottom end of the income spectrum. But even for those starting at the bottom, lifetime trajectories vary widely. The habit of saving is a critically important complement to education and social “capital” needed for upward mobility. But we need to recognize that there are many Americans who are not inclined to take part in traditional programs designed to build a savings habit. For these Americans, financial incentives and tools with approaches that have a more emotional appeal are a more effective way of creating a culture of savings by channeling the instinct to gamble into systematic savings. This approach, known as “prize-linked savings” employs the techniques of behavioral economics to turn a behavior pattern into a savings habit that enhances the economic mobility of a household.

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