Co-authored with Bill Zettler

There has been much talk regarding the unsustainable fiscal mess most states are mired in.  Some are even discussing the creation of legislation that will allow states to declare bankruptcy.  The largest component of the mess is the unsustainable pensions for public sector employees.  If a contest were held to select the poster child for the pension debacle, Illinois would win hands down.

Today, Illinois’ unfunded pension liability is estimated to be $78 billion. How did we get here?  Let’s call it the “Four Rules of Too” for public employees whose salaries are too high; contributions are too low; plans are too bloated; and retirement is too early.  As the following chart regarding the Teachers Retirement System (TRS) shows, over the last decade teacher salaries have risen by 7% per year or 96% compounded and the pension cost (Pension Benefit Obligation) taxpayers are responsible for has gone up 116%.

If we look at the rest of us who are locked into the Social Security system, our salaries increased by an average of 3.65% or 43% compounded, less than one half of the teachers’ increases. Thus although our income has gone up less than half as fast as teacher salaries and pensions, we have had to pay more taxes out of our lesser incomes to fund the promises made by union bosses and politicians.  This model could be applied to other state workers as well.  For instance, 35% of Illinois State Troopers make more than $100,000 per year with top salaries of $185,000.

And the future doesn’t look any brighter.

(more…)

I believe that the NAACP is making a grave mistake in stereotyping a diverse group of Americans who care deeply about their country and who contribute their time, energy and resources to make a difference.

As I campaign in South Carolina, I participate in numerous events sponsored by the Tea Party, 9/12, Patriot, and other like-minded groups, and I have had the opportunity to get to know many of the men and women who make up these energetic grassroots organizations.

Americans need to know that the Tea Party is a color-blind movement that has principled differences with many of the leaders in Washington, both Democrats and Republicans.

(more…)

Several weeks after the Senate rejected Barack Obama’s plan to create a bipartisan congressional panel charged with decreasing the deficit, the president will use his executive authority to create the National Commission on Fiscal Responsibility and Reform.

The less-powerful bipartisan commission, chaired by Erskine Bowles and Alan Simpson, will be tasked with formulating a plan to decrease the federal budget deficit to 3% of GDP by 2015.

Yawn.

With the signing of this executive order, Obama will add fiscal responsibility to his growing library of political theater. Thus far, his other featured films have starred earmarks, lobbyists, Sonia Sotomayor, bipartisanship, etc. Unsurprisingly, they all share a common theme: disingenuousness. You’re welcome to grab some popcorn and take a seat, but as you watch the production of fiscal responsibility featuring Obama the deficit hawk, keep in mind you’re only being entertained.

(more…)

Recently, retired military have received e-mail messages notifying them of a withholding tax increase. The email states:

NO ANNUAL COST OF LIVING ADJUSTMENT (COLA) WILL BE ADDED TO MILITARY RETIRED PAY IN 2010.

DUE TO RECENT LEGISLATION YOUR FEDERAL WITHHOLDING TAX HAS CHANGED.

After much investigating and several discussions with the IRS, it appears the Democrats have played a “cash-flow trick” on working Americans and are taking more out of American’s paychecks across the board–all the while touting the Making Work Pay tax credit.

The trick, when looking at the new withholding tax tables for 2010 as compared to post-stimulus 2009, buries an increase in federal withholding taxes–for all income categories–basically giving the government an interest-free loan until current year taxes are filed next year. Some would blame the increase in withholding on the Making Work Pay tax credit being spread out over 12 months as compared to 2009, which was only over 9 months, but this would be impossible as some middle class wage categories carry an increase in the withholding tax of over $200 per pay period.

Unlike the middle class wage earners, who are going to see huge amounts taken out of their paychecks, unless they increase their exemptions on their W4 form, it’s an increase that most wouldn’t even notice–$10 or $20 in some cases. Here are some of the “highlights” of the new 2010 withholding tables:

(more…)