Tag Archives: political economy

Contract Discipline

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Amtrak is in the hole to the tune of $140 million in maintenance costs for its current fleet of trains because the contractor Amtrak hired to build and deliver uprated replacement trains is having trouble with testing requirements and production defects and so is nearly three years late on delivery.

Amtrak is also losing even more revenue in anticipated ticket sales from the new, larger trains that were supposed to enter service in 2021. And the railroad is missing out on other revenue because some older Acela units have been pulled from service to be cannibalized for spare parts.

One way for our government to deal with such things is with fixed price contracts, under which the contractor gets a sum of money and must satisfy the production requirements of the contract within that sum. These contracts, though, don’t make the contractee whole from the contractor’s failure.

Here’s another way: write into the contract that the contractor is responsible for the contractee’s maintenance and other costs attributable to the contractor’s failure to meet deadlines. Such a move would make future contractors, e.g., France-based Alstom in the Amtrak case, responsible for Amtrak’s $140 million, and more, inflicted on it by Alstom’s failure to perform. If no contractor is willing to incur that risk, that contractor need have no business from the government at all.

Here’s a Thought

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(No comments from the peanut gallery.)

Time is rapidly decreasing to get a budget passed in time to prevent a Federal government partial shutdown. There are those who fear that, and many of those distort the situation by claiming that it would be a total shutdown and one that would push all grandmas and grandpas off the Social Security cliff and deny wages for our soldiers. The hysteria is strong in those, but let’s take it seriously for a moment.

Here’s a solution. Assume Congressman Andrew Clyde (R, GA) is correct in his prediction that the House will finish passing all 12 of its appropriation bills by the supposed deadline of 17 November. To the extent the shutdown hysteria needs to be taken seriously, there will need to be an extension/additional Continuing Resolution in order to give the Senate time to deal with the appropriations bills, the House-Senate Conference that will be necessary to resolve any differences, and that CR. I’m eliding here the idea that Senators themselves need no funding in order to do their jobs and work these bills. They can work for free for the time being.

If the Senators, led by Progressive-Democrat Majority Leader Chuck Schumer (NY) and Republican Minority Leader Mitch McConnell (KY), but really only 60 of the 100 are needed, are serious, they’ll need under Senate rules only about a week to consider and pass or vote down an appropriation bill. Since Senators all are very proud of their ability to “walk and chew gum,” as they love so quaintly to put it, they can consider all of the appropriations simultaneously and in parallel with their handling of the CR. This is especially true given the size of each Senator’s staff and the size of the Senate-as-a-whole’s staff.

It should take only a day for the Conference Committee to resolve any differences, and an additional day for the respective houses to pass or reject the Committee’s recommendations.

Thus: pass a CR containing spending at the latest pre-Wuhan Virus Situation level, good for nine days. That’s sufficient time for the Senate to act on the CR and the appropriations bills.

And pass no further CRs. Full stop. If the Senate as a whole chooses to reject any of the House bills, or the CR, the Senate—Republicans as well as Progressive-Democrats, depending on how the Republicans vote—will have demonstrated that they’re more interested in their political games than they are in the weal of their constituents and of our nation at large. They should be left, with apologies to Hosea, to reap the whirlwind: it hath no budget; the funds shall yield no meal.

“Just Another Use of Fossil Fuels”

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There’s a move afoot to produce hydrogen as an energy source by fracturing natural gas into its hydrogen and carbon and oxygen components, the latter two typically as CO2 (and then capturing the CO2 and sequestering it). The foolishness of trying to use hydrogen as an energy source is for another day. What interests me here is the beef from the Global Warming Know Betters who see [fracturing natural gas] as just another use of fossil fuels.

Those august persons, then, must object to our several materials industries, in which natural gas, oil, and coal are major inputs to plastics.

Oh, wait—they hate plastics, too.

Selfish

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And from that, a Texas bill that would create universal/State-wide school choice—paid for by Education Savings Accounts of $10,500 per K-12 student—is on the brink of failure to pass. Much progress has been made, courtesy of Governor Greg Abbott (R) having convened a special session of the Texas legislature for the purpose. However, here we are on the last day of that session (as I write), and the failure brink is caused by a few rural Republican representatives.

The bill would let any Texas parent withdraw his student child from a public school that parent deemed unsuitable or failing to educate his son or daughter and transfer him/her to a different school (typically charter, voucher, or private) more to his liking.

However.

…some rural Republicans have joined Democrats in resisting ESAs. Their claim is that because their districts have few private schools, education choice doesn’t help their constituents.

Be clear on that. Because a rural Republican’s constituents wouldn’t be helped by universal school choice (I’m eliding the questionability of that claim), no one anywhere in Texas should be allowed that choice.

How very Progressive-Democrat of these selfish rural…Republicans. In the event, Abbott has committed to extending the current special session or calling a new special session, if his school choice bill does not pass in the current session.

Poison Pill

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The Republican-led House of Representatives is set to vote on a stand-alone aid bill for Israel Thursday or Friday (as I write on the preceding Wednesday), a bill whose spending is paid for by reallocating monies from elsewhere—here by reclaiming money allocated for an IRS expansion from the Progressive-Democratic Party-passed Inflation Reduction Act.

Senate Majority Leader Chuck Schumer (D, NY) is crying foul over that. That pay-for provision constitutes

poison pills that increase the deficit and help wealthy tax cheats avoid paying their fair share.

Imagine that. The Progressive-Democratic Party—because Schumer, a senior leader of Party, is typical of Party members—thinks actually covering expenses rather than just spending away without regard for where the money will come from is a poison pill.

This is what the Progressive-Democratic Party and its Congressional and Presidential members and candidates stand for.