Monday, March 24, 2008

How much is that Prebate Check Worth ?

When mail from the IRS arrives in my mailbox, it gets my immediate attention. Yet when I opened the Economic Stimulus Payment Notice from the IRS, my first thought was “How much did this mailing cost????”. Well, according to IRS spokesman John Lipold notices are going out this month to an estimated 130 million households who filed returns for the 2006 tax year, at a cost $41.8 million.” So add $41.8 million onto $168 Billion that Bush has already approved.

Two thoughts.
First, at a Congressional hearing the IRS was questioned about scams yet, the IRS notice fails to warn consumers about that. The IRS response at the hearing was that Congressmen may want to include a warning in their mailings to their constituents.

Second, for a Congress member to issue that mailing it would be through the Franking Privilege. Karl Bremer penned an interesting article on how members of the Minnesota delegation use franked mail.

When Congressmen issue a mailing the cries arise from the opposition party that the incumbent is just trying to pander to the voters. Recently letters to the editors have appeared in Winona and Mankato newspapers chastising Congressman Tim Walz for a mailing that was sent discussing the Economic Stimulus Package. Not mentioned was that in 2005, then Republican Congressman Gil Gutknecht sent out 174,770 pieces of franked mail.

One of the concerns with franked mail should be whether it is target marketing or necessary information for constituents.
During the past decade, Members of Congress have begun patronizing innovative mailing list vendors to ensure that the mailings are sent to the right people. I found it interesting in 2006, that since I have a rural route address, I received a mailing from then Congressman Gutknecht concerning his ethanol legislation while friends in urban centers received mailings on illegal immigration. True, both are voter education, but I felt like a target.

In the House, the franked mail postage allowance is based on the number of addresses in each Member's district. Each Representative's mail allowance is combined with allowances for office staff and official office expenses to form a Member's Representational Allowance (MRA). Members may spend any portion of their MRA on franked mail, subject to law and House regulations. Within the limits of their MRA, House Members are not restricted as to the total amount they may spend on mass mailings.

Managing the MRA should be a fair tool for how well the Congressman is committed to exercising fiscal restraint. Many offices use funds still unexpended near the end of the year to stock up on supplies, upgrade or pay off existing equipment, and give staff bonuses.

In 2007, the Member's Representational Allowance was roughly $1.34 million ranging from $1.07 to $1.78 million. Congressman Walz reported that he will return approximately $100,000 in unspent funds from his 2007 MRA to the U.S. Treasury.

Next time voters in the Second District hear John Kline complain about earmarks they need to remind him of his 509,784 pieces of franked mail that he sent out in 2005 and question why his MRA spending was in excess of 96% of the maximum budgetary amount. A true fiscal hawk would find ways to trim his own budget ... like Rep. Virgil Goode (R-VA) who did without $518,036 of his MRA. Leadership begins by example.

= = =
And a follow-up comment concerning the Economic Stimulus which I opposed as wasteful spending. More proof that it was unwise, as the Center on the Budget estimates that Minnesota could lose $151 million dollars depending upon how it handles the bonus business depreciation.

And remember this is a Prebate … in other words, this is monies that you will receive in 2008 based on the assumptions that you will earn that payment when you report your income taxes in April 2009. Worse yet, the funding is from borrowed money … borrowing that will have to be paid by future generations.

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