TAX

We know from having heard numerous stories reported again and again on TV and in newspapers over the years about “pork barrel” spending, that our government is not necessarily judicious in watching the purse strings (to say the least). However, I heard an expose reported by ABC news in Phoenix earlier this week that made my blood pressure rise.

The headline: “Social Security spends $700,000 on Phoenix conference.”

This investigative report was broken by Channel ABC 15 News in Phoenix (snipurl.com/ng2qk) and reported to the Social Security Administration and members of Congress, who are now conducting additional investigations. Here’s the story’s highlights:

675 Social Security managers attended a “motivational management” conference at the Arizona Biltmore Resort & Spa, a high-end Phoenix area resort last week that cost $700,000. The conference’s costs included airfare, hotel entertainment, dancers, motivational speakers, and food. The Social Security Administration provided ABC 15 with a list of courses offered at the conference, which included, “Techniques to Empower You,” Mentoring the Generations,” and “Emotional Intelligence.”

A spokesperson from the SSA’s regional office said the conference was essential, that teleconferencing was not an option, and that all 675 managers needed to meet in person. They did put the conference out to bid, and rooms for the conference were booked at $85 per night, versus the rack rate of $400 for a room during the prime tourist season. However, as you might note, it is not prime tourist season in Phoenix in July…..

The SSA omitted from their report to ABC 15 that the conference also included an after-hours casino trip, family members staying at the resort, or a dance that was observed by the reporters.

“This was a training conference. The location was selected through the government’s competitive bidding process. The facility that was selected was the lowest bidder, and we paid well-below the prescribed government rate.” Leslie Walker, Regional Communications Director, SSA.

By the way, Social Security trustees said in May that the program will begin paying out more in benefits than it collects in taxes in 2016, and the program’s trust fund will be depleted by 2037. 2016 is little more than six years away from now….

This story offends on so many levels. Let me count just a few of the the ways:

-They’re spending my money (and yours) on unnecessary perks and travel when they don’t have the funds. Repeat: they don’t have the money! When was the last time your company sent you to the Biltmore for a few days of motivational training?

- Why is there a different standard for the public sector versus the private sector? Since when it is acceptable to “do as I say, but not as I do?”

- Haven’t they heard about holding webinars and using GotoMeeting.com as an alternative to personal travel?

- Corporations and the banking industry in particular have been vilified by the Obama Administration, who promised during campaigns to cut waste in the government. In fairness, I do recall that Obama announced a 10% cut in the budgets of his director reports in February or March, which resulted in a couple hundred million saved. Yes, we need MUCH more of this kind of action. Every new major legislative proposal is presented as a cost saving initiative, yet how many trillions in debt are we now with no apparent end in sight for additional new Federal programs?

- How can these agencies continue to spend money they don’t have? Contrary to what Joe Biden (always interesting) said this week in a speech to the Association of Active Retired Persons (snipurl.com/oay25), everyone knows you STOP spending when you go bankrupt; you don’t spend MORE!

- Training & developing their managers is OK and economically justifiable for a major benefit program that has no assets that all of us have paid into for many, many years.

- What’s happened to fiduciary responsibility in the government? The SEC would throw the SSA execs in jail if it were a private sector agency, based upon the way it’s been managed. Essentially it’s a Ponzi scheme. There are no assets because the government has robbed Peter to pay Paul.

- What about the people who’ve paid into FICA for decades, counted on receiving retirement benefits from the SSA, are legitimately disabled, and/or worked in lower level jobs so they didn’t save enough money for retirement? Particularly after the financial “repression” we’ve experienced resulting in drastically reduced 401K balances and housing values, many “would-be retirees” are delaying retirement.

The hypocrisy and arrogance of the public sector and our politicians for both parties is just unbelievable to me!! We need leaders who are tough enough to take on the challenge of addressing the fact that the SSA is on the verge of bankruptcy and will fix it so it can be restored to serve its original purpose. It’s been pillaged & plunged for many years, and now we’re seeing the results of that greed and failure to control spending.

Several months ago, I wrote about Wells Fargo (snipurl.com/o95ov) buckling to public pressure and canceling their annual employee recognition event scheduled to be held in Las Vegas. They had the money set aside in their budget to pay for this event yet canceled it due to public pressure for TARP recipients regarding compensation practices.

What’s good for the goose isn’t good for the gander anymore. I really worry about our future. California’s on the verge of going bankrupt with its recently downgraded credit rating just above junk bond status as our legislators fail to agree on viable budget solutions. Is our nation also at risk for going bankrupt a few years hence? Is the SSA situation simply a foreshadowing of bigger issues to come? How do we get out of this mess?

I’m going on vacation for a long weekend…..and hope to be more positive when I return!

Becky Regan, M.A., CCP began her own consulting practice in 1995, Regan HR, Inc. to provide human resources consulting services to businesses in California. She has been successful in growing her business through reputation and client referrals. Her work as a consultant includes the full spectrum of HR technical expertise, including C-level recruitment, compensation studies (design, market and executive pay studies, sales compensation plans), training & teaching, interim assignments as a HR Director for organizations, and employee relations, including workplace investigations and written responses to formal complaints. For more HR tips and to receive my FREE “The Top 5 Secrets to Building a Better Organization that Every HR Pro Must Know