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Cut Pay For Government Workers (The only way to get serious about the deficit) (
Forbes ^ | 03/02/2010 | Brian Westbury and Robert Stein

Posted on 03/02/2010 6:49:56 AM PST by SeekAndFind

Imagine a company that dominates its field. It's been No. 1 in its industry as long as anyone can remember. But lately it's fallen on hard times. Revenue has dropped dramatically. The only thing keeping it afloat is record borrowing based on its stellar credit rating, earned many years ago. Meanwhile, independent analysts have shown that workers at this company earn higher than average wages. Moreover, the workers have skills that are not easily transferable.

If this were an airline or an automaker, the solution would be a no-brainer: It would be time for a big pay cut. If the company didn't cut pay, or increased it, creditors and investors would question the seriousness of management.

But this is exactly what President Obama did in his most recent budget--request a wage increase of 2% for civilian federal workers in 2010. It's no wonder some are questioning the financial stability of the U.S. So why don't we do something serious. How about an outright pay cut of 10% for all civilian federal workers?

Just to be clear, we're not just picking on President Obama here. The pay increase in his budget would actually be the smallest in 20 years. But total compensation per federal worker--cash earnings plus fringe benefits--now averages twice that of the private sector. So cutting cash earnings by 10% across the board seems not only reasonable, but justified.

Truth be told, it would not save a great deal of money, at least not up front. The payroll (wages and salaries) for civilian federal workers is about $150 billion per year, so a 10% cut would only create $15 billion in outlay savings.

Nonetheless, a one-time pay cut of 10% permanently shifts future wages onto a lower path.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: deficit; government; pay; workers

1 posted on 03/02/2010 6:49:56 AM PST by SeekAndFind
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To: SeekAndFind
.........and cut the number of employees!

Name one profit making business that has not trimmed its overall numbers when times get tough.

2 posted on 03/02/2010 6:52:44 AM PST by Recon Dad ( USMC SSgt Patrick O - 3rd Afghanistan Deployment - Day 133)
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To: SeekAndFind

Sounds like GM.


3 posted on 03/02/2010 6:53:40 AM PST by Paladin2
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To: SeekAndFind

The difference in pay for government employees vs. the private sector is insulting to the core.


4 posted on 03/02/2010 6:56:27 AM PST by Psycho_Bunny
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To: SeekAndFind

The private sector has, for the most part, adjusted budgets inline with the recession. The public sector has done just the opposite - increased spending as tax receipts declined. This “government bubble” will burst, it will be on The Kenyan’s watch, and it will be fugly.


5 posted on 03/02/2010 7:02:04 AM PST by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: SeekAndFind
Never happen. Look for higher pay in hyper-inflated dollars.

Same thing for SS, Granny can't very well complain that her SS benefits are smaller when the number of dollars she gets is much higher, even if the new number has 1/10th the buying power. Obviously it's her own damm fault that she can't budget effectively.

And Welfare Queens? Well, pretty hard to complain when everyone's a millionaire!

6 posted on 03/02/2010 7:02:13 AM PST by null and void (We are now in day 404 of our national holiday from reality. - 0bama really isn't one of US.)
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To: SeekAndFind

Here is another money saving idea cut foreign aid to the following countries:

Below are the actual voting records of various Arabic/Islamic States which are recorded in both the US State Department and United Nations records:
>
> Kuwait votes against the United States 67% of the time
>
> Qatar votes against the United States 67% of the time
>
> Morocco votes against the United States 70% of the time
> United Arab Emirates votes against the U. S. 70% of the time.
>
> Jordan votes against the United States 71% of the time.
>
> Tunisia votes against the United States 71% of the time.
>
> Saudi Arabia votes against the United States 73% of the time..
>
> Yemen votes against the United States 74% of the time.
>
> Algeria votes against the United States 74% of the time.
>
> Oman votes against the United States 74% of the time.
>
> Sudan votes against the United States 75% of the time.
>
> Pakistan votes against the United States 75% of the time.
>
> Libya votes against the United States 76% of the time.
>
> Egypt votes against the United States 79% of the time.
>
> Lebanon votes against the United States 80% of the time.
>
> India votes against the United States 81% of the time.
>
> Syria votes against the United States 84% of the time.
>
> Mauritania votes against the United States 87% of the time.
>
> U S Foreign Aid to those that hate us:
>
> Egypt, for example, after voting 79% of the time against the United States, still receives $2 billion annually in US Foreign Aid.
>
> Jordan votes 71% against the United States
>
> And receives $192,814,000 annually in US Foreign Aid..
>
> Pakistan votes 75% against the United States
>
> Receives $6,721,000 annually in US Foreign Aid.
>
> India votes 81% against the United States
>
> Receives $143,699,000 annually.
>
> Perhaps it is time to get out of the UN and give the tax savings back to the American workers who are having to skimp and sacrifice to pay the taxes (and gasoline).
>


7 posted on 03/02/2010 7:02:29 AM PST by BubbaBobTX ("The problem with socialism is you eventually run out of other peoples money." Margaret Thatcher)
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To: Oldeconomybuyer

Yeah, but when? October would be best, IMHO...


8 posted on 03/02/2010 7:03:27 AM PST by null and void (We are now in day 404 of our national holiday from reality. - 0bama really isn't one of US.)
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To: SeekAndFind

I think to make it fair EVERY government expenditure needs to be cut 10%. Welfare, roads, congress, president, the only thing left untouched would be defense.


9 posted on 03/02/2010 7:06:55 AM PST by tiki (True Christians will not deliberately slander or misrepresent others or their beliefs)
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To: SeekAndFind
Nonetheless, a one-time pay cut of 10% permanently shifts future wages onto a lower path.

Include Congress and the Executive Branch in the 10% cut.

Nobody likes to see anyone's pay cut. But a whole lot of private companies, my own among them, cut pay a minimum of 5% and a maximum in come cases of 30%. In this time of massive budget cuts it's only fair that federal employees take a hit.

10 posted on 03/02/2010 7:07:14 AM PST by Non-Sequitur
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To: SeekAndFind
They need to crack down on people collect 2, 3, or sometimes even 4 government pensions.

They also need to end the practice of allowing people to pad their last year of work salary with overtime in order to double what they get in government retirement benefits.

11 posted on 03/02/2010 7:07:57 AM PST by TexasFreeper2009 (Obama = Epic Fail)
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To: Psycho_Bunny
Gives a whole new meaning to "public servants", doesn't it?

It's unfortunate though, that we wait until tough times to recognize this travesty.

12 posted on 03/02/2010 7:09:08 AM PST by The Duke
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To: SeekAndFind

And cut entitlements for those that are able to work or that are addicted to drugs. Also, relook at foreign aid. Those that don’t like us get cut off. I bet we save lots of cash that way.


13 posted on 03/02/2010 7:10:33 AM PST by b4its2late (A Liberal is a person who will give away everything he doesn't own.)
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To: SeekAndFind

Publish the salaries/total compensation of local government employees. This should be a requirement in every town, city, and state.


14 posted on 03/02/2010 7:12:25 AM PST by Mobties
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To: SeekAndFind

Ancient Rome didn’t scale back their bureaucracy and it bankrupted them. China was a superpower 1000 years ago and their bureaucrats - the Mandarins - became too large and did in the country. America is definitely on course to see the same.


15 posted on 03/02/2010 7:13:58 AM PST by Jack Hydrazine
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To: Mobties

It’s alreay on the internet at OPM.gov. Knock your self out pasting it all over town.


16 posted on 03/02/2010 7:17:55 AM PST by gitmogrunt
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To: Psycho_Bunny

Not for all federal employees. I left private sector in 2003 (not by choice, my job was outsouced).

I took a job with the VA in 2004.

Just now (Jan 2010) have I made the salary I lost in 2003.

I write Contracts - not an easy job and not for the uneducated or lazy. My salary? $40,875.00.

I don’t know where you gov’t employee haters get your stats but you are way off most of the time.


17 posted on 03/02/2010 7:18:09 AM PST by mom4melody
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To: tiki
Welfare, roads, congress, president, the only thing left untouched would be defense.

I had a conversation recently with a person who, along with his wife, was in their second year of receiving unemployment, and food subsidies. He was outraged that we were paying anyone in the military since, in his mind, we have no need for a military and the money paid to our soldiers is merely taking away money that should be given to him.

After a little more conversation, I discovered that this guy was making a substantial under the table income. As long as these kind of people get to vote, we are screwed.

18 posted on 03/02/2010 7:19:37 AM PST by CharacterCounts (November 4, 2008 - the day America drank the Kool-Aid)
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To: Psycho_Bunny

I’m sure you found those CEO bonuses and the bail outs equally insulting core.


19 posted on 03/02/2010 7:19:51 AM PST by gitmogrunt
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To: SeekAndFind
Dear Author of the article:

A cut of 10% is a savings of 15 Billion dollars, that is not chicken feed, as you implied.

20 posted on 03/02/2010 7:22:06 AM PST by gitmogrunt
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To: SeekAndFind

Its more the outrageous pension and other post retirement benefits packages than salaries, IMO. Even though for some titles salary packages are too high also.

Very rare to be able to retire in the private sector with a guaranteed pension. Some people can vest in as few as 20 years (cops mainly) or 25 years (teachers) and then get paid pensions for life, usually with COLAs too.

Sweet deal. Work 20 or 25 years, and then get paid for another 30 or more, almost all on the taxpayer’s dime.

And that doesn’t even include the post retirment medical benefits. We are creating many public sector millionaires, because that is what their fat retirement packages are worth.


21 posted on 03/02/2010 7:24:32 AM PST by dashing doofus (Those who are too smart to engage in politics are punished by being governed by those who are dumber)
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To: mom4melody
I don’t know where you gov’t employee haters get your stats but you are way off most of the time.

Did you learn the tactic of calling a person who says something you disagree with a hater from Alinsky?

22 posted on 03/02/2010 7:25:38 AM PST by CharacterCounts (November 4, 2008 - the day America drank the Kool-Aid)
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To: mom4melody
I don’t know where you gov’t employee haters get your stats but you are way off most of the time.

Thanks for the information, please continue with additional information on benefits, vacation days, etc. so that we can have the true picture of government employee pay/benefits. I think most people think of the higher officials, most which are appointed with their higher pay.

23 posted on 03/02/2010 7:34:32 AM PST by Lockbox
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To: TexasFreeper2009
"They need to crack down on people collect 2, 3, or sometimes even 4 government pensions.

Good point knucklehead.

Did they crack down on Ronald Reagan when he collected a Califronia State Government Pension and a Federal Govt Pension, plus the Screen Actor's Guild pension, and Social Security?

Envy directed toward CEO's or Govt pee-on workers, is still envy.

24 posted on 03/02/2010 7:35:09 AM PST by gitmogrunt
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To: SeekAndFind

And cut the lavish benefits, too. Make their cars taxable. End the government pension and put them on social security. Allow them to participate in a supplemental 401k if they wish. No early retirement. End “multiple pensions;” all time in Federal employment goes into social security and that’s it. Have them enroll in HSA’s for health care.

An example: As pro tem judge back in the late 1980s I heard a divorce case involving a former federal employee. He had served in the US Army and Reserves 10 years, then served in the Navy Reserves 15 years, while working at Naval Avionics as a civilian employee, from which he retired with full pension at age 55. He was getting four pension checks a month, totaling over $5000,00, plus full medical care. What was his job at Naval Avionics?

He was a janitor.


25 posted on 03/02/2010 7:37:10 AM PST by henkster (A broken government does not merit full faith and credit.)
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To: CharacterCounts
"this guy was making a substantial under the table income"

With the "Fair Tax" (tax on purchases), that would not matter - "Under the table" money might then be a "spouse dodge", but not a "tax dodge".

26 posted on 03/02/2010 7:38:19 AM PST by LZ_Bayonet ( I AM THE TEA PARTY LEADER !)
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To: mom4melody

I’m with you. I have no idea what these folks are talking about. I guess I understand the anger, but most of the posters have absolutely no idea what they are talking about. Federal pay in some jobs may be better than civilian pay, but in other jobs it’s less. The retirement is not what most people think. TSP is essentially a 401K type, employee funded retirement program with a % of employer matching contributions. The biggest benefit of government work, in my opinion, is job security—not pay and other forms of compensation.

As I posted on other threads, we WANT quality people in government jobs. The problem is not that quality people are being overpaid so much that we ask government to do too many things. It takes a lot of people to run a bureaucracy as big as the federal government. Eliminate programs and return federal employees to the civilian sector. Keep those in constitutionally enumerated jobs and pay them what they deserve.

Across-the-board cuts are asinine. That’s the easy way...instead of actually having to make choices, just punish everyone regardless of what they do, the amount of expertise they bring, and the quality of their work. Across-the-board pay cuts don’t actually eliminate anything other than further encouraging the best employees to leave government service!


27 posted on 03/02/2010 7:39:45 AM PST by CitizenUSA (Governor Palin backs RINO extraordinaire Juan McPain (and that just sucks!))
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To: gitmogrunt
Absolutely....not to start another argument but, if you founded a company, I don't care if you bankrupt it paying yourself an outrageous salary: it's yours to do with as you please.

But these clowns who walk into 120 year old companies and play the back-scratching game with the board for tens of millions of dollars piss me off to no end.

And the bailouts? I could go on all day about that.

Sorry you didn't make the ZING point you thought you were.

28 posted on 03/02/2010 7:41:36 AM PST by Psycho_Bunny
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To: SeekAndFind

I seem to remember that NObama gave ALL Federal workers a cost of living wage increase last year, then shortly thereafter, announced that all Social Security was being frozen thru 2010 + 2011 because there was “NO INCREASE in the cost of living!!!


29 posted on 03/02/2010 7:42:01 AM PST by ridesthemiles
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To: SeekAndFind

The authors are making the same mistake we have made for 70 years! A 10% pay cut is a feel good action trying to fix a 40% problem. The only solution is to close completely the numerous failed departments and fire all their useless employees. No other path will solve the problem. Besides being unconstitutional, unnecessary and totally ineffective I can not think of another thing to say about the likes of the Department of Energy, Education, HUD, etc.


30 posted on 03/02/2010 7:42:34 AM PST by sight picture (Acehorseman)
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To: SeekAndFind

Reduce non-military workforce by 30% across the board.
CUT pay 30% for remaining staffers.
NO early retirement options offered.
GARNISH all pay to collect past-due taxes, child support, student loans and immigrant sponsorship liabilities.

After completing that her first day in office, President Palin continued reducing the size of government by . . .


31 posted on 03/02/2010 7:42:34 AM PST by Jaspar Palmer
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To: mom4melody
Try not to extrapolate generalities to your specifics. There are a ton of great, underpaid people working for the various local, state and federal governments.

But compared to the private sector, the government is out of control.

32 posted on 03/02/2010 7:46:11 AM PST by Psycho_Bunny
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To: henkster

Post 10

I have no idea about the specifics of your example but, from what I know about federal retirement, this sounds like BS, so it probably is.

The article states “truth be told, it would not save a great deal of money” so this would be just a symbolic action. The writer could do a little investigation to determine waste and abuse and propose actions to eliminate that.

Federal salaries, as well as colas, are set by wage surveys and are consistent with comparable positions in the area. There are dedicated federal workers, in essential positions, that earn every penny they are paid, there are others with ill defined duties and little accountability that have little true purpose. Anyone addressing this issue should know the difference.


33 posted on 03/02/2010 8:04:06 AM PST by Peter Horry (Those who aren't responsible always know best.)
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To: gitmogrunt
A cut of 10% is a savings of 15 Billion dollars, that is not chicken feed, as you implied.

15 Billion dollars in a budget that is say 1.5 trillion dollars is what ? 0.01% ?? Thta's really nothing in the whole scheme of things.
34 posted on 03/02/2010 8:11:57 AM PST by SeekAndFind
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To: Peter Horry; SeekAndFind; Non-Sequitur

Should have been directed to SeekAndFind, post 25.


35 posted on 03/02/2010 8:16:02 AM PST by Peter Horry (Those who aren't responsible always know best.)
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To: Peter Horry

I’ll go so far as to say there are plenty of hard working, federal workers in non-essential positions. By non-essential, I mean in jobs that are not in support of constitutionally enumerated federal powers. The problem isn’t the workers so much as the voters who keep asking the federal government to take on more and more.

I don’t blame anyone for taking a federal job. What do folks want good people to do? Turn down federal work so that only leftists work for government?!? That’s crazy!

Stop asking government to do things that people should be doing for themselves! Start reducing government back to its core tasks.

This will take time, folks. You do this all at once, and we WILL have a depression or worse. You ELIMINATE those programs, over time, that do not support the constitutionally enumerated powers. You return the employees in those programs, over time, to the private work force (and/or transfer the brightest into core jobs).

I know people are fired up to slash government. I’m all for that, too, but it took us 80 years to get here. You try returning millions of federal employees to civilian jobs all at once, and you are going to have an unbelievable mess. Or, you do some asinine across-the-board cut and the best, hardest working folks will bail, leaving the dregs to run the programs (which will still be there albeit not as well funded).


36 posted on 03/02/2010 8:25:02 AM PST by CitizenUSA (Governor Palin backs RINO extraordinaire Juan McPain (and that just sucks!))
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To: CharacterCounts

No, I learned it from all the hateful, nasty, and largely incorrect things said about Government employees.

I worked in both public and private sectors, and there are lazy unmotivated useless employees everywhere.

Freepers need to remember that some of their own are government employees before posting some of the venum I’ve seen here. It’s one thing to disagree, or to state that things could be done better, but some of the bitter hate speech I’ve seen here is uncalled for.


37 posted on 03/02/2010 8:37:05 AM PST by mom4melody
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To: gitmogrunt

I don’t think it’s envy.

I think it is boarding on fraud.

Pension and retirement benefits were entended to help people in their twilight years and a reward for a LIFETIME of service.

Unions have distorted this, and now people are working 15 years or less in many cases and are collecting “retirement” benefits of various sorts for 60+ years for jobs they only worked at for 15. Then they repeat the process at 2 or 3 other government jobs and get that multiple times, THEN they are taking advantage of how the benefits are calculated by working 1000’s of extra hours of overtime in their final year, so that they can actually be paid MORE to retire than they were when they were working FOR THE REST OF THEIR LIVES.


38 posted on 03/02/2010 8:38:13 AM PST by TexasFreeper2009 (Obama = Epic Fail)
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To: CitizenUSA
Across-the-board cuts are asinine. That’s the easy way...instead of actually having to make choices, just punish everyone regardless of what they do, the amount of expertise they bring, and the quality of their work. Across-the-board pay cuts don’t actually eliminate anything other than further encouraging the best employees to leave government service!

And go where? Private sector? Where your chance of a pension is nill, where your 401K may or may not be matched on any given quarter, where layoffs are rife and salary freezes or cuts are the norm? All I can say to that is more power to you and welcome to the real world.

39 posted on 03/02/2010 8:58:22 AM PST by Non-Sequitur
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To: CitizenUSA

“I’ll go so far as to say there are plenty of hard working, federal workers in non-essential positions.”

Didn’t mean to infer that that they weren’t, only that those positions should be reviewed to determine if they should be eliminated or if the function can be done more efficiently and effectively in the private sector.

I think the Post Office, which is very protective of it’s turf, is one that needs to be evaluated. They should allow private competition and draw down as necessary and deliver only in areas where there is no private delivery, even this may be better accomplished by state or county government. This may increase cost per item but would greatly decrease the overall expenditure.

On the other hand I think EMS is an example of government addressing a clear need that was not being effectively done by the private sector. There were some very good ambulance services but not nearly enough to meet the need, many areas had to rely on funeral homes or police “crash wagons” (often with limited medical training) in a medical emergency.

I tend to be more pragmatic than many on this forum, as I believe the purpose of the Constitution was more to protect the people from oppression by the government than to strictly limit the functions of government. Having said that, all functions of government should have a clear purpose, well defined duties and have strict oversight, as government is mostly isolated from market forces.


40 posted on 03/02/2010 9:17:34 AM PST by Peter Horry (Those who aren't responsible always know best.)
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To: Peter Horry

One more point on the EMS. This also shows what can be accomplished when government limits it’s function to an unmet need and interfaces with the private sector.

If the EMS program had been approached the way the Congress is currently approaching health care the aim would have been to control the private sector (doctors & medical facilities) instead of working with it.


41 posted on 03/02/2010 9:32:09 AM PST by Peter Horry (Those who aren't responsible always know best.)
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To: gitmogrunt
“It’s alreay on the internet at OPM.gov. Knock your self out pasting it all over town.”

Not quite what I meant. I need to see the names of individuals, employed by the state (payed with our taxes) and next to each name the total compensation received.
Taxpayers should know how much and to whom their taxes are paid or wasted, government employees should have to look their fellow citizens in the eye and not hide behind some bureaucracy.

Ideally, these data would be published one full month before any vote on town budgets, city, county, state elections, etc.

42 posted on 03/02/2010 9:53:12 AM PST by Mobties
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To: TexasFreeper2009

Exactly right. Pension liabilities are virtually bankrupting a number of states and localities, including California, Illinois, West Virginia and others.

Government employees (we see a few examples right here on FR), like to compare salaries, but completely disregard the enormous benefit packages they receive and how quickly they qualify for full retirement benefits.

Personally, I’m ok with most government salaries (although not the $150K cops you find in places like California, NY, Massachusetts, CT, and elsewhere), but I would scrap the pension plans and convert them to 401K plans with government match, similar to private sector plans.

These plans were NEVER designed for people to work for 20 or 25 years, and then get paid for another 30 or more after they “retire.” Plus, as you note, many don’t really retire. They collect that pension on top of another salary (usually government), sometimes earning credits toward a second pension.

And their contributions only cover a small portion of the retirement costs - taxpayer contributions cover the bulk.


43 posted on 03/02/2010 9:56:34 AM PST by dashing doofus (Those who are too smart to engage in politics are punished by being governed by those who are dumber)
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