Dwell on these thoughts. First, there is only one source of income for government, and that is tax paid by private, profit-making industry and its employees. All other “taxes” paid are only recycled tax dollars from the private origin. No government employee pays taxes – they only recycle original revenues. Second, it is written policy of U.S. government, articulated by President Roosevelt in 1934 and written into OMB Circular A-76 (a federal regulation), that: “The competitive enterprise system, characterized by individual freedom and initiative, is the primary source of national economic strength, and in recognition of this principle, it has been and continues to be the general policy of the government to rely on commercial sources to supply products and services the government needs.” In other words, government will not compete with the private sector. Hold these thoughts.

Most industry readers of this journal are forced to compete with their government, which pays no taxes and diminishes income potential for industry. The culprit here is UNICOR, or Federal Prison Industries (FPI), with 21,205 inmate employees (about 18% of prisoners) earning $0.23-$1.15 per hour (never complain again about outsourced jobs and foreign slave labor), has 108 factories and in fiscal 2006 had $718 million in sales. FPI advertising says, “our bread and butter is metal products,” and it is the largest of seven FPI operating sectors. Four metals factories – Lewisburg, Pa.; Pekin, Ill.; El Reno, Okla.; and Terminal Island, Calif. – perform all type of stamping, machining, welding, tool and die, and finishing processes. FPI management is proud that 60% of sales are to DOD, and that all money received is used as operating capital to lease, buy or maintain industrial buildings and equipment and to pay compensation to inmates. Profits are not sent to the U.S. Treasury and are not spent to reduce the cost of prison operations. As a business, FPI generally earns profits at twice the average rate of all American private industries. You will be pleased to know that FPI is in the process of trying to diversify and expand via subcontracting to industry with aid of an increasingly socialist and corrupt Congress.

This all came about because on June 23, 1934, Mr. Roosevelt issued Executive Order 6917 creating UNICOR. Congress then used that order to enact law now codified and frequently modified, available to read at 18 U.S.C. 4121-4129. Google it yourself. Perpetual jiggling of U.S. Codes to favor this government-owned corporation has many manifestations. In recent years, see H.R. 1829 (FPI Competition in Contracting Act of 2003) and H.R. 2965 (same title 2005). These and related bills want to phase out the non-competitive contracting authority for federal purchasing in the 2007-2012 period and require FPI to gain award of contracts via competitive processes.

Give me a break! If FPI is not able to win awards with the current “stacked deck,” why should rules change to encourage the little devils to pursue a course that is in violation to stated Executive policy. In fact, why not eliminate this sham and distortion to the free enterprise system and eliminate UNICOR?

All of this raises significant points. Why is this an issue at all? A major part of the answer is that the federal employee unions (AFGE) that dominate all government rank-and-file employee members want government preeminence in employment. Power is the name of the game. These unions contribute heavily to politicians who are sympathetic to causes their benefactors desire. In other words, the country has a corrupt political system with politicians beholden to “monied interests.” Another reason is that members of Congress (both parties and overwhelmingly lawyers), are too inept to understand that private industry has been “the goose that laid the golden eggs for America” and that the national policy is correct to mandate that government must not compete with its private sector but must be forced to account and be prohibited from violating its own policy.

It is well worth your time to contact your member of Congress (House or Senate) to object to the socialization of America and your own demise. For example, the Pentagon says that 640,000 of its employees are performing “commercial work.” The Defense Science Board at the DOD says that $15-$30 billion in tax revenues could be generated annually via outsourcing of commercial work. What are you waiting for? Tell your politicians to “knock it off.”IH