I would say that the best answer to the question: What feedback would be most useful to give to the writer of this paragraph, would be, A: Find some common ground with the opponent.
Explanation:
The thesis that is being proposed in this paragraph is pretty straightfoward and pretty clear, although it is a bit impassioned when it uses words like waste, in relation to such a touchy subject as the way taxpayers´ money is used. However, the real issue lies with the counter-argument because it is so totally closed to any arguments against it that it becomes more of a subjective opinion and point of view, rather than an objective counter-argument that shows that the original thesis might not be completely true. In fact, the counter-argument looks more like the writer would insult whoever opposed him on that position, rather than be open to discussion. Therefore, the writer does need to find a bit more of a common ground with the opponents of such a position.
The last one. The only scenario where you wouldn't put a comma in the first quote is if it's a completed remark that uses particular punctuation such as a quotation or exclamation mark, but never a period. Hope this helped.