Tag Archives: spending

Misguided Categorizations

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The Wall Street Journal has them in its article concerning some outcomes of the just-passed House version of the budget reconciliation bill. The headline reads

The Biggest Losers in Trump’s Megabill

Some Medicaid users are categorized as losers. House-passed work requirements would mean some few millions would lose Medicaid coverage unless they show they’re working part time or are actively seeking work or they are volunteering. Separately, nearly a million and a half illegal aliens would lose coverage. It’s hard to see how these are losers. Those going back to work rather than coasting on our taxpayer handouts stand to gain morally and in the medium- and longer-term economically by having jobs and being able thereby to move up the economic ladder. Those volunteering will do much good for their community while gaining—if they volunteer seriously—valuable work experience. The illegal aliens being denied coverage can’t be losers, since it’s not a loss to no longer receive that to which they were never entitled in the first place.

Older food-aid recipients are categorized as losers from those same work requirements, here being extended to age 64. This is an especially wrong categorization since these folks actually gain in two ways. The first and immediate way is from the same gains as just above, for all that the longer-term part is absent. The second way these folks actually gain, though, directly addresses that longer term: by working those added years, they’re plussing up the Social Security payments they’ll receive when they actually retire.

Clean-energy projects are categorized as losers. The House-passed bill cancels these projects’ tax credits on an accelerated (relative to the originally proposed glacial) schedule. This time, the projects really are losers, but our economy gains enormously by cutting off those money wasters and by reducing the energy production and market distortions such credits have created.

Some student-loan borrowers are categorized as losers. The House-passed bill would put them on one of two offered repayment plans. This actually makes the borrowers winners, since it makes it possible for them actually to repay their loans and get those yokes off their necks.

EV/hybrid car owners and buyers are categorized as losers. Here, as with clean energy, the battery car buyers will lose out on subsidies, but our economy as a whole—and ultimately those battery car buyers—will gain sharply. These wastes of our taxpayer money will stop, and those subsidies’ production and market distortions will disappear.

While it’s true enough that the House-passed bill has much for which to be criticized—it doesn’t reduce tax rates enough, and it doesn’t cut spending nearly enough—these five items aren’t on that list.

Tariffs and Economic Growth

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The good editors at The Wall Street Journal spent a lot of ink and pixels decrying President Donald Trump’s (R) tariff moves. They saved the money bit for the end, though maybe not in the way they intended.

The best response to the warning from the first-quarter GDP decline would be for Mr Trump to call the whole tariff thing off. Short of that, settle for 10% across the board and call it a day. If that’s too much of a come-down, Republicans will need to pass a pro-growth tax cut and accelerate their deregulatory push as their best chance to liberate the economy from its tariff kidnapping.

Those first two sentences are irrelevant, whatever one might think of Trump’s tariff moves. Republicans need to pass a pro-growth tax cut and accelerate their deregulatory push—and pass serious spending cuts—independently of any tariff moves.

My Irony Meter…

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…is pegged. In their letter published in The Wall Street Journal‘s Friday Letters section, David Wippman and Glenn Altschuler of Hamilton College and Cornell University, respectively, object to comparisons of Harvard to Hillsdale College, even as they misleadingly mischaracterize the latter’s relationship with Federal dollars (writing that Hillsdale has for decades refused federal funding, when the fact is Hillsdale has never taken Federal dollars at any time in its 180 years of existence).

The letter writers acknowledge that Harvard’s taking Federal dollars makes it “vulnerable” to Federal pressure, citing supposed risks to Harvard’s research capacity. In truth, Harvard still could conduct effective research, were it to get serious about the bigots and terrorist supporters entrenched in its student and faculty and staff populations.

That brings me to the irony of their letter.

[I]t is absurd to compare this Christian college with 1,700 students and 170 faculty with Harvard, one of the leading research universities in the world with almost 25,000 students and more than 20,000 faculty and staff.

Actually, two: Wippman and Altschuler call out Hillsdale as an explicitly Christian college as though that were somehow important to their discussion, while ignoring Harvard’s more religiously and areligiously ecumenical bent—as though that does not matter at all.

The real irony though is that 1:10 faculty to student ratio at Hillsdale compared to that 8:10 ratio of faculty and staff to students at Harvard. Clearly one school is focused on actual teaching, while the other is focused on…nothing in particular, apparently, other than faculty and staff activism, antisemitic bigotry, terrorist support, and condoning when not actively encouraging the same in the student population. That only creates an environment where that vaunted research is merely an afterthought and a source of Federal largesse rather than a serious focal point for the institution.

A Sort of Start on a Student Loan Fix

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Department of Education Secretary Linda McMahon has proposed a series of steps to correct our nation’s student loan miasma.

• mov[e] roughly 1.8 million borrowers into repayment plans and restart collections of loans in default
• in some cases wages would be automatically garnished
• push colleges to be responsible and transparent

That last is especially curious. McMahon does not say how she defines “responsible and transparent,” nor does she say what constitutes her “push,” how hard she will push, or what consequences—concrete, measurable, and publicly accessible—she will apply for noncompliance, or how promptly.

These steps need to be taken, but by themselves they can be only stopgap, and they are wholly inadequate. What’s really necessary is to get the Federal government completely out of the student loan business: no Federal student loan guarantees, no Federal student loan-supporting programs whatsoever.

Because money is fungible, that must include drastically curtailing the range of student grants and scholarships originating from Federal programs. The same reasoning for getting rid of DoEd altogether applies to any sort of Federal involvement in education.

McMahon can do these things from within DoED while she’s setting the stage for Congress’ elimination of the Department (note: not merely defunding the department; eliminate it altogether). However, for the complete solution, Congress needs to act:

• statutorily require colleges and universities to publish the average, median, and range of income at the five years employment mark for their graduates in each of the major fields offered
• statutorily require student loans to be originated by private lenders or colleges and universities
• statutorily require colleges and universities to guarantee at least 50% of each loan granted their students
• statutorily allow current and future student loans to be discharged in “ordinary” bankruptcy proceedings

Only when private lenders and colleges and universities are the only ones with skin in this student loan game will those loans and their borrowers be carefully screened for repayment risk. That will prove optimal for the student borrowers and for us taxpayers.

Responsibility

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The Republican caucuses in the Senate and House are considering restrict[ing] the [provider] taxes’ use to finance state Medicaid contributions entirely, which would have the effect of putting more of a State’s expenditures under Medicaid on the State itself: overall, the restriction would save the Federal government—which is us taxpaying citizens writ nationwide—some $600 billion over 10 years.

There are objections, of course, by those whose money tree would be severely pruned. Ryan Cross, Franciscan Missionaries of Our Lady Health System’s Government Affairs VP:

If you end provider taxes, you’re going to shift that burden to the state, either harming Medicaid patients and healthcare-provider reimbursement, or leading to higher state and local taxes[.]

This is disingenuous. Any harm done Medicaid patients, who as citizens of their State are the responsibility of that State, and of healthcare providers, who as operators in that State also are the responsibility of that State, is done by that State through its own decisions regarding the tax remittals of that State’s own citizens. Regarding those decisions, it apparently is inconceivable to Cross and the rest of the Leftists that the State could reallocate its spending to cover the costs rather than just knee-jerk and willy-nilly raise its taxes.

These are $600 billion dollars for which us taxpaying citizens of our nation have better use.