Tag Archives: spending

Two Birds

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I’ve often argued against government spending on matters unrelated to the Constitutionally mandated payment of government debt, providing for the national defense, and seeing to the general Welfare (as defined by the clauses of Article I, Section 8).  I’ve also argued for privatizing the major social welfare programs of Social Security and Medicare.

Now Oklahoma illustrates the failure to limit the one and do the other at the State level, with Medicaid standing in for Medicare.

Following the nationwide trend, Medicaid has taken a growing toll on Oklahoma’s budget. In 2017 the health-care program that is supposedly for the poor consumed nearly 25% of the state’s general fund, up from 14% in 2008, as nearly 200,000 more people enrolled. Lawmakers are left with less money for everything else, not least education.

Which also means crowding out spending on voucher and charter schools, which means crowding out school choice and competition-improved schools—including public schools.

All that spending on Medicaid, too, instead of the State privatizing that—to an extent; this program, after all, is intended to help the poor, so their contributions can’t cover all their medical costs—means Oklahoma’s citizens have less money to spend on their own needs and wants, which depresses economic activity, which reduces revenues to the State, which reduces monies available for programs like Medicaid….  And this chain doesn’t even address the addition of those 200,000 folks since 2008.  That was the year the Panic began, and it may be that most of those added to the Medicaid rolls then truly should have been—but do all of them need to be on the rolls today, or is it time to re-tighten the eligibility criteria?

Taxing vs Spending

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In a Wall Street Journal piece about Tennessee’s required closure of failing bridges problem, a Leake County Democrat supervisor, Joe Andy Helton, had this:

…he was frustrated by politicians being afraid to raise taxes—even to pay for basic services like roads and bridges.

“There’s only but one way to fix things on the local, state or federal level and that’s taxes,” he said.

Of course. Reallocating spending is utterly inconceivable to him.

The two bridges in Helton’s county that must be closed until repaired would cost, at most, a bit over a half-million dollars, together.  That’s not pocket money for a rural county like Leake, but it’s not that much, either.  County and State spending could be (re)directed toward the repairs.

This is a local failure of performance, but rising taxes and no spending responsibility nationally are what we can expect if Progressive-Democratic Party politicians like this one gain the majority in the House this fall.

Infrastructure Funding

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Much has been made about the deteriorating state of our nation’s infrastructure, from past todos that worked out to be just political chit-chat with nothing done to today’s efforts and commentary.

The commentary, as far as it goes, isn’t far wrong: our infrastructure, our roads, bridges, railroads, airports, even our communications infrastructure are in terrible shape.  But the commentary continues to be largely chit-chat, and the NLMSM isn’t helping.

Take this opening from a piece on President Donald Trump’s latest budget proposal from Fox News, for instance.

President Trump is calling to pump $1.5 trillion into fixing America’s infrastructure while streamlining the often-cumbersome permitting process, as part of a $4 trillion-plus budget plan unveiled Monday.

We’re going to spend 3/8 of our 2019 Federal budget on infrastructure, are we?  That’s the impression the author of this piece has chosen to give.

The truth of the matter, though, is buried deeper into the piece.

The infrastructure component, however, would not necessarily be a huge driver of Washington’s red ink.

Well, NSS.  It turns out the infrastructure spending component of Trump’s budget proposal is just $200 billion—just about 1/8 of those $1.5 trillion.  The Federal part of that spending is just seed money, with the States and local jurisdictions, and importantly, private enterprise, putting up the rest.

And that’s entirely appropriate.  While our national infrastructure benefits our nation as a whole—is critical to it, in fact—the vast majority of use and of benefit is local: it’s the States and local regions that get the first and the most of the benefit of a functioning and sound set of bridges, roads, airports, and so on.  Of course, then, it’s the States and locals who should front most of the money for infrastructure rehab.  After all, why should Illinois or Missouri, with their citizens’ tax dollars, contribute a whole lot to improving Iowa’s lousy highway system?  A bit, yes; some interstate commerce traffic into and out of Illinois and Missouri uses Iowa roads.  But far and away the bulk of Iowa highway traffic is intrastate.  It’s Iowans who are the largest users of Iowa roads.

There’s another reason to put the cost of improvement on the State and locals.  They’re the ones closest to the problem, and so they’re the ones with the most impact from regulations and permitting and other red tape; they’re the ones who can have the most impact on these impediments to improvements.  Private enterprises best know the surrounding regulatory and permit environment, and it’s private enterprise that will employ local workers.

Bigger Budgets and Spending Cuts

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Last week, Congress passed and President Donald Trump signed, a budget covering the next two years that has significantly larger spending caps than the last several budgets have had, including in particular a large increase in domestic spending.  Of course, that means spending must rise, right?  Every dollar budgeted must be spent; the budget is a spending floor, not a cap?

Not at all, as the budget proposal Trump has sent over to Congress for FY2019 demonstrates.

The Trump budget is proposing to reduce nondefense discretionary spending caps by 41% over the coming decade.

Cuts to domestic spending instead of spending every dollar budgeted.  Hmm….

The Budget Deal

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…was just passed in the small hours of Friday morning.  The high points of what it does is provide funding for the Federal government into late March, provide a budget good for two years, raise the debt ceiling a smidge, and increase spending authorization for defense by $165 billion over the next two years and for domestic items by $131 billion over those two years.  It does not include anything regarding immigration, particularly DACA, despite House Minority Leader Nancy Pelosi’s (D, CA) 8-hour speech Thursday, nor does it include anything regarding welfare reform.

The lack of immigration matters in the budget deal is appropriate; Pelosi’s long harangue notwithstanding.  Immigration has nothing to do with the budget, and it will be handled separately, as both House Speaker Paul Ryan (R, WI) and Senate Majority Leader Mitch McConnell (R, KY) have said repeatedly.  The lack of welfare reform does matter, but it needn’t have been a deal breaker in the present instant.  There needs to be a stronger consensus both in Congress and in the nation before that can be done properly—recall the fiasco that is Obamacare.

A number of Republicans in both houses objected to the deal, though, and voted against it and held it up in the Senate.  Senator Rand Paul (R, KY) wanted a vote on his amendment to restore the prior spending caps, which would have eliminated those $196 billion in spending increases.  The Conservative Caucus of House Republicans also objected to the vasty spending increases.  In all cases, those increases will add to the Federal budget deficit and through that to the national debt by up to $1 trillion, depending on how much our growing economy adds to Federal revenues.

Except.

One thing the budget deal does not do, and this is a Critical Item, is require all that money to be spent.  The bill is an authorization bill; it sets an outer bound on how much can be spent.  That’s all it does.  Actual spending will come from the several appropriation bills that must now be passed.  This is where those Republicans’ concerns can be addressed, and they should be; the concerns are entirely valid.

In the coming appropriations bills, Republicans must hold the line on the defense spending increases—there’s nothing domestic of any import if we can’t support our friends and allies or even defend ourselves—and reduce spending in other, domestic, areas (including welfare reform, even if only a series of tweaks this year) to pay for the defense increases.  And that includes on holding the line on those domestic appropriations bills already passed by the House, which were passed under the lower caps.

The Progressive-Democrats in Congress will howl over this; they view authorization to spend as an absolute requirement to spend.  Let them howl.  Let the Progressive-Democrats continue to be the heavy spending, deficits and debt be damned, party.  Let the Progressive-Democrats run on a platform of profligate spending.  They’ll drag out every tear-jerking trope they can dream up—it’s for the children, our grandmas are getting pushed off the cliff, think of the poor people in Illinois and Connecticut, and on and on.

Americans aren’t as stupid as the Progressive-Democrats make us out to be.  Our kids, our parents, our poor regardless of where they live will be better off for that spending discipline.  Let the Progressive-Democrats try to sell their snake oil budgeting that Government spending and Government income have nothing to do with each other.

One more thing.  The budget deal, good for two years like it is, means Republicans won’t be able to pass anything, including those appropriations bills, without nine Senate Progressive-Democrats on board.  Appropriations bills aren’t subject to reconciliation votes.  Without actual spending authorization, the Federal government will shut down in late March.  Without nine Democrats to support ending a Senate filibuster, spending won’t be authorized.  Let Senate Minority Leader Chuck Schumer (D, NY) shut down the government again because he can’t get wastrel spending done.  Let the Progressive-Democrats throw another temper tantrum.  That won’t play any better than the just ended Schumer Shutdown did.