Tag Archives: spending

Taxing and Spending in New York

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Bookending (in more than one sense of the term) California’s move to confiscate business’ tax cuts, New York’s Progressive-Democrat governor Andrew Cuomo wants to increase the taxes levied on that State’s citizens by $1 billion.  He’s claiming, in all seriousness,

You can’t possibly get anywhere near where you want to be on education and health care unless you raise revenues.  It’s just too big a deficit, and the choice of cutting education or cutting health care I don’t think is a place anyone wants to go to this year. So you have to raise revenue.

This is a false choice.  The largest cause of the State’s deficit, after all, is its spending level, not the size of its revenue.  Thus, one choice Cuomo is carefully eliding is this: the State’s government could cut spending across the board; there is, after all, more going on in New York than just education and health coverage costs.

Alternatively (which Cuomo also avoids mentioning), the State’s government could simply reallocate existing spending into education and health care.

Still another alternative unmentioned, the State’s government could fix its runaway pension funds for its public unions by using accurate projections of investment return rates and increasing the contributions union members and the unions themselves make to the funds.  Along with this, the State’s government could fix its health coverage program, replacing its version of Obamacare with market-based solutions, and freeing the citizens to buy the health plans that suit them rather than suiting Government.  Or not buy at all.

There’s simply no need for more revenue for the State’s government, no need to take even more money out of the pockets of the State’s citizens.

Unfortunately, neither the man nor his Party cronies in the legislature are emotionally capable of conceiving of actually cutting spending, or even of reallocating existing spending.

Value in Spending vs Parity in Spending

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The House and Senate leadership met Wednesday in Speaker Paul Ryan’s (R, WI) office, along with White House Director of Legislative Affairs Marc Short and OMB Director Mick Mulvaney, to see if there’s any possibility of the Progressive-Democrats working with Republicans to get Federal spending under control.  It seems not.

Both parties claim to want to increase our ability to defend ourselves and our friends and allies, and so both claim to want to increase defense spending.  Only one of the two seems serious, however.  House Minority Leader Nancy Pelosi (D, CA):

In these talks, Leader Schumer and I will continue to insist on parity in the caps[.]

Parity in the spending caps, she meant.  The icon of Progressive-Democracy in Congress is conflating parity with equal value.

There will be no domestic spending available if we can’t defend ourselves.  We will have nothing with which to deal with the opioid epidemic, veterans, pensions, disaster relief, National Institutes of Health, Children’s Health Insurance Program and community health centers, or infrastructure rebuilding, or education, or Social Security, or Medicare, or Medicaid or anything else if we can’t defend ourselves.

Or if we merely go broke, whether by being forced to spend all of our money just to pay the vig on that debt or by defaulting outright.

Parity—this is not the same as equal value. It is, however, another example of the Progressive-Democrats’ constant demand for equal outcomes rather than true equality.

It may be time to kill the filibuster on matters involving the Federal budget and spending bills, at least for the current Congressional session.  The alternative, if the Republicans stand tall on spending, along with getting their messaging skills up to snuff—finally—is to let the Progressive-Democrats shut down the Federal government over their demand to spend us into oblivion as their price for letting us spend enough on defense to rebuild our military.

To do any of that, though, Republicans also will have to understand that parity is not equality.

Deficits as Cudgel?

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Gerald Seib says that’s what the Progressive-Democrats in Congress fear the Republicans will use them for.

Democrats worry that Republicans will simply use the rising deficits they are creating as an excuse to cut government spending on domestic programs important to Democrats—in the vernacular, that the tax bill will “starve the beast” of the federal government of the money it needs to keep spending at current levels.

I certainly hope those deficits will be used as the reason for cutting government spending.  The Federal government spends way too much of our money, and it does so without regard for whose money it is and without regard for the amount of revenue that taxes bring in—deficit spending is enthusiastically pursued regardless of tax rates or revenues.

Federal spending needs to be cut back drastically, not just on domestic programs important to Progressive-Democrats, but on all domestic programs (other than defense, which already is so low that our military cannot reliably win a war against a regional power like Russia, much less a rapidly expanding one like the People’s Republic of China.  We’ve even had to abandon our Cold War mission of being able to fight and win two separate wars simultaneously).  A good start would be a 10% across the board cut on all extant programs, and then begin cutting seriously from there.

And yes, that includes privatizing Social Security and Medicare and block granting Medicaid transfer payments to the States without strings—they know better than the Feds how to spend those funds State-domestically, anyway.  After conversion, the Feds then should reduce those Year Zero block grants by [10%] per year after that until there are no more Federal Medicaid transfers.

An additional step for Federal spending curtailment is to consolidate all current Federal transfers into a single block grant for each State and then reducing the size of that grant along the schedule above.  In this way, States like New York, California, and the rest of the dozen or so States that send more of their citizens’ tax money to the Federal government than they get back could keep all of their citizens’ money and spend it within their State in accordance with those citizens’ imperatives.  Surely even Progressive-Democrats could get behind a program that lets their constituents keep their money local—that’s more for the local Progressive-Democrats to spend.

Net recipient States would be able to keep all of their citizens’ tax money, also, reducing the alleged “need” for Federal transfers.

Additional cost saving: the middle-man bureaucracies, with their inherent costs, would be eliminated, too.

The only deviation from eliminating such knee-jerk routine transfers should be in times of declared State or regional emergency.

Higher Education Improvement

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The Wall Street Journal has a summary of the House’s The Promoting Real Opportunity, Success and Prosperity Through Education Reform (PROSPER) Act, to be proposed this week.  It’s aimed at

filling that gap [in college graduates’ skills, with 6 million jobs left begging] by both deregulating parts of the sector and laying the conditions for shorter, faster pathways to the workforce. The act focuses on ensuring students don’t just enroll in school, but actually graduate with skills that the labor market is seeking.

Highlights include these:

  • revamp of the $1.34 trillion federal student loan program
    • graduate students and parents of undergraduates would have overall caps on tuition and living expense loans, instead of borrowing whatever schools charge.
    • end loan-forgiveness programs for public-service employees
    • eliminate a program that ties monthly payments to income levels for private-sector workers.
  • community colleges would get more funding to team with the private sector and create or expand apprenticeships and learn and earn programs
  • for-profit college sector would be on equal footing with nonprofit schools regarding limits on federal aid and measurements of graduate success: overall, competency-based education
  • functional repeal of the gainful employment regulation, which ties access to federal student aid to whether career programs lead to decent-paying jobs. Government will no longer be the decider of what jobs are suitable; the graduate and employer will.
  • increased accountability of schools by improving the quality of information available to prospective students
  • “historically black” and developing Hispanic schools would have to provably graduate or transfer at least 25% of their students in order to get funding from the pile otherwise earmarked for these schools
  • require schools to pay back some portion of federal loans if the student didn’t rather than leaving the schools strictly as loan generators that get the proceeds from the loans without regard to suitability or outcome.

All in all, this could represent a major improvement to our higher community college/college/university education system, especially in its core: graduates’ employability and the costs incurred (and by whom) in achieving that employability.

Naturally, the colleges and universities, whose funding oxen are going to get gored, will squawk.  Ignore them, and move past the dinosaurs and vested interests.

A State Runs a Budget Deficit

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Louisiana, run by Progressive-Democrats since Bobby Jindall was term-limited out of office, is facing a $1.5 billion deficit as “temporary” tax increases implemented earlier begin to expire.  Jay Dardenne, the center-left Republican Commissioner of Administration, Louisiana governor John Bel Edwards’ chief budget officer, says that “devastating” spending cuts would be necessary absent a renewal of the tax increases or enactment of other tax increases.

Devastating: among those are additional reductions in higher education. This is misleading from a State official whose State already objects to school choice and to successful voucher schools in the K-12 range—because they take money away from badly failing public schools.  Except they don’t.  The State funds the public schools on a per-student basis, but when a student leaves for a voucher school, he takes less than his full allotment of funds with him, leaving the “losing” public school fiscally net better off.

It’s misleading, too, because higher education has an inflated tuition and fee structure supported by all that government funding (the Feds are contributors to this inflation with their own money transfers to the higher ed institutions), leaving those students fiscally net worse off.

Other areas facing spending reductions are tear-jerker “child-welfare” programs and “other” state agencies.  Never mind that these facilities waste the funds allocated with their high bureaucratic overhead and middle-man frictions.  And in the case of welfare (not just child), through uncertain enforcement.

No, the only ones truly facing serious spending reductions are the lobbyists and the Progressive-Democrats’ (and too many Republicans’) cronies.

It’s past time for a $1.5 billion reduction in State spending.  Louisiana needs to leave the money in the citizens’ hands, and it needs to stop competing with the private sector in providing goods and services and in acquiring resources for its own (unnecessary) functioning.