Tag Archives: spending

One More Pitch

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In their editorial about the success of the Republican reform of the Federal Food Stamp program, the WSJ editors had this remark toward the end:

Congress ought to reduce the 90% federal payment match for the ObamaCare expansion population on Medicaid….

That would be a small first step, though useful in its way, and it prompts me to push again for something I’ve touted over the years: make Federal transfers to the States, not just for Medicaid, but all Federal transfers, block grants on a declining basis.

Designate the year of enactment as Year0, and tot up the total of all transfers to each State in that year. In Year1, send that amount to each State as a single, no strings attached, block grant. In each year of the interval Year2-Year11, reduce the size of the block grant by 10% of Year1, so that from Year11 on, there are no more Federal funds—which are the tax remittances of all of us American citizens—being sent to the States.

The citizens of each State should not be required to fund the profligacy of other States; those taxes sent to the Federal government should be for the sole purpose of funding the constitutionally mandated expenditures of the Federal government, those expenditures enumerated in Article I, Section 8. Each State’s governing politicians should be required to justify the tax levels and expenditures they want directly to their own constituents.

Of course, there’s one exception to this end of Federal transfers. In the event of a natural disaster that’s beyond the capacity of a State or a region to handle from its own resources, Federal transfers to the State or region would be justified. To hold down the incidence of manufactured emergencies (for instance, excessive spending leading to a risk of fiscal failure), a significant fraction of the transfer, or all of it, should be in the form of loans due in full within, say, five years of the onset of the claimed disaster.

SNAP Reforms

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The Senate’s Progressive-Democrats object to States having even minimal fiscal responsibility for managing Federal outlays to them for welfare programs. Their latest objections concern reforms to SNAP payments. Currently, the Federal government forks over 100% of the funding for a State’s SNAP program, and the State is solely responsible for disbursing those funds to eligible recipients. The current reforms, enacted last year, require those States with error rates—paying out to fraudulent recipients, for instance—above a low level (10%) to begin picking up a small part of the SNAP tab, with effect in 2028.

Progressive-Democrat Senators, en masse, object, and they’re blocking a farm bill unless they get that deadline extended. Their real goal is to functionally eliminate the deadline.

There is an alternative that would render this sort of Progressive-Democrat…foolishness…moot, and it’s one I’ve proposed before. Maybe its time has come, in response to Party’s studied intransigence to any reform that would reduce dependency on Party government.

Designate a nearby year as Year0, and add up all the Federal funds transfers for any purpose to each State in that year. Lump that sum into a single payment for the year. In each subsequent year, reduce that lump sum payment by 10% of the Year0 transfer, until the transfer is reduced, in about 10 years, to $0.00.

Federal transfers—taxpayer dollars—in general should not be getting made to any State except in exigent circumstances. The good citizens of Texas should not see their tax remittances pushed on over to New York or California. The good citizens of New York and California should not see their remittances relayed to Illinois or Iowa. Each State and territory in our union should keep its citizens’ tax remittances solely for the benefit of that State’s/territory’s citizens.

Exigent circumstances: when a State-wide or region-wide emergency arises that’s beyond the resources of that State or region, then Federal transfers (a going in allocation, to start the discussion, would be 50% grant and 50% loan at market interest rates) would be an appropriate means of assisting the State or region in dealing with the emergency.

Contradiction in Terms

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The lede lays it out.

State financial aid continues to expand within higher education, allowing money to go to eligible illegal immigrant students.

That’s an obvious oxymoron, or it should be. Leave aside the plain fact that folks in the US illegally are not “migrants”—those are folks who entered (and remain) our nation legally. These folks are illegal aliens.

The contradiction is magnified by this bit:

Currently, around 21 states and the District of Columbia offer in-state tuition eligibility to certain illegal immigrant students, and 18 states and DC provide access to state financial aid programs, according to Higher Ed immigration.
For example, at a University of California school, the base in-state tuition is roughly $15,000 annually. For nonresidents, the base tuition is over $31,000, which means eligible illegal immigrants are essentially receiving $16,000 a year in aid.

That understates the case: these illegal aliens (not migrants or immigrants) are receiving $31,000 per year in aid, since they are, or should be, by dint of their illegal status not at all eligible for any of this taxpayer largesse.

Illegal aliens should be eligible for none of our welfare or other financial assistance beyond the payments they’re offered for leaving voluntarily, payments consisting both of a lump sum cash payment and he preservation of a one-time ability to come back, this time doing so legally and above board.

Don’t Mention Cutting Spending

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Don’t you dare. The newly proposed Australian budget contains some tax cuts here, some tax structural changes nearby, and some tax increases there.

The tax cuts and structural changes are small steps in the right direction. The tax increases, though, are rationalized in this way: Saul Eslake, ex-Chief Economist at Merrill Lynch in Australia is claiming, as paraphrased by the WSJ:

If the process of reform is to be extended from here, policy makers should consider increasing and/or broadening the country’s goods-and-services tax to repair the revenue side of the federal budget and help ease the significant tax burden faced by wage earners and companies[.]

“Repair the revenue side?” What’s to repair? It isn’t the government’s money; it belongs to the good citizens of Australia. Their government only takes the money away from them; any seeming shortfalls in collections are nothing less than more money in those citizens’ hands.

And this from Shane Oliver, AMP Ltd‘s Head of Investment Strategy and Chief Economist:

If you do one reform without looking at income tax, then you miss the bigger picture[.]

There are two things wrong with these criticisms. One is the utter lack of justification for the amount of money the government collects through its taxing regime, whether current or as proposed. That “need” is simply assumed as received wisdom. The other is the equally utter lack of consideration of government spending cuts. The supposed necessity of current (or increased) spending levels also is simply assumed as received wisdom, albeit the spending is occasionally weasel-wordedly justified by announced social need—but even that isn’t seriously justified, merely announced from on high.

If Australia—and others, including us—want serious, durable prosperity, it’s necessary to cut taxes and cut spending further. That’s not austerity, no matter how hysterically the Left generally proclaims it to be. Leaving more money in the hands of the citizens is not austerity being inflicted on them, it’s their prosperity being restored to them. And that’s the bigger picture that Oliver is missing.

Bah—Who Needs National Defense?

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A letter writer in The Wall Street Journal‘s Tuesday Letters section was unhappy with the spending proposal for and attendant priority given to defense spending. He didn’t seem to see any need for spending there.

I read with some alarm the enthusiastic commentary in your editorial regarding the proposed $1.5 trillion defense budget….
… Diverting expenditures to military weapons and away from social needs—housing, food and medical care—isn’t sensible nor is it possible, given current domestic needs.

What isn’t sensible is not funding our ability to defend ourselves in a world of many powerful enemy nations, at least one of which has sworn to surpass and dominate us.

Any free nation needs to be able to defend itself, or it won’t be free for long, and all the social needs—housing, food, and medical care—it gets, such as they might be, will be dictated by that nation’s conqueror. National defense must be that nation’s government’s first priority.

I decline to live under a People’s Republic of China tyranny. Or to see my nation simply destroyed by a nuclear armed Iran that has no other goal aside from visiting the same extermination on Israel.