Tag Archives: spending

Obamacare Subsidies and Appropriations Bills

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The Progressive-Democratic Party’s Congressmen and Senators are attempting to extort Republicans into surrendering on extending/restoring Progressive-Democrat-passed (in 2021) Obamacare expanded subsidies.

Unfortunately, they’ll likely succeed, as too many Republicans in each house are too timid to stand their ground.

Never mind that if those Republicans would crawl out from under their desks, they easily could make the case that any government shutdown would be (and after the realization, was) the sole doing of those Progressive-Democrats. It’s those Party members, after all, who threatened to close our government if they weren’t meekly obeyed and who in the realization did close our government.

These Republicans think they face regarding the Progressive-Democrats’ announcement is a chimera, too. The Federal government never really shuts down. With current tax law, funds come flowing in to Federal coffers are plenty for the Federal government to keep paying, on schedule, almost all of existing Federal outlays. The losses from any supposed shutdown would be primarily via Federal contracts with businesses that provide services to the Feds, but most of these businesses would be made whole under the terms of those same contracts.

The larger, underlying problem this extortion exposes, though, is the Republicans’ failure, in their aggregate, to pass all of the dozen separate appropriations bills they’re nominally required to pass every year. These appropriations bills are the actual spending bills that commit actual dollars that the Federal government has committed through its various allocation bills, which is where the government says what it wants to fund. Appropriations are those funds.

Had the Republicans in Congress actually passed those dozen bills on schedule, or at least by the end of the current fiscal year (which has another week left, so theoretically they still could), as they promised at the start of the year and of which they’ve only passed three or four, there would be no risk of a shutdown, and the Progressive-Democrats would have no extortion bricks to throw threw government windows.

Will the Republicans learn this lesson for the second year of this Congressional session? They never have in the past. I’m not holding my breath for the future.

Raise Those Taxes

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Progressive-Democrat-run States are looking at ways to cover putative budgetary shortfalls.

  • Minnesota State Representative Aisha Gomez, a Democrat…sponsored legislation that would implement a higher tax rate for joint filers in Minnesota making over $1 million a year if federal Medicaid cuts take effect
  • Connecticut legislators have proposed a bill that would raise income-tax rates on couples making at least $500,000 and individuals making at least $250,000
  • Washington Governor Bob Ferguson, a Democrat, in May signed into law a budget that includes an increase in the capital-gains tax, among other things
  • Maryland Governor Wes Moore, a Democrat, in May signed into law his tax proposal, which includes higher income-tax rates for state residents making more than $500,000 a year
  • Rhode Island in June imposed a new tax on certain vacation homes valued at $1 million or more

And this:

Many states face projected budget deficits after increasing spending and cutting taxes in the flush postpandemic years….

Notice that. Profligate spending leads to revenue shortfalls, so—raise those taxes, especially on the rich, who Owe Us. That’s akin to a business losing money, so it raises the prices it charges for its products.

Nowhere in there is any Progressive-Democrat-run State reallocating its spending to stay within existing revenues, much less cutting spending to do so.

I repeat a long-standing challenge of mine: can any Progressive-Democratic Party politician even say the words, “Cut spending?”

Universal Basic Income

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The Leftist dream of socialism won’t die, and neither will the Leftist dream of free money, which they masquerade as universal basic income, the steady handout of taxpayer money to everyone because—well, just because. The Left doesn’t care that handing out free money—one of the more extreme aspects of socialism—doesn’t work.

The Left simply doesn’t care about making lives better for Americans, only making their own lives better. Free money, this universal basic income, is just modern day bread and circuses offered in payment for votes so the Left can keep their Progressive-Democrat politicians in power, favoring them. They hope.

The editorial at the second link lays out a number of the ways that UBS fails us all.

Here’s another path to that failure. A UBS increases overall demand for goods and services beyond what producers can supply. This is textbook inflation. Eventually, production succeeds in getting supply increased to match that increased demand, and inflation abates. However, the higher price levels resulting from that bout of inflation remain in place, which means the handed-out money doesn’t have the buying power that it was represented as having: recipients can’t buy significantly more goods and services than they could before the handouts started due to that eroded dollar.

It gets worse. One of the areas of failure that the editorial pointed out was that recipients of free money took advantage of that largesse to work less. Since there is less work being done—this is a universal basic income handout, recall; all of us get it—it would take producers commensurately longer for production to catch up to demand. This would let that inflation run longer, elevating overall price levels even higher. That, in turn, would reduce the buying power of the handed-out money even further, leaving us recipients even less well off than before the handouts began, likely worse off in absolute terms.

Leftists and their politicians, of course, know this full well. They’re hoping us average Americans are too grindingly stupid to figure out that these folks are merely buying, and playing, us for their own power gains.

There’s an Answer to This

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It’s simple, straightforward, and deucedly politically difficult given the timidity and/or self-serving political power seeking of too many politicians to carry out. The lede and second paragraph laid out the problem:

As the Department of Government Efficiency and the One Big Beautiful Bill Act make painfully clear, any entity relying on federal funds for fiscal stability had best reconsider its future.
Recently released US Census Bureau data on federal funds flowing to states reveal that in 2023 the average state relied on federal sources for 37% of its revenue—nearly double the 1990 average. Some states were far more dependent, like Arizona (49%), Alaska (45%), Wyoming (46%), and Louisiana, which counted on federal support for more than half its budget. States have…made themselves vulnerable to the ideological proclivities of presidential administrations.

And this:

More pernicious are the ways federal agency ideologues hold those funds hostage to their agendas. …
A massive amount of federal spending isn’t even going to projects most people care about. It funds the priorities of federal agency bureaucrats.

The solution is to identify the total amount of Federal fund transfers to each State in 2026 (or 2027, but no later). Call that baseline year Year Zero. In Year 1, make a single, no strings attached block grant to each State in the amount of 90% of Year Zero. In each subsequent year, reduce the size of the block grant by an additional 10% of the Year Zero amount. In 10 years, there will be no more Federal funds transferred to a State, and all the States will be free of Federal strings on their own spending and taxing imperatives.

This would have the additional benefit for the citizens of each State in that State government spending and taxing would be subjected to greater citizen visibility and discipline.

The only time States need Federal funds transferred is during a State- or region-wide emergency, and those funds should be readily available—as they are currently, and potentially the more so with the cessation of unnecessary transfers done currently on a just because and it’s always done basis.

NATO’s Promises

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A NATO pledge. President Donald Trump (R) appears close to getting NATO nations to pledge to raise their NATO-related defense spending to 5% of each nation’s GDP, which would be a marked increase in those nations’ spending.

I question the value of those nations’ promises. Fully a third of NATO’s member nations already have, and are, welching on prior commitments to spend money on NATO-related expenses, for all that Trump’s open questioning of the value of the alliance over its freeloading on American treasure and blood has contributed to an increase in the number of nations that spend adequate amounts on NATO (from five or six!) to the current roughly two-thirds.

The value of a new, and replacement, arrangement centered on the US and the Three Seas Initiative nations is looking better and better.