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PrintAugust 12, 2010
Forcing States into Debt
The Obama administration just can't give up it's Chicago ways or it's blind big government ideology. The latest example is enshrined in the farcical bill passed during a special session of Congress. The New York Times describes the bill as "$26 billion in aid to school districts and states to prevent large-scale layoffs". That sounds good, until you look at the details. This mornings Wall Street Journal looks at the details and here is some of what it finds.
"Specifically, the bill stipulates that federal funds must supplement, not replace, state spending on education. Also, in each state, next year's spending on elementary and secondary education as a percentage of total state revenues must be equal to or greater than the previous year's level."
Drowning in red ink already, States aren't seeing Congressional deficit spending as a life preserver. State revenues are already down, why accept money that requires more spending and therefore more taxes? This amounts to legal bondage. Only in the Obama/Pelosi world can a requirement that raises both taxes and state budgets be called "relief".
The people that do get relief are Unions. A big chunk of the money is earmarked for "preserving jobs", and that means union jobs. The union bosses have figured out in these tough economic times that they don't have to sacrifice when big daddy government will come to the rescue. Witness that UAW with GM and Chrysler. In Milwaukee the layoff of up to 500 teachers could have been averted if the Union accepted a reduction in medical benefits from $22,000 to $17,000. To put that in perspective, if the Union accepted benefits that was only 1.3 times better than the average Milwaukee family, the jobs losses would have been averted. What do you expect from a group that fights for free Viagra instead of preserving jobs?
What this bill makes clear is that the democratic Congress and Obama Administration will spend money they don't have to reward their political allies. Forcing states to tax and spend during hard economic times doesn't phase them. Obama and the democrats also have no compunction about punishing states they don't agree with (It's the Chicago way). Can you imagine what these same folks will try to do in a lame duck session after the full anger of the American people has forced many of them to join the unemployment line? American's should beware of a post election surprise.
Aaron Gee is a US based IT consultant whose personal blog can be found at http://www.foundingideals.com
