“Social Safety Net In Hands Of The States?”: The GOP’s State Budget Disaster Is The Best Case For Big Government
The Republican Party is cutting a swath of destruction through state budgets.
In Kansas, Gov. Sam Brownback’s experiment in income and business tax cuts has blown a $344 million hole in the budget for this fiscal year, and a projected $600 million hole for the next fiscal year. Part of his plan to close it is to cut $44.5 million from public schools and universities.
Illinois needs to cut over $6 billion to balance its books. So Gov. Bruce Rauner is calling for a $1.5 billion cut to the state’s Medicaid program, plus $600 million in cuts to local government finances and $387 million in cuts to higher education (though he may have trouble getting those ideas past the Democrats in the Illinois legislature).
Wisconsin’s state budget, meanwhile, faces a $238 million deficit, thanks in small part to tax cuts Gov. Scott Walker pushed through after taking office in 2011. That wiped out a $759 million budget surplus in 2013. Now Walker is looking to cut $300 million from higher education over the next two years, along with cuts to the state park system and its recycling programs, among other things, and to restructure about $100 million in debt payments the state already owes.
These three examples show the GOP’s “tax cuts now, tax cuts forever” ideology remains utterly unconcerned with economic reality. But more deeply, they’re a lesson in some bad choices America made in how to design its national social safety net, which set the stage for the current crises.
In not one of these three cases do the projected budget gaps rise above 1 percent of the income generated annually by the state’s economy. The idea that taxes couldn’t be raised, starting on high earners, to close these holes is risible.
On top of that, these tax cuts are often pitched as growth enhancers for state economies. That was the explicit case Brownback made for his tax cut package. But for such a policy gambit to have even a chance of working, spending must be held constant. If you start cutting spending on things like health care or education or transit or whatnot, you’re just pulling more dollars out of the state economy with one hand even as you leave more dollars in with the other.
In other words, you have to be able to deficit spend. But that can be hard for states. First off, most of them have balanced budget amendments in their constitutions, which means deficit spending is just a no-go. These restrictions generally don’t cover individual infrastructure projects and the like, which states can choose to borrow a set amount for from the bond markets. But covering shortfalls between general annual spending and revenue is much more difficult legislatively.
The other problem is that the bond markets might just not give you the money. Investors may consider a state a bad bet, which would drive its borrowing and interest payments up. That hasn’t been much of a problem in the aftermath of the recession, as investors have been desperate for safe places to park their money — which makes the refusal of state governments to borrow to cover their regular expenditures all the more absurd.
But the low rates won’t last forever, and the willingness of investors to take a bet on a state puts limits on state government borrowing.
What this all means is that state government spending is pretty pro-cyclical — i.e. it rises and falls with the economy. If the economy is doing well, state tax revenues go up. If the economy goes into recession, state tax revenues go down, forcing budget cuts in health, education, and elsewhere. And that’s before you factor in Republican governors and state legislators who are out to cut taxes willy-nilly.
But for spending on things like health care and education — two of the biggest drivers of any state’s budget — being pro-cyclical makes no sense. It’s not as if people just stop getting sick during recessions, or that children simply stop needing an education. These are public investments in the health and well-being of the American people themselves, and the need for them remains constant throughout all the ups and downs in the economy.
The only entity that can spend with impunity regardless of the state of the economy is the federal government. That’s because it can print money, which means it can always pay lenders back in a pinch. This does mean the federal government faces a different sort of threat — instead of being abandoned by investors, it could print so much money it drives up inflation. But that’s just really hard to do, historically speaking.
In short, these are programs that should be run through the federal government. But Medicaid is a joint state-and-federal program, meaning both the federal government and state government supply some of the money from their respective budgets. Meanwhile, education is funded by streams from the federal, state, and local levels at the same time.
That structure leaves these programs critically vulnerable to the whims of the economy — not to mention the whims of Walker, Brownback, Rauner, and their friends in the Republican Party.
By: Jeff Spross, The Week, February 24, 2015
“Lying To Your Face”: Republicans Don’t Care About The Deficit. Just Look At Scott Walker
Wisconsin’s Republican Gov. Scott Walker is almost certain to run for president. He’s got two blue state election victories under his belt, ravening anti-union bona fides, and a record that would make him the most conservative presidential candidate in at least 50 years. Best of all, he’s got a pleasant, mild demeanor — none of the bug-eyed nutcase affect of other right-wingers.
However, he’s recently run into some budget troubles. Back in 2013, Wisconsin had a sizable budget surplus. Walker did what conservatives always do: he passed $2 billion in tax cuts heavily weighted towards the rich, blowing through the entire surplus and then some. Now he’s resorting to financial chicanery to avoid default:
Scott Walker, facing a $283 million deficit that needs to be closed by the end of June, will skip more than $100 million in debt payments to balance the books thrown into disarray by his tax cuts. [Bloomberg]
Whether Walker — who has surrounded himself with Ronald Reagan’s crackpot voodoo economists — can talk his way out of this will be a big political question. But this does demonstrate a fundamental truth of American politics: conservatives don’t care, at all, about deficits or debt. They use deficit concern trolling as a convenient excuse to cut social insurance and other benefits. But when it comes down to brass tacks, they choose larger deficits, not smaller.
To be clear, Walker’s move is perfectly legal. But it’s just a delaying tactic, and it will cost more in the future. Per Bloomberg‘s analysis, it will increase debt service payments “by $545,000 in the next budget year, which starts July 1, and by $18.7 million in the one after that.”
Kansas’ Sam Brownback, another Republican governor, did the exact same thing to his state. Louisiana Gov. Bobby Jindal, another possible 2016 contender, has the same problems as Walker, only worse — his budget hole is $1.6 billion. He passed massive tax cuts early in his term, and has spent the rest of the time cutting services, especially higher education, to the bone in a desperate, futile bid to make up the shortfall. He won’t rescind the tax cuts, of course.
And when collapsing oil revenues turned the budget problem into a full-blown crisis, Jindal began raiding every change jar in the state to keep Louisiana from defaulting outright, including selling state property and burning through all manner of special reserve funds.
The Republican Party has gone precisely nowhere on fiscal policy since 2000, when President George W. Bush pulled this exact same trick. He took the Clinton surplus and spent it on tax cuts for the rich. The following eight years, incidentally, resulted in the worst economic performance since Herbert Hoover.
Policy-wise, there isn’t that much to learn from this, other than conservatives produce absolutely atrocious economic policy. But we already knew that.
However, there are two political lessons. For liberals, very much including President Obama, it implies that any hard work done reducing the budget deficit will be immediately negated the moment Republicans get a chance. All of Obama’s cherished deficit reduction — accomplished at gruesome cost to the American people — will go straight to the 1 percent if Walker (or Jindal, or Jeb Bush) is elected.
Second, for paid-up members of the centrist austerity cult, who worship a falling deficit like some kind of fetish object, realize that Republicans are lying to your face. If you genuinely care about the deficit, the GOP is not going to deliver.
By: Ryan Cooper, The Week, February 20, 2015
“Hating Good Government”: We’re Living In A Political Era In Which Facts Don’t Matter
It’s now official: 2014 was the warmest year on record. You might expect this to be a politically important milestone. After all, climate change deniers have long used the blip of 1998 — an unusually hot year, mainly due to an upwelling of warm water in the Pacific — to claim that the planet has stopped warming. This claim involves a complete misunderstanding of how one goes about identifying underlying trends. (Hint: Don’t cherry-pick your observations.) But now even that bogus argument has collapsed. So will the deniers now concede that climate change is real?
Of course not. Evidence doesn’t matter for the “debate” over climate policy, where I put scare quotes around “debate” because, given the obvious irrelevance of logic and evidence, it’s not really a debate in any normal sense. And this situation is by no means unique. Indeed, at this point it’s hard to think of a major policy dispute where facts actually do matter; it’s unshakable dogma, across the board. And the real question is why.
Before I get into that, let me remind you of some other news that won’t matter.
First, consider the Kansas experiment. Back in 2012 Sam Brownback, the state’s right-wing governor, went all in on supply-side economics: He drastically cut taxes, assuring everyone that the resulting boom would make up for the initial loss in revenues. Unfortunately for his constituents, his experiment has been a resounding failure. The economy of Kansas, far from booming, has lagged the economies of neighboring states, and Kansas is now in fiscal crisis.
So will we see conservatives scaling back their claims about the magical efficacy of tax cuts as a form of economic stimulus? Of course not. If evidence mattered, supply-side economics would have faded into obscurity decades ago. Instead, it has only strengthened its grip on the Republican Party.
Meanwhile, the news on health reform keeps coming in, and it keeps being more favorable than even the supporters expected. We already knew that the number of Americans without insurance is dropping fast, even as the growth in health care costs moderates. Now we have evidence that the number of Americans experiencing financial distress due to medical expenses is also dropping fast.
All this is utterly at odds with dire predictions that reform would lead to declining coverage and soaring costs. So will we see any of the people claiming that Obamacare is doomed to utter failure revising their position? You know the answer.
And the list goes on. On issues that range from monetary policy to the control of infectious disease, a big chunk of America’s body politic holds views that are completely at odds with, and completely unmovable by, actual experience. And no matter the issue, it’s the same chunk. If you’ve gotten involved in any of these debates, you know that these people aren’t happy warriors; they’re red-faced angry, with special rage directed at know-it-alls who snootily point out that the facts don’t support their position.
The question, as I said at the beginning, is why. Why the dogmatism? Why the rage? And why do these issues go together, with the set of people insisting that climate change is a hoax pretty much the same as the set of people insisting that any attempt at providing universal health insurance must lead to disaster and tyranny?
Well, it strikes me that the immovable position in each of these cases is bound up with rejecting any role for government that serves the public interest. If you don’t want the government to impose controls or fees on polluters, you want to deny that there is any reason to limit emissions. If you don’t want the combination of regulation, mandates and subsidies that is needed to extend coverage to the uninsured, you want to deny that expanding coverage is even possible. And claims about the magical powers of tax cuts are often little more than a mask for the real agenda of crippling government by starving it of revenue.
And why this hatred of government in the public interest? Well, the political scientist Corey Robin argues that most self-proclaimed conservatives are actually reactionaries. That is, they’re defenders of traditional hierarchy — the kind of hierarchy that is threatened by any expansion of government, even (or perhaps especially) when that expansion makes the lives of ordinary citizens better and more secure. I’m partial to that story, partly because it helps explain why climate science and health economics inspire so much rage.
Whether this is the right explanation or not, the fact is that we’re living in a political era in which facts don’t matter. This doesn’t mean that those of us who care about evidence should stop seeking it out. But we should be realistic in our expectations, and not expect even the most decisive evidence to make much difference.
By: Paul Krugman, Op-Ed Columnist, The New York Times, January 18, 2015
“Conservative GOP Governors Are Accepting Obamacare”: Wagging A Finger With One Hand, Holding Out The Other Hand For The Money
Many GOP governors who loudly condemned Obamacare are secretly signing up for the Affordable Care Act’s Medicaid Expansion. And they aren’t just Republicans in Democrat states. A growing number are from Southern conservative states, like Alabama and Tennessee.
Tennessee Governor Bill Haslam announced his state would oppose Obamacare, saying that he would rather have any money sent to his state go to private insurance, according to Bill Barrow with the Associated Press. But after getting reelected, Haslam announced that he had struck a deal that would allow that Medicaid expansion, according to Dave Boucher with The Tennessean.
Ditto Alabama Governor Robert Bentley, who once claimed that “the anything but Affordable Care Act has done nothing to gain our trust,” according to Tom Baxter with Saporta Report. But there was Bentley, after getting easily reelected, claiming “he could support the expansion in the form of a block grant, with a lot of strings attached,” Baxter writes.
In other red states, Republicans are doing the same, wagging a finger at Obamacare with one hand and holding out the other hand for the money. Kansas Governor Sam Brownback condemned GOP Governors for taking the Medicaid expansion money, as noted on his own website. But then, buffeted by a deficit from ill-advised tax cuts, Brownback took the money, calling it something else, in order to balance the budget, according to Salon.
It is unlikely that Representative Mike Pence cast many votes in favor of Obamacare while in Congress. But as Indiana Governor, he’s signed on to the Medicaid expansion, according to Dana Milbank from the Washington Post.
Arizona Gov. Jan Brewer joined her name to the lawsuits challenging the constitutionality of Obamacare. But then, she signed up for the dollars from Washington, DC after dodging a primary challenge, as reported by CBS.
Florida Governor Rick Scott, another Republican, had few kind words for Obama or the ACA. But once it was clear that he wouldn’t face a primary challenger, Scott took the money, according to the Miami Herald, hoping to boost his reelection chances. He was able to hold onto the Governor’s Mansion in Tallahassee as a result.
And it was Ohio Governor John Kasich who called for repealing Obamacare, well, at least most of it. Now he’s saying it is here to stay, as noted by CNN, and other Republicans better get used to it being around.
Michael Hiltzik with the Los Angeles Times is reporting that even Texas is considering the Medicaid expansion, modeled after Utah’s acceptance of the ACA plan.
There are a few reasons for this. While the House of Representatives and Senate can pass repeal after repeal votes, governors have to balance budgets. Also, many of these governors talk the conservative talk to beat back or forestall Tea Party primary challengers. Given that only a dwindling number of these are succeeding, there’s no need to kowtow to this group after reelection. They can use some creative accounting to accept the money, or call it something else so it will have a lower profile (Alabama could call it Bamacare, for example).
Of course, this is bound to infuriate the most conservative members of the Republican Party, but only if they are paying attention. Besides, this is still the party of Jeb Bush, who was linked to a firm that benefited from Obamacare, as reported by The Daily Mail. It’s also the party of Mitt Romney, whose Romneycare had many similarities to Obamacare, according to health expert Brad Burd.
By: John A. Tures, Professor of Political Science at LaGrange College in LaGrange, Ga; The Blog, The Huffington Post, December 31, 2014
“This Man Is Truly From The Dark Side”: Kansas Must Send Kris Kobach To Political Oblivion
If Sam Brownback wins re-election as Kansas governor, the world will not end.
If Pat Roberts wins re-election to the U.S. Senate, for sure the world will not end.
If independent candidate Greg Orman upsets Roberts for the U.S. Senate, again the world will not end.
If Kris Kobach wins re-election as Kansas secretary of state…well, that’s another story.
Kobach would fill the secretary of state’s seat for four more years, where he will continue to ignore his duties and spend his time in courts fighting one thing after another. But that’s only the beginning of the havoc he would to wreak.
Kobach, who is only 48, would then find himself in the catbird’s seat to run for governor in four years or to seek in six years the U.S. Senate seat that either Roberts or Orman would hold.
Kobach has to be nailed by the electorate in such a way that he goes away. Long, long away into political oblivion.
Of all the politicians I have covered in more than four decades, starting with a campaign trip with Richard Nixon in 1968, I have never run across a meaner, nastier, more egomaniacal politician than Kris Kobach.
Kobach is also the most brilliant and clever politician I have ever covered. The man is dripping with Ivy League degrees.
The combination of his traits is lethal, which makes him so dangerous.
I have known Kobach since he was first elected to the Overland Park City Council in 1999, when on his questionnaire he stated he was in favor of abortions. Four years later, when he ran unsuccessfully for U.S. Congress, he switched to a pro-life position.
Kobach knows how to play the public like a fiddle, although there is hope that Kansans have finally figured out that they have been played for saps.
He stokes anti-immigration fears by championing the most vicious laws and then travels from state to state, spewing his hate through the laws he writes — for huge fees. It is one thing to fret over undocumented immigrants, but Kobach seeks with his obsessive plots to make their lives as miserable as possible, while he personally gains.
But because he presents himself as waging a heroic battle, too many Kansans have, at least until now, met his grandstanding with oohs and aahs.
The handsome, charismatic candidate in 2010, running for secretary of state, told Kansans he was going to stamp out voter fraud. More oohs and aahs. Who wouldn’t be for that?
But there had been, on average, only a dozen cases of voter fraud each year between 1997 and 2010, despite Kobach’s best efforts to dredge up more. He was scamming the electorate, plain and simple.
That did not stop Kobach from ramrodding through legislation that has disqualified almost 20,000 would-be voters because the state now requires them to come up with identification papers such as passports or birth certificates. The secretary of state, who is supposed to encourage voter turnout has, instead, crushed it. Between 2008 and 2012, voter turnout in Kansas declined more than other comparable states. A federal report finds this was likely due to Kobach’s voter registration laws.
Because of a quirk in the court rulings on Kobach’s scheme, it has left Kansas with a two-tiered voting system. New voters who have not presented their passports or birth certificates can only vote for federal candidates but cannot vote for state officials
Kobach’s swan song, I hope, was his creepy efforts to keep Democrat Chad Taylor on the ballot for U.S. senator, thereby splitting the vote with independent Orman, which, in turn, undoubtedly would have elected Roberts through the back door. Fortunately, the Kansas Supreme Court stomped on his shenanigans in a unanimous vote. Both Republicans and Democrats on the bench rejected Kobach’s attempt to mastermind the outcome of the vote.
After the courts ruled against him, Kobach attempted to intervene in a subsequent lawsuit that would have forced Democrats to put someone else on the ballot. The courts said Kobach could not intervene, and then ruled against the Kobach position.
Kansans, this man is truly from the dark side.
Kris Kobach must be stopped now, before we find him in an even more powerful position to ply his diabolical schemes.
By: Steve Rose, Columnist, The Kansas City Star; The National Memo, October 14, 2014
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