The back-and-forth over the so-called infrastructure bill working its way through the U.S. House of Representatives is helping perpetuate a myth that is distorting the people’s perception of where we as a country are. That perception is that there is, somehow, within the House and Senate and sprinkled throughout the Biden administration, a substantial cadre of moderate Democrats who are doing all they can to block a leftward lurch toward big-government socialism pushed by one wing of the party.
It makes for nice reading and it’s an easy story to write. Unfortunately, it’s inaccurate. As far as national politics is concerned, the Democratic Party has been running the moderates out for years. As former House Speaker Newt Gingrich pointed out in a recent policy document that’s making the rounds, virtually every Democrat in the U.S. House and Senate voted for the budget outline produced by Senator Bernie Sanders—a self-identified socialist.
The Sanders document, which includes $3.5 trillion in new and higher spending, $3 trillion in new and higher taxes, and a host of radical regulatory proposals intended to roll back 40 years of deregulatory reform that started with Ronald Reagan, is a left-winger’s pipe dream. The only objections to it Democrats have had—Senators Joe Manchin of West Virginia and Arizona’s Kyrsten Sinema excepted—have centered on the cost, not on what the proposed legislation would do.
The division among Democrats is real, but it’s not based on ideology. All but one Democrat recently voted for a bill that would eliminate state restrictions on late-term abortions and codify the Supreme Court‘s decision in Roe v. Wade. Democrats are united on policy but opposed (or at least some of them are) to doing things that will cost them their seats the next time they run.
It’s not principle that’s keeping the Democrats apart—it’s politics. Why were Nancy Pelosi and Chuck Schumer insisting on Republican votes to pass an increase in the debt ceiling? Because some members of their party who are up for re-election in 2022 need to be able to vote “no” on that issue—and they can only do that if a few GOP lawmakers can be persuaded to vote “yes.”
The “moderate” myth is useful for those Democrats who want to go home and pretend they fought against the largest expansion of government since LBJ gave us the Great Society. They’ll promise their voters they’ll continue to fight for pro-business policies and might even again earn the endorsement of the U.S. Chamber of Commerce. But it will all be a fallacy. The Democratic Party has been taken over by people who take their cues from the British Labour Party circa 1960—not the free-enterprise entrepreneurs who built this great nation.
The polling, the Gingrich document said, “is clear and devastating” for those who think the federal government needs to be bigger and do more. “Americans in general favor Free Market Capitalism over Big Government Socialism by a huge margin (59 percent to 16 percent),” Gingrich wrote while, among so-called independent or “swing” voters, the advantage for those who oppose the Sanders/Biden agenda grows to 82 percent to 18 percent.
The infrastructure bill was held up because too many Democrats refused to risk their seats by voting for it. It’s not a “moderate” piece of legislation even if it was written with Republican support. It includes such intrusive measures as the establishment of a pilot program that is supposed to come up with the best way to tax cars and trucks by the number of miles driven.
The reconciliation package? Even worse.
As Gingrich and others have observed, the Democrats in Congress were all-in at the beginning when it counted—when the process of getting these bills through began. The framework for each mostly survives, whether or not any given bill emerges from the legislative process intact. What cannot be accomplished in a day will be pushed by Democrats for weeks, months and years. President Joe Biden has said he has it in mind to correct 40 years of policy mistakes that, in his view, hobbled this formerly great nation. Biden’s objective: Roll back the Reaganite revolution that brought America back from the brink. What a foolish objective—and certainly not a moderate one.
Missouri Congressman Blaine Luetkemeyer is taking on the Biden administration over policy moves that have caused higher prices and the return of noticeable inflation.
“Gas, milk, fruit, televisions, furniture, washing machines, car rentals, hotel rooms – what do all of these things have in common? Their prices have gone up under the Biden administration,” Luetkemeyer, the ranking Republican on the House Committee on Small Business wrote in an op-ed published Friday by Fox Business.
Data published by the U.S. Bureau of Labor Statistics showed prices up 5.4 percent last month over June 2020, the highest jump since the economic difficulties that began when the market for sub-prime home mortgages collapsed in 2008. That’s higher than the interest rate setting U.S. Federal Reserve expected and marks the sixth straight month in which prices have risen.
“While Democrats in Washington bulldoze a path for reckless government spending, small businesses and middle class working American families alike are left to pay the bill,” Luetkemeyer wrote, singling out the damaging impact the newest round of inflation is having on family-owned business.
“Small businesses are the backbone of the United States economy, and they were making huge economic strides before the Biden administration took over. Now, small businesses nationwide are facing the consequences of the Democrats’ massive government spending agenda in all sectors,” he wrote.
The U.S. says government nearly half the country’s small businesses were forced to increase prices in May, which Luetkemeyer said was “the largest percentage reported in 40 years.”
“From increased gas prices for delivering goods to rising food costs for restaurants, small business owners are bearing the brunt of Democrat-induced inflation,” he continued. “As more American consumers are spending and patronizing small businesses following the COVID pandemic shutdowns, this increased immediate spending has given our economy a bit of a shock. But rather than acknowledge this problem and correct the course, President Biden and Congressional Democrats are doubling down.”
“Make no mistake – inflation is taxation. Prices of the goods you buy go up, meaning the dollars in your pocket are worth less. It then takes more of those hard-earned dollars to purchase these goods.
“The Democrats’ proposed $3.5 trillion package will severely exacerbate the inflation problem for middle-class families and further crush Main Street U.S.A.
“Simply put, small businesses cannot afford the inflation tax that comes with the Democrats’ failed economic policies.
“As Republican Leader of the House Small Business Committee, my colleagues and I have worked tirelessly to provide much-needed relief for small businesses across the country as they regain their footing and reopen their doors to local communities.
“Unfortunately, there is no single COVID relief package that can simply fix inflation – the Democrats must stop their spending spree. As if the pandemic didn’t create enough of an economic burden for American families and workers, they now face an increased cost of living and consumer prices across the board with no end in sight.”
Luetkemeyer’s criticisms are being echoed by economists and others concerned about the effects ongoing inflation will have on the post-pandemic recovery.
Writing in mid-July for the Carsey School of Public Policy at the University of New Hampshire, Michael Ettlinger and Jordan Hensley observed that “As measured by Real Gross Domestic Product (GDP), 35 states and the District of Columbia have smaller economies, as of the first quarter of this year, than they did before COVID-19, while 14 states have seen a modicum of economic growth. Nationally, GDP remains 0.9 percent lower than it was before the pandemic struck.”
President Biden and others in his administration seem happy to claim credit for the good economic news but are rather cavalier about the impact the bad news is having, saying the spike in inflation is at worst temporary.
Biden himself recently dismissed the issue, saying his multi-trillion-dollar spending initiatives will “reduce inflation, reduce inflation, reduce inflation.” Some economists and business leaders fear, however, it is that very spending that is driving the hike in prices and that they will not stabilize or return to the levels at which they were at before the pandemic struck any time soon.
Ten-year program crafted will allow Postal Service to remain a self-sustaining entity
Controversial U.S. Postmaster General Louis DeJoy’s initiatives to get the chronically mismanaged United States Postal Service back on sound financial footing are already bearing good fruit. His back-to-basics approach, which relies on strengthening core competencies and relying on increased efficiency, will likely keep U.S. taxpayers from having to spend billions to keep one of the world’s oldest postal systems in operation.
A Trump appointee, Mr. DeJoy drew the ire of progressives during the 2020 campaign when they accused him of making changes that would interfere with the ability of voters who could not get to the polls because of pandemic restrictions from voting by mail.
It would be a shame if partisan political concerns were allowed to derail his reform plans. The 10-year program Mr. DeJoy has pulled together will allow it to remain a self-sustaining entity funded by those who use the mail to send letters, catalogs, magazines, and packages for years going forward. The allegations against him have generally been disproven, at least as far as his leadership of the postal service is concerned. Some nonetheless would like to use them to block his initiatives from being enacted, even those Congress has endorsed in the bipartisan postal reform legislation currently under consideration.
The Postal Service Reform Act of 2021 (introduced in the U.S. Senate by Democrat Gary Peters of Michigan and Republican Rob Portman of Ohio) gives the Postal Service what it needs to eventually return to profitability.
Absent congressional approval for Mr. DeJoy’s plan, the USPS projects losses of more than $150 billion over the next 10 years. Mr. DeJoy and congressional postal leaders understand the problem — the decline in mail volume that’s taken place since the introduction of email and text messaging — and at least part of the solution, which lies in its e-tail driven package business.
It’s a strange turn of events. The last time Congress passed a piece of postal reform legislation, the primary concern was that the Postal Service might use earnings from its monopoly mail business to subsidize the cost of comprehensive package delivery — a globally competitive business.
Instead, the opposite occurred. Package deliveries are keeping the Postal Service afloat. Last year they generated a net $11 billion for the USPS over and above what it costs to deliver packages to every address in the continental United States six days a week.
Let’s start with the internet.
It has its roots in a program called the ARPANET, which was established by the Defense Advanced Research Projects Agency. Private sector entrepreneurs then transformed the internet from an obscure government experiment into the cultural and economic success that it is today. It has made our technology sector the envy of the world and enables us to keep innovating and competing with the likes of South Korea, Canada, Japan, Switzerland, and China.
This matters in light of President Joe Biden’s recently unveiled American Jobs Plan. While billed as a $2.3 trillion infrastructure plan, less than 10% of allocated funds are actually for traditional infrastructure such as roads, highways, bridges, ports, airports, etc. Instead, Biden redefines infrastructure to include all sorts of things, including research and community colleges, that, while they are possibly meritorious investments, have nothing to do with infrastructure. On broadband internet services, which both parties agree isinfrastructure, Biden’s plan has a stated goal of 100% U.S. connectivity.
One problem: The plan wouldn’t actually help connect more people to the internet.
That’s because it relies on government-run broadband to improve America’s internet experience. Government-run networks have a history of failure. They tend to drive out private investment and leave taxpayers holding the bag when the plans fail — without the better broadband they were promised. A perfect example of how government often stymies innovation and entrepreneurship is found in Kentucky. Kentucky Wired, a $1.5 billion plan to improve connectivity across the state was announced under Gov. Steve Beshear. Andy Beshear, Steve Beshear’s son and the state’s current governor, vowed to complete the project by October 2020. But Kentucky Wired has failed. Lesson: Investing public money in laying cable when increasingly affordable satellite networks are at our doorstep is not only counterproductive but irresponsible.
Biden’s plan ignores the dynamics of the marketplace in a similar manner. It also signals rate regulation and arbitrary speed mandates that would discourage satellite providers such as Amazon and SpaceX (Starlink) from investing in infrastructure and creating new jobs. Instead of bridging the digital divide, Biden would widen it by hampering the free market.
Biden’s plan focuses exclusively on a single technology for providing internet access: fiber. To be clear, fiber is often the backbone of the internet and works well in densely populated areas. Private industry has invested billions in deploying fiber across the country. Yet, laying thousands of miles of fiber optic cable is very expensive. Many factors affect the cost of fiber infrastructure, but, on average, the cost of deploying fiber runs between $18,000 and $22,000 per mile. In rural areas, it is often far too expensive for most businesses to recoup their fiber deployment costs. The good news is that America uses a mix of technologies to get online — from cable and fiber to 5G and NextGen satellites. If Biden chooses not to impose a one-size-fits-all solution, the private sector can meet the challenge of closing the digital divide. But as it now stands, Biden’s plan would stop this competition between technologies. Instead, it would replace that competition with a top-down approach in which government picks the winners and losers rather than letting consumers make the choices.
A better idea would be for Biden to expand Broadband Opportunity Zones and encourage billions in investment where it is needed the most. Private enterprise will invest in solutions that work for underserved areas.
Put simply, Biden’s infrastructure bill is a bad deal for America. It is entirely reasonable to fund the building and maintenance of interstate roads, bridges, ports, and highways. It is also good to incentivize innovation and investment. Sadly, Biden’s bill discourages those imperatives without good cause and at great risk.
Before his death on February 6, George P. Shultz, a former US Secretary of the Treasury and Secretary of State, co-authored a final commentary warning of the dangers posed by the vast increase in US government spending in recent years, including during the COVID-19 crisis.
STANFORD – Many in Washington now seem to think that the US federal government can spend a limitless amount of money without any harmful economic consequences. They are wrong. Excessive federal spending is creating grave economic and national-security risks. America’s fiscal recklessness must stop.
The COVID-19 crisis has provided the latest impetus for government spending, even to the point of steering the American mindset toward socialism – a doctrine that has always harmed people’s well-being. But some say there is no need to worry about excessive spending. After all, they argue, record-low interest rates apparently show no sign of increasing. The economy was humming along just fine until the pandemic hit, and will no doubt rebound strongly when it ends. And is there even a whiff of inflation in the air?
This thinking is dangerously short-sighted. The fundamental laws of economics have not been repealed. As one of us (Cogan) demonstrated in his book The High Cost of Good Intentions, profligate government spending invariably has damaging consequences.
High and rising US national debt will eventually crowd out private investment, thereby slowing economic growth and job creation. The Federal Reserve’s continued accommodation of deficit spending will inevitably lead to rising inflation. Financial markets will become more prone to turmoil, increasing the chance of another big economic downturn.
Financial markets’ current relative calm and low consumer-price inflation are no cause for comfort. Previous periods of sharp increases in inflation, rapidly rising interest rates, and financial crises have followed periods of excessive debt like a sudden wind, without warning.
Shultz and Taylor’s book Choose Economic Freedom shows that economic indicators in the United States gave no hint in the late 1960s of the subsequent rapid rise in inflation and interest rates in the early 1970s. Likewise, financial markets during the years immediately preceding the 2007-09 Great Recession provided little indication of the calamity that would ensue.
So, what should today’s US policymakers do? Higher tax rates are not the answer. Even before the pandemic hit, every federal tax rate would have had to be increased by one-third in order to finance the current level of federal spending without adding to the national debt. Such an increase would have harmful effects – similar to those of mounting public debt – on economic growth and job creation.
Congress may be tempted to reduce defense spending to help close the deficit, as it often has done in the past. But these previous efforts demonstrably failed. Rather than reduce the budget deficit, Congress instead used the savings from lower defense outlays to finance additional domestic spending.
Unless policymakers abandon their misguided beliefs about budget deficits, cutting defense expenditure now would produce the same result. More importantly, it would be a grave strategic mistake, weakening US national security and emboldening the country’s foreign adversaries – particularly now that China is flexing its muscles in Asia and investing heavily in its military.
Throughout US history, the federal government’s ability to borrow during times of international crisis has proven to be an invaluable national-security asset. Two hundred years ago, the ability to borrow was instrumental in America maintaining its independence from England. During the Civil War, it was crucial to preserving the union. And it proved decisive in defeating totalitarian regimes in the two world wars of the twentieth century.
The US government’s careless spending is jeopardizing this asset. If the country continues along its current fiscal path, the federal government’s borrowing well will eventually dry up. When it does, America will be far less able to counter national-security threats. As hostile foreign governments and terrorist organizations recognize this, the world will become a far more dangerous place.
US policymakers’ mistaken belief that deficits and debt don’t matter is the sad culmination of a long downward slide in fiscal responsibility. From 1789 to the 1930s, the federal government adhered to a balanced-budget norm, incurring fiscal deficits during wartime and economic recessions, and running modest surpluses during good times to pay down this debt. This prudent management of the federal finances was instrumental in establishing America’s strong position in world financial markets.3
President Franklin D. Roosevelt’s New Deal broke this norm, and deficit spending has since become a way of life in Washington, with the federal government outspending its available revenues in 63 of the 75 years since the end of World War II. At first, elected officials were deeply concerned about the adverse consequences of their excess spending. But over time, this anxiety gradually lessened. Annual deficits grew so large that by the mid-1970s the US national debt was growing faster than national income.Sign up for our weekly newsletter, PS on Sunday
During the last decade, any remaining fiscal concerns in either the Democratic or Republican parties have seemingly vanished. Freed from a belief that rising deficits and debt are harmful, policymakers unleashed a torrent of new spending. By fiscal year 2019, the federal government was spending $1 trillion per year more in inflation-adjusted terms than it had a dozen years earlier. In fiscal year 2020, the federal government added nearly another $2 trillion of new spending in response to the pandemic, raising the national debt to 100% of national income. This year, another trillion dollars of new spending – if not more – appears to be on the way.
The momentum toward more spending and exploding debt may currently appear unstoppable. But sooner or later, people will look at the facts, see the destructive path fiscal policy is now on, and recognize that they and the US economy will be better off with a different approach. At that point, America’s democratic system will say the expenditure growth must stop.
U.S. Senator Rand Paul (R-KY) recently introduced his own “Three Penny Plan” federal budget that will balance within five years by assuming the repeal of the Bipartisan Budget Act of 2021 and utilizing the “Three Penny Plan.” Dr. Paul’s budget includes instructions that would pave the way for the expansion of Health Savings Accounts (HSAs) to help Americans more easily cover their health care costs.
“When I started offering these kinds of budgets four years ago, we could balance with a freeze in spending. Not cut anything, then we went to just a penny, then two, now it is three,” said Dr. Paul. “We cannot keep ignoring this problem, this budget sets a goal for balance and provides Congress with necessary tools to achieve that objective.”
“Senator Rand Paul has long been a champion of balancing the federal budget and protecting the American taxpayer,” said Frontiers of Freedom President George Landrith. “Too often opponents of fiscal responsibility argue that to balance the budget would require draconian cuts. But Senator Paul’s proposal only requires a budget cut of 3 pennies on the dollar each year for the next five years and then limits spending increases thereafter by 2 percent per year.”
“Senators should support Rand Paul’s balanced budget plan to expand HSAs, reject tax hikes, and reduce spending by 3 pennies for every dollar,” said Americans for Tax Reform President Grover Norquist.
“I’m glad to see Senator Rand Paul continue his work to address the rampant growth in federal spending and the national debt,” said American Legislative Exchange Council Chief Economist Jonathan Williams.
Dr. Paul’s plan requires that for every on-budget dollar the federal government spends in Fiscal Year 2021, it spends three pennies fewer each year for the next five years. Senator Paul’s proposal doesn’t change anything about Social Security, but reduces spending by $67.4 billion in Fiscal Year 2022 and by $7.2 trillion over ten years.
If all you did was listen to the politicians and commentators, you’d think America’s health care system was on the verge of collapse. Nothing could be further from the truth. There are problems, but most of them have been caused by the self-same reformers who’ve been trying for more than two decades to “fix” it.
Much progress has been made since the New York Times and presidential candidate Bill Clinton declared a crisis existed and proposed solving it by increasing the role played by the government in managing the delivery of services and prices. Once the voters learned the potential adverse impacts on the quality of care they received, the debate changed.
Through it all, America has continued providing the best care anywhere. The spirit of invention and innovation that is the hallmark of our civilization exists robustly in the health care sector and, because it does, people are living longer, generally healthier lives. Yet, instead of encouraging that, scholars and policymakers continue to focus on flattening the cost curve through fiat. Price controls and rationing may reduce the perceived costs of medical care but won’t solve the problem.
The real solutions will come from innovations in care. That means continuing the development of radical new treatments that were unthinkable a generation ago and, in a few cases, going back to what was working before the government messed things up.
One place where looking back is already helping us move forward is kidney dialysis. In 1972, thinking they were helping, Congress passed legislation creating a Medicare program to pay for dialysis treatment and patients with end-stage renal disease gravitated to more expensive, center-based care using machines built for use in centers that are large, hard-to-use, and too expensive for home use.
In 1973, 40 percent of dialysis patients received treatment at home. Today, 90 percent receive treatment at dialysis centers and hospitals — at much greater cost and at greater risk to their health because the entire time they are there, checking in, checking out, waiting for and receiving treatment, they’re in the company of others who might be sick with something like COVID-19 that science tells us preys on those whose immune systems are compromised.
We spend more than $110 billion on kidney disease, the ninth leading cause of death in the United States. More than 37 million Americans have some form of this disease and the money paying for their dialysis comes from Uncle Sam through Medicare. That’s not sustainable.
The alternative to spending more is to spend smarter. The Trump Administration, which earlier this year announced a plan to “shake up” the kidney care medical complex is pushing for a return to home-based hemodialysis as a cost-saving measure and one more in line with patient concerns. His executive order on the issue included a direction to the Department of Health and Human Services to develop policies to reduce the number of Americans getting dialysis treatment at dialysis centers.
That’s the right move. The in-home care alternative will have the biggest impact in the shortest amount of time. The current care cycle, where treatment begins when it’s too late to stop disease progression. Must be broken. Instead of throwing more money at dialysis clinics, the priority is being repurposed in the right place, on early diagnosis, better patient education, and comprehensive and holistic care services.
Home-based options for hemodialysis, where blood is pumped out of the body under supervision into a machine that acts as a kidney and filters the blood before returning it to the body, and peritoneal dialysis, where blood vessels in the lining of the belly filter the blood with the help of a cleansing fluid, exist and should be utilized to the fullest extent possible.
Starting in 2021, ESRD patients will also be able to enroll in Medicare Advantage plans – great for the ESRD patients, but it could increase premiums for all seniors if we don’t help these plans negotiate for fair rates and prevent costs from rising. The Centers for Medicare and Medicaid Services should remove any roadblocks that exist to making this option viable.
With COVID-19 is changing how people go about their lives, the incentive to adapt and innovate in the health care sector is there. Telehealth, which was generally frowned upon before the current crisis, has taken off like a moonshot. Changing the kidney dialysis model to one where the care is mostly provided at home could liberate those receiving treatment now held prisoner by their illness and could lead the transformation of American medicine. Anyway, it’s worth a try.
Generally, when we think of multibillion-dollar military contracts, we think of advanced weapon systems or other cutting-edge technologies. However, a recent Pentagon contract that is intended to overhaul how the military moves service members’ household belongings has hit the news. In an attempt to both save taxpayer money and provide a streamlined, more reliable, and higher quality moving experience for military families, the Pentagon recently requested proposals to revamp and privatize these moving services for America’s military families. The initial contract is valued at more than $7 billion, and with future options and extensions, could exceed $20 billion.
The contract process has been marred with serious misfires. The problem is that the Pentagon originally awarded the Global Household Goods Contract to American Roll-On Roll-Off Carrier Group (ARC) under questionable circumstances. ARC’s capacity to actually perform the contract is doubtful. ARC’s bid was more than $2 billion higher than competitors who actually have experience and a real track record.
Another problem was that ARC’s proposal incorrectly listed Wallenius Wilhelmsen Logistics AS as its parent company. The listed parent company pleaded guilty to bid-rigging and price-fixing only four years ago and faced a fine of $100 million. On top of that, the Department of Justice indicted three former and current executives in the matter.
It turns out that ARC’s parent company is actually Wallenius Wilhelmsen ASA which didn’t plead guilty to bid-rigging or price-fixing. However, Wallenius Wilhelmsen ASA is the parent company of both ARC and the convicted company, Wallenius Wilhelmsen Logistics AS, so there is a real and formal corporate genealogical relationship between the ARC and the bid-rigging and price-fixing company.
The contract award was challenged or protested on these and other grounds (a total of nine specific grounds). Normally, protests take up to four months to review, but the Pentagon’s TRANSCOM took only two weeks to review its original decision before reinstating it. TRANSCOM only looked at the bid-rigging and price-fixing conviction issue and ignored all the other issues. TRANSCOM’s review was focused more on technicalities than real-life concerns.
Bid-rigging and price-fixing issue aside, the formal protests of the contract award to ARC included eight other grounds any one of which would be sufficient to overturn the contract award. As previously mentioned, ARC’s bid was more than $2 billion higher than other bids, which were found to be both responsive and technically solid. Why would the Pentagon be willing to pay an extra $2 billion for nothing?
It gets worse. Not only is ARC’s bid $2 billion higher than its competitors, but ARC doesn’t have the capacity to deal with the massive number of moves that will happen in 2021 due to the 2020 military moves that were postponed and disrupted by COVID-19. ARC has less than 100 employees to oversee all military moves and related subcontractors. Moreover, ARC does not have any experience in military moves, so ARC can’t seriously argue that they have state of the art experience that will allow them to get the job done with so few people.
This contract is a once in a generation chance to reorganize the military’s moving system to create better accountability and in the end better results for America’s military families, all while saving money. However, it seems unlikely to turn out well if the new moving contract is to be administered by a company with a corporate genealogy that includes bid-rigging and price-fixing. Moreover, ARC’s large team of subcontractors includes a large number with a questionable performance history. If the goal is to reduce costs and improve moving experiences, this seems a poor way to accomplish the stated goals.
The Pentagon has made a big mistake in awarding this contract to ARC. If the goal is to improve quality, streamline processes, and reduce costs, you don’t select a company with zero experience that lacks the capacity to deal with the significant number of military moves that occur every year, and that has bid-rigging and price-fixing convictions with $100 million fines in its corporate family tree. On top of all of that, you don’t overpay by $2 billion.
It is time for the Pentagon to get this right and not dig in its institutional heels in defense of its original misjudgment.
The US House of Representatives is getting closer to voting on the Butch Lewis Act, which failed to pass last year. While a number of provisions in the current version of the legislation make it an unworthy solution, the truth is the problem it attempts to address is real and the legislation even with its flaws does create the opportunity to amend and improve it so that a serious financial crisis can be avoided. Conservatives should consider this an opportunity.
Many multi-employer pension and defined pension plans are now on the brink of failure. They carry over $600 billion of unfunded liabilities and are dangerously close to failing. Millions of retired Americans in states like Pennsylvania, Wisconsin, Michigan, Minnesota, Ohio, Nevada, Florida, Colorado, Maine and New Hampshire could lose their retirement. If that happens, they will be thrust onto the welfare rolls and the fruits of their life’s work will be lost.
Even those who don’t have such pensions, are at risk. The 2008 housing bubble that triggered a huge economic slowdown, impacted everyone — not merely those whose mortgage was foreclosed upon. And we spent the next five plus years in economic turmoil and that was used as an excuse to grow the government. So we paid twice — first with the economic downturn and lost jobs and second, when government spending and debt grew dramatically and government’s penchant to over regulate drastically expanded.
President Trump could ensure his reelection in 2020 and conservatives in the House could insure a return to the majority as well — if they can fashion a sustainable, conservative fix to the pending multiemployer pension plan crisis.
In 2016, Trump won a number of states narrowly — states like Pennsylvania, Wisconsin, and Michigan. In those states and many others — Ohio, Colorado, Nevada, Minnesota, Maine, New Hampshire and Florida — there are millions of citizens who are participants in multi-employer pension plans. Each of these potential voters has family and friends which only multiplies their electoral influence. By stepping in and averting this potential economic pitfall, Trump would win millions of blue collar voters in key states. Likewise, GOP congressmen who had a difficult year in 2018, could find themselves swimming with the current and regain the majority if they can take the opportunity to use the Butch Lewis Act as a starting point to address the multiemployer pension plan crisis in a conservative and sustainable way. Even Senate Republicans could see their majority grow if they move helpful legislation.
In Pennsylvania, there are more than 493,000 participants in multi-employer pension plans. In Michigan, there are more than 440,000 multi-employer pension participants. In Wisconsin, there are almost 150,000. Ohio has almost half a million. Florida has more than 340,000. Colorado has almost 200,000. In Maine, more than 50,000. In Nevada almost 135,000. In Minnesota, more than 278,000.
In each case, those numbers could either expand upon Trump’s 2016 victory, or flip a state that he narrowly lost in 2016, to make it part of his expanded victory in 2020. And once you account for family friends and relatives, those numbers only increase the potential for an impressive reelection victory.
For GOP members of Congress, this provides a powerful way to win the support of working class voters and pave the way to reclaiming the majority in the House and help the Senate preserve and grow its majority.
It may be tempting to leave this problem to fester and then let some future President and Congress deal with it when this pending crisis becomes a full blown, current crisis. But that’s dangerous and risky. The far Left has repeatedly signaled that they won’t let a “crisis go to waste.” They will use any crisis as an excuse to grow government, bust the budget and further smother economic opportunity with burdensome regulations. So solving this now is actually the conservative thing to do. It protects taxpayers and it can keep government growth in check.
A workable and permanent solution will include a number of important principles. First, the affected pension plans must be reformed by requiring them to meet more rigorous and realistic actuarial standards. Second, the reform must engage all the stakeholders to share in the costs, including at least temporarily, the retirees — rather than passing off the costs to taxpayers. Third, modest loan guarantees must be authorized to help pension plans that make the required reforms. This will allow them to get through their short term cash crunch and get back on a firm actuarial footing when the loans would be fully repaid. Fourth, the Pension Benefit Guarantee Corporation (PBGC) must be reformed to make it function as a real insurer where risks and cost balance out. If nothing is done, the PBGC will be bankrupt within 6 years — leaving taxpayers to make good on its promises which will cost hundreds of billions.
If President Trump and GOP conservatives become the champion of a wise pension plan solution like this, they can easily win re-election in 2020, regain the House majority, and expand their Senate majority. That is why the Butch Lewis Act with all its problems, presents conservatives with a real opportunity to fashion a solid conservative solution that benefits all Americans.
By Elizabeth Harrington • Washington Free Beacon
The special counsel investigation into the 2016 election has cost taxpayers over $25 million and counting.
Robert Mueller’s office released its latest expenditures spanning from April 1, 2018, through Sept. 30, 2018, finding the special counsel racked up over $8.4 million in five months.
The statement of expenditures reveals Mueller and his team of lawyers cost over $4.5 million for salaries and rent, and an additional $3.9 million in resources from the Department of Justice.
Personnel compensation and benefits cost taxpayers $2,886,270, including $1 million for special counsel office employees, and $1.9 million for Department of Justice employees who have been detailed to the investigation. Continue reading
While Puerto Rico is still recovering from last year’s severe hurricane damage, the all too predictable push to blame the tragedy on the Jones Act appears to have passed — for now. But almost like clockwork, this false blame game will be replayed whenever opponents of the Jones Act think they can spread falsehood during times of tragedy to gain a political advantage. When that next moment comes, the tired, oft-repeated, and baseless arguments will be trotted out once again.
The Jones Act, or more precisely, the “Merchant Marine Act of 1920,” simply requires goods shipped between U.S. ports to be shipped on American vessels crewed by Americans. It does not limit foreign vessels from bringing goods to US ports. It only prevents foreign ships from carrying cargo between two or more US ports. This has a number of homeland security benefits as well as ensuring that our military has a robust merchant marine sea lift capability and ship repair industry.
Some may assume that Americans are burned out on debating the Jones Act’s merits every time there’s a hurricane or some other event that supplies the pretext to blame the nearly 100 year old law. But when I recently spoke at a public policy conference, I saw Continue reading
Some Republicans were complaining that they didn’t know what was in the massive $1.3 trillion “omnibus” spending bill they voted on this week. But it’s what’s not in the bill that’s the most troubling.
Republicans used to love to trot around copies of ObamaCare, pointing out how its massive size — around 2,300 pages — was a sign of runaway government.
The spending bill Congress just approved is nearly as big, weighing in at 2,232 pages. And, like ObamaCare, no one who voted on it had read the bill before casting their ballots.
Then there’s the amount of money we’re talking about. That $1.3 trillion is what will be spent in just the next six months. And that represents just a fraction of what the government will spend, since it doesn’t include Social Security, Medicare, Medicaid, ObamaCare or welfare. Continue reading
By Lewis M. Andrews • National Review
Talk to the people of Illinois about America’s looming public-pension crisis, and they’ll tell you it’s not looming — it’s already here. This month, a statute went into effect giving Comptroller Susana Mendoza the right to make up for any town or county’s delinquent pension payments by seizing its share of sales, excise, and other taxes collected by the state. The result is that municipalities across Illinois have been scrambling to either cut services or raise taxes.
Mattoon officials have announced that ambulance services will be scuttled to pay pension bills a half-million dollars higher than last year’s, while Springfield’s budget director, Bill McCarthy, says he will have to “reduce other services just to meet pension obligations.” Normal will handle the problem through property-tax increases, while Danville has imposed a separate “public safety pension fee,” which will cost residents up to $267 annually. East St. Louis, which depends almost exclusively on its share of tax money from state’s Local Government Distributive Fund, could soon see its entire budget confiscated to satisfy pension obligations.
With a national pension asset shortfall calculated as high as $6 trillion — and with accelerating benefit payouts to retiring Baby Boomers — Illinois is sadly not the only state where voters are being hit with revenue surcharges or deprived of essential services. Florida localities will have to allocate an additional $178.5 million in their upcoming budgets to pension payments; Continue reading
Government shutdowns are petty, but they're rarely as detrimental as pundits and politicians fear.
By US News•
For various reasons it’s become popular to threaten to shut down the federal government. Whether that goes back to the Reagan years when Democrats would run out the clock on the fiscal year to try and force spending increases the White House didn’t want or the years in which the tea party Republicans decided the American people would stand with them in closing the government to stop Obama initiatives, there are people in government who believe hanging the “Closed” sign on the Washington Monument is a political winner.
It isn’t. It makes everyone involved look petty and small. The American political process is by design deliberative. The founders designed a system that forced compromise between regions of the country, between politicians of dissimilar views and of competing interests at all levels of government. Pushing the government to close because there’s no money to run it is akin to taking one’s ball home from the playground because the other kids will not agree to play the game by the rules you want.
All that said, the government never really shuts down. The president is allowed far too much discretion to declare services essential, meaning all kinds of people get to stay on the job without pay, working away as usual processing government checks, funding grants, administering programs and doing all kinds of things that, while they might be the purpose for which people get up and go to work each day, would hardly be classified as “essential” in any kind of real emergency. Continue reading