$1.9T spending bill squanders resources
Christmas came early in Washington, D.C., this week as Congress passed a $1.9 trillion spending bill to “rescue” America.
“Today, we have a real opportunity for change,” House Speaker Nancy Pelosi, D-California, said. She called it “a critical moment in our country’s history.”
In fact, it’s more of the same old thing, massive government “stimulus” spending of money we don’t have, adding to the debt burden that is already calling dibs on the earnings of future generations.
Wrapped in the mantle of Covid-19 relief, the measure does include some help to mitigate the economic damage from the pandemic. Millions of Americans will receive $1,400 checks and extended unemployment benefits. The legislation includes $14 billion for vaccine distribution and $49 billion to pay for Covid-19 testing, personal protective equipment and contact tracing.
But that’s merely the Christmas tree. Following the usual Washington practice, ornaments have been added until the branches nearly break under the weight. The bill provides $30 billion for public transit and $24 billion to “stabilize” the child care industry. U.S. taxpayers will send the states $125 billion for K-12 schools and almost $40 billion for higher education.
“It does so much good for so many people,” Senate Majority Leader Chuck Schumer told NBC News. Merry Christmas to Albany from Washington —
Schumer negotiated a cash infusion to the Empire State of $12.6 billion in unrestricted funds, enough to wipe out the state’s projected budget deficit.
According to E.J. McMahon of the Empire Center for Public Policy, the federal aid to New York is so massive that there is no longer a need for the income tax increase that Gov. Andrew Cuomo has proposed, which would raise the top rate on high-earning New Yorkers from 8.82% to 10.86%. A spokesman for Cuomo, however, said the tax increase is still on the table.
That’s an indication that excessive spending will continue, and state politicians will continue to call on federal taxpayers to bail them out when things go south faster than expected.
Pelosi was asked if there will be another “rescue” package after this one. “You’re just going to have to ask the virus,” she said.
California, which has an unexpected $25.3 billion budget surplus, is set to receive $40 billion from the federal stimulus package, including $4.6 billion for transit systems and $898 million for airports. The state will receive $15 billion for K-12 school “reopenings” and $5 billion for colleges and universities.
The money will defer the day when officials and administrators must look at the bottom line and make hard choices about spending priorities. Instead, the taxpayers will just keep paying, shelling out money for bailouts of inefficient and bloated bureaucracies and agencies, and paying interest on the debt incurred to keep the party going.
The federal government will be providing a total of $350 billion to state and local governments. The legislation also expands eligibility for subsidies to buy health insurance under the Affordable Care Act, making taxpayer assistance available to individuals regardless of income.
The American Rescue Plan Act, as its authors have named it, passed by the narrowest of margins—50-49 in the Senate and 220-211 in the House—almost entirely along party lines. The bill is more than twice the cost of the 2009 “American Recovery and Reinvestment Act.”
We may be rescuing ourselves into permanent insolvency.