We have a wave of gov­ern­ment bud­gets awash in red ink

The Community Connection - - OPINION - Low­man S. Henry Colum­nist Low­man S. Henry is Chair­man & CEO of the Lin­coln In­sti­tute.

There was much talk this past year about a “blue wave,” but what re­ally oc­curred was a “red wave.” This “red wave” de­scribes both the fed­eral and state bud­gets which for the cur­rent fis­cal year are awash in red ink.

Within days of the Novem­ber Gen­eral Elec­tion the In­de­pen­dent Fis­cal Of­fice re­vealed the Com­mon­wealth of Penn­syl­va­nia faces at least a $1.7 bil­lion deficit as Gov. Tom Wolf and law­mak­ers get set to be­gin the 2019-2020 state bud­get process.

That pales in com­par­i­son with the fed­eral gov­ern­ment which for the cur­rent fis­cal year is ex­pected to come per­ilously close to run­ning a tril­lion dol­lar deficit. The fis­cal year 2019 fed­eral bud­get deficit is 18% greater than 2018 due to a mas­sive om­nibus spend­ing bill last De­cem­ber.

Pres­i­dent Don­ald Trump signed that spend­ing bill, but pledged to never do so again.

In this midst of this spend­ing orgy some con­ser­va­tive Repub­li­cans are of­fer­ing plans to be­gin get­ting the bud­get un­der con­trol. One par­tic­u­larly promis­ing idea has been put forth by Sen­a­tor Rand Paul and has been aptly ti­tled the “Penny Plan.”

Re­al­iz­ing that most peo­ples’ eyes glaze over when talk­ing about bil­lions and tril­lions, Sen­a­tor Paul has sim­pli­fied the dis­cus­sion by propos­ing that for ev­ery on-bud­get dol­lar the fed­eral gov­ern­ment spent in fis­cal year 2018 it spends one penny less for each of the next five years. That one penny per dol­lar re­duc­tion would re­duce spend­ing by $13.35 tril­lion over the next 10 years.

Keep­ing in mind that much fed­eral spend­ing is “off bud­get,” that means to­tal spend­ing will still in­crease by 14.6% dur­ing those ten years. Thus those who howl at the prospect of re­duc­ing on-bud­get spend­ing by one per­cent per year for five years will still see an over­all in­crease in fed­eral spend­ing.

It is im­por­tant to note the one penny per dol­lar cut does not ap­ply to So­cial Se­cu­rity and other safety net pro­grams. It also makes no spe­cific pol­icy as­sump­tions, al­low­ing congress and the deep state bu­reau­cracy to de­ter­mine how to achieve one per­cent an­nual re­duc­tions by in­creas­ing ef­fi­ciency, con­sol­i­dat­ing ser­vices or other means.

In in­tro­duc­ing the Penny Plan Sen. Paul called upon con­ser­va­tives to “gov­ern like con­ser­va­tives,” some­thing they failed to do dur­ing the two years Repub­li­cans held com­plete con­trol of congress. Paul added it is time to “prove to the Amer­i­can peo­ple that it (congress) is se­ri­ous about get­ting our fis­cal house in order.”

Like their col­leagues in Wash­ing­ton, D.C., many leg­is­la­tors in Har­ris­burg have been ad­dicted to higher and higher spend­ing. They have uti­lized a se­ries of bud­get gim­micks and one-time rev­enue sources in an ef­fort to avoid mak­ing hard de­ci­sions.

Their prof­li­gate spend­ing has now caught up with them. You can bet the mort­gage that Gov. Wolf will pro­pose even more spend­ing, es­pe­cially to pour down the pub­lic ed­u­ca­tion rat hole.

South­east­ern Penn­syl­va­nia RINOs are vir­tu­ally ex­tinct af­ter this year’s elec­tions, so fis­cal con­ser­va­tives will find their voices am­pli­fied in the com­ing leg­isla­tive ses­sion. The Achilles heel, how­ever, re­mains weak-kneed Se­nate Re­pub­li­can “lead­er­ship,” which tends to cater to spend­ing in­ter­ests.

As a re­sult, strate­gies for re­duc­ing spend­ing to match pro­jected rev­enue will be driven by the House of Rep­re­sen­ta­tives where lead­er­ship is much more tax­payer friendly.

With di­vided gov­ern­ment at both the fed­eral and state lev­els get­ting spend­ing un­der con­trol, which is dif­fi­cult un­der the best of cir­cum­stances, will be even more so this com­ing year.

Bi­par­ti­san unity only seems to ex­ist when both sides are feast­ing at the tax­pay­ers’ ta­ble. It re­mains to be seen whether the “red wave” be­gins to sub­side, or whether it turns into a tidal wave of red ink.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.