NRD Editor’s Update: Check out this interview Bill Wilson on Lars Larson 08-03-10
This could the straw that broke the camel’s back.
Yesterday the Senate passed a $26.1 billion bailout for bankrupt states like New York and California, which includes $10 billion for public teachers spending and $16.1 billion for state Medicaid spending. Now, the Politico is reporting that Nancy Pelosi will speedily bring the House of Representatives back from its August recess to pass it and have it on Barack Obama’s desk next week.
The American people rightly are outraged at the prospect of balancing the budgets for states that refuse to cut their own spending. Last year’s $862 billion “stimulus” already included some $145 billion to balance state budgets, and this year’s $26.1 billion bailout will only forestall necessary cuts to those budgets.
While Americans struggle to balance their family budgets during this weak economic recovery, they expect elected officials to muster the political will to do the same. Instead, all 59 Senate Democrats and Republican Senators Susan Collins and Olympia Snowe have caved to pressure from the public teachers unions — all to help fill their campaign coffers.
Out of the estimated 3.3 million public school teachers nationwide, teachers unions were expecting about 160,000 layoffs this year — just 4.8 percent of all teachers. 38.1 percent of those layoffs are centered in just three states: 9,000 in New Jersey, 16,000 in New York and 36,000 in California.
About 57 percent of those 160,000 teachers are unionized as noted by the Heritage Foundation, with contributions to state and local unions averaging $300 per teacher. Add another $162 per teacher to the National Education Association and $190 per teacher to the American Federation of Teachers, as reported by Education Next, and the Senate easily has voted to give a minimum $40 million to the public teachers unions’ political coffers. That money will be mobilized into campaign ads, direct mail, phone banks, you name it, all to help elect Democrats.
Democrats want to ensure that their reelection campaigns well-funded, and so now the House is rushing back to the nation’s capital to secure the political slush money.
That’s bad enough. The bill also significantly increases taxes on profits generated by U.S. businesses that operate overseas, which employ 22 million people and are responsible for nearly half of all American exports. The resulting perverse incentive will be for those businesses to simply not repatriate their profits, thus endangering those jobs and severely reducing future capital investment in the struggling U.S. economy.
It could easily cost the economy $149 billion annually, with no significant revenue raised as a result. Which means the $26.1 billion state teachers union and Medicaid bailouts will have to be borrowed and printed, adding directly to the $13.3 trillion national debt.
The recovery is already slowing down. Growth dropped by 1.2 percent in the second quarter to an anemic 2.4 percent, according to the Bureau of Economic Analysis. Making matters worse, the private sector only produced 42,000 jobs last month, as reported in an estimate by Automatic Data Processing, indicating that unemployment will remain high for many more months, if not years. At that rate, it will take over 16 years to recover the 8.4 million jobs lost in this recession.
Rather than incentivizing private sector growth, capital investment in the economy, and jobs creation, the only prescription Nancy Pelosi, Harry Reid, and Barack Obama are offering is to continue to crowd out the private sector with more taxes on job creators, higher unemployment, and unsustainable spending.
The American people need to let their elected representatives know their outrage over this latest $26.1 billion states bailout. The House will be voting as early as Monday, and the least the people can do is let members know that there will be a severe political price to be paid for wasting more taxpayer money in such a reckless fashion.
By all accounts, the electorate’s blood is already boiling, with Congress registering a record-low 11 percent approval rating according to Gallup. No other institution ranked lower. The $26.1 billion bankrupt states bailout succinctly demonstrates why.
Bill Wilson is the President of Americans for Limited Government.