Time To Pass The President’s Plan

The President is our titular leader. And if ever leadership was needed, it is now on the crisis presented by our national debt and our annual deficit spending. I think it’s time to consider his plan.

First, we need to look at his plan for dealing with deficit spending in the current year’s budget. Oh, he hasn’t put one on paper for us to consider. In fact, we haven’t had a budget for over two years! Forget that idea.

Second, we need to look at his plan for dealing with getting the national debt under control. Oh, he’s not put one on paper for us to consider. Forget that idea, too.

Mr. President, platitudes and vague generalities cannot be voted on. The “devil is in the details,” and you’ve offered none. And, Mr. President, while you may want to criticize the plan put down on paper by Republicans and actually approved by a bipartisan vote, at least they “put up,” as the old saying goes. And, as that saying goes, those who don’t “put up,” need to “shut up.” And now, Mr. President, it is time for you to “shut up” because you haven’t put anything up that America can read or Congress can vote on.

I know those words sound harsh, but I can’t really think of a nicer, more accurate and succinct way of saying what needs to be said. Does our President really think we Americans are so dumb that when he accuses Republicans of being intransigent about not having tax increases that we don’t see that he’s equally intransigent about having tax increases? It’s fine, Mr. President, to criticize one side for what they are intransigent about; it’s quite another to accuse them of being intransigent when you, too, are intransigent. I, for one, don’t want to hear that tired old doublespeak anymore.

And, Mr. President, in the absence of your own written plan, are you really so arrogant and imperialistic as to veto a plan that would pass the U.S. House and Senate? Such a plan would have to have bipartisan support, but you would exalt your nonexistent plan over one that exists and has bipartisan approval. So, in the absence of anything specific, please be quiet, and let the folks who actually have to vote on a plan do their work without your interference. You’ve had your time to shine, and you’ve let it get pretty dark.

It’s time, Mr. President, to give the American people a break; we’ve had enough of your kind of change. We didn’t know the “change” you promised also meant having a President who could only criticize but have no specific plan of his own to present to the American people and to Congress. That was a change we sure didn’t need.

Laurel and Hardy in the Flying Deuces

A Fine Mess In Tennessee

Often our state tax dollar is being used to draw down another dollar or two from the federal government. So, you cut a dollar from the state budget, and you may actually be losing as much as two or three dollars because you lose the federal “match.” As the proverb says, “The debtor is the slave of the lender.”

State House Majority Leader, Gerald McCormick, was recently asked about the new effort by the Tennessee State Employees Association to have state employees identify areas of wasteful spending with the hope that elimination of waste would save state employee jobs.  This effort was launched in response to Governor Haslam’s recent decision to let go 70 planners in the Department of Economic and Community Development.

But one fascinating statement by Leader McCormick that needs digesting is that federal tax dollars represent “as much as 40% of state lending.”  Wow!

I love to quote the statement, “the debtor is the slave of the lender” and while these federal dollars don’t represent “borrowing” by the state, it does represent a dependence on the federal government that is an erosion of our liberty as a state – the notion of federalism.  Federalism was the idea that states would retain their sovereignty as a part of a group of “united states” with the federal government having limited, specific powers with all other powers belonging to the states (see the 10th Amendment).

But with 40% of our budget coming from the federal government, don’t think that there are no strings attached telling us what we can and cannot do.  There are a lot of strings that wind up dictating state policy.

And that’s not all.  These federal dollars are what makes cutting the state budget so hard.  Often our state tax dollar is being used to draw down another dollar or two from the federal government (which explains, in part, why we’re up to 40% in federal revenue). So, you cut a dollar from the state budget and you may actually be reducing the service provided by the state from that dollar by as much as two or three dollars because you lose the federal “match.”  As a former state Senator caught up in a budget mess, I know this from first hand experience.

This also means that the cuts in Washington designed to attack Washington’s budget deficit and national debt will trickle (if not stream) down to the state, putting a greater demand for state cuts (which cuts are made harder for the reason just aforesaid) or increased state revenue to make up for the “lost” federal money.

Paraphrasing Stanley Laurel’s catchphrase to his comedic sidekick, Oliver Hardy, “What a nice mess we’ve gotten ourselves into!”  Except this “mess” isn’t very funny.

Capitol building amongst the trees

Bringing Washington Budget Policies to Tennessee

Is Washington in a mess budget-wise because it spends more money than it takes in? Yes. Is that the reason Washington is in a mess budget-wise? No.

Obviously a budget deficit mathematically represents spending in excess of revenue, but is the deficit the problem or a symptom? I confess I don’t know as much about the national budget (of course, they haven’t actually passed one for two years either) as I do the state budget, but it seems to me that a major problem in Washington is that slightly over 50% of Americans no longer pay federal taxes. And when half the people don’t pay taxes, it’s easy for them to want more benefits paid for by other people’s money. And since we like to get things, it’s easy for politicians to succumb to giving us things and before long, they’re giving out more than they’ve got money to pay for.

With President Lyndon Johnson, the war on poverty and the great society really got going, and it just kept growing. And it got out of hand. Perhaps when this mess all started we didn’t see where the premise would lead us or, if we did, the initial cost wasn’t so bad. After all we were a wealthy country, and we had the money. So why not help out the less fortunate. And now look where we are.

Well, if we’re not careful our state politicians are about to start down the same path – if we have some extra money, why not help folks. In this case, the Tennessee Democratic Party has proposed that if state tax revenues continue to rebound that we use part of the extra money to reduce the sales tax on groceries and use the other part to pay for more college scholarships. And, to be honest, many Republicans have clamored for the same thing. In my opinion, it’s bad idea.

I know some conservatives would be shocked to hear me say that. To them we should reduce taxes whenever there is an opportunity and starve the government into submission. I’ve got no problem reducing taxes, and I’ve got no problem putting the government on a diet. So what’s my problem?

My problem is the trend – reduce what people have to pay in taxes while increasing the “goodies” we give away. Lower revenue and increase expenses. Sounds like Washington to me.

You see, we are a sales tax based state and payment of sales tax is often the only thing that keeps those who would want more state government benefits from clamoring for them. Having a sales tax makes them have to pay some of the cost of the benefits they want. It helps us avoid the situation in Washington. Everyone having some “skin in the game” because they aren’t exempt from sales tax helps keep everyone from voting themselves money out of the state treasury.

Furthermore, the tax on groceries is the broadest, most stable part of our sales tax base because we exempt so many other things (that’s also why the sales tax rate we do have is so high). So, in an economic downturn, the tax that keeps the bottom from completely dropping out is the sales tax on those items we have to keep buying. After all, in a bad economy, you will buy food, but you will put off buying the new car, refrigerator, washer and dryer, sofa, etc. These are the big-ticket items that can produce a lot of sales tax in one fell swoop. But they are also the items you put off buying in a bad economy.

So, take the sales tax down or off of food, and we have a fiscal mess that starts to look like Washington. The people who have been getting benefits and will be getting the increased benefits will not want to give them up. They aren’t paying for them anyway. And the politicians who gave them those benefits know that the benefits got or kept them in office so taking away benefits is tantamount to giving up your office. No elected official (or very few) are willing to essentially vote themselves out of office. So, you have Washington.

I, for one, am for leaving the Washington approach to taxation and public benefits in Washington. We don’t need to duplicate their problems here too.